Natural Resources: Definitions & Conceptual Issues
The literature on natural resources includes a variety of terms that are often used interchangeably, but also, sometimes, have nuanced differences. Below is an overview of some of the key terms used in research on natural resources, conflict and peacebuilding.
1 Centering on the economic definition of resources, the Organisation for Economic Co-operation and Development (OECD) classifies them as raw materials or "natural assets" valued according to their contribution to economic production or consumption. These assets provide benefits or potential future value and are "subject primarily to quantitative depletion through human use. They are subdivided into four categories: mineral and energy resources, soil resources, water resources and biological resources."2
Natural resources are also sometimes called "natural capital" in analysis of the economic value of resources to humans and to understand how various types of resources play a role in conflict and development. The OECD defines natural capital as consisting of natural resource stocks, land, and ecosystems that are essential to the long-term sustainability of development due to their provision of economic "functions."3
Conflicts over natural resources are categorized in numerous ways that are discussed throughout the definitions that follow, as well as in the following sections. This thematic section in general uses the extractable / livelihood distinction, while also discussing the related lootable / non-lootable and non-renewable / renewable distinctions used by some scholars, and other concepts and typologies that are used in the literature and practice.
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The term "extractable" resources is often used interchangeably with "lootable resources," although they are not necessarily the same thing (see Figure 1). Whereas the term "mineral resource" describes an intrinsic characteristic of the resource, "extractability," or ease of extraction, depends not just on the resource itself, but also on its accessibility to would-be extractors, and the technology available to them. Examples of extractable resources include fossil fuels (oil, coal, natural gas), metallic ores (iron, copper, silver, gold), minerals (alluvial diamonds, coltan), and biological supplies (timber, fisheries, wild game, natural rubber).4 The concept of "lootability" further extends this definition, depending not only on the intrinsic qualities of the resource and the technology of the would-be looters, but also the resource's accessibility as a function of whether it is processed (and into what form), how it is being transported, and the organization and technology of those controlling the resource. A simple way of putting this is that that the lootable / unlootable distinction is a rough indication of how much coordinated effort it takes to steal the resource. For example, mining and refining iron ore takes a large, coordinated division of labor, while gathering alluvial diamonds or running drugs takes just one person operating independently. Unlootable resources include oil, natural gas, and deep-shaft minerals.5
In conflict literature, extractable and lootable resources are often associated with "the natural resource curse" and are associated, respectively, with (1) initiating and (2) fuelling and sustaining conflict.6
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The means of livelihoods may also be considered to be types of "natural capital,"10 that is, assets as types of capital: natural; produced/economic/financial; human; and social.11 Land and water are examples of natural capital or "environmental resources."12 Livelihood resources are sometimes a source of conflict and/or structural violence. This is particularly true with land claim disputes that may result from post-colonial situations leaving extreme horizontal inequality, such as in Zimbabwe and South Africa, and in "sons of the soil" conflicts pitting long-term residents against powerful minority "intruders." Such conflicts tend to be long-lived. 13 Afghanistan and Palestine are examples where conflicts have erupted over land/water rights access. The lack of clear title deed histories in many post-conflict situations often contributes to tensions over competing claims for land and water rights.
