Making private capital flows to developing countries environmentally sustainable: the policy challenge

The 1990s have seen a dramatic shift in capital flows into the developing world. Despite pledges made at the 1992 UNCED Conference in Rio de Janeiro, official development aid has declined in real terms. At the same time, private direct investment and lending to developing countries has risen from $44 billion at the beginning of this decade to $256 billion in 1997, supporting a record economic boom in the developing world. Developing countries have become significant sources of capital, as well as hosts to transnational corporations.
Cases illustrating the negative impacts of large investments under environmentally lax conditions are contrasted with the rise of environmental screening of funds by commercial entities, such as banks, insurance companies and investors. Although the new inflows of foreign capital may have brought the spread of Western consumerism, this new economic potential has also contributed cutting-edge environmental technologies, that may assist developing countries leapfrog over the most damaging phases of industrialization.
The article discusses the role of public lending agencies, international organizations and NGOs in setting the investment climate that determines the effects of foreign capital on the natural resources base, communities and the environment. Various mechanisms for defining environmental standards are discussed, and a more active role for governments and the United Nations is advocated.     

Human Freshwater Demand for Economic Activity and Ecosystems in Taiwan

Freshwater is necessary to economic activity, and humans depend on goods and services generated by water-dependent ecosystems. However, national freshwater management usually focuses on direct use of domestic freshwater. With an increasing scarcity of freshwater, attention has turned to two indirect uses of freshwater by humans. The first indirect use is freshwater used by foreign countries when producing products for export. The second use is freshwater required by local ecosystems: human survival and development depend on goods and services generated in these ecosystems. This work adopted Taiwan as a case study. In addition to two widely recognized ecosystem freshwater demands, evapotranspiration and reversed river flow, this study suggests that freshwater is a constituent of some abiotic components, such as groundwater in aquifers, because excessive withdrawal has already caused significant land subsidence in Taiwan. Moreover, the estimated results show that Taiwan’s net imports of freshwater through trade amounts to approximately 25% of its total freshwater use for economic production. Integrating industrial policy, trade policy, and national freshwater management is a useful approach for developing strategies to limit the growing use of freshwater in Taiwan. Policy implications are then developed by further analyzing withdrawal sources of freshwater (domestic and foreign) for supporting economic production in Taiwan and identifying the factors (domestic final demand and export) driving freshwater-intensive products.     

Defining the Features of Sustainable Development for a Developing Country: The Zimbabwe Case

For the past two decades, planners and researchers have struggled to define concepts of sustainable development, but most definitions are too general. Goals need to be more specific and will vary to reflect the different conditions and national development policies across countries. A national Delphi survey, using two sequential questionnaires, was conducted in Zimbabwe during late 1992 with a broad cross-section of stakeholders. The survey identified, clarified and ranked 34 national objectives for environmentally sustainable development in Zimbabwe. Survey respondents weighted environmental objectives in development planning higher than both economic and social objectives. The ranked objectives will help guide the country's efforts to implement environmentally sustainable development and associated policy measures.     

Small–scale mining in South Africa: Past, present and future

Mining is an important part of the South African economy and has been the driver of much of the economic development of the country. However, the small–scale mining subsector still has to realise its full potential. A small–scale mine has been defined as a mining activity employing less than 50 people and with an annual turnover of less than 7.5 million Rand and includes artisanal mines. Small–scale miners are involved in many commodities but there appears to be a bias towards gold, diamonds and quarrying for construction materials, including brickclays. Small–scale mining is regulated by the same legislation (i.e., for the environment, labour, mineral rights, exploration and mining permitting, and skills development) as large–scale mining, though compliance is low, particularly where artisanal mining in concerned. The effective participation of small–scale miners in the mining sector is hampered by their lack of skills, i.e., technical, business and management, and their limited access to mineral deposits, capital and markets. Some of these hindrances have been inherited from the imbalances of the colonial and apartheid eras and continue to act as barriers, making entrance to the industry difficult. For those who have entered the industry out of desperation, as is the case with most artisanal miners, their activities result in negative impacts evident in the inefficient, unsafe and environmentally unfriendly operations. With the advent of the new political dispensation in South Africa, a new era is dawning for the country’s small–scale mining subsector. This has resulted in a change of attitude and new government policies which have led to special programmes being put in place to promote the subsector. Intervention strategies for the support of small–scale mining (some of which are already in operation) include programmes for kickstarting mineral beneficiation and value–addition projects, development of appropriate technologies and skills and technology transfer. Proponents of small–scale mining see a well–regulated industry as being the cornerstone of future rural economic development, particularly for previously disadvantaged communities in the poverty nodes.     

