That is what the paper of Frederick Van der Ploeg published by the Center for Economics Studies is telling us, entitled "Natural Resources: Curse or Blessing?" This is specially true if such a country has bad institutions--public or private. In fact, Van der Ploeg gives us a couple of reasons why some natural resource-rich countries haven't taken advantage of their blessings:
1. "[The reasons] include that a resource bonanza induces appreciation of the real exchange rate, deindustrialization and bad growth prospects, and that these adverse effects are more severe in volatile countries with bad institutions and lack of rule of law, corruption, presidential democracies, and underdeveloped financial systems."
2. "Another hypothesis is that a resource boom reinforces rent grabbing and civil conflict especially if institutions are bad, induces corruption especially in non-democratic countries, and keeps in place bad policies."
3. "Finally, resource rich developing economies seem unable to successfully convert their depleting exhaustible resources into other productive assets."
One thing seems to be common--bad institutions and lack of rule of law. And I'm afraid I have to agree with the paper. Having analyzed the Philippines, a natural-rich resource country but which is, at one point in time (and maybe still is), labeled as the "Sick Man of Asia", Van der Ploeg's reasons are not that hard to agree.
Back in the 1960s, the growth rate of the country is among the best in Southeast Asia--only Singapore is better. Now, it has lagged behind the countries of Thailand and Malaysia by a wide margin. The martial law regime of the late President Ferdinand Marcos in the 1970s, the series of coup d'etat during the 1980s and 1990s, the rise of oligopolistic families, and the persistent existence of graft and corruption in the public may have significantly contributed to the country's slow growth since then.
I tell you, having a natural resource-rich country does not automatically guarantee economic development. That's why the Philippines and Japan has always been the perfect example of the two opposite sides of this is case.