Mineral rights, rents and resources in South Africa’s development narrative | Land Portal

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Date of publication: 
janvier 2015
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South Africa is endowed with substantial subsoil mineral wealth, yet the development promise typically associated with this wealth has not been realised. Between 2001 and 2008 the South African mining industry contracted at a rate of 1% a year, while comparable mining jurisdictions grew at an average of 5% a year.1 This period marked the longest commodity price boom in recent history. South Africa’s failure to capitalise on the boom provides a clue to the country’s puzzling post-1994 economic and political development.This paper explores potential explanations for South Africa’s economic underperformance since 1994. Despite the country’s substantial subsoil mineral wealth endowment, the development promise typically associated with such wealth has not been realised. The democratic dividend has produced some level of macroeconomic stability, but large fault lines have emerged, especially since the 2008 financial crisis.The paper examines whether ‘Dutch disease’ explanations can account for weak manufacturing performance, but finds that they are inadequate. Given mining’s continued importance to the economy, the paper explores whether mineral resources could be better leveraged for inclusive development. It concludes that more coherent institutional choices are required if this is to come to fruition. Currently, the mineral rights regime, traditional leadership legislation and industrial policy are not sufficiently integrated to give effect to the ambitions of the National Development Plan as they pertain to the potential contribution of mining to the economy. Mineral rents could provide the impetus for upstream technology and product development, but the mining industry first has to generate growth.Beyond mining, economically inefficient visa regulations, electricity shortages and a general lack of policy clarity all contribute to South Africa’s weak economic performance. Addressing these factors would attract the growth-inducing investment required for sustained and inclusive economic growth.

Auteurs et éditeurs

Author(s), editor(s), contributor(s): 

R. Harvey

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eldis (ELDIS)

Eldis is an online information service providing free access to relevant, up-to-date and diverse research on international development issues. The database includes over 40,000 summaries and provides free links to full-text research and policy documents from over 8,000 publishers. Each document is selected by members of our editorial team.

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