Pengshan Pan is PhD Candidate in the Graduate School of Public and International Affairs at the University of Pittsburgh.
His research focuses on international development with a specific focus on the political economy of foreign direct investment in Central Asia.
He is especially interested in the interconnection between foreign direct investment, environment, labor welfare, and conflict.
Foreign Mining, Labor Welfare and Local Trust: Evidence from Kyrgyzstan Gold Mine
There has been controversy over the impact of foreign natural resource investment on worker welfare and host country politics. This article explores this question by analyzing one of Kyrgyzstan’s dominant natural resource FDIs, which accounted for 12.5% of Kyrgyzstan’s GDP in 2020. Using geolocated data from household panel surveys in Kyrgyzstan, the study shows Kumtor, the largest foreign mine, offers workers better wages and social benefits. Foreign mining investment has caused national discontent, not because it worsens the local economy, but because it creates greater inequality and social division. This study also believes that the emergence of Kumtor is associated to the high level of trust in the central government by local residents, especially high-income miners. It also fosters mistrust among its employees, local communities and the foreign investor.