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- Convenors:
-
Jesse Ovadia
(University of Windsor)
Richard Saunders (York University)
Send message to Convenors
- Stream:
- Economy and Development
- Location:
- 50 George Square, G.05
- Sessions:
- Wednesday 12 June, -, -
Time zone: Europe/London
Short Abstract:
A resurgent 'resource nationalism' (RN) has been at the heart of social/economic debates aimed at re-imagining development efforts. Resulting mining reforms have been diverse, controversial and contested. This panel examines the politics and dynamics of RN by undertaking assessments of mining reform
Long Abstract:
In recent years demands for greater national control over and benefit from foreign owned mining operations have escalated in mineral-rich countries, especially in Southern Africa. In the 1970s, resource-rich countries began pursuing more nationalist strategies to assert control over resources. At best they met with limited success. Unlike resource nationalism of decades past, today's resource nationalism focuses less on nationalization and more on national participation (Wilson, 2015; Childs, 2016; Lange and Kinyondo, 2016). Such demands, even when influenced by a fierce resource nationalism, are much more palatable to international capital. A resurgent 'resource nationalism' has been at the heart of social and economic debates aimed at re-imagining development efforts. The resulting mining regulatory reforms across the region have been diverse, controversial and the subject of intense contestation. Yet there has been little comparative assessment of their objectives, mechanisms and outcomes, and most research has remained focused at the national level. The development consequences of different approaches have therefore not been comprehensively analyzed. This panel will examine the politics and dynamics of resource nationalism in Southern Africa (especially Tanzania, Zambia and Zimbabwe) by undertaking assessments of mining reform at the national level involving new measures regulating mine ownership; local content and industrial linkages; artisanal and small-scale mining; and community participation in resource governance at the local level.
Accepted papers:
Session 1 Wednesday 12 June, 2019, -Paper short abstract:
This paper explores the trajectory of Zimbabwe's resource nationalist interventions in the 2000s through a case study of government's indigenization and empowerment regulations, mining industry responses and developmental outcomes.
Paper long abstract:
In the early 2000s Zimbabwe introduced wide-ranging indigenization and empowerment regulations aimed at leveraging greater revenue and developmental benefits from the foreign-dominated mining sector. A key strategy underpinning this approach involved the transfer of company equity into the hands of domestic 'indigenous' players; another included the establishment of community-based trusts to receive and manage shareholdings in locally-restructured mining operations. However, increasing state capture, elite predation and fiscal dependence on the mining sector sharply constrained indigenization in practice. Having severely dampened foreign investor interest while failing to generate meaningful restructuring in the industry, indigenization was effectively abandoned by 2018. This paper explores the policy's political origins and uneven implementation in Zimbabwe, and the challenges posed by the response of business and donors. It raises questions about the policy's fiscal and developmental consequences, and the role of elite politics in its formulation. More broadly, the paper argues that accounts of resource nationalism must include a close analysis of the domestic political interests, institutions and contexts which drive policy making in specific periods of regulatory reform.
Paper short abstract:
Despite political uncertainty, in 2018, the country renewed with resource nationalism in an era of green technology. It reformed its mining policy to improve management of mining wealth and increase mining revenues, leaving unease of foreign mining companies operating in the country.
Paper long abstract:
Since independence in 1960, the DR Congo, a resource-rich country, has attempted to regain control of the management of its mining resources. Under Mobutu's era in the 70s, it experimented the zaïrenization of its economy, notably the mining sector. Then, under Kabila's era, the country experienced the mining contracts' review in 2007-2010, combined with two reforms of its mining policy in 2002 and 2018.
The mining policy of 2002 was mainly designed to attract Foreign Direct Investment (FDI) to develop the extractive sector. A decade later, it became too generous for foreign mining companies and detrimental to the state. In response, on March 9, 2018, the Congolese authorities reformed the mining legal framework. They promoted a resource nationalism, which is mainly featured by suppressing a 10-year stability clause and increasing the taxation of minerals to prevent tax base erosion. In the context of climate-friendly technology, on November 24, 2018, the country designated cobalt, germanium, and coltan, as strategic minerals, which led to further raising the taxation of these minerals. Since then, multinationals operating in the country have remained opposed to the new mining legislation. Nonetheless, on January 10, 2019, the DR Congo embarked on a new phase of political alternation, which might impact the key priorities of resource nationalism's strategy.
As a policy recommendation, the attempt at changing relationships between the state and mining foreign companies will remain a critical challenge to achieve, as the state's legitimacy has to be consolidated.
Paper short abstract:
This paper explores the existent backward linkages in Zambia's copper value chain, through an examination of state policies and donor-driven campaigns, the procurement policies of private mining firms, and the experiences of Zambian contractors and suppliers.
Paper long abstract:
Over the past decade, a body of literature has emerged calling for the establishment of backward (and forward)
linkages to resource extraction on the African continent. The expectation is that the formation of local value
chains tied to processes of resource extraction and processing will create employment, develop technical
capacities, encourage technology transfers, and ultimately lead to industrialization and economic
diversification. In Zambia, local mine suppliers and contractors have sought to secure more business from the
copper mines. In response, policymakers have engaged in discussions around the feasibility of local content
regulations, as part of a recent trend towards increasing resource nationalism in the governance of mineral
extraction. This paper explores the existent backward linkages in the copper value chain, through
an examination of state policies and donor-driven campaigns, the procurement policies of private mining firms,
and the experiences of Zambian contractors and suppliers. It argues that existing backward linkages to copper mining are weak due to the negative effects of neoliberal structural adjustment and an inadequate regulatory regime. Local content measures are undoubtedly required to create and/or bolster backward linkages. Yet these measures are absent due to the PF government's preoccupation with fiscal linkages, the recalcitrance of foreign mining capital, and the constraints of multilateral trade agreements.
