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How Resource Rushes Impact Global Poverty

Resource rushes impact global povertyIn June 2021, impoverished South Africans in the province of KwaZulu-Natal flocked to the town of KwaHlathi after reports of diamonds in the area, the most modern example of a resource rush. Many people hoped this could be their key out of poverty in a country with a 32.6% unemployment rate and a stagnating GDP per capita. Unfortunately, the gems were actually quartz, a common crystal found across the globe, dashing the hopes of these amateur miners. In the developed world, the resource rushes once common in the 19th century have now largely faded away, replaced by institutionalized mining companies. However, the developing world still struggles with informal mining and its environmental, economic and political consequences. Because of this, resource rushes impact global poverty both directly and indirectly.

What is a Resource Rush?

Resource rushes occur when a natural resource is discovered and many people move to participate in its extraction. In the 19th and 20th centuries, resource rushes for gold and diamonds led to the colonization and settlement of many parts of South Africa, Australia and the Western United States. Modern-day resource rushes do not drive the same levels of migration. However, they still carry large impacts on the economies of developing countries.

Why is it Important?

In the 21st century, resource rushes create both opportunities and conflicts. Currently, more than 15 million small-scale “artisanal” miners operate in resource-rich areas, many times informally. Nearly 100 million people rely on the income that artisanal mining brings. Artisanal miners usually have to sell their goods below market price as there is usually only one large local buyer. While an important source of income, the extraction process is largely inefficient due to the small scale of these artisanal mining operations. This creates an opportunity to develop single or multi-person mining operations by increasing the efficiency of artisanal miners and connecting them to global markets.

On the other hand, resource discoveries commonly drive violent conflicts and human rights abuses. Large resource discoveries, combined with access to arms from previous conflicts, have driven wars in the Democratic Republic of the Congo and Sierra Leone. Many times, the armed groups extracting these resources use them to fund their operations, drawing the label of “conflict minerals.”

Resource rushes also lead to migration. Mineral deposits, largely in rural or environmentally preserved areas, attract large numbers of settlers who heighten the human impact on these areas. These impacts create environmental strain, leading to deforestation, lower standards of temporary informal housing and chemical pollution.

Building a Better Mining Industry

Artisanal and small-scale mining ventures offer many opportunities for growth around the world. While problems of health hazards and political conflicts exist, many actions by national, international and NGO stakeholders are working to overcome these challenges.

One project involving the Swiss Agency for Development and Cooperation (SDC) partnered with the Peruvian government to improve the environmental impacts and working conditions of small-scale mining. This project utilized technical assistance, working with national governments to create system-wide change. This resulted in the implementation of mercury-reducing technologies in Peruvian mines. Other initiatives in the continent have sought to organize small-scale mines to sell their products on the international market, avoiding price-setting middlemen.

Another project in Central Africa by PACT, an NGO that focuses on mining issues, works to create a verification system so that consumers can choose responsibly sourced raw materials. This verification system includes 54,836 miners spread across 727 mines with 672 government officials tasked with implementing the system. By verifying raw materials and helping consumers gain access to raw material markets, PACT has made a large impact on raw material extraction in Central Africa.

These projects aim to reduce the impacts of informal mining at the local level, but national governments of importing countries can also implement policies toward the same goal. In 2012, the U.S. launched the Public-Private Alliance for Responsible Mineral Trade, a multi-sector task force aimed at implementing measures to stop imports of conflict minerals.

Looking to the Future

Resource rushes impact global poverty by fueling conflicts, migration and creating substandard mining industries that further contribute to deforestation and various forms of pollution. However, through projects such as PACT’s, organizations are working to improve the conditions of small-scale ventures so that workers and their dependents can sell their products on the international market. In this way, impoverished people have the opportunity to improve their lives and rise out of poverty.

– Justin Morgan
Photo: Wikimedia Commons

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Resource Distribution in Refugee Camps

Refugee CampsRefugee camps house people who had to migrate as a result of unsafe conditions in their home countries. Displaced people hve to leave everything behind in order to find safety. Recently, the United Nations reported that two refugee camps in Ethiopia were on the verge of running out of food. The refugees, dependent on organizations to bring them that food, were at risk of starvation.

What is Happening in Ethiopia?

Conflict has enveloped the Tigray region of Ethiopia. In November 2020, The Tigray People’s Liberation Front and the government began fighting. Two refugee camps in this region containing 24,000 refugees recently could not access aid. About 170 food trucks transporting the necessary food supplies ended up in the Afar region and were unable to move. Without these resources, the refugees will likely starve.

