Investing in Stability: Can Extractive Sector Activity Help Build Peace?

Over the past decade growing demand for resources, geostrategic competition and new technologies have pushed resource exploration and development into increasingly politically, socially and environmentally sensitive areas. At the same time, donors and multilateral development banks have backed ‘extractives-led growth’ models in fragile and conflict-affected situations on the basis that resource development may help support stability and thus the underlying conditions for peace. There is intuitive appeal to the logic that development of an extractive sector can help contribute to peace and stability via economic development; and in conflict-affected situations where governments struggle to attract foreign direct investment, the extractive sector may be the only real opportunity to do so. However a considerable body of literature argues the opposite, and draws a link between resource development and the risk of conflict. The current softening in global commodity prices and a slowdown in the race to ‘frontier’ regions present an opportunity to reassess some current working assumptions regarding resource development, conflict and peace. This research paper takes as its starting point the idea that neither conflict nor peace is an inevitable consequence of resource development in fragile or conflict-affected settings. Drawing upon a large body of research on the ‘resource curse’ and the emerging field of business and peace, as well as on practical guidelines on responsible resource development in conflict-affected and fragile situations, it asks whether and under what circumstances resource development might support peace.