Extractive industries have become more important to export revenues and government revenues in many low-income and middle-income countries (LICs and MICs), over the last twenty years. Of the 72 LICs and MICs identified as most dependent on extractives exports, 63 have increased their dependence on extractives resources over that period. While development economics emphasizes the desirability of structural transformation to diversify economies away from dependence on primary products including extractives, dependence is in fact increasing in many countries. Countries therefore need to get more positive development-impact from their extractives sectors, while avoiding the many traps – including a vulnerability to political instability and conflict. Issues of development and state fragility interconnect in the extractives sector and its relationship to the wider economy, society, and politics.
The project’s initial outcome is an important stocktaking of what has worked and what has not worked in the extractive sectors, both for mining and for oil and gas. The project further identifies the existing knowledge base, the gaps and the opportunities for further research in the context of a scoping paper. Interviews are being held with key stakeholders, including policy makers (in particular ministries of finance, mining ministries, and national oil companies), industry associations, and researchers working in the field. From this initial first phase, a plan for the remainder of the project will then be constructed.