Prevalence of a mineral resource curse in South Africa : a critical analysis of the gold and diamond sectors

M.Com. (Local Economic Development)Abstract: Throughout history, resources have always played a significant role in the development of economies. However, with the introduction of the term “resource curse” this notion has changed and many economists now believe that too much resources can be detrimental to an economy. An ever-growing body of literature has sought to identify countries which have been resource cursed, South Africa being one of them. Research on South Africa has thus far generated mixed results. One of the possible reasons for this is that macroeconomic data for the country only goes back to the 1940s, and therefore a longer perspective cannot be attained. This research completed a missing time period in a database which allowed analysis into the resource curse from 1850 onwards. The analysis tools used were descriptive statistics, as well as a graphical analysis. It is demonstrated that resource abundance and dependence is evident in South Africa, but the notion that the country has a resource curse could not be determined outright