Resource-based Development

Developing countries, in particular the nations of Sub Saharan Africa (SSA) are still significantly defined by resource dependency. Many countries remain highly dependent on resource extraction and exports, despite efforts to promote industrial development as well as the diversification of exports and production. A crucial factor is the high volatility of commodity prices making the macroeconomic management of resource-based economies difficult.

The discussion on a fairer distribution of resource revenues has intensified as a consequence of the commodity price boom of the 2000s, which has furthermore brought the issue of resource-based development strategies back on the agenda of development debates. In particular, the role of upgrading strategies within global value chains, industrial policy and linkages is the focus here. In addition, development opportunities are determined by the new role of China, which has led and continues to lead to major shifts in commodity and financial flows.

As part of the research project “Financial Markets and the Commodity Price Boom”, funded by the Austrian National Bank, ÖFSE analyses the macroeconomic implications as well as the effects of current commodity price dynamics on the development of resource-dependent low-income economies in SSA. A key issue was, which macroeconomic implications step from the high volatility of commodity prices. In a structuralist Computable General Equilibrium (CGE) Model interactions of import-export dynamics and their differences in Burkina Faso, Ethiopia and Mozambique were demonstrated. In addition, the possibilities of resource-based development were analysed in the context of the global value chain approach. For this purpose, the global coffee value chain and its national effects in Ethiopia were examined, the cotton sectors in Burkina Faso, Mozambique and Tanzania were compared and the importance of national regulations was shown. In addition, ÖFSE examined China's activities and policies in the extractive sector and analysed their impact on development prospects in sub-Saharan Africa and Latin America.

For more information contact:

Dr. Bernhard Tröster
Senior Researcher
phone: +43 1 317 40 10 – 117  
b.troester@oefse.at
1090 Vienna, Sensengasse 3
 
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