ABSTRACT
The phrases ‘the resource curse’ and ‘the paradox of plenty’, as used by Auty (1993) and others, refer to the social and economic phenomenon in which many countries that are otherwise rich in natural resources experience poor economic growth, confl ict and declining standards of democracy. In Australia, while the nation as a whole may not endure the failings associated with countries caught up by the resource curse, there are mining regions where conditions bear a remarkable similarity to those in countries described by Auty (1993), Sachs and Warner (1995), and others (see, for example, Mehlum et al. 2006). Sachs and Warner, for instance, have documented a ‘statistically signifi cant, inverse, and robust association between natural resource intensity and growth over the past 20 years’ (1995: 21). There are some mining regions of Australia, where Aboriginal populations are signifi cant majorities, for which the socioeconomic data show extreme poverty. The similarities of these populations with those discussed in the resource curse literature are so striking as to raise the question whether the ‘resource curse’ thesis applies to these Australian situations. In this chapter we explore this problem, highlight the lessons learned from research on the resource curse and discuss how they apply to Australia’s institutional and policy environment. We draw on research conducted on the negotiation and implementation of agreements with indigenous Australians, many of which are enabled by the Native Title Act 1993 (Cth) (NTA). Such agreements, together with the mining industry’s approach to corporate social responsibility, are intended to ameliorate the disadvantages faced by indigenous communities. Despite these developments, however, little socioeconomic improvement has been achieved in these communities, and we look to explanations such as the inequitable distribution of resource project impacts on local peoples, issues of rent seeking and substitution and the potential effects of low levels of economic diversifi cation to account for this phenomenon (see Switzer 2001). Finally, we discuss institutional and other reforms that might be effective in these circumstances.
