Input–output analysis in an oil-rich economy: The case of Azerbaijan

This paper aims to provide empirical research to identify the linkages between final demand–total output, final demand–total supply, value-added ratios and prices, and also to analyze total factor productivity growth using input–output framework for 25 sectors. Studying the input–output tables for 2001 and 2006, the research estimates impact and response multipliers of non-oil sectors, as well as non-oil trading sectors. The results are important from the view of development of non-oil trading sectors and diversification of the economy in order to avoid the “resource curse”.     

Economic and social effects analysis of mineral development in China and policy implications

Mineral development has contributed greatly to China's economic and social development. Many challenges remain, however, including environmental pollution and resource waste in practice, as well as a dearth of systematic theoretical research. The goal of this study is to analyze the economic and social effects of various mineral developments in China from diversified perspectives, so as to provide the basis for the formulation of China's mineral development policy. The input–output effects, industrial linkage effects and income distribution effects of different mining industries are quantitatively analyzed by adopting basic hypotheses of input–output economics, industrial linkage model and income distribution antitheses based on the latest available official data from China Statistical Yearbook from 2004 to 2010 and the 2007 Input–Output Table of China. The empirical results obtained in this study indicate that all mineral development industries, especially coal mining and washing, and petroleum and natural gas extraction industries, have given a strong impetus to the increase of China's fixed asset investment and GDP. Moreover, they have provided a large number of jobs, thereby alleviating ongoing employment pressure, and they have also played a positive role in promoting China's technology investment. The analysis of industrial linkages demonstrates that mining industries are basic to the national economy and produce a significant impetus to its downstream industries, but create weak pull effects in terms of national economic development. From the perspective of income distribution, mining industries play an important role in increasing China's fiscal revenue and per capital income. Hence, China's mineral development policy should (1) encourage additional investment in technology for exploration and development to insure sufficient supply and expand the input effects; (2) attract additional talent to work in remote regions; (3) optimize the industrial structure and promote the industrial transformation in resource regions; (4) adjust the interest distribution between the central and local governments to enable the local regions to become more self-sufficient; and (5) enhance the legal environment so that companies can more readily undertake their social responsibilities voluntarily.     

Resource windfalls,investment, and long-term income

We develop a simple mechanism to explain why resource windfalls are likely to lower income levels in the long run. Most mineral-producing countries, in particular, fail to maintain incentives for savings and investment after positive resource shocks. Our analysis focuses on this savings–investment transmission channel through which resource rents affect welfare, and develops an OverLapping-Generations (OLG) model with features from endogenous growth theory to study the mechanism. In this model, savings adjust downwards to income from natural resources, investments adjust to savings, and subsequently the level of overall productivity falls. Resource affluence has two counteracting effects on income. In the short term, resource wealth augments income, but in the long-term, it decreases income through a crowding-out effect on knowledge creation.     

The mining industry in the European Union: Analysis of inter-industry linkages using input–output analysis

Input–output modelling is a useful tool in policy analysis and economic planning. This methodology is used to detect the inter-industry linkages known as forward and backward linkages. Examination of these measures provides one mechanism for identifying “key” or “leading” sectors. The main objective of this paper is to measure the linkages of the mining and quarrying industry in the European Union (EU) and to determine if any of the industry subsectors can be considered key sectors. The paper shows that three subsectors can be considered key sectors: the mining of coal and lignite and extraction of peat in Germany; mining of metal ores in Sweden; and other mining and quarrying in Austria, Denmark and Spain. These sectors are more stimulated by overall industry growth than other sectors and have greater impacts in terms of investment expenditures on the national economy than other sectors. The values of the forward and backward linkages show that the mining and quarrying is an industry that would be stimulated by an increase in a regional economy's production more than other sectors, while an increase in the mining and quarrying industry's output would not stimulate this regional economy more than an increase in other sectors.     

