Peru's Resource-State Curse?

News last week that over 100 people had been affected by a toxic spill from the copper mine in Antamina added more fuel to the debate in Peru over the safety and responsibility of mining.  Despite the spills and controversy, the extraction of natural resources in Peru contributed the largest share to the county’s impressive 7-plus percent average growth for the last seven years.  But can it continue?

For almost a year, another conflict has raged north of where last week’s spill occurred in Cajamarca between a handful of community leaders and Colorado-based Newmont over the mining company’s plans to develop and expand the gold and copper Conga mines.  Local community leaders, supported by international non-governmental organizations, claim that Newmont’s operations will pollute water sources, a charge disputed by the Canadian mining company and a number of studies it has commissioned. Public marches, road blockages and violence over the Conga mines have crippled the national government and forced President Ollanta Humala to make several cabinet changes.

In Peru and outside, the clash has been portrayed as emblematic of the escalating and inevitable tension between the global markets’ demand for natural resources and the environmental and political rights of the communities where those commodities are produced.

Both sides are right in seeing it as a sign of things to come.  But framing it only as a conflict between companies and communities misses one of the crucial elements that underlies the conflict: how well local governments manage and direct the revenues generated by the mining-resource boom to address long-simmering social demands...

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