Do international commodity prices drive natural resource booms? An empirical analysis of small-scale gold mining in Suriname

Abstract

Natural resource booms have been central to conservation and development in resource-rich Latin American countries, yet the origin of these events remains poorly understood. Understanding the socioeconomic drivers of resource booms is important because such sudden increases in natural resources extraction are usually ecologically and economically unsustainable. This paper analyzes the socioeconomic drivers of small-scale gold mining, which is degrading ecological resources and the health of people in the Amazon region. Two conventional hypotheses are tested: (1) International prices of gold drive the Amazon gold rush, and (2) National economic recession encourages small-scale gold mining. A simple empirical model is presented to link the gold mining histories of local miners to international and national trends. The analysis indicates that theories that explain corporately-driven resource extraction may not apply to the behavior of small-scale producers. It appears that extractive booms that are driven by local resource users can occur independently of global price markets. The Suriname case further suggests that inhibited national economic development can be the cause of a natural resource boom, and not only a consequence as some researchers propose. The author concludes that conservation policies for Suriname should act to stabilize the national economy and to promote more sustainable mining methods.