Golden growth: generating wealth and income for countries
Gold is a mainstay of economies worldwide. In China, the world’s largest producer, gold contributed $13,814bn to its GDP in 2010. For Australia, the second largest producer, the contribution of gold to its GDP in 2010 was £10.271bn, while it accounted for revenues of $9.2bn in the US, the third largest producer.
The strongest rise in output has been seen in Heavily Indebted Poor Countries (HIPCs) whose gold production rose by 84% between 1994 and 2004. Of the 38 HIPC countries in this period, 14 were significant gold producers (Bolivia, Burkina Faso, Congo Côte d’Ivoire, Ethiopia, Ghana, Guinea, Guyana, Honduras, Laos, Mali, Nicaragua, Sudan and Tanzania) with lesser or minor production in at least a further 14.
In Ghana, gold accounted for 11.6% of GDP in 2010, while in Mali its contribution was 18.98%.
The average price of gold (per ounce) rose from $271.04 in 2001 to $1571.52 in 2011, according to Thomson Reuters GFMS.
At the World Bank’s Gold For Development conference held in October 2011, three reports (from Ghana, Peru and Tanzania) were presented to illustrate the role of gold in economic development.
According to the World Bank’s conclusions: “the reports showed that large-scale gold mining has a significant economic, social and environmental footprint and there is undoubtedly a complex interplay between gold mines and the communities and countries in which they operate. The reports also added to the understanding of this interplay, showing that mining can bring benefits to people’s lives.”
It continued: “Much of the focus on the “resource curse” centres on the thesis that many developing countries suffer, rather than benefit from, their natural resource riches. The Gold for Development event highlighted a growing body of evidence that natural resources, when managed well and with transparency, can lead to accelerated, sustainable economic and social development for producer countries and their local communities.”