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According to the OECD, renewable resources are "natural resources that, after exploitation, can return to their previous stock levels by natural processes of growth or replenishment. Conditionally, renewable resources are those whose exploitation eventually reaches a level beyond which regeneration will become impossible."15Pivi Lujala identifies temporal scale as a key definitional component, stating "Renewable resources are defined as resources that are regenerated on a human time scale. Examples of renewable resources are water, fisheries and forests."16 Non-renewable natural resources are "exhaustible natural resources such as mineral resources that cannot be regenerated after exploitation."17
[Back to Top] 18 Many quantitative studies of the links between resources and conflict have used a country's share of primary commodity exports to its GDP as a measure of natural resource endowment.19 These studies have been criticized for failing to distinguish between relatively low-value agricultural products, relatively high-value exports, and re-exports.20 Critics argue that without this distinction, there is a risk of overemphasizing the correlation between dependence on highly-profitable commodity exports, such as oil, and the likelihood of conflict given weak governance structures.21
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[Back to Top] The Afghanistan Research and Evaluation Unit (AREU), an independent research institution, defines natural resource management as "the institutional arrangements that affect the management of natural resources as actual practices at the local and farm-level."22 The OECD offers specific activities related to the management of natural resources: monitoring, control, surveys, administration and actions for facilitating structural adjustments of the sectors concerned.23 Revenue Watch discusses good natural resource management in terms of contract, revenue and expenditure transparency.24 In a similar vein, "resource governance" captures the state's regulatory governance of natural assets, with particular reference to an equitable redistribution of the costs and profit generated from these sources.25
Natural resource management is often linked to aims to establish legitimate authority over natural sources of wealth. For the state, establishing control over natural resources is a key step in restoring government legitimacy in the post-conflict setting. However, the research on governance is inconclusive. Some scholars argue for the privatization of natural resource management to disperse risks and access rights, implying that legitimacy is not necessarily borne of state control.26 By contrast, in his book Escaping the Resource Curse, Joseph Stiglitz (2007) presents an argument for more state control, in the oil sector in particular.27 The disparate conclusions in the academic literature suggest that optimal management models vary between different resource sectors.
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[Back to Top] Global Witness, a non-governmental organization (NGO) serving as a natural resources and conflict watchdog and advocate, a formally adopted definition of conflict resources would assist the international community to evaluate different uses of natural resources. In the summary report of the February 2006 meeting on "Security, Development, and Forest Conflict: A Forum for Action," the International Crisis Group, the United Nations Security Council, the United Nations Development Programme, Commission for Africa, and the G8 all called for a common definition of conflict resources.28
Many of these entities contend that coming to a common definition would help to distinguish between licit and illicit use of natural resource rentsin conflict. Others suggest a common definition might be used as a preventative tool for early identification of natural resources that are potential catalysts or drivers of conflict. Some, however, argue that it would be too simple and may be misleading, suggesting that certain resources give rise to conflicts in themselves.29
At present, varied understandings populate the current debate over the scope of conflict resources. A well known scholar on the subject, Philippe Le Billon, offers a more precise encapsulation of these concerns. He defines conflict resources as, "natural resources whose control, exploitation, trade, taxation, or protection contribute to, or benefit from the context of, armed conflict." 30
The more commonly used and accepted definition of conflict resources is given by Global Witness: "natural resources whose systematic exploitation and trade in a context of conflict contribute to, benefit from, or result in the commission of serious violations of human rights, violations of international humanitarian law or violations amounting to crimes under international law."31
Definitions of 'conflict resources' may be further refined according to the specific type of resource. For example, "Conflict timber is 'timber that has been traded at some point in the chain of custody by armed groups, be they rebel factions or regular soldiers, or by a civilian administration involved in armed conflict or its representatives, either to perpetuate conflict or take advantage of conflict situations for personal gain...Conflict timber is not necessarily illegal, as the legality (or otherwise) of timber is a product of national laws.'"32
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[Back to Top] 34 In economic parlance, rents represent the difference between what a factor of production costs to keep in its current use and what it is actually paid. Rents are similar to economic profits (but not financial profits), in that they should not exist under perfect market conditions (perfect competition and information) and can hence be considered an artifact of suppressed supply and/or monopoly. For instance, law enforcement keeps the supply of illegal drugs below the level that it would naturally attain, creating economic profits for drug-runners. The main difference between the two is that while economic profits are theoretically supposed to reward risks taken (by the firm, or entrepreneur, etc.) given imperfect information, rents are not associated with risk and thus do not affect production decisions. They are therefore more efficiently used in any other productive capacity.35
Thad Dunning defines 'rents' as the extraordinary profits, often associated with the extraction of oil and other minerals, which flow directly into the fiscal coffers of the government.36 As a consequence, it is often understood as a misuse of authority to compromise government regulation for financial gain, and runs counter to the goal of establishing good governance and fair business practices, central to peacebuilding. Where rents loosely represent higher incomes than would otherwise be earned, they create incentives to generate and maintain these higher rents. Although some scholars have sought to demonstrate a link between high natural resource rents and authoritarianism, there are also models through which resource rents may promote greater democracy.