The United Nations High Commissioner for Refugees (UNHCR) is working to relocate the refugees. They are also trying to ensure safe travel out of the camp by discussing the issues with Tigrayan authorities.

The Increase of Refugees

The amount of refugees and displaced people around the world is higher than ever. As of 2020, the world had the largest refugee population ever recorded. About 25 million people experienced displacement, including 11 million children. This has only made conditions in refugee camps worse, as overcrowding compounds with a lack of resources.

The Problems with Refugee Camps

Displaced people who come to live in refugee camps often have nothing. They have no income, few to no possessions and no food. They rely entirely on what humanitarian organizations can provide for them. Unfortunately, what organizations can provide often falls short of what is necessary to survive. Two main problems that refugee camps deal with are inadequate food and water. The malnutrition and dehydration that occurs in refugee camps increase the risk of disease, like diarrhea and cholera, for the people living in the camps. Improving amounts and access to food and water will help to improve health conditions at refugee camps.

The UNHCR recommends at least 2,100 calories and 20 liters of water per person per day. However, in 2006, refugees in Tanzania received only 1,460 calories per person per day. A 1987 study of a Thailand camp showed that 30% of the camp’s population suffered from malnutrition. The UNHCR also estimates that more than half of the refugee camps across the world are unable to provide refugees with the 20 liters of water a day that they need.

Part of the problem with water is that it must also be accessible to all people in the camps. One way the UNHCR aspires to provide this is by ensuring there are water taps within 200 meters of every household. This way, individuals do not have to travel long distances to retrieve water, burning the already limited amount of calories they have.

Ways to Improve

There are a few things that can improve living conditions at refugee camps around the world. One important way is to begin to place a higher emphasis on making camps a long-term solution. When a refugee experiences displacement for more than five years, the UNHCR calls their situation a protracted refugee situation. Currently, two-thirds of refugees live in a protracted situation and the time they spend in this situation increased to 20 years. This means that more people live in camps for longer periods of time.

If displaced people are living in camps for such extended periods of time, then they are no longer temporary placements. This translates into a need to make refugee camps more permanent and more equipped to support people actually living there. The construction of more permanent housing, rather than tents, and fully functioning toilets and showers would help achieve permanent living conditions.

Camps can also allow refugees to set up businesses like barbershops and fruit stands. Some camps in Bangladesh currently allow refugees to farm patches of land to grow fruits, vegetables and spices. This is another way to increase food production and better conditions in the camps.

Looking to the Future

The struggle will continue to ensure that people living in refugee camps have enough resources to adequately survive and have livable conditions in camps. Transporting goods becomes especially difficult in war-ravaged regions. Roads are unreliable and food trucks are vulnerable to attack. Displaced persons, however, often have nowhere else to go and deserve for the world to put in its best effort toward helping them. This can begin with creating refugee camps as more permanent establishments, as cities and homes in and of themselves.

– Alessandra Heitmann
Photo: Flickr

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Kahre Org is Providing Meal Kits and PPE in Ecuador

Providing Meal Kits
After Ecuador rounded its first full year in the coronavirus pandemic, citizens found themselves struggling to survive. Since the pandemic started in March 2020, the Ecuadorian government has repeatedly failed to protect and care for its citizens. It has been neglecting the sick and dead, spreading rampant misinformation, severely underreporting coronavirus cases, and most recently, allowing corruption to occur in the vaccine rollout. As a result, reports have determined the existence of more than 320,000 coronavirus cases along with nearly 17,000 deaths. Health care facilities have become overrun with desperate families and patients seeking care. As a response, the organization Kahre Org is providing meal kits and personal protective equipment (PPE) in Ecuador to help alleviate the suffering of its citizens.

COVID-19 in Ecuador

The pandemic and the blunt of the Ecuadorian government’s lack of responsibility has fallen upon its citizens, most notably, those living in rural areas. The pandemic has upended rural society and displaced many citizens. Communities lack basic necessities such as meal kits, PPE and education. The government has failed to provide citizens with information about the virus. Moreover, rural Ecuadorians, who are typically farmers, have faced an economic crash. This is because their typical markets and routes have closed to prevent the spread of the virus. Many rural Ecuadorians have had to face a harsh economic situation as they are no longer able to sustain their livelihood.