Paper short abstract:
Tanzania is part of an African turn towards 'resource nationalism' in the mining sector. This paper looks at potential impacts of resource nationalism on artisanal and small-scale mining (ASM).
Paper long abstract:
Tanzania is part of an African turn towards 'resource nationalism' in the mining sector. The potential impacts of recent policy and legal changes on artisanal and small-scale mining (ASM) have been under-researched. Based on fieldwork conducted in October-November 2018 involving high-level policy-makers, artisanal and small-scale miners, civil society representatives and others, this paper provides a political economy analysis of the motivations for, and key characteristics of, resource nationalism in Tanzania. It pays particular attention to both the symbolic and material value of the mining sector, and ASM in particular, to the political strategies and aims of the government. Comparisons are made with other countries in the region, in order to better identify the particular characteristics of the contemporary Tanzanian version of resource nationalism. In addition, the paper uses data from the Tanzanite sector to document the intended and unintended consequences of recent government attempts to enhance state control over the ASM sector.
Paper short abstract:
This paper argues for a comprehensive approach to resource-based development involving multiple interrelated but separate strategies states can pursue to maximize the benefit of natural resources.
Paper long abstract:
The failure of 1970s-style resource nationalism and rise to prominence of market liberalism has limited imaginations around the possibilities for developmental interventions in natural resource economies. Throwing the proverbial baby out with the bathwater, there has been a tendency to dismiss all state-led approaches to natural resource-based development. As a result, scholars and practitioners have looked to corporate social responsibility (CSR) to as a means of delivering a developmental benefit from resource extraction. However, while CSR is a good first step, social investment alone can at best only be a very small aspect of meaningful development. In recent years, local content policies (LCPs) have emerged as a second and related mechanism for state-led development in a context of resource wealth (Ovadia, 2014, 2016). Local content can be more than a stand-alone policy for the extractive sector. It can be also be part of a broader strategy of economic diversification. However, while local content is a good second step, it too is insufficient for making natural resources an asset instead of a liability. This paper argues for a comprehensive approach to resource-based development involving multiple interrelated but separate strategies, including maximizing natural resource revenues, managing those resources wisely, promoting and directing social investments by natural resource companies to mitigate the harmful effects of their activities, increasing local content and managing the overall local content strategy, and redistributing revenues and benefits through investment in education, health, technology, manufacturing and poverty alleviation.
Paper short abstract:
This paper explores the spatiality of local content in the EACOP project in Tanzania. It will argue that the temporary nature of the project and international investment have aided a centralisation of 'local' content and has hindered potential longer-term developmental benefits in the periphery.
Paper long abstract:
This paper will examine the implementation of local content policies in the East African Crude Oil Pipeline (EACOP) by the Tanzanian Government. Costing $3.5bn and spanning Uganda and Tanzania, the pipeline is one of the largest cross-border infrastructure projects in the history of East Africa. The amount of capital involved, and the limited amount of time of investment, has provided a catalyst for the increase of the implementation of local content policies and increased public awareness of such policies. This is to such an extent that both the Government of Tanzania and the private sector see this project as an experiment in local content. However, in reality this has led towards a centralisation of local content at the expense of those closest to the project, with opportunities primarily occurring in Dar es Salaam. This has led to the question, how 'local' is local content? Using a geographical perspective, this paper will argue that while EACOP has provided the catalyst amongst the private sector for local content participation, it has led to a centralisation of the policy, and a neglect of enacting preparations of local content in areas where the project is occurring. This lack of preparation in the periphery has ensured that local content will fail in the region before construction has started. This paper will speak to broader debates on local content, resource nationalism and development, and using a geographical perspective, it will provide a different theoretical viewpoint on emerging resource nationalism and local content literature.
Paper short abstract:
The current study explores and explains how the implementation process of the Ugandan local content policy is being understood and translated into outputs by top-down and bottom-up actors.
Paper long abstract:
Oil-producing countries implement local content policies to encourage citizens participation in the emerging wealth. Uganda began implementing its own policy in 2008. Whereas several scholarly studies have explained their (in)effectiveness, none has been conducted into how the Ugandan policy is being successfully implemented. To address this lacuna, this study develops Rhodes' (2006) policy network theory to explore and explain how the implementation process of the Ugandan policy is being understood and translated into outputs by top-down and bottom-up actors. We used semi-structured interview techniques to gather primary data from 57 key informants which were complemented by analysis of contents of oil and gas policy documents and reports. The findings show different layers of policy interactions which for analytical purposes, we categorize into discursive - understandings and interpretations of the policy; power networks - spheres of interests and influences; operational networks - approaches and interventions. Their analysis reveals how the contexts of these relations and the manner in which their contradictions are addressed directly contribute to the achievement of the policy objective though in a minimal way. We conclude by arguing for sufficient attention to be paid to how the implementation process is being understood and translated into top-down and bottom-up activities.