Economic Growth, “Development,” and the Triple Crisis: Reflections on El Salvador and Gold Mining
Let me introduce myself as does my business card: I am a professor of development. I am aware that most mainstream economists – and even many so-called development professionals — define progress primarily through the lens of aggregate economic growth. Yet, my recent research in El Salvador shows why this definition of progress is wrong.
El Salvador is poor by almost any economic measure, be it per capita gross domestic product or per capita income. But a rich vein of gold lies buried beneath its mountains. This has led some prominent individuals in that country to argue that gold mining is the ticket to economic growth and therefore “development.” Former Salvadoran finance minister and mining company advisor Manuel Hinds said that renouncing mining would be “globally unprecedented” and “unjustifiable.”
This is, of course, what mainstream economic theory would have one believe.
Yet, as is often the case with field research, my travels deep into mining country in El Salvador in 2011 and 2012 and interactions with ordinary Salvadorans there revealed the reality of what “development” is and what it is not. Salvadoran farmers told me about mining executives from the Canadian firm Pacific Rim and others coming into their towns around eight years ago as mining prices started to skyrocket (gold prices have gone from under $300/ounce in 2000 to over $1,600 today). The companies promised prosperity; they said that mining was the only chance for “development.”
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