Mining and poverty reduction: Transforming rhetoric into reality

This article critically evaluates the contribution that mining has made to poverty reduction, and assesses the prospects for better performance in the future. The article starts from the two assumptions that mineral resources are a potentially great source of wealth for poor countries, and that the various ill-effects associated with the “resource curse” are not inevitable. It then directs its attention toward the World Bank, a leading advocate of mining-led development and an institution with a core mandate to reduce poverty. Employing the World Bank's own conceptualization of poverty as an analytical framework, the article demonstrates that mining has a dismal empirical track record to date in poverty reduction. While the theoretical reasons to believe that mining can contribute to poverty alleviation are perhaps sound, the reality of mineral-led development has not lived up to its rhetorical promise. The article elucidates problems with existing approaches and evaluates the World Bank's recently concluded Extractive Industries Review as a dramatic new paradigm shift in thinking on mining and poverty reduction. It concludes that mining can positively contribute toward poverty alleviation, but only if a variety of demanding preconditions are met.