Global Scramble for Resources
By Dr Arvind Kumar
Many trade experts and strategic thinkers feel that the world is already witnessing a resource war. A series of ongoing commercial conflicts caused by Chinese export restrictions on rare earths are cited as example. Commercial conflicts over export restrictions are a growing area of tension in international trade, with developing countries defending their right to curtail global access to their resources in support of domestic economic development and industrialized nations trying to ensure undistorted access to raw materials for their industries. While suggesting that world history has been influenced by hostile resource wars and much of the European expansion and colonisation of Africa was to control raw materials, Mogens Peter Carl, former director-general of the European Commission’s trade department, warns that “there is a danger of a resource war even today – but from the commercial aspect only”.
Africa still holds some of the largest unexploited mineral resources in the world. The production of critical raw materials is concentrated in a handful of countries – mainly China, Russia, Congo and Brazil. China restricts its exports but allows local companies to use and transform them into finished products – that’s what the conflict is about. The export restrictions allow China’s domestic processing industry to develop and become more competitive on world markets – eventually undermining business competitiveness of other nations. Rufus Yerxa, deputy director-general of the World Trade Organisation (WTO), acknowledges that export restrictions are clearly “an area of growing tension” in which new disputes are arising.
