Using local content policies to engender resource-based development in Zambia: A chronicle of a death foretold?. Issue 2 (April 2020)

• Record Type: Journal Article
• Authors: Kragelund, Peter
• Is Part Of: Extractive industries and society. Volume 7:Issue 2(2020)
• Page Start: 267
• Page End: 273
• Publication Date: 2020-04
• Subjects: Zambia -- Local content policy -- Domestic market formation -- Structural transformation -- Copper -- Mining -- Resource-based development; Mineral industries -- Periodicals; Gas industry -- Periodicals; Petroleum industry and trade -- Periodicals; 338.205
• DOI: 10.1016/j.exis.2019.09.006
• Languages: English
• ISSNs: 2214-790X

Abstract

Highlights: Confidence in resource-based development in the Global South has been restored. Local content policies are widely perceived as a path to resource-led development. TNC needs do not match suppliers capabilities; Zambian policies do not address this. Local content policies need to also build capacity in the Zambian bureaucracy. Local content policies are highly unlikely to trigger resource-based development. Abstract: The commodity super cycle, shifting terms of trade, new oil discoveries, and altering geographies of supply and demand have restored confidence in resource-based development in the Global South. A central element herein is local content policies, which are thought to enhance host country participation in resource extraction and thus lay the foundation for structural transformation. This article analyses the extent to which local content policies trigger resource-based development. It uses Zambia as a critical case and argues that while, in theory, these policies could further domestic market formation, this is hampered in practice by local suppliers' inability to meet the quality requirements of transnational mining corporations. It also argues that the Doing Business Indicator ranking drives the Zambian government to adopt policies that work against domestic market formation; and that power relations between transnational mining corporations and the Zambian state are imbalanced. The most likely result is that Zambia's new Local Content Strategy has as little chance of transforming the Zambian economy as previous attempts to engender resource-based development.