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Poll results: Are local content policies working?

07/10/2019
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Across the world, resource rich nations have implemented a series of local content policies which in theory are designed to upskill local workforces, nurture and grow local supply chains, and increase the overall economic development of a country. But does reality match the theory? That’s what we asked you in last week’s EngineeringPro poll.
Are local content policies working?
As the table above illustrates, the majority of readers (53.85%) believe that local content policies are having little to no effect on the host countries of natural resource projects. Reasons for this are likely to be varied – however, a common criticism levelled against local content policies centres on the restrictions they place on free trade. By installing rules and regulations which stipulate which suppliers an operator must use (and other restrictions), local content policies could in-fact be harming local economies. This is very much the ‘free trade’ criticism of local content policies. However, a secondary criticism that is often directed towards local content policies centres on the issue of corruption. The spectre of facilitation payments and other forms of corruption can sometimes raise their heads when local content policies are introduced without proper safeguards. As one reader put it:

“Run by the corrupt politicians of local countries. Projects have deteriorated as a result.”
Corruption and barriers to trade are some of the negative impacts associated with local content policies.
On the positive side, a sizeable number of readers (38.46%) felt that local content policies do indeed have a positive impact upon the host countries of natural resource projects. Positive benefits associated with these policies can include sizeable short-term injections of capital into the local economy, medium-term skills transfer and capacity building amongst local workforces, and over the longer-term the development of a domestic natural resources industry.

Do you agree?


What are your thoughts on local content policies? Are there any issues which we haven’t considered? Let us know in the comments below.

The best comments and ideas will be featured in the next edition of the EngineeringPro Newsletter.
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Poll results: Are local content policies working? - Time to read 2 min
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