21. Managing Natural Resource Wealth
- Author:
- Jill Shankleman
- Publication Date:
- 08-2006
- Content Type:
- Working Paper
- Institution:
- United States Institute of Peace
- Abstract:
- This report analyzes the particular challenges of stabilization and reconstruction missions in countries rich in hydrocarbons and minerals and provides lessons learned from the recent experience of such countries as Iraq, Sudan, Angola, Liberia, and Afghanistan. It offers recommendations for the U.S. government and others involved in natural resource–rich countries emerging from conflict and also to the extractive industry companies and banking sectors––that play a critical role in these states. War-torn countries rich in hydrocarbons and minerals face particular problems in the stabilization and reconstruction of their states despite the apparent promise that natural resource wealth holds. Unless deliberate efforts are made to avoid the “resource curses”—corruption, economic instability, conflict over the distribution of resource wealth and control of resource–rich areas—these curses will undermine peace building. Elite groups who receive royalties and taxes paid by extractive industry companies have shown themselves consistently resistant to democratization. Control over natural resources is fundamental to sovereignty. Ultimately, it is the governments and people of resource–rich countries who must put in place the systems that enable resource wealth to support stability and development However, through early and consistent action, the international community can play an important role in helping resource–rich states emerging from conflict manage the wealth that accrues from these resources, and can make proper wealth management a condition for donor assistance. It is essential that international missions and indigenous transitional governments immediately secure effective control of natural resource wealth (physical and monetary) and establish the laws, institutions, and capacity to manage that wealth transparently, accountably, and in ways that support reconstruction. Achieving these goals requires prior planning by relevant U.S. agencies, a willingness to confront vested interests, a consistent approach from the international community and donors, the involvement of civil society, and the deployment of human resources, such as forensic accountants able to “follow the money,” as part of the mission staff. To be successful, the extractive industries and their bankers, the international financial institutions, and non-governmental organizations (NGOs) must be brought into this process
- Topic:
- Development, Economics, and Environment
- Political Geography:
- Afghanistan, United States, Iraq, Sudan, Middle East, Liberia, and Angola