Developing countries rich in natural resources face a well-documented 'extractive trap'—an over-reliance on raw material exports that leaves them vulnerable to price shocks and hinders diversification. However, a new report from the United Nations Conference on Trade and Development (UNCTAD) argues that the global energy transition offers a critical opportunity to break this cycle.
The report, released in July 2026, highlights that the surging demand for minerals like lithium, cobalt, and copper—essential for batteries and renewable energy technologies—could be a springboard for these economies. By leveraging their vast mineral wealth and fostering regional cooperation, these nations can build thriving green industries of their own, rather than remaining mere suppliers of raw inputs.
UNCTAD emphasizes that this requires strategic policies, including local processing and manufacturing, technology transfer, and value addition. The report cites examples of countries that have successfully moved up the value chain, such as Chile and Indonesia, which have increased their share of mineral processing and refining.
However, the report also warns that without deliberate action, the energy transition could simply replicate old patterns of dependency. It calls for international support to help developing countries capture more of the value from their resources, ensuring that the green transition is both economically and environmentally sustainable.
