Green Economy in a Blue World-Full Report

opportunities in service and technology sectors, as well as trade and finance. Still, for many countries, non-extractive resources and human capital may be insufficient tomeet development targets. For these countries, deep-sea minerals may offer an opportunity to meet these goals and help economies transition to higher levels of development. 2.4 Social opportunities A thorough cost-benefit analysis should be undertaken before any mining operation commences. The cost-benefit analysis should include careful accounting of the likely monetary and non-monetary costs and benefits which might accompany a deep-sea mining endeavour. Additionally, such an analysis should provide a clear accounting of how these costs and benefits are distributed across society with special attention given to costs and benefits which accrue to the host country and to (national, regional, and local) components of society within the host country. The benefits enjoyed nationally and locally from deep-sea mining will depend on a host of factors. At a minimum, States can charge fees, taxes and royalties which can be reinvested locally. Deep-sea mining might also provide direct employment opportunities for the host country, but such employment depends Papua New Guinea has seen three resource booms since independence in 1975. Wealth from these developments has not been shared widely and the country isunlikely tomeet theMillennium Development Goals (Morris, 2011). So will new marine mining ventures break with the past and contribute to economic, social and political development? Many resource-rich developing states like Papua New Guinea are seen as victims of the ‘resource curse’ because despite their resourcewealth, they have exhibited slow economic growth. The resource curse is often associated with ‘Dutch disease’, a phenomenon which arises when local currency appreciates due to increases in resource exports. Thismakes it difficult for other sectors, such as manufacturing and

on the degree to which the administration, transport and technical operations related to mining are based locally. Potential employment could be created directly in industries such as shipping, aviation, warehousing, maintenance, construction, regulation and monitoring (including laboratory services), although highly skilled or technically specialized positions may be filled by foreigners. Indirect employment, for instance in hospitality, lodging and provisioning industries, could occur if mining operations source goods and services locally. Mining operations may also require the development of new local infrastructure (roads, ports, power plants) which could serve to support or spur needed infrastructural development in host countries. Mining companies may also provide direct philanthropy and community support services for host countries. Such philanthropy could include health and education services. The mining company currently engaged in offshore mine development in Papua New Guinea has established a skills-building programme, which is providing vocational training to local geologists, geophysicists and environmental scientists and also support for selected students to pursue studies in marine-science related fields at an international University. Industry- provided philanthropy, however, will be case- agriculture to compete internationally and consequently they decline. Once the boom is over it may be difficult for these industries to start up again. In addition, it has been noted which when a new income possibility arises it can lead to increased rent seeking by powerful individuals or groups. The more people are involved in rent seeking, the less total income increases (Torvik, 2009). There has been considerable research aimed at understanding the causal relationship between resource abundance and slow economic growth. Although the relationship is still not clear, it appears which good governance is fundamental and which states need to move from simple resource extraction to integrated resource management (Pedro, 2006).

in a Blue World

Dutch disease and resource curse

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