By Paul Collier, Professor of Economics and Public Policy at Oxford University

Australia has become the world champion at turning rocks into prosperity. It has built the technical expertise to discover and mine resources. This has been complemented by the economic policies and political checks and balances needed to avoid the resource curse. More commonly the natural wealth of resource-rich countries has corroded governance: checks and balances have been undermined by the scramble for control.

Africa, the world’s poorest region, now has the opportunity to follow Australia’s pathway. Mining expertise, much of it Australian, has been instrumental in a raft of recent African resource discoveries. There need be no conflict between corporate self-interest and corporate responsibility. At a time when softening world prices have plunged mining companies into the psychology of retrenchment, recognizing their important role as handmaidens of African development can be uplifting. Mining can generate revenues for governments, build infrastructure that has spill-over benefits for other activities, and help local communities. The forthcoming conference in Sydney on Mining for Development, an initiative of AusAID, focuses on these opportunities.

But the last time Africa had a resource boom, some thirty years ago, it led not to prosperity but to plunder. If Australia is indeed to unleash African prosperity, rather than inadvertently ushering in a repeat of history, this time must be different. Fortunately for Africa, much has indeed changed. There is more awareness of the need for scrutiny, greatly aided by the Extractive Industries Transparency Initiative. Precariously launched in 2002, it now has 37 countries as signatories and its annual conference, to be held in Sydney this month back-to-back with Mining for Development, is a major event.

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