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Glitter
Greed
Growth |
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The prices of Third World minerals are steadily going down |
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| "The mineral dependent developing countries
actually had slower rates of economic growth, lower levels of social welfare and higher
disparity between rich and poor when compared to developing countries less reliant on
mining." — G.Nankuri, World Bank researcher |
 ome where in the 19th Century: Thousands of gold
prospectors raided Red Indian lands in a series of gold rushes in North America. The
whites did a lot of damage. They tore down fences. Pastures were dug up. But the natives
could do little. Red Indian land which had gold, silver or oil was snatched away by force.
Somewhere in the 20th Century: After thriving by extracting mineral resources from
colonies for centuries, the colonial powers were forced to give independence to them. But
while going, they ensured that the economics of exploitation would continue through their
so-called "free trade".
Somewhere in the 21st Century: The Developed world's major mineral deposits have been
mined out, but they are still getting what they want from the developing world. Each major
industrial region has picked a zone. The US looks to Latin America, Western Europe to
Africa, Japan to the rest of Asia.
"We mine, they
consume"
Although man has been mining for thousands of years, it was
the Industrial revolution which really set the pace for the exploitation of the
Earth’s resources. From 1850 to 1900, the use of minerals grew 10-fold even as the
population doubled. Since 1900, it increased 13-fold again. The West made tremendous
economic gains and mineral exploitation continued well into the twentieth century.
England, which was a small island nation, used the mineral resources of its colonies to
power both its economy and military.
Tiny change, huge
impact
Developing economies are heavily dependent on mineral exports and hence at the mercy of
the international market. This is how it works:
A minor recession in the US in 1970 led to a 0.3 per cent
drop in GNP. |
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| This led to a 3.3
per cent decline in sales of consumer durables. |
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| This led to a 12
per cent decline in demand for copper. |
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| Which led to a 34
per cent decline in the copper industry's profitability. |
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| And 90 per
cent of Zambia's exports come from copper! |
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Even today, things are not very different. The Third World continues to be the major
producer of minerals, while the Developed countries are still the largest consumers.
Moreover, the Developed world has woken to the impacts of environmental degradation and
it’s very difficult to get mining permits there. The governments of the developing
countries, on the other hands, are making laws more and more lax in a bid to attract
foreign investment.
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| From 1850 to 1900, the use of minerals increased 10-fold even as
the population doubled. |
Caught in a vicious circle
Developing countries are in effect caught in a trap. They
are locked into an economic structure which depends upon exporting minerals and isn’t
leading to economic development. There are many reasons for this. For one, MNCs take
profits out of the country. They also take the production process outside, generating
employment elsewhere. Also, mineral prices are steadily coming down. Finally, mining is
capital intensive, not employing as much labour as other industries, and seldom has links
with the local economy.
A writer sums up the whole situation taking
Bolivia’s example: "The world knows Bolivia, if it knows it all, as a mining
country. It’s a member of a small group of African and Latin American countries for
whom mining is the cornerstone of their economies; no other country of this group has been
so dependent on mining as Bolivia. But great mining wealth has only brought poverty to the
average Bolivian; no other country in South America is the standard of living so
low."
MNCs have an argument to counter all of this. Mineral exploration is very expensive and
very risky and something which only they are willing to do. Also, such projects generate
revenue for the government, develop infrastructure and provide foreign exchange. But
critics say this hasn't led to a wider and sustainable process of economic development,
locking countries into a cycle of dependence on the mining industry.
Future shock
Once a mine has been mined out, it has to be shut down. So
the future of developing countries doesn’t look too bright. When they become
developed, they will have less economic mines to mine. There are also the environmental
impacts, for which they don’t have the technology to handle. That responsibility
clearly lies with the Developed world.
Prices of the West’s products from minerals are steadily
going up |
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