Enclave development and ‘offshore corporate social responsibility’: Implications for oil-rich sub-Saharan Africa

This paper critically reflects on the challenges of engaging, proactively, in Corporate Social Responsibility (CSR) in oil-rich sub-Saharan Africa. Most of the region's oil production takes place in enclave-type environments offshore and in countries ruled by autocratic governments which generally exert minimal pressure on companies to embrace CSR. With companies having little sense of who to target in their local economic development policies and programs, there is always a possibility of ‘offshore CSR’ – recognized here as potentially-effective ideas for improving social welfare that linger within the enclave and never fully materialize – surfacing. The aim is to conceptualize and broaden understanding of the challenge of developing CSR programs in these settings, where there are no clear linkages to communities or local economies more generally.     

Mining development,income growth and poverty alleviation: A multiplier decomposition technique applied to China

Mining has grown rapidly and is expected to continue to develop solidly in the future with the economic development in China. Based on this trend, how an increase in the outputs of mining sectors affects household income and poverty alleviation is an issue worthy of study. A multiplier decomposition method within a social accounting matrix (SAM) framework shows the linkages through which a mining sector's output contributes to household income growth and poverty alleviation. The decomposition applied to China reveals that mining development has more significantly positive impacts on the high and middle income household than low income household. Moreover, the decomposition incorporated with the Foster, Greer and Thoerbecke (FGT) poverty measure shows that the ‘coal’ sector contributes most to poverty alleviation and the low income household group, which has the biggest poverty rate, is the smallest beneficiary from the mining development. Thus, the policy implication is proposed that the government should give appropriate adjustment on the distribution of income between rich and poor households and help the unskilled human capital from the household group at a low income level to handle advanced technology of mining through education and training to reduce poverty more effectively.     

ECONOMIC RESOURCE MULTIPLIERS FOR REGIONAL IMPACT ANALYSIS1

ABSTRACT: Tradeoffs between regional economic development and resource use is a question often confronting local decisionmakers. A resource-interindustry model can be used to depict the interrelationships between regional economic sectors as to household income and/or employment and resource use. A resource-interindustry model was developed for Humboldt and Lander Counties in Nevada which shows the tradeoffs between regional household income (wages, salaries, profits, and rents) and/or employment and water usage. Water income and water employment multipliers can be ranked, enabling decisionmakers to realize sectors which require greatest regional water usage to regional household income and/or employment.     

Ongoing ascent to the helium production plateau—Insights from system dynamics

Recent, pre-downturn, disturbance in the global helium market can be traced to the tight supply–demand position, which characterizes today’s changing helium supply structure. A detailed System Dynamics model provides fresh insight into the helium question and suggests a production path that is closely associated with future natural gas production. Venting of un-extracted helium to the atmosphere remains a central issue. The model indicates that improving resource exploitation strategies might extend a production plateau that emerges in the 2030s. Substitution will result in more helium being vented. To mitigate this, the industry needs to ensure security of supply (particularly after the Bureau of Land Management reserve is sold).     

Total-factor water efficiency of regions in China

Water is a limited and unevenly distributed resource in China, with the per capita amount of water resource there only about one-fourth of the world's average. However, water is an essential resource for people's lives and economic development. Over the past two decades China has seen the fruit of its rapid economic growth; nevertheless, a severe water shortage is behind this prosperous scenario and is becoming worse. Efficient water supply is certainly essential for the sustainable development of human beings. This paper analyzes water efficiency by incorporating water as an input as well as using conventional inputs such as labor employment and capital stock. An index of a water adjustment target ratio (WATR) is established from the production frontier constructed by data envelopment analysis (DEA) including water as an input. The water efficiency of regions is obtained from a total-factor framework with both residential and productive water use. A U-shape relation is discovered between the total-factor water efficiency and per capita real income among areas in China. The central area has the worst water efficiency ranking and the total adjustment amount of water used there is around three-fourths of China's total. More efficient production processes and advanced technologies need to be adopted in the central area to improve its water efficiency, especially for its productive use of water.     

