What Explains the Ups and Downs of Resource Nationalism?

Aug 1, 2018 | 15:22 GMT

Bolivian military police try to seize the Vinto industrial complex of Swiss mining group Glencore in Oruro in 2007.

Bolivian military police try to seize the Vinto industrial complex of Swiss mining group Glencore in Oruro, 380 kilometers (236 miles) south of La Paz, in 2007. Many countries have sought to exert greater control over their natural resources, especially since 2004.



  • Through resource nationalism — an attempt by a state to assert greater control over natural resources in its territory through mandates on global extractive industries — host countries seek to create value-added products and services and supply chains or capture assets.
  • Over many decades, the balance of power has slowly shifted in the direction of host states as compared to global corporations.
  • In the short- to medium-term, however, the strength of resource nationalism is likely to ebb and flow with global market cycles and local political cycles.
  • Global geopolitical shifts are another conditioning factor, and China's rise has especially stoked worries in several countries about a loss of sovereignty.

News that the Indonesian government has taken a majority stake in U.S.-based Freeport-McMoRan's giant Grasberg copper mine after a hard-fought dispute is just the latest sign of growing pressures exerted by host states on global extractive industry corporations. The mining industry has cried foul over such actions, with the CEO of mining giant Rio Tinto warning in May that resource nationalism was "gaining momentum," threatening investment in the lucrative sector. But what exactly drives resource nationalism and what explains its ups and downs? As it turns out, the conventional explanation -- market cycles -- does not account for much of what leads states around the globe to strive for greater control over their natural resources....

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