Natural resources - Source of income and cause for conflicts

Conflicts around natural resources—today, a highly relevant topic. Often, threat scenarios are painted in which the increasing competition for natural resources worldwide gives cause to predict resource wars between countries or where the sole motivation of the warring parties in ongoing wars seems to be the interest in or profit from natural resources, such as the war in Iraq. Indeed, resource conflicts can occur both internationally and nationally. On the one hand, there are interstate resource-related conflicts where two (or more) states claim ownership over a resource-rich territory. On the other, there are intra-state resource-related conflicts where one rebel or secession movement threatens a state over a resource-rich territory.

Conflict resources and the 'resource curse'

So-called conflict resources can be both means of financing a war and motive for or cause of a violent conflict. The NGO’s Global Witness’ definition of conflict resources is as follows: “Conflict resources are natural resources whose systematic exploitation and trade in a context of conflict contribute to, benefit from or result in the commission of serious violations of human rights, violations of international humanitarian law or violations amounting to crimes under international law.”

Blood diamonds is one keyword that shows the direct relation between war and natural resources. The term relates to civil wars in which rebels finance their bloody fight through the sale of diamonds. In the 1990s, this was particularly the case in the Western African states of Angola, Liberia and Sierra Leone. So, are these conflict really resource-related conflicts? Not necessarily. The causes of the civil wars in Angola, Liberia and Sierra Leone were complex, and diamonds played a lesser role as regards the outbreak of the conflicts: political and socio-economic reasons were far more important. But diamonds were decisive as a source of income.

The civil war in Angola lasted for 26 years. The conflict issue was the distribution of political power after independence. In the first phase that started in 1975, the warring parties were supported by the countries of the Eastern and Western blocs respectively. The Angolan government received aid from the Eastern bloc while the UNITA rebels were supported by the Western powers. Already then did both parties use income from resource deposits for their fight. With the end of the Cold War, the countries of the Eastern and Western blocs stopped their support as a consequence of which natural resources became essential for financing the conflict. The government side was able to resort to its oil production while the rebels exploited diamond deposits in their area, forcing the civilian population to work in the diamond mines.

The civil war in Angola is only one example of a possible connection between resources and conflicts. There are many ways in which conflicts are interconnected with natural resources. It is obvious that there is no automatic relation between the prevalence of natural resources and violent conflicts. However, there are studies that establish a correlation between resource wealth and civil wars. According to Paul Collier and Anke Hoeffler, countries that are heavily dependent on the export of resources are at a higher risk of civil war than others. Later studies, however, questioned such a direct interrelation. Still, there is the danger that resource-rich countries experience the 'resource curse', for many countries with large resource deposits are characterized by weak governance and economic instability. This phenomenon is known as 'resource curse'. Trigger for the resource curse is the 'Dutch disease where a national economy that lives off the export of one or few resources tends to neglect other economic sectors. This dependence makes a country vulnerable to falling commodity prices, for example. Should prices collapse, the threat of a recession becomes real. Such an economic downturn carries with it conflict potentials, such as socio-economic discontent of large parts of the population, which can lead to the 'paradox of plenty'. Resource wealth leads to a higher susceptibility of crises. Yet, there are also examples, where states were able to use their mineral wealth (Botswana, Chile and South Africa) or oil (Malaysia, Indonesia and Norway) to increase their economic performance.

Civil wars and the role of natural resources

There are various conflict settings in which natural resources can play a role on the national level. One can differentiate between three categories: national conflict on the distribution of revenues, local conflict in resource-rich areas and war economies.

National conflict on the distribution of revenues

Revenues from a state’s resource sector primarily flow into that state's budget. It is therefore in the hands of the government to manage these revenues and to spend them according to its policy. The oil-rich and democratic Norway, for instance, has established a fund for future generations so that the population profits from its resource wealth in the long term. In less democratic states, it is the elite in power that enjoys the wealth rather than the wider population: Heads of state with no democratic legitimization use revenues for bribes, securing their power. Government officials and administrative officers also become rich through corruption. In the capitals, one can see many prestigious buildings while there is no investment in the rest of the country. Political power is the key to resource wealth.

When the advantages of resource wealth are concentrated on a small elite, feelings of resentment can build quickly among the rest of the population. Often, those who profit and those who do not are from different sections of the population (ethnic groups, social groups, different parts of the country). In such a case, economic dissatisfaction can mix with social and political issues. The breeding ground for conflicts is prepared. If this frustration cannot be expressed by political and non-violent means, the likelihood of a violent conflict increases.

Local conflict in resource-rich regions

In regions where resources are extracted. conflicts can ignite around the worsening living conditions of those who live nearby. Digging for oil, but also for other extractive resources (gold, uranium, ores, etc.) has a massive impact on nature. Entire landscapes are changed, and water, soil and air are polluted. Local residents are forced to re-settle; at times violently, and often compensation is not adequate. Unsolved land ownership leads to conflict—especially when it comes to compensation. The population often shows its dissatisfaction by committing sporadic sabotage acts or by attacking those who work for the mining company or its security personnel. If the needs of the people are neither taken seriously by their own government nor by mining companies, these violent acts can increase and finally lead to civil war or the demand for secession.

War economy: A war economy that is based on natural resources arises when rebels occupy a resource-rich area and finance their fight through the proceeds of the sale of the mined resources. The reasons for the fight continue to be of a political, social or other nature but, for certain periods of time, the control over mining and the smuggling of the resources will be so profitable that a continuation of the conflict becomes an end in itself: The conflict is maintained to profit further from the resource revenues. They not only serve to pay for weapons and ammunition or to feed the fighters but also to enrich the powerful.

So, resource-related conflicts have many reasons and occur in different kinds and forms. Yet it must be borne in mind that it is stakeholders who determine what happens rather than the availability of resources per se that leads to conflict. This opens a window of opportunity for preventing and containing such conflicts.

Sources and further information:

Buchhandlungen bangen um die Buchpreisbindung

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