![]()
ABSTRACT The past decade has seen an increasing focus on the links between extractive resource (oil, gas and mining) wealth and conflict. Studies show that a combination of price fluctuations, a decline in accountability, corruption and extortion rackets often lead to chronic social conflict feeding off the politics of rage, race and revenge.
The Extractive Industries Transparency Initiative was launched by Tony Blair in 2002 and seeks to address the lack of accountability in extractive rich states. The EITI seeks to build this accountability by working with governments and companies (multinational, national and state-owned); to capture and present in an intelligible form and in a trustworthy manner, data on the payments made by extractive industries companies to governments, and on revenues received by the government from these companies. Secondly EITI seeks to ensure that civil society is involved in this process of increasing fiscal transparency, and the scrutiny of the end result.
At present, Nigeria, Azerbaijan, Kyrgyz Republic, Ghana, Congo Brazzaville, Sao Tome e Principe, Trinidad & Tobago, Timor Leste, Peru and Democratic Republic of Congo have committed to implementing the Initiative. Implementation is supported by the G8, the World Bank, the IMF, and EBRD as well as by an international grouping of companies, investors, and civil society groups.
INTRODUCTION More than 50 countries are dependent on the extractives (oil, gas, and mining) sector.i Although the revenues generated from these industries are large, the benefits of such wealth often seems remote. One of the causes is the prevalence of conflict. Access to, and the control of, extractive resources have been major sources of conflict throughout history particularly when abusive militaries control these resources. On a structural level, a combination of price fluctuations, squandered revenues and extortion rackets often lead to chronic social conflict. Citizens of such countries can often end up worse off than previous generations, as corrupt elites use the revenues to insulate themselves from necessary reforms, to suppress dissent and to promote narrowly based groups of supporters. All of these pressures make low-income, resource-rich countries particularly prone to civil war.
So, just how costly is a civil war? Collier calculates an average cost of £50 billion per civil conflict. He points out that at a country level any civil conflict casts a long shadow and costs continue to accrue for many years after the peace settlement such as low investment in public health and diseases spread by conflict. He estimates it takes a country 20 years to return to its pre-conflict economic status. That's a long time particularly in an interdependent world where insecurity can easily spread. So development, defence and diplomacy need to work together. It is not possible to address threats to human and global security without close collaboration. This collaboration, as a UK Government DFID report observes, is not easy. Security and development people - and one could add - business people, do not regularly talk to each other as their focus countries, timeframes and resources differ.
Site News