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16.01.2009 Business & Finance

Structural Adjustment has led to conflict in mining areas – Study

By GBN
Structural Adjustment has led to conflict in mining areas – Study
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A study has shown that the implementation of the World Bank/IMF led Structural Adjustment Programme (SAP) in Ghana and other African countries in the 80s and 90s has changed relationships between foreign mining companies and the communities in which they operate, often leading to conflict.

The study conducted by the University of Alberta, Canada, looked at community and company relations in gold mining in Ghana and other African countries and examined the impacts of the SAP.

Implementing the SAP required reduced government functions, the implementation of a free market system and privatization of state-owned corporations.

One of the researchers, Theresa Garvin, commenting on the study said, the introduction of these systems and policies resulted at times in considerable social conflicts in Ghana and other African countries.

According to Garvin, the retrenchment of government investments during the past 15 years created a vacuum and this has resulted in foreign mining companies being seen as surrogate regional government entities. Local people as a result looked up to the mining companies to provide for their basic needs in the communities.

The research found that when the expectations of local people were not met, it led to strife.

“The ordinary people in our research project stopped looking to the government for delivering basic social services and began looking to the companies. They saw the companies in a quasi-governmental capacity, and therefore had expectations that the companies didn't feel was their moral obligation to meet,” Marvin says “So what resulted in Ghana, and at least three other African countries, were at times considerable social conflicts.”

The Structural Adjustment Programme was designed to assist the economies of developing countries. As a result of the programme, many developing countries have experienced an increase in resource extraction activities by international corporations, the report said.

“There is fairly strong evidence that the Structural Adjustment Programme was not felt evenly across social classes, regardless of whether it was in Latin America or Africa. The programme was harder on some social groups than others,” Garvin said. “And the communities we dealt with in this particular study were very poor rural communities who felt the program quite strongly.”

Meanwhile, some proponents of the mining industry like Prof. R. Anthony Hodge, argues that the over $5 billion invested in the mining sector in Ghana in the last two decades has had some positive impacts on mining communities.

He argued that standards of living have improved as well as improvements in disease control. He said of Ghana's 138 districts, its four mining districts have the lowest poverty levels in the country outside the capital, Accra, adding “effective disease control programmes have been a key component of this success.”

But environmentalists and some Civil Society organizations that are working in these mining communities would not agree. Indeed, facts on the ground point otherwise.

Local people lose their land and as a result livelihood when mining companies acquire land and in some cases, engage in expansions.

The debate would go on for a long time, but the fact still remains that people in the middle of it all, the local people are the best to tell their own story.

By Emmanuel K. Dogbevi

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