The Economics of Landmine Clearance: Case Study of Cambodia

This paper identifies and prices the costs and benefits of locating and dealing with landmines in Cambodia, one of the world's most heavily mined countries. The three main benefits are the saved costs in terms of human productivity, medical treatment and foregone agricultural production. The annual costs of completely de-mining the country over 25 years are estimated to be $US 140million whereas the annual benefits are only $0.7 million. Using a 10 per cent discount rate, the total de-mining expenditure (in present values) of $3,500 million would result in a net present value of -$3,434 million. An alternative set of assumptions, including a halving of the costs of de-mining over 25 years, produces net present values of more than -$400 million. These results have at least two important implications: there is crucial need to bring down the cost of de-mining and policymakers concerned to maximize the welfare of the Cambodian people should consider alternatives to de-mining.