Countries that are rich in natural resources are often poor, because exploiting those resources has taken precedence over good government. Competing oil and mining companies, backed by their governments, are often willing to deal with anyone who can assure them of a concession.
This has bred corrupt and repressive governments and armed conflict. In Africa, resource-rich countries like Congo, Angola and Sudan have been devastated by civil wars. In the Middle East, democratic development has been lagging.
Curing this "resource curse" could make a major contribution to alleviating poverty and misery in the world, and there is an international movement afoot to do just that. The first step is transparency; the second is accountability.
ILLUSTRATION: YU SHA
The movement started a few years ago with the Publish What You Pay campaign, which urged oil and mining companies to disclose payments to governments. In response, the British government launched the Extractive Industries Transparency Initiative (EITI). Three years into the process, the UK convened an important EITI conference in London attended by representatives of governments, business and civil society.
Much has already been accomplished. On the business side, the major international extractive companies have started to acknowledge the value and necessity of greater transparency. British Petroleum has undertaken to disclose disaggregated payment information on its operations in Azerbaijan, and Royal Dutch Shell is doing the same in Nigeria. ChevronTexaco recently negotiated an agreement with Nigeria and Sao Tome that includes a transparency clause requiring publication of company payments in the joint production zone.
Most encouraging is that producing countries themselves are beginning to seize the initiative. Nigeria is reorganizing its state oil company, introducing transparency legislation, and launching sweeping audits of the oil and gas sector. It plans to begin publishing details of company payments to the state this summer.
The Kyrgyz Republic became the first country to report under EITI, for a large gold-mining project. Azerbaijan will report oil revenues later this month. Ghana and Trinidad and Tobago have also signed on. Peru, Sao Tome and Principe, and East Timor are currently in negotiations to implement the initiative.
Equally important, local activists in many of these countries are starting to use EITI as an opening to demand greater public accountability for government spending. My own foundation, the Open Society Institute, has established Revenue Watch programs in producing countries such as Azerbaijan, Kazakhstan, the Kyrgyz Republic, Mongolia and Iraq.
But there is a lot more to be done. Two-thirds of the world's most impoverished people live in about 60 developing or transition countries that depend on oil, mining or gas revenues. The recently published transparency index from Save the Children UK shows that transparency is the exception, not the rule. Many important producing countries have yet to make even a gesture toward disclosure. There is no reason the major Middle Eastern producers should not be part of this transparency push, and Indonesia should join its neighbor East Timor in embracing the EITI. It is also critical that state-owned companies, which account for the bulk of global oil and gas production, be subject to full disclosure.
Other governments need to follow the UK's lead and become involved politically and financially in expanding the EITI. France appears to have done little to encourage countries within its sphere of influence, much less to ensure that its own companies begin disclosing. The Bush administration's recent decision to initiate a parallel anti-corruption process through the G8 leaves the US outside the premier international forum for addressing transparency in resource revenues while unnecessarily reinventing the wheel in the process.
Nor have the US and UK used their power in Iraq to promote transparency in the oil sector. Let us hope that the new Iraqi government does better. It is difficult to see how democracy can take root if the country's most important source of income remains as veiled in secrecy as it was under former Iraqi president Saddam Hussein.
The EITI still has a long way to go, but it is one of the most effective vehicles available for achieving a global standard of disclosure and accountability. This week's summit is an opportunity to assess progress and to define more precisely what it means to implement the EITI by establishing some basic minimum requirements on host countries.
Those committed to seeing the wealth generated by energy and mining finally result in better lives for ordinary people would do well to invest in the initiative during this critical stage. The EITI may not be a catchy acronym, but in concert with civil society efforts such as Publish What You Pay, it promises to do a lot more good in the world than most.
George Soros is president of Soros Fund Management and chairman of the Open Society Institute.
Copyright: Project Syndicate
Saudi Arabian largesse is flooding Egypt’s cultural scene, but the reception is mixed. Some welcome new “cooperation” between two regional powerhouses, while others fear a hostile takeover by Riyadh. In Cairo, historically the cultural capital of the Arab world, Egyptian Minister of Culture Nevine al-Kilany recently hosted Saudi Arabian General Entertainment Authority chairman Turki al-Sheikh. The deep-pocketed al-Sheikh has emerged as a Medici-like patron for Egypt’s cultural elite, courted by Cairo’s top talent to produce a slew of forthcoming films. A new three-way agreement between al-Sheikh, Kilany and United Media Services — a multi-media conglomerate linked to state intelligence that owns much of
The US and other countries should take concrete steps to confront the threats from Beijing to avoid war, US Representative Mario Diaz-Balart said in an interview with Voice of America on March 13. The US should use “every diplomatic economic tool at our disposal to treat China as what it is... to avoid war,” Diaz-Balart said. Giving an example of what the US could do, he said that it has to be more aggressive in its military sales to Taiwan. Actions by cross-party US lawmakers in the past few years such as meeting with Taiwanese officials in Washington and Taipei, and
Denmark’s “one China” policy more and more resembles Beijing’s “one China” principle. At least, this is how things appear. In recent interactions with the Danish state, such as applying for residency permits, a Taiwanese’s nationality would be listed as “China.” That designation occurs for a Taiwanese student coming to Denmark or a Danish citizen arriving in Denmark with, for example, their Taiwanese partner. Details of this were published on Sunday in an article in the Danish daily Berlingske written by Alexander Sjoberg and Tobias Reinwald. The pretext for this new practice is that Denmark does not recognize Taiwan as a state under
The Republic of China (ROC) on Taiwan has no official diplomatic allies in the EU. With the exception of the Vatican, it has no official allies in Europe at all. This does not prevent the ROC — Taiwan — from having close relations with EU member states and other European countries. The exact nature of the relationship does bear revisiting, if only to clarify what is a very complicated and sensitive idea, the details of which leave considerable room for misunderstanding, misrepresentation and disagreement. Only this week, President Tsai Ing-wen (蔡英文) received members of the European Parliament’s Delegation for Relations