Until 2012, the past decade saw Indonesia’s growth maintain a respectable momentum. This column argues that recent hints of political dirigisme presents Indonesia with a stark development choice. Policymakers can continue their tightening of political control – staving off the trade effects of a global crisis in the run up to elections next year – or they can orient the economy outward, with complementary policies to sustain long-term growth.

Using data series recently released by the World Bank (2011) on natural capital and other forms of countries’ wealth, this column revisits some of the conclusions reached in the literature on the relationship between natural resource abundance and income levels. The findings support the assertion that there is no clear deterministic evidence of natural resource abundance as a curse or a blessing; therefore, the effect on a country depends on other determinants.

The presence of natural resources poses a number of potential economic challenges, especially for developing countries. This column argues resource-rich countries need to look beyond the so-called resource curse and put into action innovative policies and institutions to confront their many challenges and reap the benefits of widely shared natural-resource wealth.

The so-called resource curse suggests that resource booms are bad for development. One reason put forward is that fighting over resource rents leads to armed conflict. This column argues the evidence identifying resources as a cause of conflicts is weak and that the policy focus should be on institutional reform, rather than on resources per se.

Regional integration schemes that include natural-resource-abundant countries have by and large been unsuccessful. Part of the reason is the uneven distribution of gains when resource-poor and resource-rich countries integrate. This column presents new evidence suggesting that the slow progress of regional integration efforts in the Middle East and North Africa can be explained by the reluctance of resource-rich countries to enter into trade agreements that will hurt them.

Around one fifth of global merchandise trade is in natural resources. Yet national policies manipulate trade flows and prices, and the problem is exacerbated by market failure in long-run extraction contracts. This column argues these problems could be addressed by extending the role of the WTO in the enforcement of resource-extraction agreements.

Oil prices are again on the rise – will this derail the economic recovery? And what if there is an oil shock on the horizon? This column presents an overview of the oil market and its possible effects on the global economy. It argues that if there is a shock, the list of casualties will have Europe at the top with the US close behind.

China is often accused of providing ‘rogue aid’. China is said to be more interested in securing natural resources, export markets, and political alliances than concerned about the development of needy countries This column looks at the data on China’s aid allocations between 1996 and 2005. It finds that China is in fact no more self-serving than most Western donors.

Oil and other natural resources can be both a blessing and a curse. Incomes may rise, but the politics can soon turn nasty. This column looks at a large panel of countries and finds that this isn’t always the case. Discovering natural resources has no effect on the political system – if the country is already a democracy.

Foreign direct investment is a vital tool for building infrastructure and raising economic activity in the world’s poorer countries. This column describes the emergence of FDI between developing and transition economies (the South). It argues that these are different from traditional North-South flows. Although investors from the South are sometimes deterred by countries that have bad institutions, this is often outweighed by the presence of natural resources.