Kahre Org is providing Meal Kits and PPE in Ecuador

When the initiatives of Kahre Org, a nonprofit organization located in Ecuador, came to a halt at the beginning of the pandemic, they had to readjust their scope of work to suit the new needs that arose. Before the pandemic, Kahre Org offered community outreach. This included providing communities with access to legal services, shelters, education and provisions. The organization has adapted and refocused its efforts to now provide meal kits and PPE during the COVID-19 pandemic.

The organization started with those in rural Ecuador and continued its efforts to frontline workers and the medical community. Consequently, the Kahre Org minimized food insecurity while also creating additional jobs for impoverished and unemployed individuals.

How it Works

By partnering with the Ecuadorian armed forces, Kahre Org was able to deliver more than 100,000 meal kits across Ecuador. These meal kits offer stability to vulnerable individuals. It meant they could focus on finding employment, recovering from the pandemic or taking care of their families rather than worrying about where their next meals would come from. Along with these meal kits came important medical supplies. This included sanitization products and PPE to further help Ecuadorians stay fed and healthy. As many of these rural communities are far from hospitals and medical care, such protective equipment is extremely important.

Moreover, the Kahre Org saw an opportunity with the pandemic to expand their preexisting Child Food Programme. This initiative provides more than 100 Ecuadorian children with two meals a day. It was able to travel to small, local communities and offer children food to minimize their food insecurity. This simultaneously creates more job opportunities for Ecuadorians who wish to work with the organization.

To further the hard work of the Kahre Org in Ecuadorian communities, the local organization extended its helping hand past rural communities to the frontline workers. The organization managed to provide hundreds of Red Cross workers, government corps, doctors and other health care providers with meal kits.

Looking Ahead

By amassing donations and formulating a thorough response plan, the Kahre Org mobilized and inspired Ecuadorians to give back to their communities. In the process, the organization was able to educate rural Ecuadorians of the dangers of the virus and how to minimize the spread and stay healthy. Through providing meal kits and PPE, thousands of Ecuadorians are receiving the resources they need to fight the pandemic.

– Caroline Largoza
Photo: Flickr

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Oil Spills Are Contaminating the World’s Water Sources

Oil Spills Are Contaminating the World's Water Sources

Oil spills happen all over the world. These oil spills are contaminating the world’s water sources and destroying marine life. Every year, the U.S. Department of Energy estimates that more than 1 million gallons of oil contaminate the oceans. These oil spills cost the world important natural resources. Oil spills can happen in many ways. Some are accidental spills while mining the oil from the Earth; others happen due to oil rig malfunctions, attacked tankers or drowned tankers. The containment and clean-up of these spills can cost millions even billions of dollars.

Top 6 Major Oil Spills

The top six major oil spills in the world as of early 2019 are:

  1. The 1991 Gulf War Oil Spill resulted in 240 million gallons of oil spilled.
  2. The 2010 Deepwater Horizon Spill (also considered the Gulf of Mexico Oil Spill) resulted in an estimated 53,000 barrels of oil spilled into the ocean every day for 3 months.
  3. The 1979 Ixtoc 1 Oil Well Spill resulted in 140 million gallons of oil spilled.
  4. The 1979 Atlantic Empress Oil Spill spilled 88.3 million gallons of oil.
  5. The 1983 Nowruz Field Platform Oil Spill spilled 80 million gallons of oil.
  6. The 1991 ABT Summer Oil Spill resulted in 51 million gallons of oil spilled.

 Just these oil spills alone have caused many lost lives and damage to marine life and the ecosystem on which humanity depends. When marine life is attacked, it has an effect on world populations. Oil spills kill thousands of marine life species when they occur. While cleaning the oil spills does save some, it is not before the damage has been done. Humans partly rely on marine life to survive.

Poverty and Water Contamination

Oil spills are contaminating the world’s water sources because it makes water unconsumable. It contaminates parts of the ocean and can seep into the clean water supply that humans and other species need in order to survive. It can seep into rivers, lakes and other bodies of water naturally connected to the ocean. While developed countries have access to clean water by manufacturing companies, many underdeveloped countries do not. Poverty ridden countries tend to suffer the most when water is contaminated due to lack of access to water bottles or barrels to collect rainwater.