Rent-seeking activities can range from bribing or even coercion at one extreme, to perfectly legal political activities such as political lobbying or advertising at the other.37 Collectively understood as rent-seeking, this combustible mix of activities sparks legitimate concern over its implications, both for the economic development of local markets and in the prospects for sustaining peace.38 More broadly, rent-seeking can involve either livelihood-related or lootable natural resource derived activities. The theory of rent-seeking is associated with the rise of neoclassical economics and the idea (enshrined in "public choice theory") that government is not necessarily a helpful "development partner" to the private sector (as in the Keynsian view), but consists of self-interested individual politicians and bureaucrats.39
The OECD highlights the monopoly-capturing tendencies of rent-seeking. Rather than engaging in the usual economic activity of production and trade, firms or individuals seek profit through the clever manipulation of rents, using financial or legal instruments to their advantage. Rent is "normally associated with expenditures designed to persuade governments to impose regulations which create monopolies." These financial tools may be erecting barriers to entry for competition or encouraging taxes or controls on certain imports.40 Such activities can undermine peacebuilding, particularly where such practices were common in conflict and pre-conflict settings, creating an environment where some could profit from unfair economic advantages.
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In more specific terms, Ballentine and Sherman define the war economies that arise in situations of civil wars as being distinguished by "the militarization of economic life and the mobilization of economic assets and activity to finance the prosecution of war." They identify four traits that characterize such civil war economies: such economies are parasitic because they are dominated by rent-seeking instead of value adding activities; illicit as they rely on the black market or shadow economies; predatory as they are based on the use of violence to acquire assets, control trade and exploit labor; and to a large extent they also rely on external financial and commodities networks for survival.42 These networks may be well-established trading corridors through neighboring states long used for trafficking illicit war-related commodities such as arms, extractable resources, combatants or captured civilians.43 Moreover, even domestic coping economy actors may become reliant on - and even mould their supply chains around - military networks.44
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Combat economyAccording to scholar Heiko Nitzschke, the combat economy can be understood as commerce that directly contributes to financing the violence.45 It generally refers to arms trafficking and the extraction of high-value resources, as well as the prevailing force responsible for sources of income for the fighting forces.46 In many cases, these economies involve forceful take over of assets and means of production needed to maintain support for the fighting. They also tend to include the "economic strategies of war aimed at the disempowerment of specific groups" involved in or targeted by the conflict.47 Combat economies are then strategically and tactically oriented toward military objectives or the perpetuation of military operations.
Shadow economyAccording to the scholars Michael Pugh and Neil Cooper, "the term 'shadow economy' refers to economic activities that are conducted outside state-regulated frameworks and are not audited by the state institutions. The key economic agents are those whose objectives may be economic rather than military, but whose rationales depend on economic problems and opportunities brought about by the erosion of state authority." Shadow economies are also known as "black markets," "underground economies," and "parallel economies."
Coping EconomyA shadow economy may also incorporate the "coping economy," which refers to the kind of commerce people engage in to leverage their own limited resources to maintain the most basic living standards, as a means of survival.48 In their three-tiered classification of war economies, Pugh and Cooper highlight the coping economy as a distinction that reflects a society's ability to cope with the consequences of this activity in day to day life.