A new approach to sustainable tourism development: Moving beyond environmental protection

Tourism is one of the largest and fastest growing industries in the world. It is an increasingly important source of income, employment and wealth in many countries. Its rapid expansion has, however, had detrimental environmental (and socio-cultural) impacts in many regions. In this article, I examine the main economic benefits and environmental impacts of tourism, and review the development of the international sustainable tourism agenda. While much of international tourism activity takes place within the developed world, this article will focus on the (economic) development of the industry in developing countries I conclude that new approaches to sustainable tourism development in these countries should not only seek to minimize local environmental impact, but also give greater priority to community participation and poverty alleviation. I argue, in particular, that more emphasis should be given to a 'pro-poor tourism' approach at both national and international levels.     

Mining and development: Are they compatible in South America?

Taking issue with the view that mining as an activity is necessarily beneficial to Third World countries, the author examines experience in South America. Possible non-beneficial aspects of mining in a developing country include its high capital intensiveness — when capital is liable to be scarce and unemployment high — and the potential for small but powerful groups, such as miners, to exercise a disproportionate influence on the political and economic life of the country. Furthermore, working conditions in many South American mines are extremely poor. Ways must be found to develop mining techniques more appropriate to developing countries.     

Small-scale mining and its socio-economic impact in developing countries

This article examines both the positive and negative socio-economic impacts of small-scale mining in developing countries, and outlines some key measures for improving sustainability in the sector. It is important to clarify that, in spite of experiencing its share of environmental- and health-related problems that adversely impact human quality-of-life, small-scale mining plays a pivotal role in alleviating poverty in the developing world, and contributes significantly to national revenues and foreign exchange earnings. Though these important socio-economic contributions make small-scale mining an indispensable economic activity, there is an obvious need for improved sustainability in the industry, more specifically, for operations to resolve pressing problems, many of which have wide-ranging impacts. However, because most small-scale mines are low-tech and employ poorly trained uneducated people, it is difficult for the sector to improve on its own. Thus, governments and regional international bodies must play an expanded role in bridging critical information, techno-logic and economic gaps. It is concluded that governments and regional organizations could accomplish much in the way of improved sustainability in the small-scale mining industry by: (1) legalizing small-scale mining and implementing sector-specific legislation; (2) contributing to community development and providing increased economic support; and (3) providing training and educational assistance, and playing an expanded role in the dissemination and transfer of important technologies.     

Government participation in mining projects

Governments of developing countries may obtain ownership participation in national mining projects in the hope of receiving greater policy control over, financial rewards from, and information about such projects. These objectives could be achieved by using their sovereign authority to tax, regulate and monitor projects more effectively. The principal problem is likely to be the administrative inability fully to enjoy rights that they lawfully possess. As such projects are nearly always controlled by foreign entities, and involve the exploitation of irreplaceable mineral wealth, they may engender feelings of suspicion and hostility. Government participation may sometimes be necessary to mitigate those feelings and to lead to more stable and successful projects. If these political objectives are fully recognized, then government participation may be structured so as to minimize any detrimental effect it might have on the fiscal and financial structure of the project. It may also prove to be a vehicle for future participation by private local interests, thereby eliminating the alien enclave feature generally characteristic of such projects.     

Explaining the resource curse, with special reference to mineral-exporting countries

Recent studies have found an inverse correlation between economic growth and natural resource abundance among developing countries. There appears to be no obvious explanation for this finding, such as an important growth variable that is common in resource-poor countries and deficient in resource-abundant countries. The resource curse hypothesis is closely related to the problem of sustainability for resource-exporting countries since periods of high growth are frequently followed by long periods of stagnation. Models are examined showing how increases in export income can affect relative prices in the trade and nontrade sectors and how the changes in relative prices affect investment and growth. It is the thesis of this article that there is nothing inherent in resource-abundance that condemns countries to either low growth or nonsustainability.     

