SITUATION ANALYSIS OF THE SMALL-SCALE GOLD ... - WWF

Zoning of mining areas. The third intervention involves assisting the government in
creating a more enabling environment in the sub-sector. It is suggested that the principle
reason for zoning is to provide an organizational basis for regulating the mining regions.
Better regulated regions are safer and create an enabling environment in which miners
and interion communities can collaborate. Zones under effective government
management will provide a context in which the miner‟s association can set up assistance
schemes to promote technically, economically and environmentally sounder mineral
extraction techniques. Higher recovery and productivity will result in higher incomes,
allowing miners to invest in better mining equipment and develop superior mining
methods, feeding an upward spiral of recovery, profits and reduced pollution.
A miner who has a good year and expects to do even better the next year is a better
taxpayer and more effective manager. A miner who has barely managed to get by and is
uncertain about the next year will not be able to pay taxes, and is not in a position to
worry about the environment and the social costs of his operation. The basic idea is to
encourage and support the government in creating a viable tax base in the SSGM sector.
Policy, legislative and institutional development. With a national organization of miners
and the zoning of mining regions in place, the government will be in a much better
position to develop a new mining policy. In fact, the work done under the first three
interventions will have produced significant input from the key stakeholders that can be
used to formulate a policy framework and improve the new draft mining law. The process
of interactive policy making, however, should be institutionalized, as rapid changes will
most certainly continue to occur in the sub-sector.
With a solid policy basis, the new laws that are being drafted will be more practical and
will enjoy greater support among the miners. The likelihood of compliance with the
regulations will have been significantly increased. Under these circumstances it will also
be easier to design and develop efficient and effective mining institution. The British
Geological Survey (BGS) has already developed a full proposal for the development of a
Minerals Institute and this work could be used as a point of departure in the preparation
of a revised proposal.
1.3 Background of the approach
The approach recommended here has been inspired by the writings of the Peruvian
economist Hernanado de Soto, who has formulated innovative strategies to redress the
shortcomings of the “underground” or informal economies in developing countries. De
Soto‟s basic thesis is that the poor in developing countries have not accumulated all the
assets needed for successful capitalism. Because they are legally disenfranchised, they do
not have title to the land and other assets they exploit, the poor are unable to turn these
assets into liquid capital – the kind of capital that generates new wealth.
De Soto argues that during the industrial revolution, the advanced nations faced the same
kind of development problems that low-income countries face today. In those days the
developed nations “were themselves Third World countries teeming with black markets,
pervasive mafias, widespread poverty and flagrant disregard for the law.” About 150
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