This is an archived version of the PW Sources newsletter from Saturday, June 1, 2024. Sign up to receive PW Sources directly to your inbox here.

PORGERA JOINT VENTURE

Last Friday, a massive landslide occurred in the Enga province of Papua New Guinea, killing over 2,000 people and blocking access to the Porgera Gold Mine, which has been able to continue operating without restrictions due to an on-site fuel stockpile. A tectonically volatile region, the frequency of fatal landslides in Papua New Guinea is partially exasperated by deforestation, developmental patterns, and mining practices. 

In a 2014 book, ALEX GOLUB provides an ethnographic account of how the Porgera Mine affected local Ipili communities: 

“As birthrates rose and child mortality decreased, an entire generation was coming of age surrounded by a mine they had not chosen, and without the houses and other compensation their elders had received from the mine. Many Porgeran families had a group of Engan or Huli immigrants who were attached to them in a client-patron relationship, and these factors compounded the land shortage caused by the mine’s presence to create a crisis of subsistence agriculture that led in turn to an increased reliance on money from the mine to purchase store-bought food. Ten years into what was supposed to be an age of effortless wealth and health, they felt cheated by what the mine had wrought and deeply entitled to more than they had received.

The Yakatabari dump was designed as a solution to all of these problems. The plan was attractive to the mine because the proposed new dump site was below the open pit, near the mine’s main plant, and was capacious enough not only to receive waste generated by the current mine plan but possibly even to extend the mine’s life by lowering costs. The plan was also attractive to landowners, whose goal— however unintuitive it might seem—was to be displaced by the Yakatabari dump. Ipili saw relocation as a chance to acquire the millennial affluence they had missed out on in 1988 and as a chance to leave an area increasingly affected by pollution, land shortages, and overpopulation. Throughout the negotiations, the groups which would be displaced by the dump were also those who were the most eager for its construction, while those who would remain felt that they were getting the short end of the stick. As the difficulties of living inside the Special Mining Lease territory grew more and more intractable, compensation and relocation looked more and more like the solution to their problems.”

+  “Since most of the world’s international mining and exploration companies—including Barrick—are Canadian, one might expect the Canadian government to exercise some oversight over its corporate citizens abroad.” A 2011 Human Rights Watch report on the Porgera Joint Venture. Link. And Ian Morse on protests against Barrick. Link.

+“Prior to the construction of the Porgera Joint Venture’s power line, communities living along the route had established flexible arrangements regarding land usage. While land issues did lead to violence from time to time, most conflicts could be resolved amicably.” By Kai Lavu. Link. 

+  “Lack of support for, and investment in, provincial disaster committees will continue to act as a handbrake on PNG’s efforts to implement the four priorities in the Sendai Framework.” Darian Clark on disaster prevention in the Pacific. Link. 

NEW RESEARCHERS

Deskilling Technologies

WILLIAM M. COCKRIEL is a Ph.D. Candidate in Economics at the Booth School of Business at the University of Chicago. His job market paper documents the effects of the McKay stitcher, an unevenly distributed deskilling technology, on the artisanal shoemakers in the nineteenth century.

From the paper:

“The children of shoemakers did not pursue other skilled occupations. In high-exposure counties, they entered lower wage occupations and were less likely to continue their education as students. In McKay counties, the children of shoemakers turned to shoe factory work, implying high industry continuance in McKay counties despite plummeting occupation continuance. As was true for their fathers, shoe factory work was temporary, and the children of shoemakers continued in other lower-wage occupations through 1880 and even 1900. The children of shoemakers had limited migration responses, similar to their fathers. Though costs to incumbent workers and their children were high, the McKay stitcher also created new opportunities for workers from less literate and lower wealth fathers. This highlights the deskilling effect of the McKay stitcher. Workers entering the shoe industry prior to the McKay stitcher came from above average wealth fathers with above average rates of literacy, while new entrants after the McKay stitcher came from below average wealth fathers with below average rates of literacy. Though many new occupations were created at the lower end of the skill distribution, there were relatively few new opportunities at the top, and very few children of shoemakers benefited from these occupations. In line with Goldin and Katz (1998), the McKay stitcher did create managerial and machinist occupations in the upper end of the skill distribution along with the new occupations in the lower end. There were only twenty-six machinists employed at shoemaking establishments in 1870 compared with 166,435 workers in the industry in total. Gordon McKay’s firm responsible for producing and repairing the stitchers employed fifty-eight machinists. These eighty-four new machinist jobs are a small number relative to the size of affected individuals. Only 0.3 percent of the children of shoemakers become machinists in 1870, and none of those are in the shoe industry, nor are any of them machinists in later decades.”

