THE Resource Curse, or the paradox of plenty, refers to the idea that countries with many natural resources often end up growing more slowly, having weaker democracies, facing more corruption, and showing worse development compared to countries with fewer resources.
This happens because having a lot of resources encourages rent-seeking and makes countries rely too heavily on resource exports while ignoring other parts of the economy.
Earlier this year, Pakistan published its National Minerals Harmonization Framework 2025 with the main goal of streamlining geological data and attracting international investment. In that context, the recent $500 million investment deal signed between United States Strategic Metals and Pakistan’s Frontier Works Organization has generated significant attention as a potential game-changer for Pakistan’s resource-rich but underdeveloped mineral sector. Looking more closely at the details, past trends, and the country’s social and political situation suggests that the deal might end up hurting ordinary Pakistanis while mainly benefiting the ruling elite.
In the first phase of the deal, Pakistan will immediately export minerals like antimony, copper, gold, tungsten, and rare earth elements, which are already found in the country. Although this will bring in quick revenue, it is likely to deny Pakistan long-term gains because the focus is on raw exports instead of developing local industries or advanced mineral processing. Data shows that resource extraction in Pakistan is often done with minimal value addition—past ventures like the Reko Diq gold mine have resulted in only a fraction of value creation remaining within the country. With mineral wealth estimated at up to $6 trillion, exporting unprocessed resources means potential lost opportunities to catalyze broader economic development.
The Frontier Works Organization, which signed the MoU, indicates that oversight and administration of new projects should not be concentrated within established institutional frameworks, with limited public awareness of how decisions are made. Past experience shows that deals like this usually prioritize political stability and enriching the ruling elite rather than ensuring accountability or fair distribution of resources. These arrangements lack local governance with profits mostly circulating at Centre.
Most of Pakistan’s mineral deposits are in Balochistan, a province troubled by separatist movements and claims that its resources are exploited without helping local communities. Previous resource deals have failed to deliver much development in these areas. The views of local people are rarely taken into account, while the environmental and social costs—like water pollution, displacement, and loss of livelihoods—are usually suffered by the poorest Pakistanis.
The current agreement exists in the form of a Memorandum of Understanding, not a comprehensive contract. This ambiguity calls for assurance of transparent revenue-sharing, labor protections, or environmental safeguards for Pakistan’s citizens. Recent data from mining agreements in Pakistan, particularly with powerful nations like China, demonstrates a recurrent pattern where people are sidelined and broad-based development or local benefits are not materialized.
Pakistan’s mineral reserves, while valuable, are finite. The rapid export of easily accessible mineral resources risks depleting these reserves without building a sustainable technological or industrial base for the future use of these resources for consistent future revenue. Pakistan is engaging with several countries— US, China, Saudi Arabia, Canada, Portugal, to name a few, for mineral exploration. Overexploitation by foreign partners may leave Pakistan not only with depleted assets and environmental damages but also with lost opportunity of future revenue generation.
The government is presenting Pakistan’s mineral sector as a potential avenue to help address the country’s $130 billion external debt challenge. But relying on quick capital infusions rather than developing indigenous expertise or technology transfer may ultimately deepen Pakistan’s dependency on foreign companies and waste strategic assets. The claim that “trillion-dollar reserves” will solve the country’s financial crisis ignores realities of global commodity prices, political risks, and the tendency for resource-rich nations to suffer from the “resource curse”—wherein elites profit while populations remain impoverished.
Bottom line is that although the deal is marketed as a big win, it looks like the same old pattern. Powerful elites tighten control, export out raw minerals for easy money, ignore local communities, and leave long-term social and environmental harm. Without real reforms, transparency, and local involvement, the ordinary people cannot be benefitted.
— The writer is an educator, based in Sindh.
