Reversing the curse? What are the pathways and pitfalls for innovation in the mining sector in developing countries?
There has been a historic rate of investment in mineral resources due to the commodity super cycle (McKinsey Global Institute, 2013 among others). However, many resource-driven countries have failed to convert their resource endowments into long-term growth. Why is this? Almost 80% of these countries have per capita income below the global average. Therefore this could have been a window of opportunity for their economic development. However, very few countries were able to maintain growth beyond the boom. What can the natural resource rich countries do to transform their potential resource windfall into long-term prosperity? Commodities – or extractive resources – have long been considered a ‘curse’. This is mainly due to:
- Volatility in price and demand, creating an unstable macro-economy;
- Appreciation of exchange rate, discouraging growth in other sectors with export potential (Dutch disease);
- Over-reliance on ‘commodities’, inferior goods, contributes to long-term trade imbalances (deterioration in terms of trade);
- No forward or backward productive linkages, thus failing to generate effective employment and economic impact (enclave);
- Generation of little technological and scientific knowledge because innovation is driven by input suppliers (supplier-driven innovation);
- Associated political conflicts and corruption that hamper stable development.
Some literature indicates that the main challenges for natural resource rich countries to be on a sustainable growth path are: i) maintaining macroeconomic stability; ii) creating local linkages; and iii) diversification of economic activities. In this workshop, cases from African and Latin American countries will be examined to discuss attempts made in these countries to overcome these challenges.
Aim of the workshop
- Share cross-country experiences in the mining sector and mining-related activities using the framework of global value chains, national systems of innovation and clusters.
- Explore cross-country policy approaches to enhance innovation and to spread the benefits of innovation in the mining sector and mining-related activities more broadly.
- Prof. David Kaplan, University of Cape Town
- Prof. Carlo Pietrobelli, University Roma Tre, UNU-MERIT and Georgetown University
- Dr. Michiko Iizuka, UNU-MERIT
- Mr. Fernando Vargas, UNU-MERIT
Click here for a map.
The workshop can be attended free of charge. However, for logistical reasons we would like you to register using the registration form.
Media Credit: ILO / Joseph Fortin
Venue: Conference room 0.16-0.17
Date: 07 December 2016
Time: 09:00 - 13:00 CEST