Bravo-Ortega and De Gregorio (2005) state that, whenever natural resources draw the scarce human capital away from growth favoring activities, the development of natural resources might reduce growth. Thus, countries with high endowment of human capital can more than offset the negative effect of natural resource abundance on growth. Still, while growth can be slower, abundant natural resources do result in higher income, which is what ultimately matters from the standpoint of the welfare of the population. Finally, it is worth to make the distinction between the abundance of and the dependence on natural resources. This issue has been analyzed in Cerný and Filer (2006), who find that natural resource dependent countries are the ones associated with low economic growth, not natural resource abundant ones. 2 When studying the case of Chile, it can be argued that there is no evidence of the problems that associate natural resource abundance with bad economic performance. On the one hand, we can observe that our country is more and more open to international trade (figure 2). This integration not only brings benefits because of the traditional gains from trade based  1  Another closely related work is Boschini et al. (2003). These authors claim that the natural resource curse depends not only on the quality of institutions but also on the characteristics of the resources. Specifically, whether it is easy to obtain large earnings in a short period of time from having control over the resource.
Figure 3  Mining exports  (percentage) 50  0,7  Billions of USD FOB  0,5  30  0,4  20  0,3 0,2  10 0  % Goods exports  0,6  40  0,1 0  1984  1987  1990  Mining exports  1993  1996  1999  2002  2005  2008  Mining Exports/ Goods exports  Source: Central Bank of Chile. 6  BIS Review 106/2009  Figure 4  Earnings from nitrates-iodine and from copper  (percentage of total fiscal income) 70% 60% 50% 40% 30% 20% 10% 0% t  t+6  1880  t+11  t+16  t+21  t+26  t+31  Nitrates and iodine earnings  1959  t+36  t+41  Copper earnings  t+46  T 1930 2008  Sources: Jeftánovic, Jofré, and Lüders (2000); Central Bank of Chile. Figure 5  Government spending, exports and GDP  (index, 1880=100) 500  1,200  400  1,000 800  300  600  200  400  100  200  0  0  1880  1890 1900 Government spending Exports  1910  1920  1930 GDP  1940  Source: Braun, Braun, Briones, and Díaz (2000).