Explaining Resource Nationalism

Explaining Resource Nationalism

This article attempts to dissect the term resource nationalism (hereafter RN). It looks first at the origins of the term. Second, it examines various definitions of RN: in the business press where a zero sum conception of state and corporate interest is generally assumed, related definitions in academic writings that hinge on the relative control of resources by government and company, explanations that subsume the phenomenon within economic nationalism, accounts that stress how it restricts outputs and, finally, recent discussions that question prevailing understandings of RN and emphasise instead the diversity of its contemporary forms. The article then considers drivers of RN: the capture of economic rents, the corollary of the influence of market prices on this objective, obsolescing bargaining, the pressures of natural scarcity and the role of national identity. Fourth, the global context, commercial and legal, in which RN operates. Finally, the article considers the fluctuations in RN in recent years.

Policy Implications

Resource nationalisms are, despite cartels, one factor underlying the lack of global regulation of natural resources. An effective global policy, so desperately needed in the context of finite resources and unsustainable warming, would require a transformation in current trading regimes to combine the dynamism of corporate exploration with sustainable priorities.

Resource nationalism is not new. The quest by nation states to benefit from the ownership and control of natural resources within their jurisdiction has a long history and is evident periodically since the mid-twentieth century.

Resource nationalism is a widespread and normal policy of states – especially with energy supply. Such an understanding is at odds with dominant definitions of resource nationalism that assume antagonistic, zero sum, relationship between a state and foreign company involved in the extraction of a natural resource.

There is very little international regulation to limit resource nationalism. The WTO makes limited attempts to involve itself in the resource policy of members. So the determination of trade agreements between states and companies is through bilateral deals.

There was a rise in resource nationalism in the period 2003–2013 due to high market prices. However, it was not as far reaching as often assumed. Rather, the rise was generally of mutual benefit to governments (through rents) and companies (through profits).

 

 

Image Credit: Henry Burrows via Flickr (CC BY-SA 2.0)

Policy Implications

  • Resource nationalisms are, despite cartels, one factor underlying the lack of global regulation of natural resources. An effective global policy, so desperately needed in the context of finite resources and unsustainable warming, would require a transformation in current trading regimes to combine the dynamism of corporate exploration with sustainable priorities.
  • Resource nationalism is not new. The quest by nation states to benefit from the ownership and control of natural resources within their jurisdiction has a long history and is evident periodically since the mid-twentieth century.
  • Resource nationalism is a widespread and normal policy of states – especially with energy supply. Such an understanding is at odds with dominant definitions of resource nationalism that assume antagonistic, zero sum, relationship between a state and foreign company involved in the extraction of a natural resource.
  • There is very little international regulation to limit resource nationalism. The WTO makes limited attempts to involve itself in the resource policy of members. So the determination of trade agreements between states and companies is through bilateral deals.
  • There was a rise in resource nationalism in the period 2003–2013 due to high market prices. However, it was not as far reaching as often assumed. Rather, the rise was generally of mutual benefit to governments (through rents) and companies (through profits).
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