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 according to this OPM study.
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.