Working Paper
The potential of extractive industries as anchor investments for broader regional development

The paper reviews what we know about the possibilities of designing and implementing policy measures that raise the contribution of the extractive industries’ production/consumption links to economic growth and wellbeing, and reviews how policies pursued by various governments have succeeded. It describes policies used in four areas: local content, employment, downstream processing, and infrastructure, and finds that the policies used have mostly not lived up to expectations.

Finally, the outline of a broader, more coordinated approach is sketched out. Its main elements are those that have proved to work at least reasonably well in existing programmes, including (i) supplier identification and development schemes, (ii) government investment in technical and vocational education and training , (iii) elimination of obstacles to small enterprises, (iv) multiple use of infrastructure, (v) a strong role for local government, and (vi) accurate information and monitoring.