By Bingxun Seng and Fraser Thompson
Myanmar Times – Aug 3
Myanmar is blessed with sizeable endowments of mining metals, ranging from tin, copper, tungsten, and zinc to other precious metals such as jade, rubies and sapphires. It also has a substantial amount of oil and gas reserves, relative to its size, and recent discoveries of offshore gas deposits have intensified investor interest to develop untapped resources. Myanmar’s dependency on natural resources has led to much debate of the economic, social, and environmental effects of extractive industries on its people. In particular, landslides and flooding linked to mining, as well as land expropriation and environmental damage, have perpetuated negative ideas about extractive industries.
An abundance of natural resources can be both a blessing and a curse for a country. Economies often experience a production and export boom following the discovery of rich deposits of oil, gas or minerals. However, the gains from unearthing these resources can be difficult to sustain over the long term. But what are the implications of resource riches for broader socio-economic progress in the country? New research by the International Council of Mining and Metals has examined socio-economic effects in mining-dependent countries. The report, “Social Progress in Mining-Dependent Countries,” examines trends across a broad set of socio-economic indicators linked to 11 United Nations’ Sustainable Development Goals (SDGs) in countries with a sustained history of mineral dependence over the past 20 years.
Its main finding: being endowed with natural resources is not inevitably a curse, particularly when examined through the socio-economic lens. The majority of resource-dependent countries from Africa to Asia have made substantial social progress over the past 20 years, raising the quality of life for people in these areas significantly. It is therefore instructive for Myanmar to understand the lessons from other resource rich countries in translating that wealth into socio-economic development.
Today, people in these countries are generally healthier, wealthier, and better educated. Between 1995 and 2015, almost 80 percent of the 32 socio-economic indicators evaluated improved in absolute terms. The greatest progress was made in providing people with more access to infrastructure and clean energy, and in promoting good health and well-being. In each of these areas in mining-dependent countries, over 90pc of the metrics improved. Progress was weakest in some measures of governance and gender equality, although at least half of the metrics measured still improved over the past 20 years. The research appears to confirm the importance of governance on socio-economic development.
The relative performance of mining-dependent countries has also been strong. In 1995, the overall socio-economic performance of 56pc of mining-dependent countries was below the global average, but 84pc of them have been able to close the gap over the next two decades.
What is not clear from these cross-country comparisons is the importance of mining in driving the overall results. Many factors, ranging from urbanization to government reforms, influence these socio-economic indicators, so isolating the role of mining can be difficult. To shed further light on its role, the council analyzed the socio-economic performance of sub-national regions in selected countries (Ghana, Indonesia, Peru and Chile), based on their relative economic dependence on mining. The findings reveal that social progress in mining-dependent countries are also visible at the regional level, where at least three-quarters of the socio-economic metrics advanced in absolute terms, suggesting that a dependency on mining correlates with positive social progress for host populations across metrics. Mining-dependent regions also score relatively better than non-resource-dependent regions, outperforming in 8 of the 11 SDGs measured. Also, the distance between regions is narrowed, with more than 80pc of mining-dependent regions closing the gap on the most socially advanced region in their country.
The findings of this report have several potential implications for policymakers and resource companies in Myanmar.
The research clearly shows that the inevitable consequence of mineral wealth is not a curse and that most mining-dependent countries have experienced significant social progress over the two decades before the UN introduced its SDGs.
The analysis also suggests that there could be an important role for resource companies and governments to cooperate in promoting socio-economic progress.
Performance gaps highlighted by this research could be the basis for resource companies, governments, communities and civil society groups to think about new ways of engaging and supporting mining-dependent regions to improve the lives of their people.
A resource curse is not necessarily our destiny. Thoughtful partnerships between government and resource companies could ensure that Myanmar’s citizens see the benefits of the country’s rich resource endowments.
Bingxun Seng is a consultant and Fraser Thompson is a director with AlphaBeta. AlphaBeta supported the International Council on Mining Metals in writing the report “Social Progress in Mining-Dependent Countries.”
https://www.mmtimes.com/news/myanmar-can-avoid-resource-curse.html