Furthermore, the World Wildlife Fund posits that approximately three billion people around the world rely on seafood as their only source of protein. Oil spills continue to impact an already suffering ecosystem. Around 85 percent of marine fish stocks have already been either fully exploited or overfished. Add these two factors together and the marine life that poverty-ridden countries rely on begins to decrease and an already struggling country begins to fall even more.

ISCO Is Trying to Clean Up the Oceans

The International Spill Control Organization (ISCO) is a nonprofit NGO that was established in 1984 and has members in over 45 countries. ISCO has helped clean up multiple oil spills including Exxon Valdez in 1989, the Gulf War Oil Spill in 1991, Lebanon Oil Spill in 2006 and the Gulf of Mexico Oil Spill in 2010.

Along with the aiding of cleaning up oil spills, ISCO also helps to raise co-operation and preparedness worldwide, promoting technological development and making knowledge on spill control available for all organizations when needed. Some recommended safety tips on preventing spills include regular inspections of containers including both piping and mechanical properties, proper loading and unloading procedures and proper training.

Why and how oil spills are contaminating the world’s water sources are important for society to take notice in because it costs hundreds to millions of dollars to clean up but will already have done damage towards contaminating water sources and damaging marine life ecosystems which affects poverty-ridden countries. Many oil spills can be avoided if more action towards taking safer steps to obtaining and transporting oil is taken. By increasing the safety of these actions, oil spills can begin to stop contaminating water sources.

– Chelsea Wolfe
Photo: Unsplash

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The Power of Mining and the Future of Eritrea

The Power of Mining and the Future of Eritrea

Eritrea is a poor country located in the horn of Africa. Its high poverty rate of 50 percent is a burden on Eritreans seeking greater well-being. Although the country is poor, the mining sector has shown considerable promise for the future of Eritrea. The GDP growth rate increase from 2.2 percent in 2010 to 8.7 percent in 2011, which made it one of the fastest-growing economies in the world at the time. Its current GDP growth rate is high at about 4 percent. One reason for its high average growth is the mining sector.

Abundant Natural Resources

Eritrea has many natural resources that account for its growth, such as copper, granite, potash, gold and marble. The United Nations Development Programme believes the Colluli Mining Share’s potash project in Eritrea has the potential to boost its economy while also appealing to the country’s sustainability agenda. The Australian mining company Danakali and the Eritrean government share the project 50-50.

The largest known deposit of potash or SOP in the world exists in Eritrea. Globally, SOP is currently consumed at a rate of seven million tonnes annually. Seamus Cornelius, the Colluli company director, said that Eritrea could meet that demand for at least 30 years. With the implementation of the project, locals could find work at the mines, especially those in poverty.

Economic Effects

The U.N. report also reported the impact of the Colluli mine. Reports showed that SOP could make up to 50 percent of exports in Eritrean by 2030 and comprise at least 3 percent of Eritrean GDP by 2021. It could also have a strong impact on agriculture productivity, indirectly employing upwards of 10,000 people by 2026. Another positive aspect of the project is that it will not affect any animals or plants because the mine is located in an uninhabited salt basin.

China’s Sichuan Road & Bridge Mining Investment Development Corp. is also seeing potential in Eritrea, particularly in copper, gold, silver and zinc. Estimates determine that more than 574,000 tons of copper, 930,000 ounces of gold and 1.2 million tons of zinc could be found in four deposits near the city, Asmara. July 9, 2018, marked the end of Eritrea’s conflict with Ethiopia, which increased notice from foreign investors interested in Eritrea’s mines such as China. Due to peace between the two nations, the future of Eritrea appears optimistic.

The Ports Rehabilitation Project

The World Bank upgraded and rehabilitated two major ports in Eritrea, Massawa and Assab through a $30 million project that was approved in 2011. Results were substantial, particularly for the Massawa port. Bulk cargo handling exceeded the original target of 1,100 tonnes by hitting 1,457. This was a 71 percent increase from 850 tonnes per ship per day in 1997. Natural resources are a top exporter and the Ports Rehabilitation Project exponentially improved productivity and efficiency. It especially enabled easier access for petroleum imports into Eritrea.

Corruption and Privatization

Canadian mining company Nevsun Resource had a 60 percent stake in the Bisha Mine, which mines zinc and copper. Accusations of forced labor caused the company to appeal to the Canadian Supreme Court in January 2019. One of the largest gold producers in the world, Zijin Mining Group Company, acquired Nevsun. After the human rights incident, Nevsun began training its employees on Voluntary Principles on Security and Human Rights and now has an ongoing presence in infrastructure projects including water accessibility and supply in Eritrea.

