EXTRACTIVE INDUSTRIES AND SUSTAINABLE DEVELOPMENT: Challenges for Latin America and the Caribbean

EXTRACTIVE
Volatility of prices, 1970 2016
RED (standard deviation of
SUR 1 What are the characteristics international prices)

INDUSTRIES of the Extractive Industries?

0,00 0,20 0,40

> Capital-intensive Energy

0.34

$
Extractive industries contribute to economic growth in > Conicts on rents allocation Agriculture
0.11
Latin America and the Caribbean, but their often negative

$
social and environmental impacts cannot be ignored. Minerals

There are plenty of opportunities for innovation and

> High concentration levels and Metals 0.17

$
linkages in these industries, but taking advantage of them Manufactured

demands capabilities and resources that are not available > Strong social and Goods
0.07

$
in the region today. Policies and decision-making in this environmental impacts
area are becoming increasingly sensitive and of interest Source: Own elaboration based on the World Bank
Commodity Price Index data.
to all citizens. > Volatile prices

CARBON

2 Which is their impact on Latin COPPER

BAUXITE
America and Caribbean countries? DIAMONDS
TIN
GAS

More dependency. Not so much wealth.

IRON
LITHIUM
MOLYBDENUM
Share of subsoil assets in Per capita subsoil NICKEL
total wealth, 2005 assets, USD, 2005 GOLD
OIL
14% 25,000 SILVER
13%
19,972 PLATINUM
12% 20,000 $
LEAD
10%
15,000 POTASSIUM
8% ZINC
10,000 7,470
6%
$
5,000 3,597 3,525 Control Group South America I South America II
4%
3% 3% 3% 3% 2,779 2,321
2% $ $ 1,364
1% $ $ 203 102 Australia Argentina Bolivia
2% $
0% 0 Canada Paraguay Colombia
0% Denmark Uruguay Chile
p

be nd

ico

an

ica
I
u

II
Ecuador

ld
Finland

il

ica
ro

an
rib a a
ica

az
ex

be
or

er
lg

er
Br
Peru

W
Netherlands

Am
er

Ca ic

rib
II

ico

ica

ld
p

ro
I

Am
an

e er
Am
ica

ica
ou
il

Ca
or

nt

Venezuela
az

th Am
er
ex

l
New Zealand
be

ra
gr
er

er

h
Co
Br

h
M

nt
ut
rib
Am

Am

ut

tin
l

lA

Norway
ro

Ce
So
Ca

So

La
ra
nt
h

Sweden
nt
ut

ut
Co

Ce
So

So

Source: Own elaboration based on data from the World Bank. Source: Own elaboration based on data from the World Bank.
 EXTRACTIVE INDUSTRIES AND SUSTAINABLE DEVELOPMENT: Challenges for Latin America and the Caribbean

SUSTAINABLE 1 Latin America and the Caribbean integrate the world

RED
SUR DEVELOPMENT as providers of natural resource-intensive goods

One out of every two dollars of Latin American -

exports is intensive in natural resources. Are we

taking advantage of this pattern of international Share of natural
integration to promote sustainable development? resources in total
exports. C. 2015.
To answer this question we must evaluate whether:
Very high
(a) natural resources are exploited in a sustainable High
manner; (b) benets are distributed equitably; Medium
Low
and (c) we are enriching or impoverishing No data
future generations.

2 Are we moving towards sustainable development in Latin America and the Caribbean? Not much.

Economic growth: Mixed outcomes. Current generations are decapitalizing

Very close to the world average High inequality the future generations
(a) levels (b) in relation to the world average
35,000 5
4.5
30,000
4
25,000 3.5

20,000 3
No data
2.5
15,000 Decapitalization
2
No data below world average
10,000 1.5
1
5,000 Below world average
0.5 Decapitalization
above world average
0 Above world average
1820
1830
1840
1850
1860
1870
1880
1890
1900
1910
1920
1930
1940
1950
1960
1970
1980
1990
2000
2000
1820

1840

1860

1880

1900

1920

1940

1960

1980

Latin America Western Europe East Asia Source: Own elaboration based Inequality: Gini coecient for income, Circa 2015. Period: 1990 - 2010 Source: Own elaboration based on data from the Wealth Index Report 2014.
World Other Westerners on data from The Conference Board. Source: World Bank