F OR BETTER or worse, many poor countries’ fortunes hinge on their natural resources. Since their industries are less sophisticated and their service sectors smaller than in rich places, an underground bounty can make a big difference to their economic prospects. Rising global demand for oil or ores can spur growth, attract investment and fill fiscal holes.
Many finance ministers in the poor world fondly recall the last commodity “supercycle”, when rising China’s insatiable demand pushed up the price of metals and fossil fuels. Oil sales helped to nearly double Angola’s GDP between 2002 and 2008. The task facing the new head of India’s biggest private bank If the country is winning the future, why are its investors so glum?
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