For centuries, mining has been an important economic activity for the generation of wealth in Peru. Since the mid-2000s, the commodity boom – which involved the rise of metal prices at a global level – has enhanced the relevance of mining activities within the national economy, representing about 15% of the annual GDP. This has translated to an average 5.5% economic growth rate during these last two decades. Rather than facing the resource trap – whereby countries that depend on an abundance of natural resources may experience economic contraction due to international market price volatility – Peru took advantage of the favourable economic conditions. It partly used that wealth to foster sustainable development and improve living standards around mining areas. However, the socioeconomic benefits, such as “reducing poverty in half and improving income distribution” have been limited mainly because of the government’s systemic mismanagement of resources. The continuous growth of the informal economy and the rise of illicit economic activity, such as the illegal extraction and export of gold, the below-standards working conditions, and the impairing of water quality in rivers near mining areas, has demonstrated the government apparatus’ inability to adapt and respond with effective measures to ensure wealth redistribution and sustainability.Continue reading “Can mining corporations promote socio-economic development in Peru?”
Tag: Business and Economics
What Led to the Successful Economic Development of South Korea?
After independence from Japan in 1945, Korea split into the Communist North and Capitalist South. The two Koreas subsequently engaged in a civil war from 1950 to 1953 that devastated both countries and killed two to three million civilians. By the end of this war, South Korea was one of the poorest, least developed countries in the world.
Continue reading “What Led to the Successful Economic Development of South Korea?”