Eritrea has one of the fastest-growing economies due to the strength of its mining sector. With the help of nongovernment organizations, external companies and other parties, the economy could become stronger. Growth from not just from the mining sector but also the agriculture sector would increase possibilities for the future of Eritrea.

– Lucas Schmidt
Photo: Flickr

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The Oil Discovery in Guyana and Plans for the Future

Oil Discovery in Guyana
The 2018 oil discovery in Guyana means this former British Colony can expect a massive increase in wealth by the early 2020s. The country found over three billion barrels worth of oil off its coast and it will likely positively impact its future economy. By 2020 Guyana will be a major petroleum producer. This may lead to a 300 percent increase in Guyana’s GDP by 2025.

For a country that heavily relies on agricultural, mining and lumber exports such as sugar, rice, bauxite, timber and gold, the oil revenue will heavily impact the Guyanese economy. As of now, Guyana’s agriculture industry experiences many ups and downs because of its vulnerability to floods. Between 1990 and 2014, floods were responsible for 93.6 percent for Guyana’s economic inactivity.

Currently, the oil project is still under production so it does not account for any percentage of the GDP. The oil and gas revenue, however, for the 2017 fiscal year is $2.8 billion. This accounts for only 14 percent of the Guyanese revenue generated by extractives.

As of 2017, 36 percent of Guyana’s population lived in poverty with unemployment rates almost reaching 12 percent. Education and trade learning are essential for the elevation of a country out of poverty. However, many are unable to continue their education after primary school. Youth from 15 to 24 make up 40 percent of the population, yet unemployment rates for them are 22 percent. Fortunately, with the recent oil discovery, Guyana’s oil industry has hired 10 more graduates of the University of Guyana in 2018 than it did in 2017. However, since the oil discovery, Guyana’s unemployment rates have remained around 11 to 12 percentage. As of 2019, oil and gas companies claimed 51 employees making up only 0.02 percent of the population.

What is the Resource Curse?

The resource curse refers to the idea that countries with a significant amount of their own natural resources experience little economic growth, development and more authoritarianism. The oil industry is unpredictable, and when governments tend to rely on it, citizens suffer. Several countries that were once in Guyana’s shoes, like Nigeria and Venezuela, experienced corruption and a contradicting lack of economic growth when their oil business began to boom. The influx of wealth that accompanies the discovery of oil, transparency, accountability and active oversight are important for avoiding the feared resource curse.

Venezuela, Nigeria and the Resource Curse

Venezuela’s oil reserves are larger than any other country’s. Since Venezuela’s focus on oil meant that it ignored other industries, however, poverty in Venezuela has reached devastating highs. Children have been suffering from malnutrition at alarming rates, and as of 2018 up to two million people have fled the country.

In Nigeria, the influx of oil came with a bevy of problems including theft of oil pipes, damage to nearby ecological systems, oil spills and abuse of the natural resource wealth. According to the World Bank, only one percent of the Nigerian population benefits from just 80 percent of the revenue brought in by the oil. The attention and support that Nigeria received for its oil industry also meant that the country neglected other industries like agriculture.

The EITI and NPPDG in Guyana

Upon the recent oil discovery in Guyana, the country has become apart of the Extractive Industry Transparency Initiative (EITI) and the New Petroleum Producers Discussion Group (NPPDG).

The goal of the EITI is to ensure that a country is managing its natural resources in a way that benefits its citizens as much as possible. Some key standards of the EITI include informing the public, providing transparency within governments and companies dealing with the natural resources and holding those in power accountable.

As of 2019, the EITI has introduced new transparency requirements. One requirement impacting Guyana specifically is the contract transparency requirement. This states that by the year 2021, all participating countries must publish new oil, mining and gas contracts. Guyana has committed itself to the formulation of new contracts along with three other countries.

The purpose of the NPPDG is to help emerging oil producers make effective policies and decisions and remain proactive. Governments receive training sessions, mentorships and existing techniques via current successful oil-producing countries. Countries can provide one another with advice and support when facing novel challenges. In a summary of the most recent NPPDG meeting, consistency and politics were topics of discussion for Guyana. Because oil-production is a long-term project, keeping plans consistent and on track despite the occasional election of new leaders is a topic of concern for Guyana. This is mainly because prior to the discovery of the oil, Guyana began its Low Carbon Development Strategy. In this strategy, the country developed plans to fight climate change through sustainable development. According to the report, participants of the meeting are concerned that the recent oil discovery and subsequent oil production may not fit in with the Low Carbon Development Strategy.