Environmental management: An experiment in orientation in India

Summary Environmental management is a most critical input for achieving ecologically sound and balanced economic growth. It is essential that policy-makers and administrators accept the significance, principles and practices of environmental management, otherwise implementation of projects will not include the environmental protection measures. Environmental management training programmes for decision-makers are, therefore, essential. In India, The Department of Environment has initiated workshop for top level managers for sensitizing them to environmental management concepts. The experience in organizing and conducting such programmes may be of value to organizations in other developing countries, and is summarised in this paper.     

UNITED NATIONS MINERAL EXPLORATION ACTIVITIES: 1960–1976

The United Nations Development Programme plays an important role in strengthening the economies of developing countries through mineral exploration projects, training in geosciences and institution building. This review demonstrates the effectiveness of such activities, both in terms of the economic value of mineral discoveries, and the less tangible, long-term contribution through development of infrastructure and skills, introduction of modern technology, and building up a body of reliable information as a base for future planning of mineral resources development.     

Achieving nature conservation objectives: problems and opportunities with economics

This paper considers the use of economic analysis in nature conservation within the Nature Conservancy Council (NCC). The development of official nature conservation in Britain and the relationship to land use changes is described, and the focus on site safeguard illustrated by declines in distributions and viability of populations of some species. A restatement of nature conservation objectives is proposed and the role of economic analysis in developing policies to secure these described. The use of economics by the NCC and the lessons learned from this are outlined. The implication of the commitment to sustainability is then discussed and concerns over how environmental valuation is used in light of this described. The paper concludes that economic analysis is a powerful tool for integrating nature conservation into wider rural policies and for the development of measures to secure contributions by other interests to meeting nature conservation objectives.     

The fate of the poor in growing mineral and energy economies

There are frequent suggestions that countries specializing in mineral and energy extraction have a type of growth that is bad for the poor. Others claim that extraction-led growth is particularly good for the poor. Both claims are made without the support of substantial empirical evidence. This paper uses longitudinal data on income growth by quintile in 57 developed and developing countries to statistically assess how mineral and energy extraction has affected the relationship between growth and the poor. We can find no evidence that the data support either the claim that extraction-led growth is good for the poor or that extraction-led growth is bad for the poor. This finding does not rule out that extractive activity can have special positive or negative impacts on the poor in some countries or regions. Rather, it simply brings to light that such effects are not evident as a persistent statistical phenomenon in the national level data that are available, which may be why the debate tends to move along without resolution.     

A Decision Support Framework for Environmental Planning in Developing Countries

This paper presents a decision support framework for environmental planning in developing countries. The interest in protecting the natural environment from pollution gained increased importance in the 1990s with a push by world communities for sustainable development. Developing countries as well as the industrialized nations are expected to cut down on pollution and control the use of non-renewable natural resources. Although the concept of sustainable development sounds plausible, it is difficult to implement in many countries due to their conflicting goals. The world-wide targets on emissions, use of fossil fuels, reduction in water and atmospheric pollution require the participation of every nation. These goals are not easily achievable by some of the poorer developing countries partly because of their economic dependence on natural resources and partly because of their inability to afford more modern and efficient technologies. Thus, environmental planning goals are often in conflict with the development,social and economic needs of a country. In this paper, we develop a decision support framework that utilizes multicriteria and optimization models to address environmental planning problems. This framework is based on identifying the priorities of conflicting goals by working through and reducing the conflicts. A strategic planning framework is introduced into the decision support system since national planning is a strategic issue and these goals can only be achieved by adopting a systemic view.     

Implications of climate change on small island developing states: experience in the Caribbean region

As the international community debates long‐term strategies to address global warming, the issue is one of increasing concern for small island developing states. Collectively, these countries account for less than 1% of greenhouse gas emissions, yet their vulnerabilities are particularly high. This paper reviews international efforts including a regional effort on the part of 12 Caribbean countries to address this issue. For many countries and especially countries of the Caribbean and other small island developing states, vulnerabilities already exist and will only be exacerbated by accelerated global warming. Dealing with global environmental change will require good, reliable information to monitor change and assess the physical and economic impact of that change. It also will require an institutional and managerial framework that incorporates dynamic change into individual and collective decision‐making processes. Small island developing states must be active players affecting long‐term solutions to climate change. In the interim, targeted investments to address high priority vulnerabilities are likely to lead to no‐regrets outcomes with high environmental and economic benefits.     

