Weber-Fahr - Treasure or Trouble? Mining in Developing Countries

Weber-Fahr, M., Treasure or Trouble? Mining in Developing Countries, World Bank and IFC Mining and Development Series, 2002

Mineral wealth in developing countries has the capability to enhance/stimulate economic growth, but how well these potentials are harnessed has been a major source of concern. This paper examines whether mineral resources in developing countries are in fact treasures or troubles for the host communities. The paper notes the challenge being faced by mineral rich developing countries which is the ability to transform mineral endowment into economic assets.

The good and bad arguments for and against mineral development are considered by the paper with a case study examination of some countries who have successfully or otherwise transformed mineral wealth into economic development. In this regard, Botswana, Chile, Namibia, Ghana and Poland are relatively said to be amongst the best examples while Cameroun, Zambia, Ukraine, Congo and Sierra Leone are the worst examples in terms of growth performance.

The paper concludes with the observation that the contribution of mining to a country’s economy does not take place in isolation but rather in the overall context of a country’s economic management and institutions. In other words, the quality and competency of these policies and institutions determine whether the mining sector can promote economic growth or otherwise.

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