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[Back to Top] 49 As observed by scholar Tobias Hagmann, "There is no widely accepted definition of what constitutes environmental conflict or environmental security. Nor is there agreement on whether environmental conflict exists as a distinct type of violence."50 Rather than defining conflicts as "environmental," authors have historically defined types of armed conflict as a result of scarcity or degradation.51
Environmental conflict resolution (ECR) is considered a practice area within the broader conflict resolution field. It addresses contentious disputes and controversies related to the use and management of natural resources, development and growth, individual and community health, and a range of additional and related concerns.52 This emerging field has its roots in various disciplines such as political science, economic theory, systems analysis, sociology and anthropology.53
1. European Environment Agency, "Environmental Terminology Discovery Service," European Environment Agency. It should be noted that even a scenic view, though, will capitalize in the values of properties that enjoy it. Truly "non-economic" values are those that do not affect human beings to the extent of influencing their preferences.
2. Organization for Economic Cooperation and Development (OECD), "Glossary of Statistical Terms: Natural Resources," OECD, 2001.
3. OECD, "Glossary of Statistical Terms: Natural Capital," OECD.
4. Jamaica Clearing-House Mechanism, "Exploitation of Natural Resources," Biodiversity for High Schools.
5. Michael L. Ross, "What Do We Know about Natural Resources and Civil War?" Journal of Peace Research 41, no. 3 (2004): 338, 350.
6. Ross, "What Do We Know about Natural Resources and Civil War?"; James D. Fearon, "Why Do Some Civil Wars Last So Much Longer Than Others?" Journal of Peace Research 43, no. 3: 275-301.
7. Pivi Lujala, "Classification of Natural Resources" (paper prepared for presentation at the 2003 ECPR Joint Session of Workshops, Edinburgh, UK 28.3 - 2.4, 2003): 10.
8. Department for International Development (DFID), "Sustainable Livelihoods Guidance Sheet: Introduction," (London: DFID), 1.1.
9. Robert Chambers and Gordon Conway, "Sustainable Rural Livelihoods: Practical Considerations for the 21st Century," IDS Discussion Paper 296 (1991): 6.
10. Vo Ngan Tho, "Livelihood Strategies of the Poor in Peri-urban Interface of Ho Chi Minh City" (Master Thesis in Rural Development with Specialization in Livelihood and Natural Resource Management, Hue City: Hue University of Agriculture and Forestry, October 2005): 4,
11. Melissa Leach, "Plural Perspectives and Institutional Dynamics: Challenges for Community Forestry," in Adaptive Management: From Theory to Practice, ed. James Oglethorpe (IUCN, 2002): 75.
12. Talitha Feenstra, Herman Cesar and Peter Kort, "Optimal Control Theory in Environmental Economies," in Handbook of Environmental and Resource Economics, ed. Jeroen C.J.M. van den Bergh (Edward Elgar Publishing, 2002), 1105.
13. Fearon, "Why Do Some Civil Wars Last So Much Longer Than Others?"
14. United Nations (UN), "United Nations Expert Group Meeting on Natural Resources and Conflict in Africa: Transforming a Peace Liability into a Peace Asset," (Cairo: UN, 2006).
15. OECD, "Glossary of Statistical Terms: Renewable Natural Resources," OECD.
16. Pivi Lujala, "Classification of Natural Resources," 6.
17. OECD, "Glossary of Statistical Terms: Non-Renewable Natural Resources," OECD.
18. Pennsylvania State University, "International Development, Renewable Resources and the Environment: Glossary," Pennsylvania State University.
19. Most famously, Paul Collier and Anke Hoeffler, "Greed and Grievance in Civil War," Oxford Economic Papers 56 (Oxford: Oxford University Press, 2004): 565.
20. Macartan Humphreys, "Natural Resources, Conflict, and Conflict Resolution: Uncovering the Mechanisms," Journal of Conflict Research 49, no. 4 (2005): 508-537.
21. James D. Fearon, "Primary Commodity Exports and Civil War," Journal of Conflict Resolution, 49, no. 4, (2005): 483-507.
22. Afghanistan Research and Evaluation Unit, "Natural Resource Management," Afghanistan Research and Evaluation Unit.
23. OECD, "Glossary of Statistical Terms: Natural Resources Management and Exploitation Activities," OECD.
24. Revenue Watch Institute (RWI), "Our Work/Projects," Revenue Watch Institute.
25. Bonn International Center for Conversion (BICC), "Resource Conflict Monitor: Governing the Dynamic Between Natural Resources and Violent Conflict," BICC.
