Modern Mining December 2023

COLUMNIST

Mining as a key to solving youth unemployment By Dr Ross Harvey, director of research and programmes at Good Governance Africa (GGA)

Dr Ross Harvey, director of research and programmes at GGA. Y

outh unemployment is a significant global concern. It is an especially concerning development challenge across African econo mies, given our relatively high fertility rates. According to the United Nations, Africa will account for four elevenths of the world’s population by 2100, while all other continents move into negative fertil ity. The nature of this concern is multivariate. In the first instance, high quality jobs provide dignity, and the absence thereof is likely to worsen dynamics that currently undermine security and wellbeing. Job income is also a means to an end. Such income, broadly distributed, tends to produce social and political stability through creating a broad-based mid dle class. In the absence of such access to income, however, political stability weakens, populist leaders gain traction, and appetite for democracy diminishes. In South Africa alone, 72% of respondents polled in the latest Afrobarometer Survey essentially indicated that they would be willing to forego the right to vote if it meant greater economic opportunity and stability. A recent article by economist Daron Acemoglu notes that since the end of the Cold War, people around the world are increasingly dissatisfied with democracy. The Economist makes a similar case. Concerningly, this trend is particularly strong among young people, who “report a growing preference for left-wing or right-wing authoritarian regimes. On both sides of the Atlantic, it is now common to hear arguments advocating new forms of socialism or a move away from economic growth altogether” writes Acemoglu. Appetite for democracy among citizens in

The conditions for shared prosperity appear to be optimal when governments are effective at distributing public goods efficiently.

Acemoglu recently put it: “Shared prosperity thus depends not only on productivity growth but also on the right composition of technology, institutions, and norms… The necessity of markets for driving innovation does not make them sufficient for producing social benefits”.

African countries appears to remain strong, though many African countries have backslidden in terms of democratic health rankings, according to the latest Economist Intelligence Unit’s Democracy Index. The data is surprisingly clear, though, as are the econometric regression results, that democracies retain significant advantages over non-democra cies in both economic growth and in the provision of public goods. Even in instances where demo cratic governance is sub-optimal, the presence of democratic mechanisms allows citizens to credibly threaten elites with the loss of power if they extract an unacceptably high level of unproductive rents from the system. There is also strong empirical evi dence to suggest that across the developing world, the political incentives for expanding the provision of basic public goods such as electricity, especially to highly populated areas, are also higher in democ racies than in autocracies at similar developmental levels. The gradual shifting of cultural preferences away from democracy and towards some kind of autoc racy is a problem. Autocracies, regardless of their ideological leanings, have strong incentives to nar rowly serve the ruling elite at the expense of the majority of citizens. Correctly identifying the source of democratic dissatisfaction is critical if confidence in liberal democracy as the most effective political system, when measured in terms of the broad-based distribution public goods, is to be restored. This brings us back to the question of employ ment. The growing dissatisfaction with democracy was not born in a vacuum. Part of the challenge is that even though they have tended to outperform auto cratic counterparts, the economic growth models pursued within liberal democracies have not cre ated evenly distributed benefits. Productivity growth should translate into wage growth, according to standard classical models, but this has not happened

Mining is an increasingly important flywheel for industrialisation across African economies.

32  MODERN MINING  December 2023