A few years ago I read Paul Collier’s book The Bottom Billion, and when I saw that his follow-up was about sustainability, it went on that long, long list of things to read. A couple of weeks back I spotted The Plundered Planet on my brother’s book shelves. I borrowed it, and have now slightly spoilt it with underlinings and notes. (Sorry Paul)
Collier is an Oxford professor, a former World Bank economist and a development specialist. He has a knack for articulating a problem in a memorable way, drawing attention to the most salient points. He did that with the concept of the bottom billion, and with his explanation of poverty traps. In this book, he sums up his central message with two formulae:
nature + technology + regulation = prosperity
As far as Collier is concerned, the world’s poorest countries have “one lifeline: nature.” It is their natural resources that will lead them to prosperity, and “the failure to harness natural capital is the single most important missed opportunity in economic development”. The potential income from natural resources far outweighs any contribution from aid, and the economic boost can then be used to invest and drive development. That all depends on using resources well, and ensuring that the benefits are shared. And there’s the rub, because the second formula is this:
nature + technology – regulation = plunder
Too often, a poor country sees its natural resources extracted without any obvious benefit to the economy as a whole. The value of them goes into the pockets of the elite, or into the Swiss bank accounts of corrupt politicians. Wealth is siphoned out of the country through the black market, or through global corporations who have negotiated good deals for themselves. When that happens, those resources have been plundered. It’s an evocative and piratical word, but Collier insists that “plunder is, at its root, an economic concept – the abrogation of property rights.”
In order to avoid plunder, we need to know who has a claim on natural resources, whether that is oil or minerals, or timber or fish. The book discusses the ethics of ownership at length, arguing that a nation’s one-off resource stocks should be held as commonly owned, and their value captured for society. That means exploiting them in a way that benefits everybody, taxing them correctly, and using the proceeds well. Don’t blow the benefits of a one-off resource on day-to-day spending, he cautions. Invest it for the future.
There’s a lot of good advice here for countries that are making resource discoveries. Policy makers in such places could learn a lot from the book, and so could ordinary citizens, keeping their governments accountable and making sure that those resources serve as a stepping stone to further development.
That’s the most useful material in the book, in my view. Beyond that, Collier doesn’t deliver on the fresh approach to sustainability that he promises. We don’t get to climate change until three quarters of the way into the book, and then it’s only concerned with one idea: a global carbon price. This is well described, but it’s not a silver bullet solution. It’s also interesting to see how far the international debate has moved since this was published in 2010. With the Paris Agreement in place, we’ve already chosen a different road. The message of ‘keep it in the ground’ is also a profound challenge to the book’s championing of natural resources as a route out of poverty.
In conclusion, The Plundered Planet is great on using natural resources well, and I’d recommend it to anyone interested in the role of natural assets and development. But it’s not the unifying theory it wants to be. On the front cover of this edition it says ‘forget everything you’ve ever been told about how to solve the world’s problems’. I expect that’s hyperbole from the publisher rather than the author, hoping to replicate the success of The Bottom Billion. Since I’ve already scribbled on the inside of my brother’s book, I am tempted to write on the outside too, and add ‘no, don’t’ underneath it.