Guyana’s New Sovereign Wealth Fund

Another proactive step taken by the Guyanese government since the oil discovery in Guyana includes the recent approval of the creation of a sovereign wealth fund. A sovereign wealth fund comprises of money from the country’s natural resources and a country uses it to boost its economy. With a sovereign wealth fund, Guyana has allowed the opportunity for other industries it relies on, such as sugar and gold, to benefit from the revenue that the oil will produce. Furthermore, since the oil industry is somewhat unpredictable, the sovereign wealth fund will allow the country to save up money in the event of hard times.

All in all, this oil discovery in Guyana could have an extremely positive impact on the Guyanese economy. Looking at other successful oil-producing countries for guidance, and learning from other country’s mistakes will allow Guyana to make the best decisions for its citizens.

– Desiree Nestor
Photo: Flickr

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Goonj: Using Excess to Fulfill Someone’s Needs

Goonj
Goonj is a non-governmental organization working in various parts of India. It aims to share unused and unrequired materials from urban households with people living in rural areas to fulfill their needs. The organization believes that countries and economies can use urban discard to alleviate poverty and enhance the dignity of the poor.

The organization works across 23 states in India with 250 partner groups. It has offices with 150 full-time people and thousands of volunteers. The organization receives about 80-100 tonnes of material each month and turns it into material that people can productively use in the remote and impoverished areas of the country. In its latest annual report for 2017 to 2018, Goonj highlights that it has been able to reach over 3,600 villages in India and has dealt with more than 4,000 tonnes of material.

Various Initiatives

Goonj has performed various activities in different fields of work from 2017 to 2018. Some of its highlights include sanitation activities where it repurposed basic essentials like clothes and utility items into materials for women to use during menstruation. In addition to this, its initiative, Not just a Piece of Cloth, also aims to break the culture of shame and silence around menstruation. It turns these cloths into biodegradable clothes for women to use. When people from urban areas contribute their cotton bed sheets, curtains and shirts, the organization turns them into cloth pads for women in rural areas. It also holds gatherings for women to talk openly about the issue of menstruation, which many still consider a stigma in Indian society.

In the field of education, Goonj’s initiative School to School works towards using urban school material to address gaps in the rural education systems in India. Goonj was able to share 39,416 school kits to over 2,100 schools and 1,200 educational setups in villages. In addition, children in rural areas learn value for their belongings as they take up various educational and behavioral change activities which reward them these school kits. Not only does this initiative provide the poor with resources for education, but it also teaches them values.

Other areas of work that the organization focuses on are road repairs, disaster relief and health that it can perform with the excess raw materials it receives. Its initiative Cloth for Work works on rural developmental activities while Raahat provides disaster relief. Meanwhile, Green, an in-house brand, creates items from the last bits of materials it receives. These are also extremely successful ventures and have impacted a large population of the country.

Awards and Recognition

Goonj has received various awards for the work it does all over India. In 2012, NASA and the U.S. State Department chose it as a Game-Changing Innovation and in the same year, Forbes magazine listed Anshu Gupta, Goonj’s founder, as one of India’s most powerful rural entrepreneurs. In recognition of its important work, Goonj has received the Japanese Award for Most Innovative Development Project by the Global Development Fund and continues to impact the country to build sustainability and impact the rural population.

– Isha Akshita Mahajan
Photo: Flickr

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Escaping the Resource Curse: The Impact of Diamonds in Botswana

Diamonds in Botswana

Botswana, located in southern Africa, has a population of 2 million. The country has achieved an impressive record of economic development and poverty reduction over the last half-century. In 1950, Botswana’s GDP per capita was $1,344. Today, it is $15,015, making Botswana a middle-income country. As the second-largest exporter of diamonds, the prudent economic management of diamonds in Botswana is responsible for much of this growth.

The Resource Curse

Paradoxically, many countries that discover large domestic reserves of natural commodities like petroleum, gold or rare-earth metals experience economic stagnation or decline. A recent paper by the International Monetary Fund explains that this trend often occurs because of commodity-dependence. When a country is heavily dependent on just one commodity export and the price of that commodity declines, there is no other revenue stream to salvage the economy. However, Botswana is a standing reproach to this trend. Judicious fiscal policy has allowed Botswana to reap the rewards of their vast diamond reserves while avoiding many potential setbacks.

