What's the contribution of mining to economic development?
According to the proponents, mining leads to economic expansion and decreasing poverty. They especially regard the following aspects as economic advantages:
- Higher tax incomes for states, thanks to mining activity.
- Improving services and increasing employment in local communities.
- The raised demand for goods and services makes the economy of local communities thrive.
More critical accounts, however, doubt that mining is prosperous to local communities. They state that:
- The costs and profits of mining are not fairly distributed and in many cases the profits even don't live up to the costs, as a result of the enormous passive social and ecological costs.
- Private enterprises make profits, but the agricultural communities have to bear the (passive) costs.
- The local economies are seriously disturbed, by e.g. the dutch disease effect, a macro-economic phenomenon which occurs when foreign currencies gain by the extraction of natural resources. In many cases the contribution of mining to a micro-economic situation, then, in a global perspective, is rather negative than positive.
- Pollution of the environment means a serious threat to the ecosystem and the health of the local communities, with grave consequences for the farmers, who depend on agriculture.
- On a global level, it is injust that natural resources which actually belong to the South, produce enormous profits for western enterprises and shareholders in the North and merely a very small percentage remains as 'royalities' for the local communities. The well-known story about the colonisation of the South just goes on, but on a much larger scale today than centuries ago.