Sunday, July 10, 2011

Mining in Development

Although the mining industry can’t directly contribute in development but the revenue generated from mining can be utilized for the sustainable and overall development of an economy because mining helps in generating more revenue than any other industry do.

A part of the longstanding debate about the role of business in development focuses on the controversy regarding the efficacy of the mining industry in contributing to economic growth and sustainable development. Based on the success of mineral-rich industrialized countries like Canada, Australia, and the United States, mining development has long been promoted by mainstream economists as a way for developing countries to achieve sustained economic growth. Although mining did play a role in the economic development of Canada, Australia, and the United States, there were a number of other factors or “unique conditions” that favored economic growth in these countries (i.e. high levels of institutional capital, large internal national markets, scarce labour, and protected national markets.). Secondly, Power argues that the dynamics of the world economy are not the same now as they were during these industrialized countries’ development. Decreased transportation costs and the emergence of large mineral companies have resulted in the “disintegration” of the mineral industry and the local manufacturing industry.

Minerals can now be shipped cost-effectively to developed countries for processing and finishing, thereby reducing opportunities for knowledge and technology transfer and investment in host countries’ economies. Moreover, because many of the large mines in developing countries are now owned and operated by foreign multinationals, much of the wealth derived from mineral extraction is often repatriated rather than invested locally. Thus, a number of studies have found that instead of experiencing sustained economic growth, contemporary developing countries those points out, modern mining is a capital and energy intensive industry that uses very little labor. Thus, the industry will have a more significant impact on the creation of income streams in labor scarce countries than in labor abundant countries because it will provide a greater percentage of the population with employment and income. Largely dependent on mining have generally experienced worse economic performance (in terms of economic growth and poverty reduction) than resource-poor countries.

At a more local level, within a state like Odisha, mining within a tribal landscape tend to be worse off than indigenous community that rely on other forms of economic activity for survival. In fact, it is widely acknowledged that local tribal community who are totally dependent on agro forestry and NTFPs, tend to suffer the greatest social, cultural, and environmental costs of mining, while the central government and other parts of the country(urban areas) reap the economic rewards. However, that most contemporary developing countries lack well-developed social, political, and economic institutions, and given that mining has thus failed to contribute to their development at the macro-economic level, one must ask whether it is indeed possible for mining to contribute to sustainable development at a more local level.

The output is now the private Mining sector’s response to the most recent wave of public pressure on mining corporations to address the negative social and environmental impacts of their operations. Throughout the last decade, a number of high profile corporations such as TATA Steel, Vedanta Aluminium Ltd, Arcelor Steel, POSCO, Utkal Aluminium were attacked by non-government organizations (NGOs) and activist organizations for their poor human rights, labour, and environmental records. In response, a number of companies have embraced the concept of ‘corporate social responsibility’ (CSR), leading them to introduce a variety of policies, practices, and codes of conduct aimed at reducing the negative impacts of their operations and improving their contribution to society by going beyond what has been traditionally expected of business.

No comments:

Post a Comment