COST SHARING AND IMPLEMENTATION OF NATIONAL WATER RESOURCES POLICY1

ABSTRACT: In this article a managerial approach to developing and implementing National Water Resources policy is suggested. Proper consideration can be given to national economic development (NED), environmental quality (EQ) and conservation and still result in an implementable policy at the operational level if proper incentives are built into the process with proper attention to alternate non-Federal cost sharing rates. Not only can these multiple objectives be entertained but the Administration and Congress will have a management tool that should ensure a certain probability of success.     

The effectiveness of market-based conservation in the tropics: forest certification in Ecuador and Bolivia

During the last decade, forest certification has gained momentum as a market-based conservation strategy in tropical forest countries. Certification has been promoted to enhance forest management in countries where governance capacities are insufficient to adequately manage natural resources and enforce pertinent regulations, given that certification relies largely on non-governmental organisations and private businesses. However, at present there are few tropical countries with large areas of certified forests. In this study, we conducted semi-structured stakeholder interviews in Ecuador and Bolivia to identify key framework conditions that influence the costs and benefits for companies to switch from conventional to certified forestry operations. Bolivia has a much greater relative area under certified forest management than Ecuador and also significantly more certified producers. The difference in the success of certification between both countries is particularly notable because Bolivia is a poorer country with more widespread corruption, and is landlocked with less access to export routes. Despite these factors, several characteristics of the Bolivian forest industry contribute to lower additional costs of certified forest management compared to Ecuador. Bolivia has stronger government enforcement of forestry regulations a fact that increases the cost of illegal logging, management units are larger, and vertical integration in the process chain from timber extraction to markets is higher. Moreover, forestry laws in Bolivia are highly compatible with certification requirements, and the government provides significant tax benefits to certified producers. Results from this study suggest that certification can be successful in countries where governments have limited governance capacity. However, the economic incentives for certification do not only arise from favourable market conditions. Certification is likely to be more successful where governments enforce forestry laws, provide financial incentives for certified forestry, and provide land tenure security, and where large-scale and vertically integrated forestry operations are commercially feasible. For this reason, at present, there are few developing countries where forest certification is likely to achieve widespread success.     

The transformation and successful development of small-scale mining enterprises in developing countries

Proponents have long argued that small-scale mining, given proper direction and support, can contribute substantively to the socioeconomic development of rural areas in developing countries. The attitudes of governments, commercial mining companies and donor agencies have been coloured by the haphazard, informal, often dangerous and seemingly wasteful character of much local mining activity, especially at the smallest scale. Yet this 'artisanal' activity has come to assume a critical economic welfare function in many countries, especially those which have suffered through extended periods of environmental and economic stress. This paper argues that this type of mining, because of both its upside potential and its problematic nature, cannot be ignored: neither can it be eradicated. Instead, explicit and sustained attention from governments, non-government organizations, the private sector and donor agencies is advocated for an effort to rationalize and formalize this type of mining, to increase its economic and technical efficiency, and to maximize its social benefits and minimize its disadvantages.     

Aligning Climate Policy with National Interest: Disengagements with Nationally Appropriate Mitigation Actions in South Africa

Nationally Appropriate Mitigation Actions (NAMAs) were proposed as a policy framework that could provide middle ground for meeting both the development and mitigation objectives in developing countries. While South Africa engaged actively with the NAMA terminology in the United Nations Framework Convention on Climate Change negotiations, its engagement at the domestic level has been rather lacklustre. This presents an interesting paradox. The paper studies the interplay of international norms embodied in NAMAs with South Africa's domestic policy process. Disengagement and contestation around NAMAs in South Africa is played out at three stages: decision-making stage where the symptoms surrounding this contestation first emerge; policy formulation stage where NAMAs have to not only align with the National Development Plan but also compete with a predilection for domestically familiar terminology of flagships under the national climate policy; and finally the broader agenda-setting stage of policy process, where NAMAs have to prove useful in not only pursuing the developmental state agenda but also in tackling the underlying material factors that represent country's economic dependency on fossil fuels. NAMAs faced combined resistance from ideas and interests in various degrees at all these stages resulting in their disengagement.