Sustainable Development in Mineral Economies

Sustainable Development in Mineral Economies

Sustainable Development in Mineral Economies

Sustainable Development in Mineral Economies

Synopsis

The mineral economies are an important group of developing countries which have suffered a "resource curse" over the past 20 years--showing a poorer performance than resource-deficient neighbors. This book draws upon case-studies and analysis of nine countries to demonstrate the difficulties currently faced and the policies which will be required in the future in order to take advantage of finite mineral resources to maintain the economic and social conditions for sustaining growth.

Excerpt

How do we justify another contribution to the prodigious literature on sustainable development? First, the mineral economies comprise around one-fifth of the developing countries and they face special problems in achieving sustainable development and they have as a whole been less successful than resource-poor countries. Second, there is a need for a better understanding of the problems faced by the mineral economies as a basis for policy decisions required to overcome them. The term 'sustainable development' is often used ambiguously to identify a particular social, economic, or ideological objective. We shall refrain from presenting yet another general concept of sustainable development (for the diversity of approaches compare, for example, Atkinson et al. (1997), Nordhaus (1992), Norgaard (1994), and WRI (1992)), but use an interpretation that reflects the principal concern of this study, which is: How can a country's mineral resources best be employed for achieving and maintaining the maximum rate of economic growth consistent with the country's social objectives? The degree to which this objective is realized becomes our general measure of sustainability.

Our concept of sustainable development requires that the contribution to economic development be maintained, both during periods of temporary reduction in mineral exports and over the long run when mineral-producing capacity declines relative to the size of the overall economy. What is required is not the sustainability of the mineral production that initially generates growth, but the maintenance of economic and social conditions for sustaining that growth. As is shown in Chapter 6, many of the mineral-exporting countries reviewed in this study have not realized the full potential of their mineral resources for achieving and maintaining growth. The capacity for a mineral-driven country to achieve any particular rate of growth differs with the kind and amounts of minerals produced and with the world markets for them. But the sustainability of the contribution of the mineral sector to growth depends upon how the economies adjust to fluctuations in product prices and to other factors affecting export revenues in the relatively short run, and upon the structural adjustments in the economy required to sustain growth over the longer run when mineral exports will inevitably constitute a relatively smaller portion of the economy. These two aspects of sustainability are closely interrelated and both types of adjustment are analysed in this study, together with case studies illustrating successful and unsuccessful adjustment.

Many of the mineral-exporting countries reviewed in this study have not realized the full potential of their mineral resources for achieving and maintaining growth.

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