Formal mining investments and artisanal mining in southern Madagascar: Effects of spontaneous reactions and adjustment policies on poverty alleviation

The main political concern in the southern areas of Madagascar is poverty alleviation. To alleviate poverty in the area, the government has chosen to enforce adjustment policies of the World Bank Group. According to the World Bank Group's argument, while artisanal mining is supposed to create significant economic, social and environmental problems, large-scale mining investment results in economic and social prosperity. This paper focuses principally on a re-analysis of the debates regarding the relationship between artisanal and large-scale mining and poverty alleviation in developing countries. Further, the paper offers an alternative viewpoint on these issues based on the example of Madagascar. In the last decade, Madagascar has experienced a significant increase in mining activity. Towards the end of the 90s, informal and artisanal mining emerged as one of the most important economic activities of the area with the development of the Ilakaka frontier. At the same time, foreign investments began to benefit from adjustment policies implemented by the government, and large-scale mining operations also commenced. As the local socio-economic system was deeply affected by these developments, it is wise to monitor the effects of each type of mining operation on poverty alleviation. On the one hand, it appears that governance insufficiency has hampered possibilities for broader economic prosperity through large-scale mining investments. On the other hand, while artisanal mining is frequently condemned by scholars, the negative comments seem to be overly pessimistic, as this activity can be demonstrated to provide considerable economic opportunities for both the native and migrant populations.