The mining industry and the future development of Tanzania

One would be inclined to think that the possession of significant natural resource reserves is a blessing. This would especially be so for developing countries; it provides them with the necessary foreign currency and potentially increases savings, making natural resources the key to economic growth. But the reality seems different. Researchers have been discovering a very robust negative relationship between different measures of development and different measures of resource endowments. Only recently, this negative relationship has been questioned. It is argued that the relationship between growth and natural resources is a complex one, and the significant negative relationship is attributed to the use of weak data. Tanzania has a considerable stock of natural resources. Given the liberalisation efforts of the government started in 1986 and the economic globalisation, these natural reserves are likely to be exploited in the near future. The government is heavily encouraging private investment in the sector, and the first signs of an upcoming boom are there. Bearing in mind the above facts, one might ask whether Tanzanians should be happy or be afraid.