A Policy Framework for New Mineral Economies: Lessons from Botswana

Abstract

Many developing economies have been receiving increasingly significant amounts of foreign direct investment in mining over the past two decades. As mining expands in these new mineral economies, this sector has become a significant source of social and political conflict. New mineral economies must implement savvy policies that preempt and mitigate the challenges of mineral-led economic development. This essay is divided into three principal sections. The first compiles and reviews the key social scientific literature regarding the economic, political and social problems associated with mineral-led development strategies. The second section draws from the case of Botswana, a mineral dependent country with high growth and high development indices for sub-Saharan Africa. Here, Botswana is compared with Nigeria to illustrate, in greater contrast, Botswana’s policy successes. The final section returns to the economic, political and social challenges of mining and puts forward a general policy framework, drawing from the example of Botswana, for new mineral economies to leverage their mineral endowments for substantive development while limiting the potential for social conflict and negative economic outcomes.