Plenty of countries are natural resource rich and do not run into major issues.
Canada, the US, Australia, and yes - Norway, all come to mind. Usually, the factor that enables a country to resist corruption from natural resources comes from having a proper governance system already in place.
Even something that many perceive as trivial, like tax collection, is essential. Because what often happens is, a nation will not collect taxes and instead say they will let the riches from natural resources trickle down to the citizenry. This enables dictatorships/political elites to remain entrenched at their expense.
You also need government agencies in place to make sure that surveys are being conducted properly so that the auction process can be optimized.
I remember a story about an African nation that needed to auction off mining rights. Their data was well over 100 years old, whereas some MNC mining companies had state of the art testing, as a result there was asymmetrical information that worked against their government.
One way to circumvent that lack of information is to auction permits in a rolling manner. So you auction off the ability to only mine in one small area. Then, if there is a discovery, you can raise initial prices for future permits in the surrounding area.
[A] nation will not collect taxes and instead say they will let the riches from natural resources trickle down to the citizenry. This enables dictatorships/political elites to remain entrenched at their expense.
Plenty of countries are natural resource rich and do not run into major issues.
That's certainly true. I think most of those countries are countries that have healthy economies independent of natural resource exploitation. This is certainly true of your examples, even, to some extent Norway (about a quarter of Norway's GDP comes from the petroleum industry according to Wikipedia). This is not to discount the importance of proper governance, as you say. However, I think there's a case to be made that part of the reason that many nations rich in natural resources have problems is because their extractive industries account for such a huge proportion of their economies.
Yes, finding having a boom in natural resources does have the effect of crowding out other industries. I agree with you. That's "Dutch Disease" and you can find it in many well governed resource rich nations.
The poster above brings up Alberta, you bring up Norway.
But Dutch Disease is just one detrimental 'symptom' of the resource curse.
Some of the more adverse symptoms are increased levels of conflict and corruption and those are precisely the fears you need to have when looking at Afghanistan's potential mineral wealth because there is a lack of proper governance in place.
Now going back to your example, Norway -- and Alberta too. It is precisely because of their governance systems that they can harness natural resource wealth at more optimal levels than nations with the curse.
Norway for example has one of the largest sovereign wealth funds in the world. That provides a mechanism for reinvesting the natural resource wealth into other industries. I am no experts on SWFs, but from my reading, Norway's SWF has a pretty good reputation.
To contrast that, look at some of the resource rich conflict nations in Africa. They don't have formal laws and organizations to structure transparent SWFs, they have swiss bank accounts that they use to raid government revenues and sometimes fund militias.
So it is good governance that helps minimize the friction caused by new found natural resource wealth and redistribute it in an optimal manner.
I pretty much agree with you. In the case of Afghanistan, though, I'd have to say that poor governance is already a serious problem, and in fact it could hardly get worse. The U.S. would like to improve this situation (as long as we've got troops in the country, anyway), but I've yet to see any evidence that we know how.
Actually, Norway's SWF is required to only invest outside of Norway (in order to avoid Dutch disease) and, although actively managed is ALMOST an index fund. They own very small stakes in many companies, and thus spread risk around.
Before they found oil, Norway was /almost/ as rich as Sweden, and Sweden is no hell-hole. Now they are of course much richer than Sweden, but it is likely that the two countries would have taken similar directions if not so much of Norway's economy was oil.
Canada, the US, Australia, and yes - Norway, all come to mind. Usually, the factor that enables a country to resist corruption from natural resources comes from having a proper governance system already in place.
Even something that many perceive as trivial, like tax collection, is essential. Because what often happens is, a nation will not collect taxes and instead say they will let the riches from natural resources trickle down to the citizenry. This enables dictatorships/political elites to remain entrenched at their expense.
You also need government agencies in place to make sure that surveys are being conducted properly so that the auction process can be optimized.
I remember a story about an African nation that needed to auction off mining rights. Their data was well over 100 years old, whereas some MNC mining companies had state of the art testing, as a result there was asymmetrical information that worked against their government.
One way to circumvent that lack of information is to auction permits in a rolling manner. So you auction off the ability to only mine in one small area. Then, if there is a discovery, you can raise initial prices for future permits in the surrounding area.