26. Erika Weinthal and Pauline Jones Luong, "Combating the Resource Curse: An Alternative Solution to Managing Mineral Wealth," Perspectives on Politics, 4 (1): 35-53.
27. Macartan Humphreys, Jeffrey D. Sachs, and Joseph E. Stiglitz ed., Escaping the Resource Curse (New York: Columbia University Press, 2007)
28. International Crisis Group and Fiona Hall, "Security, Development and Forest Conflict: A Forum for Action" (Summary Report. Brussels, 2006).
29. Philippe Le Billon, ed., "The Geopolitics of Resource Wars: Resource Dependence, Governance and Violence," (New York: Routledge, 2005).
30. Philippe Le Billon, "Getting It Done: Instruments of Enforcement," in Natural Resources and Violent Conflicts: Options and Actions, ed. Ian Bannon and Paul Collier (Washington, D.C.: The World Bank, 2003), 216.
31.Global Witness, The Sinews of War - Eliminating the Trade in Conflict Resources (London: Global Witness, 2006); Billon, L P. "The Political Ecology of War: Natural Resources and Armed Conflict," Political Geography 20 (2001): 561-584; United Nations Environment Programme Division of Early Warning and Assessment (DEWA). Understanding Environment, Conflict and Cooperation (New York:UNEP, 2004).
32. Le Billon, "Getting It Done: Instruments of Enforcement," 216.
33. Michael T. Klare, Resource Wars- The New Landscape of Global Conflict, Metropolitan (New York: Owl Books, 2002), 25.
34. Mushtaq H. Khan and Jomo K.S., "Introduction," in Rents, Rent-seeking and Economic Development: Theory and Evidence in Asia, eds. Mushtaq H. Khan and Jomo K.S. (Cambridge: Cambridge University Press, 2000), 5.
35. See The Economist, "Economics A-Z: rent," Economist.com; The Economist, "Economics A-Z: profit," Economist.com.
36. Thad Dunning, "Authoritarianism and Democracy in Rentier States" (Berkeley: University of California, 2005).
37. Khan, "Introduction"
39. Gordon Tullock, "The Welfare Costs of Tariffs, Monopolies, and Theft," Western Economic Journal 5, no. 3 (1967): 224-232.
40. OECD, "Glossary of Statistical Terms: Rent Seeking," OECD.
41.Michael Pugh and Neil Cooper, War Economies in a Regional Context (Boulder: Lynne Rienner Publishers, 2004), 8.
42. For further explanation, see Karen Ballentine and Jake Sherman, editors, The Political Economy of Armed Conflict: Beyond Greed and Grievance (Boulder: Lynne Rienner Publishers, 2003).
43. Kaysie Brown, "War Economies and Post- Conflict Peacebuilding: Identifying a Weak Link," Journal of Peacebuilding and Development, 3: 1 (2006): 8.
44. William Reno, "African Weak States and Commercial Alliances," African Affairs 96 (1997): 165-85.
45. Heiko Nitzschke and Kaysie Studdard, "The Legacies of War Economies: Challenges and Options for Peacemaking and Peacebuilding," International Peacekeeping, 12, no. 2 (2005): 222-239.
46. Heiko Nitzscke, "Transforming War Economies: Challenges for Peacemaking and Peacebuilding" (Sussex: Report of the 725th Wilton Park Conference, in association with the International Peace Academy, October 27-29, 2003), 9.
47. Pugh and Cooper, War Economies in a Regional Context, 9.
49. Tobias Hagmann, "Confronting the Concept of Environmentally Induced Conflict," Peace, Conflict and Development, 6 (January 2005): 3.
52. The United States Institute for Environmental Conflict Resolution, "Glossary."
53. University of Vermont, "Environmental Conflict Resolution: The Cyberary," Rubenstein School of Environment and Natural Resources.