Natural Resources

This chapter examines how common international factors, namely the China-induced resource boom, shaped the rise of ‘resource nationalism’ in Latin America. A central feature of resource growth policies is the move to maximize and reinvest natural resource rents to improve productivity and support sectoral development. The chapter argues that governments were more successful at capturing windfall profits but less so in capital reinvestments and promoting structural transformation. Specifically, an emphasis on continuous extraction of resources rather than on enhancing human capital, innovation systems, and the manufacturing sector ultimately characterized this policy shift. Moving forward, the challenge is how to promote structural transformation through industrial policy especially when windfall profits are limited by fluctuating prices and uncertainty in the global resource industry.