Ghana: Gold Mining Resurgence: Difference between revisions

This is a complex phenomenon and can be viewed from different (disciplinary) perspectives. Our viewpoint: direct impact at the local level – on the quality of life in diverse parts of the world.

The economy is the driving force of globalisation processes. However, the economy looks different from both a global and local perspective as a result of: on-going trade liberalisation and increasing opportunities for investment across national borders, the global production and distribution network that have become even more interconnected, their increased efficiency, and the lesser importance of boundaries and borders; the globalised economic driver to maximize profit but also deliver cheap goods to underdeveloped regions. However, from a local perspective, globalisation of economic processes might block local initiatives as it neglects local specifics – social, cultural and political conditions, and of course the traditional economy based on those same conditions. In the past, tariffs would have been imposed on imports in developing countries in order to nurture and incubate local industry and hence protect it from foreign competition, just as new industries had once been protected in developed societies, but the demands of the global economy and the World Trade Organization require opening up markets in developing nations to the full force of global competition. Globalisation in a certain sense means universalisation, and its economic imperatives destroy local diversity, which often means neglecting local consumption needs or patterns. Local people are perceived as part of the global “labour force” often working primarily toward the benefit of the wealthy “north” and absorbing their externalities – economic characteristics are important but traditional skills are no longer valued.  

Thus an economy which is a driving force for development in terms of GDP growth is not usually accompanied by cultural development, which is a local matter, but generates educated and motivated citizens to cope with its challenges. The global economic paradigm in which  multinational corporations (MNCs) operate is thus an external “engine” for development – if it is “applied” where political, social and other conditions have not been prepared then local development could be substantially distorted.  

Some developing countries have experienced a so-called “Dutch Disease”, which is “the name applied to the phenomenon experienced by countries which have a rich endowment of minerals, the result of which is that the economy of the country becomes heavily reliant upon the revenues received from mineral sales, at the expense of the growth of other industries”. <ref name="Cawood">Cawood, Kangwa, Macfarlane & Minnitt (2001). Research Topic 5 Mining, Minerals And Economic Development And The Transition To Sustainable Development In Southern Africa, School of Mining Engineering, University of the Witwatersrand, August 2001. Retrieved from [http://pubs.iied.org/pdfs/G00603.pdf. Retrieved 10 January 2014]</ref> From the point of view of business, including mining companies, the following factors are important for the predictability of investment outcomes (and are also indicators of countries’ economic performance): international competitiveness; efficient bureaucracy; a good tax system; good training systems; a wide pool of human resources; exchange controls; labour productivity; government spending; levels of corruption; infrastructural development; economic stability; crime; political stability.<ref name="Cawood" />

The Dutch Disease phenomenon has often been applied by economists and researchers to many individual cases on the African continent where 69% of countries rely on the mining industry as their largest sector; the mining exports of 13 of these countries comprise between 25% and 90% of annual export earnings.<ref name="Darimani">Darimani, Akabzaa & Attuquayefio (2013). Effective environmental governance and outcomes for gold mining in Obuasi and Birim North Districts of Ghana. Mineral Economics, 26(1-2), 47-60.</ref> Related to this phenomenon, especially in association with the energy and mining sectors of mineral-rich developing countries, is the “enclave economy” or “enclave export model” thesis. This holds that a particular sector has more external (foreign) linkages than internal (domestic) linkages and where most inputs are imported and most exports are unprocessed. In the mining sector, for example, extracted ores do not contribute to the development of the economy other than to be sent abroad to generate foreign exchange.<ref name="Bloch">Bloch & Owusu (2012). Linkages in Ghana's gold mining industry: Challenging the enclave thesis. Resources Policy.</ref> It is also often used to describe post-colonial dependency relations in the developing world.