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The Palgrave Handbook of Contemporary International Political Economy pp 535–554Cite as

Palgrave Macmillan

Natural Resources

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Abstract

This chapter examines how common international factors, namely the China-induced resource boom, shaped the rise of ‘resource nationalism’ in Latin America. A central feature of resource growth policies is the move to maximize and reinvest natural resource rents to improve productivity and support sectoral development. The chapter argues that governments were more successful at capturing windfall profits but less so in capital reinvestments and promoting structural transformation. Specifically, an emphasis on continuous extraction of resources rather than on enhancing human capital, innovation systems, and the manufacturing sector ultimately characterized this policy shift. Moving forward, the challenge is how to promote structural transformation through industrial policy especially when windfall profits are limited by fluctuating prices and uncertainty in the global resource industry.

The author would like to thank Alvin Camba and Roderick Galam for reading previous drafts of the chapter. All mistakes are mine.

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Notes

  1. 1.

    If we exclude the Chinese deals, capital raised in mining actually declined by 16% in 2016—an outcome of the grinding recovery in major markets of Europe, North America, and Australia.

  2. 2.

    It should be noted that all loans and credits are given at commercial rates, and therefore, China’s policy banks behave in a fairly similar manner to other development finance institutions, such as the World Bank’s International Bank for Reconstruction and Development (IBRD), the Inter-American Development Bank, and other export-import banks (Brautigam 2009; Gallagher 2016; Gallagher et al. 2012).

  3. 3.

    Furthermore, China likewise has an immense competitive advantage over how to price its manufacturing products and its economies of scale, which contributes to the inability of Latin American exports to compete with China. Thanks to Alvin Camba for pointing this out.

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Author information

Authors and Affiliations

  1. Leiden University, Leiden, The Netherlands

    Jewellord Nem Singh

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  1. Jewellord Nem Singh
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Editors and Affiliations

  1. University of Ottawa, Ottawa, ON, Canada

    Timothy M. Shaw

  2. Bavarian School of Public Policy, Technical University of Munich, Munich, Germany

    Laura C. Mahrenbach

  3. Centre for African Studies, University of Mumbai, Mumbai, India

    Renu Modi

  4. School of Government and International Relations, Griffith University, Nathan, QLD, Australia

    Xu Yi-chong

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Nem Singh, J. (2019). Natural Resources. In: Shaw, T.M., Mahrenbach, L.C., Modi, R., Yi-chong, X. (eds) The Palgrave Handbook of Contemporary International Political Economy. Palgrave Handbooks in IPE. Palgrave Macmillan, London. https://doi.org/10.1057/978-1-137-45443-0_33

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