The Contribution of the Mining Sector to Socioeconomic and Human Development

Many low and middle-income mineral-rich countries have experienced strong growth for a decade or longer, propelled by a rapid expansion of their mineral exports and a rise in prices of these commodities. This sustained strong economic performance g...

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Bibliographic Details
Main Authors:	McMahon, Gary, Moreira, Susana
Format:	Working Paper
Language:	English en_US
Published:	World Bank, Washington, DC 2014
Subjects:	ACCOUNTABILITY ALUMINUM AMOUNT OF EXPLORATION APARTHEID AVERAGE GROWTH RATE AVERAGE GROWTH RATES BENEFICIATION CASE STUDIES CITIZENS CIVIL SOCIETY COAL COMMODITIES COMMODITY COMMODITY PRICES COMPARATIVE ADVANTAGE COMPETITIVENESS CONVENTIONAL WISDOM COPPER CORPORATE SOCIAL RESPONSIBILITY CORRUPTION COUNTRY DATA CURRENCY DEMOCRACY DEVELOPING COUNTRIES DEVELOPING COUNTRY DEVELOPMENT AGENCY DEVELOPMENT PATHS DEVELOPMENT STRATEGIES DIRECT INVESTMENT DUTCH ECONOMY ECONOMETRIC ANALYSIS ECONOMIC ACTIVITY ECONOMIC DEVELOPMENT ECONOMIC GROWTH ECONOMIC LINKAGES ECONOMIC PERFORMANCE ECONOMIC POLICIES ECONOMIC PROGRESS ECONOMIES OF SCALE EDUCATIONAL INSTITUTIONS ENVIRONMENTAL DAMAGE EXPORT SECTOR EXPORTS EXTERNALITIES EXTRACTIVE INDUSTRIES EXTRACTIVE RESOURCES FINANCIAL CRISIS FISCAL POLICY FLUCTUATIONS FOREIGN DIRECT INVESTMENT FOREIGN EXCHANGE FOREIGN GOVERNMENTS GAS GDP GLOBAL ECONOMY GLOBAL MARKETS GOLD GOLD MINE GOOD GOVERNANCE GOVERNANCE INDICATORS GOVERNANCE PERFORMANCE GOVERNANCE REFORM GOVERNMENT EFFECTIVENESS GROSS DOMESTIC PRODUCT GROWTH PERFORMANCE GROWTH RATE GROWTH RATES GUARANTEE OF SUCCESS HUMAN CAPITAL HUMAN DEVELOPMENT INCOME INCOME LEVELS INCOME TAX INDUSTRIALIZATION INEQUALITY INEQUALITY MEASURES INFLATION INFRASTRUCTURE DEVELOPMENT INFRASTRUCTURE INVESTMENT INFRASTRUCTURE PROJECTS INSTITUTIONAL QUALITY INTERNATIONAL ORGANIZATIONS IRON IRON ORE LARGE MINING LIVING STANDARDS LOCAL COMMUNITIES LOW INCOME LOW-INCOME COUNTRIES MACROECONOMIC INSTABILITY MACROECONOMIC REFORM MANUFACTURING INDUSTRIES MEASURING GOVERNANCE METALS MIDDLE INCOME MIDDLE-INCOME COUNTRIES MIDDLE-INCOME COUNTRY MINE WORKERS MINERAL BOOMS MINERAL DEPENDENCE MINERAL ECONOMIES MINERAL EXPORTS MINERAL INDUSTRIES MINERAL PRICES MINERAL PROJECTS MINERAL RESOURCES MINERAL WEALTH MINERALS MINES MINING AREA MINING AREAS MINING COMPANIES MINING COUNTRIES MINING INDUSTRY MINING INVESTMENT MINING INVESTMENTS MINING OPERATION MINING OPERATIONS MINING POLICIES MINING PRODUCTION MINING PROJECTS MINING REGIONS MINING ROYALTIES MINING SECTOR MINING SECTOR DEVELOPMENT MINING SECTOR REFORM MULTIPLIER EFFECTS NATIONAL CURRENCY NATIONAL INFRASTRUCTURE NATURAL RESOURCE NATURAL RESOURCE ABUNDANCE NATURAL RESOURCE CURSE NATURAL RESOURCE INTENSITY NATURAL RESOURCE WEALTH NATURAL RESOURCES NONGOVERNMENTAL ORGANIZATIONS OIL OUTPUT PARTICULAR COUNTRY PER CAPITA INCOMES PLATINUM PLATINUM MINING POLICY IMPLICATIONS POLITICAL ECONOMY POLITICAL INSTABILITY POLITICAL STABILITY PRICE VOLATILITY PRIMARY EDUCATION PUBLIC INSTITUTIONS RAPID ECONOMIC GROWTH RAPID EXPANSION RAPID GROWTH REGIONAL DEVELOPMENT REGULATORY QUALITY RENT SEEKING RENT-SEEKING BEHAVIOR RESOURCE ABUNDANCE RESOURCE BASE RESOURCE DEPENDENCE RESOURCE RENTS RESOURCE-DEPENDENT COUNTRIES RESOURCE-POOR COUNTRIES RESOURCE-RICH COUNTRIES REVENUE STREAMS RICH ECONOMIES RULE OF LAW SAVINGS SMELTER SOCIOECONOMIC DEVELOPMENT STABILITY AGREEMENTS STAGNATION SUSTAINABILITY SUSTAINABLE DEVELOPMENT SUSTAINABLE GROWTH TAX TAX REVENUES TAX SYSTEM TECHNICAL ASSISTANCE TERMS OF TRADE TRADE BARRIERS TRANSPARENCY UNDERDEVELOPMENT UNEMPLOYMENT UNPROCESSED MINERALS VALUATION VALUE ADDED WEALTH
Online Access:	http://documents.worldbank.org/curated/en/2014/04/19435144/contribution-mining-sector-socioeconomic-human-development http://hdl.handle.net/10986/18660

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Summary:	Many low and middle-income mineral-rich countries have experienced strong growth for a decade or longer, propelled by a rapid expansion of their mineral exports and a rise in prices of these commodities. This sustained strong economic performance goes against the accepted wisdom that even though the mining sector, like other extractive industries, can generate foreign exchange and fiscal revenues, it contributes little to sustained economic growth and, by extension, human development. Through the presentation of trends and patterns of various indicators, this paper shows that in addition to economic growth, countries rich in minerals other than oil have experienced significant improvements in their human development index (HDI) scores that are on average better than those experienced by countries without minerals. In a sample of five low and middle-income countries with relatively long histories of mining, benefits came from foreign direct investment (FDI), export revenues, and fiscal revenues. The overall impact of the mining sector was much stronger if there were infrastructure benefits and strong linkages to other industries, especially through domestic procurement. Contrary to the notion that there are no jobs in mining, in this small sample, employment related to the mining sector was very high in countries where linkages were strong, even before the multiplier and fiscal expenditure impacts were accounted for. Cooperation between the public and private sectors seemed essential to increasing such linkages. In addition, mining firms often made substantial contributions to local and regional development, at times due to legal requirements but often not. All five countries have either relatively high HDIs (compared with neighboring countries) or strongly improving HDIs.

The Contribution of the Mining Sector to Socioeconomic and Human Development

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