Botswana’s Fiscal Prudence

Due to its capital intensive nature, the employment potential of mining is Botswana has always been limited. While diamonds make up 40 percent of Botswana’s GDP and 90 percent of Botswana’s exports, diamonds in Botswana only account for four percent of employment. As a result, the government has had to find ways to distribute the wealth generated from diamond exports across the country’s population.

Botswana has been lauded for the effective management of its diamond supply. In particular, the country has employed two strategies to ensure that its diamond exports promote sustainable, egalitarian economic growth: decoupling expenditure and revenue and investing in economic diversification.

First, Botswana has chosen not to automatically increase government spending during economic booms. Instead, when diamond prices rise and government revenue increases, Botswana often saves cash to cushion the blow during price shocks. This long-term economic mindset has prevented recessions. For example, the World Bank writes that when diamond revenues fell in 1981, Botswana used a rainy day fund to avoid any drastic decrease in government expenditure.

Botswana uses six-year National Development Plans to outline their expenditure levels. These plans involve feasibility checks to make sure that investment projects are sustainable even if government revenue falls. Once the National Development Plan has been approved, no additional projects can be added without a majority vote from parliament. These mechanisms work toward assuring that Botswana has enough reserve cash if its diamond reserves falter.

Economic Diversification

The second strategy Botswana uses to grow its economy is diversification into sectors other than diamond mining. A variegated economy is less vulnerable to commodity price shocks. Botswana has invested much of its earnings from diamond exports into incentive structures that encourage manufacturing and agriculture. In 2005, Botswana created the Business and Economic Advisory Council (BEAC) tasked with identifying barriers to diversification and crafting responsive action plans. As a result of this focus, the Botswanan economy has continued to grow even when global diamond prices fall. What is more, manufacturing today comprises 14 percent of Botswanan GDP and is more diversified than it was at independence. Even though Botswana has relied on diamonds for the last few decades, manufacturing growth in Botswana outpaced the sub-Saharan African average from 1970 to 1996.

Botswana’s Progress

Good governance has propelled Botswana from a low-income to a middle-income country. In 1985, 59 percent of the population was living in poverty. Today, that percentage has dropped to 19 percent. In 1966, 60 percent of Botswana’s government expenditure came from foreign aid. Today, only three percent of expenditure comes from foreign aid. As Botswana continues to aim for economic diversification and prudent fiscal management, they stand as an impressive example of the impact that judicious economic policy can have on a vulnerable population.

– Abraham Rohrig
Photo: Flickr

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Human Rights Violations in Diamond Trading

Human Rights Violations in Diamond Trading
Globally, about 90 million carats of rough diamonds and 1,600 tons of gold are mined for jewelry every year, generating more than $300 billion. With billions of dollars being spent on jewelry every year, brands often still face problems of guaranteeing that their products are not tainted by human rights violations in diamond trading.

Efforts to combat these violations include the introduction of the Kimberley Process Certification Scheme (KPCS), a system of export and import controls for rough diamonds. Almost two decades have passed since governments came together to end the trade in “blood diamonds” that fueled several brutal wars in Africa, yet injustices occur as mentioned in top10binary.com.

Certified Humane

The Kimberley Process unites administrations, civil societies and industry in reducing the flow of conflict diamonds — ‘rough diamonds used to finance wars against governments’ — around the world. It is a binding agreement that imposes extensive requirements on every participant. The visible evidence of this commitment is The Kimberley Process Certification Scheme which both safeguards the shipment of ‘rough diamonds’ and certifies them as conflict-free.

Under the terms of the KPCS participants must:

  • satisfy ‘minimum requirements’ and establish national legislation, institutions and import/export controls
  • commit to transparent practices and to the exchange of critical statistical data
  • trade only with fellow members who also satisfy the fundamentals of the agreement
  • certify shipments as conflict-free and provide the supporting certification.

The process unites 81 countries around the world which have their participants being responsible for stemming 99.8 percent of the global production of conflict diamonds. The Kimberly Process is underpinned by the United Nations mandate and is backed by leading civic organizations.

Diamond fields located in eastern Zimbabwe’s Marange, have shown that even with the Kimberley Process, the trade in diamonds still gives rise to abuses. Residents living near the diamond fields have suffered forced labor and torture, among other abuses.