+ + +

+  “It has become more challenging for risk managers to find swaps that precisely match the maturity dates of their funds’ underlying assets. This phenomenon, known as “duration drift,” poses a significant challenge to effective risk management.” New in her Market Microstructures series, Elham Saeidinezhad examines hedge ineffectiveness and shrinking options in the Treasury market. Link.

+  “Twenty-four years after the launch of Plan Colombia, Ecuador is following a similar path, with the government aiming to increase the military’s arsenal of weaponry in the state’s war on drugs.” New in PW, Renato Rivera Rhon on Ecuador’s position in the global drug trafficking chain. Read in English or Spanish. 

+  “When a sovereign’s debt is unsustainable, concerns regarding intercreditor equity are exacerbated by the sequential” nature of the restructuring process, where official creditors are generally expected to commit to debt relief terms before private creditors.” By Sean Hagan and Brad Setser. Link.

+  “Sheinbaum’s climate campaign leans heavily on strengthening and transforming Mexico’s state-owned enterprises.” Kate Aronoff on what Claudia Sheinbaum’s election in Mexico could mean for climate policy. Link. 

+  Thandika Mkandawire critiques the predictive value of the logic of the neopatrimonialism school as applied to African governance, and its devastating effects on African economies. Link.

+  “The neo-fascist response to migration brings traditional racism into line with climate denial and a commitment to authoritarian solutions to the eco-social crisis.” By Alberto Garzón Espinosa. Link.

+  Melanie Brusseler and Chris Hayes on the UK’s Contracts for Difference (CfD) Scheme for private generation capacity. Link.

+  Renato H. de Gaspi and Pedro Perfeito da Silva use a Polanyian-inspired framework to examine how counter-movements against corporate welfare shaped or didn’t shape Brazil’s automotive, animal protein, and pharmaceutical industries. Link.

+  “The international rise and fall of inflation since 2020 largely reflected the direct and pass-through effects of headline shocks. Macroeconomic conditions generally played a secondary role.” By Mai Chi Dao, Pierre-Olivier Gourinchas, Daniel Leigh, and Prachi Mishra. Link.

+  “On 11 September 2015, a conference entitled ‘1965 and the Indonesian Coup: Fifty Years On’ was held at the Australian National University (ANU) under the auspices of the university, the Australian Institute of International Affairs (AIIA), and the Australian Department of Foreign Affairs (DFAT). The conference assembled many diplomatic and journalistic ‘eyewitnesses’ to the experiences in Indonesia in 1965. One of the presenters, Geoffrey Miller, is worth considering. Posted to the Australian embassy from 1 October 1965, he openly supports the Indonesian government’s position that the ‘PKI did it,’ but does not explain how he could have known this in 1965. Writing a pre-conference reflection on 1965 for the Australian Institute of International Affairs (AIIA), he excuses Suharto and mentions nothing of Shann’s relentless propaganda campaign against Sukarno or the PKI (emanating from within the Australian Embassy in which he personally served). He writes at one point that ‘the great blemish on his [Suharto’s] government, and the New Order, was of course the anti-PKI campaign.’ While he concedes that the victims were overwhelming innocent, Miller writes that ‘the retribution [of 1965] was clearly terrible. Set against it must be the great improvements made by the Suharto regime in the lives of most Indonesians…’ It is perhaps not surprising that at a conference organised with the assistance of the DFAT, the role of Australian diplomacy in Indonesia in 1965—particularly the rich pickings available for Keith Shann—are not of any interest as a matter of philosophical and ethical concern.” By Adam Hughes Henry. Link.

Each week we highlight research from a graduate student, postdoc, or early-career professor. Send us recommendations: editorial@jainfamilyinstitute.org