Are Resource-Rich Countries Doomed By The Resource Curse?

 

I’m not an expert on economics, but I like reading about how the mineral industry affects a country’s economy. As I was reading about mineral economics, I came across the intriguing concept of the “resource curse.” I’m glad to share it with you.

The idea behind the “resource curse” is that countries that are well endowed with non-renewable resources, especially minerals and fuel, tend to have slower economic growth than countries with fewer resources. [1]

A 2011 research paper by economist Dr. Frederick van der Ploeg of Oxford University contains a comprehensive analysis on the resource curse concept. [2] Continue reading “Are Resource-Rich Countries Doomed By The Resource Curse?”

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Effect of Large-Scale Mining on Employment

In a research paper published in 2014 in the journal Mineral Economics, Olle Östensson discussed the significance of employment that is generated by large-scale mining in spurring local economic growth. He evaluated the effects on employment of the Escondida Mine in Chile, Tenke Fungurume Mine in the Democratic Republic of Congo, and various mining companies in Northwest Provice, Zambia. His research showed that large-scale mining generated indirect and induced employment that when combined, surpassed direct employment. The increased employment results in increased spending, which in the long run results in an increase in the overall income of the communities. This phenomenon, called the multiplier effect, boosts local economic growth.

Very few people are aware of the actual effects of mining on employment and economic growth. “It is a piece of conventional wisdom that mining projects have relatively minor Continue reading “Effect of Large-Scale Mining on Employment”