Driving around the largest diamond mine in Sierra Leone, I was told that the massive  mountain hid unimaginable riches. Wealth enough to lift thousands out of poverty, to provide basic necessities like clean drinking water, schools, hospitals and to bring the fragile $1.9 billion economy back on its feet.

Curious to see this mine from the inside, we started making our way in only to have the car promptly stopped by armed security guards. “Get permission from Freetown” ordered the man, who thought we were journalists in Kono with a mission of exposing labor practices and conditions inside the mine.

His concern was understandable, for the mining industry has a dark underbelly in this country. Diamonds fueled the brutal 11 year-civil war and engendered the infamous ‘Conflict Diamonds’ market. As diamonds left the borders, weapons flowed in and smuggling flourished. Since the end of the war in 2002, it was anticipated that diamonds could be legally channelized to bring revenues into the country. But little has changed since then. The diamond mining industry currently employs around 300,000 to 400,000 people, making it the second-largest employment generating sector after agriculture. However, standard of living and wages on an average have failed to ameliorate.

Picture this….an average miner starts his day at dawn and keeps digging until late evening, sieving through dust, grime and mud in the hopes of finding one precious stone. For this, the miner is provided one meal a day and a small wage, enough to fill neither his/her belly nor their wallet. If they get lucky and find a diamond, they sell it to their boss and get half the value. For a small rough diamond (like the one in the picture), this translates to receiving a meagre $26.

It is intriguing to observe how a country that is so generously endowed in resources is so poorly developed. Logically, more resources should mean a country can export more, generate employment and hence be richer, right? Not necessarily. This dissonance is best explained by the concept of ‘Resource Curse’ (or Paradox of Plenty), which states that countries endowed with a rich source of natural resources struggle to make effective use of them. Governments in these states respond ineffectively to public welfare needs and tend to experience higher rates of conflict, instability, corruption and lower rates of economic growth. History offers a plethora of examples of this including Angola, Nigeria, Sierra Leone, Venezuela and Iraq, among several others.

In the case of Sierra Leone, lack of functioning institutions and competition over ownership seems to be at the core of the problem. Mining is not mechanized and highly unregulated. Additionally, corruption is endemic, contributing to an unsustainable parallel economy.  Changing this trend poses a chicken and egg problem: Should strong institutions that are transparent, regulated and fair be developed first so that the diamond industry can pick up? Or will revenue from diamonds eventually pave way for greater development and better institutions? Basically, the million-dollar question is how to escape resource curse and where do we start?

While these critical questions are being raised, diamond miners in Sierra Leone continue digging not just to find diamonds but to lift themselves out of poverty. Perhaps we should be thinking harder the next time we walk into a jewelry store and admire those shiny diamonds. The sparkly stones may have some dark beginnings afterall.