The natural resources curse is well-known by now. Countries with lots of mineral (or almost any other natural resource) wealth often find themselves cruising down the roads of corruption, violence and underdevelopment. It is as if they were dismissing all the warnings on the side of the road: Warning! Take the next exit out of here! Think before you keep going! Et cetera.
Developed countries have already been down these roads but some have managed to get out in time. How did they do it? One way forward –not the only but certainly a very powerful one- is to try to move past the gold fever and think more carefully about what to do with the gold. The key word here, of course, is think.
The University of Dundee in Scotland is host to students from all over the world who travel there to read courses related to the mining sector. Many Peruvians study there –I know a few of them. Last I heard, though, there aren’t any mines in Dundee were they can practice and experience, first hand, the industry they are studying. So why would a Peruvian leave a country rich in mines to study in Scotland where the mining industry is all but a thing of the past?
The answer is simple: Peru does not have a world-class university that specialises in mining.
Even without any serious mining, Scotland remains as a leading force in the sector. It trains the next generations of mining entrepreneurs, engineers and policymakers. Scotland, through its own experts and the ones it sends out to the world, is shaping global processes and exerting enormous leverage. And all of this guarantees that there is a sustainable British mining industry that continues to mine the world all over. But not in Britain.
Peru could follow this path, too. Millions of dollars in tax made from the mining industry have been earmarked for capital investments in the regions were mines are based. Capital investments could be easily reinterpreted as human capital investment and, almost overnight, large (and I mean large) amounts of money could be available to overhaul local universities and set up new institutions (think tanks included) to transform the sector from an extractive to a knowledge economy. I know there are innumerable bureaucratic hurdles; but many this is a reasons for the private sector to take the lead rather than shrug and keep funding palliative petty projects that address immediate needs but leave little behind.
The same is true to other resources that could be the basis of sustainable and job creating sectors for many developing countries.
El Bulli, arguably the world’s best restaurant, closed its doors last month to become a culinary think tank. No wonder Spain has a strong tourism industry. In Peru, where food has become the source of great pride we ought to be following this example and look to setting up new institutions to think the future of the gastronomic sector. A food industry that expands beyond the kitchens and into global consultancies, renowned academic degrees, and a tourism industry that is adaptable and sustainable. So far this role seems to have fallen on celebrity chefs like Gaston Acurio -but there is so much one man can do.
Following this basic idea, I have been working with a friend to set up a forestry centre in Peru and I have just taken up the idea of a coffee think tank to strengthen the coffee sector (not just the selling of coffee but mostly its production).
Think tanks can be a great engine of change. They can take on the interests of the industry and the wider public and pursue policy options that governments are sometimes unable to contemplate until they are sure things. Think tanks can help to establish alliances with peer organisations in other countries without the bureaucratic difficulties that the public sector has or the concerns for competition that are common in the private sector. Unlike lobbies or interest groups they can remain neutral or at least ensure that different options are considered and discussed publicly. Their interests, if well-funded and managed, can the long-term interests of their sectors and countries.
Donors have been quick to fund think tank dealing with economic and social policy issues in many developing countries but few have an industrial specialism –these tend to be funded as part of international research programmes but there is an obvious focus on agriculture and poverty reduction.
Industry specific think tanks’ objectives, on the other hand, ought to consider poverty reduction as an ideal by-outcome but not their main one. Their primary objective should be the development of a sustainable and world-class sector. Good practices will undoubtedly bring along more jobs and increase opportunities. Not only that, but universities, think tanks, and consultancies can all create new jobs and incentives for further specialisation. They will imagine and develop new businesses around the resource and help steer the sector into its future.
These industry focused think tanks would make a great team alongside the economic and social policy think tanks that we are more accustomed to.
So why not fund some of the following (this, of course, applies to more than one country):
- A tourism think tank for Kenya;
- A few mining think tanks for Zambia;
- A tobacco (and related crops) think tank for Malawi;
- A few oil and gas think tanks for Nigeria;
- A financial services think tank for Ghana;
- A forestry think tank for Indonesia;
- A coffee think tank for Peru;
- Et cetera
The initial investments need not be terribly large. These think tanks could start quite modestly by providing a medium to channel knowledge and expertise from around the world into the national and local policy debate. A few good analysts and a competent policy communicator would probably do for the first year. An alliance with a university could create opportunities for original research being produced in-country and to channel new knowledge into the education system through undergraduate and postgraduate courses. Partnerships with the private sector would be essential to ensure that their work is relevant to the sector.
Above all they should be based (or at least have a base) where the resource exists and not just in a fancy office close to the capital’s poshest districts. We want, after all, to create centres of excellence that bring policy, practice, and research together.
These think tanks could focus their attention at three levels:
- The policy environment: research and analysis to develop recommendations directed at improving the policy environment that affects the sector.
- The business environment: research, analysis and direct support aimed at strengthening the capacity of existing and future businesses to further develop the industry –sustainably, responsibly, etc.
- The art and science of the sector: (maybe in the long-term) aimed at improving the evidence base of the sector –for example, research into new varieties of timber, into new ways of treating mineral waste, into the commercialisation of new agricultural products, the use of new seeds, etc.
So if you have resources and do not know how to use them more sustainably and in a way that will guarantee benefits for all, instead to trying to come up with a master plan that is likely to fail (let’s be honest, we do cannot plan for all eventualities) why not consider developing a knowledge industry around those questions and let it find the way?