Theft of Livelihoods in Marange

Thousands of villagers around the area took to the streets in late April to protest the alleged looting of diamond revenue by state-owned companies. These protests quickly turned violent with witness interviews by Human Rights Watch stating how armed soldiers and police firing tear gas canisters to disperse the demonstrators.

In March 2016, former president Robert Mugabe, with no evidence being provided, told the state broadcaster that diamonds worth more than $15 billion had been looted in Marange. No one was held to account for the alleged looting and years have continued to pass with alleged diamond revenue looting by state-owned companies, with no benefits to the local communities, adding to growing frustrations and protests of villagers.

Violence has been a reoccurring response by Zimbabwe’s armed forces with documentation from Human Rights Watch on these armed forces having coerced children and adults into carrying out forced labor, and tortured and harassed local villagers when they seized control of the diamond fields. More than 200 people were killed by armed forces personnel in Chiadzwa, a previously peaceful but impoverished part of Marange, in late October 2008.

Human rights violations in diamond trading led Marange communities to petition the Parliament of Zimbabwe in March to “ensure diamond mining contributes to the development of the health, educational and road infrastructure of the Marange community, especially areas affected by diamond mining.”

Combatting Human Rights Violations in Diamond Trading

More work needs to be done to fight human rights violations in diamond trading. It is estimated that in order to produce one gold ring holding a diamond, 20 tons of mined waste is produced. The earth mined ore is mixed with cyanide, a known toxic poison, to dissolve the gold or silver from the ore, making the land and waterways around the mining area poisoned.

This contributes to communities facing ill health due to the mine’s pollution of waterways with toxic chemicals. Zimbabwe authorities have failed to ensure greater revenue transparency from diamond mining. Regulating mechanisms for diamond mining are needed to ensure the rights of local communities to information and to protect them from forced evictions and from negative health and environmental impacts of mining.

The European Union is a major centre for diamond trade and within the EU, Council Regulation 2368/2002 sets out the criteria for trade in rough diamonds in order to ensure adherence to the requirements of the Kimberley Process. This year, the EU will hold the Kimberley Process Chairmanship. In this capacity, the EU aims to make progress in supporting the honest diamond trade and meet the call of the international community to ensure that the Kimberley Process is equipped to continue playing its role in combatting human rights violations in diamond trading.

– Ashley Quigley

Photo: Flickr

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What is a Parliamentary Democracy?

Parliamentary Democracy Government
There are several types of democracies, and here we will explain what a parliamentary democracy is by comparing it to a presidential democracy, which we have in the United States.

In short, a parliamentary democracy is a system of government in which citizens elect representatives to a legislative parliament to make the necessary laws and decisions for the country. This parliament directly represents the people.

In a presidential democracy, the leader is called a President, and he or she is elected by citizens to lead a branch of government separate from the legislative branch. If you remember back to government class, you will remember that the United States has three branches of the government: the executive, the judicial, and the legislative. The President leads the executive branch of government.

 

Role of Parliamentary Democracy

 

In a parliamentary democracy, you have a Prime Minister, who is first elected as a member of parliament, then elected Prime Minister by the other members of the parliamentary legislature. However, the Prime Minister remains a part of the legislature. The legislative branch makes the laws, and thus the Prime Minister has a hand in law-making decisions. The Prime Minister works directly with other people in the legislature to write and pass these laws.

In our presidential democracy, we still have a legislature, but we also have a president. He is separate from the legislature, so although he works with them, it is not as direct as if he were a Prime Minister. The laws that the legislature wants to pass must first go through the president; he can sign them into being or he can veto them. The President can go to the legislative branch and suggest laws, but they ultimately write them for his approval.

Furthermore, in parliamentary systems, the legislature has the right to dismiss a Prime Minister at any time if they feel that he or she is not doing the job as well as expected. This is called a “motion of no confidence,” and is not as much of a drawn out process. In the US, impeachment is an extensive, formal process in which an official is accused of doing something illegal.

Some countries with a parliamentary system are constitutional monarchies, which still have a king and queen. A few examples of these are the United Kingdom, Sweden, and Japan.

It is important to remember that both of these systems of government are democracies. Ultimately, the citizens who vote have the voice.

– Alycia Rock

Sources: Wise Geek, Scholastic, How Stuff Works
Photo: Joint Council for the Welfare of Immigrants

 

parliamentary democracy government