More transparency needed in managing natural resources<\/p>\n
George Soros, Chairman, Soros Fund Management, Open Society Institute,
\nProject Syndicate<\/p>\n
Many developing countries that are rich in natural resources
\nare even poorer than other countries that are less well endowed.
\nThis is because natural resources serve as an enticing prize to
\nfight over. Many countries with significant mineral deposits or
\nvaluable cash crops are in the grip of repressive or corrupt
\nregimes or torn apart by armed conflict. This problem has come to
\nbe known as \"the resource curse.\"<\/p>\n
Now a broad movement has emerged to tackle the resource curse.
\nGlobal Witness, a small British NGO, acted as the pioneer when it
\ncampaigned to close the Thai\/Cambodian border to Khmer Rouge
\ntimber exports, ending illegal trade in teak and other rare
\nhardwoods. The resulting loss of revenue played a key role in the
\ndemise of that genocidal organization.<\/p>\n
Global Witness next turned to the problem of diamonds in
\nAngola, and a campaign against \"conflict diamonds\" led to the
\nKimberley Process of Certification. Last year, Global Witness,
\ntogether with more than 60 groups from around the world, launched
\n\"Publish What You Pay,\" a campaign to force resource companies to
\ndisclose their payments to developing country governments. It was
\nendorsed by the British government, and many oil and mining
\ncompanies responded positively.<\/p>\n
I am proud to be associated with Global Witness and the
\n\"Publish What You Pay\" campaign. But \"Publish What You Pay\" is
\nonly the first step in tackling the resource curse. Governments
\nmust disclose what they receive and, even more importantly, they
\nmust be held accountable for the way they use their revenues.
\nThat is what Caspian Revenue Watch, which I also support, seeks
\nto accomplish.<\/p>\n
Caspian Revenue Watch aims to build the capacity of civil
\nsociety in the new states surrounding the Caspian Sea, through
\nresearch, training, and partnerships, to monitor the collection
\nand expenditure of government revenues from the extractive
\nsector. Greater accountability could result in a greater
\ncontribution to meeting the UN's Millennium Development Goals
\nthan most other initiatives.<\/p>\n
Here the Chad-Cameroon oil pipeline sets a valuable example.
\nThe World Bank financed the project on the condition that Chad
\ncommits itself to complete transparency and uses the revenues for
\npoverty reduction. A stringent supervisory mechanism was put in
\nplace with civil society participation; almost immediately, the
\nChad government was caught diverting a US$25 million signature
\nbonus for arms purchases. Unfortunately the mechanism expires
\nwhen oil actually starts flowing. Obviously that arrangement must
\nbe extended.<\/p>\n
British Prime Minister Tony Blair announced an Extractive
\nIndustries Transparency Initiative (EITI) at the World Summit on
\nSustainable Development in Johannesburg last September. The need
\nfor greater transparency in the management of resource revenues
\nwas endorsed by the G8 declaration at Evian this June. This was
\nfollowed by a high-level meeting hosted by the UK government in
\nLondon in June and attended by governments, major oil and mining
\ncompanies, international financial institutions, and
\nrepresentatives of civil society.<\/p>\n
The overwhelming majority of the 59 participants at that
\nmeeting endorsed the principles of EITI. A few producing
\ncountries volunteered to be pilot cases in which the government
\nand all the companies involved would disclose revenues and their
\nuse according to templates designed by the UK team. The
\nvolunteers were East Timor, Ghana, Mozambique, and Sierra Leone,
\nwith other important resource-rich countries indicating that they
\nmay follow.<\/p>\n
This is a promising step forward, but there is always a danger
\nthat a declaration of principles and a voluntary approach will
\nturn into a sham. Public opinion must be mobilized to keep
\ngovernments and companies to their promises.<\/p>\n
It is civil society that has moved the process this far, and
\nit must become even more deeply engaged, particularly in the
\nproducing countries, to maintain the forward momentum and ensure
\nthat the movement succeeds in lifting the resource curse once and
\nfor all.<\/p>",
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