Oxfam in July 2008 published Metals mining and sustainable development in Central America.
Naturally they are critical of mining. Naturally they set out to warn Central American countries not to allow mining. There is little point in reading this publication for those “new insights.” What is fun about this report is that they conclude that badly run countries do not benefit from mining, and that since the nations of Central America are so badly run, they therefore should not undertake mining. Oxfam hangs on their own noose in this report. Let me explain their dilemma.
First they tackle the issue of the failure of most African countries to benefit from mining. They say::
…in the late 20th century..Botswana and Namibia, managed significant economic growth despite heavy reliance on mining. This contrast with the dismal performance of most African mineral economies. A World Bank review commented that “depending on the quality of a country’s economic management and the competence of its institutions, mineral-rich countries can either fare spectacularly well of fail in similarly spectacular ways.”
By now we all know that incompetently governed countries never benefit from any type of economic activity, whether it be mining, McDonalds, fair-trade coffee, or drugs. In such dysfunctional countries, the spoils are to the powerful, and the lesser folk get screwed regardless of what the Church or NGOs preach. The OXfam report recognizes this sad truth that mis-governed countries do not benefit from mining.
What this report does not do, however, is answer the question whether Central American countries are any better governed than those in Africa. You can feel the authors struggling with the conundrum they paint themselves into: namely to conclude that Central American countries are not fully functional, equitable democracies, well governed by all the people for the people—–and therefore they should not undertake mining.
Therefore, let us run our own test of whether by the criterion of competent government, Central American countries should open mines. Costa Rica certainly failed the test of its ability to regulate Bellavista and Glencairn who even now are trying, under a new name, to open a mine in Nicaragua. Sadly, Central Sun Mining is not doing very well:
The gold sales in the second quarter of 2008 were negatively impacted by approximately 21 lost production days due to work stoppages, hurricane Alma and national power grid outages resulting from the storm.
One measure of the hypocracy that charaterizes the governments of Central America is the fact that Costa Rica has just allowed a new mine to go ahead on the border with Nicaragua. Predictably Nicaragua’s government is shouting blue-murder that Infinito Gold’s Crucitas Mine will pollute the river along the border. But not a word from that same government about mines deep inside Nicaragua. Maybe they just were not bribed enough to support the mine over the border.
Incidently Infinito Gold was Vanessa until earlier this year. Just following the fashion of name changing you know; maybe we can call this sustainable nomenclature?
Explotation by one group of another has been and is the norm in Latin America. Must have started with the Romans, or was it the Inquisition, or just the arrival of Europeans in El Dorado? Dare I ask whether it is something inherent in the Latin character or of societies derived from old Spain? The Scarlet Pimpernel analyzes it in readable prose. Not that this justifies it, but for the old, intellectually curious, it provides some sort of explanation.
Let’s face it, there is only one good reason to open a mine in Central America, and that is to get a company-paid trip to a nice part of the world for a vacation or to stay in your nice cheap house built with Canadian mining profits. Just like my liberal Vancouver lady friend.