It’s not altogether easy to judge whether a large resources endowment makes a nation stupid, or being stupid leads a nation to rely heavily upon a large resources endowment. It’s probably both caught in a feedback loop.
Either way, Australia is going through some kind of rude awakening when it comes to its iron ore dependency. Having all but ignored it through the boom, every man and his newspaper is suddenly an iron ore expert after last week’s inquiry debacle.
And not before time. As some readers will recall, long before MB existed I opined that the iron ore price and its market issues ought to be on the front page of every paper in the country, every day. The two steel commodities (iron ore and coking coal) account for 40% of export revenues and have driven an astonishing three-quarters of Australian export revenue growth since 2003.