A Review of the Relative Merits of Conserving,Using, or Draining Papyrus Swamps

Wetlands are a vital resource, particularly in Africa where livelihoods are closely linked to natural capital. In recent years, extensive drainage has occurred to make way for agriculture. To gain insight into whether drainage is justified, we review the value of African wetlands dominated by Cyperus papyrus in relation to use, conservation and conversion. Evidence suggests that the value derived from low-intensity, multifunctional wetland use far exceeds the value derived from swamp reclamation and generally exceeds that of conservation. At a local level, the main driver of wetland misuse appear to be a breakdown in collaborative management regimes and the main constraint on wetland use, the value of labor and selling-times. Local drivers are linked to regional factors such as the lack of coordinated wetland policies and difficulties in ensuring that legislation is absorbed by all sectors of society. We highlight opportunities for ensuring more effective collaborative management and legislation communication, which capitalize on existing governance structures. In contrast to predictions by Hardin’s Tragedy of the Commons model, we argue that effective wetland management is best achieved by preventing privatization and promoting common property management regimes. We also argue that poverty and income inequity are more important drivers of unsustainable resource use than environmental managers commonly acknowledge.     

JAMAICA - A CASE STUDY OF ENERGY PLANNING

The analysis shows the impact of the 'New International Energy Order' on Jamaica, a developing country almost totally dependent on imported oil for satisfying national energy demand. The energy supply/demand situation between 1961 and 1976 and the structure of energy consumption by major sectors of the economy are discussed. The high income elasticity of commercial energy demand and the increase in the energy intensity of the economy is directly related to expansion of the alumina industry. The structural problems of decoupling GDP and energy growth are indicated. In particular, the impact of the 'New Energy Order' on the development prospects of major bauxite/alumina producing countries which are deficient in indigenous primary energy resources is assessed. Finally, the indigenous resource base is outlined and the major elements of the five-year (1978–1982) national energy plan summarized.     

Green accounting and sustainability of the Peruvian metal mining sector

This paper estimates the true economic income of Peru’s metal mining sector for the period 1992–2006, using a model of green economic income based on Hamilton (2000). The total depletion of natural capital caused by metal mining is calculated by estimating, on the one hand, the depreciation of mining resources (using the Hotelling rent approach) and, on the other, the environmental degradation provoked by metal mining activities. The results show that the total loss of natural capital represents between 31% and 51% of the metal mining GDP and between 2% and 4.9% of Peru’s GDP. On the other hand, correcting the usual GDP measure produced by the traditional National Account System (NAS) for the total loss of natural capital caused by mining activities shows that the GDP traditional measure overestimated by 51–64% the true economic income generated by Peruvian's metal mining sector during the period 1992–2006. The importance of the generation, taxation, and disposition of mining economic rents for Peru’s sustainable development in the future is also discussed.     

Goodbye to natural resource-based livelihoods? Crossing the rural/urban divide

Life in proximity to a growing city can be especially difficult for those rural people who are poor. Findings from sustained research around three cities of the South illustrate how peri-urban conditions can create pressure for livelihood change. People were pressed further into a cash-based economy for which they were ill prepared. Surprisingly, agriculture remained important, even though urban expansion changed natural resource-based livelihoods, especially by taking land. The inevitable livelihood transitions were easier if there was support for both familiar and new natural resource-based activities, orienting production towards urban markets. Successful change was associated with greater diversification of income strands, rapid cash returns and bridging opportunities. Participatory planning of livelihood changes and local NGO inputs were advantageous. These findings are important for pro-poor development policy affecting peri-urban populations and may inform rural to urban migration policy.     

Wildlife resource utilisation at Moremi Game Reserve and Khwai community area in the Okavango Delta, Botswana

This paper uses the concept of sustainable development to examine the utilisation of wildlife resources at Moremi Game Reserve (MGR) and Khwai community area (NG 18/19) in the Okavango Delta, Botswana. Using both secondary and primary data sources, results show that the establishment of MGR in 1963 led to the displacement of Khwai residents from their land; affected Basarwa's hunting and gathering economy; marked the beginning of resource conflicts between Khwai residents and wildlife managers; and, led to the development of negative attitudes of Khwai residents towards wildlife conservation. Since the late 1980s, a predominantly foreign owned tourism industry developed in and around MGR, however, Khwai residents derive insignificant benefits from it and hence resource conflicts increased. In an attempt to address problems of resource conflicts and promote sustainable wildlife utilisation, the Botswana Government adopted the Community-Based Natural Resource Management (CBNRM) programme, which started operating at Khwai village in 2000. The CBNRM programme promotes local participation in natural resource management and rural development through tourism. It is beginning to have benefits to Khwai residents such as income generation, employment opportunities and local participation in wildlife management. These benefits from CBNRM are thus having an impact in the development of positive attitudes of Khwai residents towards wildlife conservation and tourism development. This paper argues that if extended to MGR, CBNRM has the potential of minimising wildlife conflicts between Khwai residents and the wildlife-tourism sectors. This approach may in the process promote the sustainable wildlife use in and around MGR.     

