OPM study: Blessing or curse? The rise of mineral dependence among low- and middle-income countries

Many low- and middle-income countries have become dangerously dependent on exports of minerals such as metals and hydrocarbons, according to this OPM study, leaving the countries highly vulnerable to a global economic downturn. 

The study, believed to be the first of its kind, charts the evolution of mineral dependence among low- and middle-income countries from 1996 to 2010 and assesses their relative vulnerability to the so-called 'resource curse', characterised by weak economic and institutional development. Mineral-dependent countries are defined as countries that depend on minerals for at least 25% of their tangible exports.

Key findings from the study include:

• Since 1996, the number of low- and middle-income countries that depend on exports of minerals has increased by 33%, from 46 to 61 countries. About 75% of all mineral-dependent countries are now low- and middle-income countries.
• Dependence levels have also increased significantly, especially among countries that depend on non-fuel minerals such as iron ore, copper and gold. Between 2005 and 2010, for example, 14 non-fuel, mineral-dependent countries increased their dependence ratios by more than 25 percentage points, compared to just one fuel-dependent country. The average dependence ratio for all mineral-dependent countries was 60% in 2010.
• Non-fuel, mineral-dependent countries are more likely to have stunted economic development than their fuel-dependent counterparts. However, both fuel-dependent and non-fuel, mineral dependent countries are likely to suffer from institutional problems such as weak government capacity and corruption.
• More than 20 countries are particularly vulnerable to the resource curse and at risk from a slowing world economy.