THE CONTRIBUTION OF THE MINING SECTOR TO SUSTAINABILITY IN DEVELOPING-COUNTRIES

Does the mining sector contribute to, or detract from, the achievement of sustainable development in developing countries? Sustainability is defined as development that will give future generations opportunitie s equal to or greater than those of the present generation. Treating g ross income per capita as an imperfect proxy of these opportunities, a test is made to investigate whether increases in mining GDP have led to long-run increases in GNP per capita despite the exhaustibility of mineral deposits. This is a more encompassing criterion than the conve ntional Hartwick criterion which establishes necessary conditions for the achievement of a related definition of sustainability. A vector au toregression model (VAR) is estimated for each of 19 non-OPEC developi ng countries with large mining sectors. Using the impulse response fun ctions, the long-run multiplier of mining income on GNP is calculated. The sustainability criterion developed in the paper requires the mult iplier to exceed a minimum value. This test is carried out under alter native assumptions regarding future mining income.