Paper

Monday, May 9th:

Pengshan Pan (Pittsburgh), presents:

Title: Foreign Mining, Labor Welfare and Local Trust: Evidence from Kyrgyzstan Gold Mine

Abstract: There has been controversy over the impact of foreign natural resource investment on worker welfare and host country politics. This paper explores this question by analyzing Kyrgyzstan’s dominant foreign invested gold mine, which accounted for 12.5% of Kyrgyzstan’s GDP in 2020. A key finding is that the economic growth from foreign invested mine undermines the trust of the beneficiary mining industry in local communities. Using geolocated data from household panel surveys in Kyrgyzstan from 2010 to 2016, the study shows Kumtor, this largest foreign mine, offers mining workers better incomes and social benefits. However, Kumtor mining investment creates greater inequality and social division. This study also finds that the emergence of Kumtor is associated to economic grievances of the non-mining sector. Higher corporate earnings or gold prices were associated with lower trust in local leaders by mining workers, but higher trust by manufacturing workers.