Canadian manufacturing: The impacts of natural resource price increases on input demands and costs

The separate effects of 50% increases in the prices of energy, renewable and nonrenewable natural resource inputs on factor demands and production costs are simulated for Canadian total manufacturing and six two-digit industries. Both renewable and nonrenewable natural resource price increases have a substantially greater effect upon the demands for other factors and upon production costs than a parallel energy price increase. These results are important from a policy perspective and justify the further disaggregation of inputs in this and in other models of input demand.     

FORUM: Is Ecotourism Sustainable?

/ It is legitimate to ask whether and in what form tourism might contribute to sustainable development. This is not the same as sustainable tourism which, as a single-sector approach to development, may overlook important linkages with other sectors. If tourism is to contribute to sustainable development, then it must be economically viable, ecologically sensitive and culturally appropriate. Ecotourism is often advocated as being a sustainable form of tourism but imprecision in terminology clouds basic issues and there are strong economic, ecological, and cultural reasons for believing that, even in its purest forms, ecotourism is likely to present substantial challenges to destination areas, particularly if it competes for scarce resources and displaces existing uses and users. Sustainable tourism and ecotourism are not synonyms, many forms of ecotourism may not be sustainable, and if ecotourism is to contribute to sustainable development, then careful planning and management will be required.KEY WORDS: Ecotourism; Sustainable development; Development; Tourism     

On technical change in the elasticities of resource inputs

This article analyses growth of an economy where the substitutability between non-renewable and renewable resource inputs changes over time. We allow for exogenous technical change in the elasticity of substitution (EoS) between these two types of resources as well as for biased factor-augmenting technical change. Our main results are: (1) sustained technical change in the EoS is enough to overcome resource constraints; (2) productivity-enhancing technical change is most beneficial when directed to the resource which is currently most important for production; (3) the speed of productivity-enhancing technical change is crucial for its usefulness to overcome resource constraints; (4) sustainability depends critically on the type of technical change.     

Chinese construction companies in Angola: A local linkages perspective

China tends to spearhead its economic overtures to African countries through high-level bilateral negotiations. These are frequently in the form of China Exim Bank loans for large-scale infrastructure projects, repaid by resource exports to China. While much is made of China's resource-based activities in Africa, less focus is placed on the converse of this relationship—the infrastructure provision that African resources buy from China. This article takes the positions that local linkages development is one of the clearest ways that African countries can benefit from Chinese construction companies' market engagement. The prevailing view is that Chinese companies contracted to undertake the construction projects financed in this way do not use local labour, materials or any other inputs in the undertaking of their contracts. Focusing on the strategic orientation of large Chinese companies state-owned enterprises (SOEs) operating in Angola's construction sector, this article seeks to uncover the determinants of their sourcing behaviour, and the manner in which this is reflected in their use of local inputs.     

The relationship between mining and socio-economic well being in Australia’s regions

This paper examines the relationship between quality of life indicators and the gross value of minerals production from Australian regions. We used quality of life indicators, aggregated for 71 local government areas containing mining activities, of household income, housing affordability, access to communication services, educational attainment, life expectancy, and unemployment. We find no evidence of systematic negative associations between quality of life and the gross value of minerals production. Instead, mining activity has a positive impact on incomes, housing affordability, communication access, education and employment across regional and remote Australia. Whilst we do not establish causality between mining activity and quality of life, our analysis prompts a rethink of the resource curse as it applies within a single country. We did not find evidence of a resource curse, at the local government level, in Australia’s mining regions. Nevertheless, we note observations by many other researchers of negative social impacts on specific demographic sectors, localities, families of fly-in fly-out mining operations, and individuals. This contrast may be a scale issue, with the regional benefits of mineral wealth masking highly localised inequalities and disadvantage. We suggest that there is a need to better understand these impacts and, more importantly, the types of policy mechanisms government and industry can adopt to mitigate or avoid them.