CEU Electronic Theses and Dissertations, 2025
| Author | Carlton, Daniel Thomas Morgan |
|---|---|
| Title | Navigating the Resource Curse: Lessons from Indonesia for the Management of Chinese Foreign Direct Investment in the Democratic Republic of Congo's Cobalt Sector |
| Summary | This thesis explores why Chinese foreign direct investment has contributed to industrial upgrading in Indonesia but reinforced dependency in the Democratic Republic of Congo. Indonesia has utilised foreign direct investment, particularly from China, to advance domestic industrial development in the mineral sector, reduce economic dependency, enhance local industrial integration, and foster sustainable development, while the DRC has struggled to manage Chinese investment, largely due to poor governance, resulting in continued extractive dependency, minimal local value addition, and a failure to translate resource wealth into broad-based economic development. Grounded in dependency theory, enclave economy analysis, and the leading sector model, this research compares the divergent outcomes of Chinese FDI in both nations. While Indonesia has used regulatory instruments such as export bans, local content requirements, and territorial industrial planning to promote downstream processing and economic upgrading, the DRC remains locked in extractive dependency. Weak institutional capacity, elite capture, fragmented governance, and limited bargaining power have impeded the DRC’s ability to align foreign investment with national development goals. The DRC and Indonesia are compelling comparative cases, as both are resource-rich countries targeted by Chinese FDI in the critical minerals sector (cobalt and nickel, respectively), and both are central to the global energy transition. Yet, the divergent outcomes of industrial upgrading in Indonesia versus persistent dependency in the DRC, highlight how institutional and policy contexts shape the developmental impact of FDI. Results reveal that institutional integrity and state coordination are essential for turning resource wealth into inclusive development. Although direct policy transfer is constrained by structural differences, context-specific reforms such as targeted regulation, institutional strengthening, transparent contract negotiation, and the formalisation of artisanal mining could provide the foundation for more equitable and sustainable outcomes. |
| Supervisor | Melnykovska, Inna |
| Department | Political Science MA |
| Full text | https://www.etd.ceu.edu/2025/carlton_daniel.pdf |
Visit the CEU Library.
© 2007-2025, Central European University