Imagine for a moment that you’ve just been elected as President of Nigeria, rising to power on a ticket that set out to halve poverty in your country within five years.
You’ve done the numbers, and in purely financial terms, it should be easy. You exported around $55b in oil in 2009, and need only a fraction of that amount as a government to invest in poverty-reduction measures.
But, for years governments before you have failed. The oil and other natural resources that should be your ticket out of poverty have been a curse. They’ve made other exports uncompetitive, created huge competition for power, allowed corruption to flourish, and sparked conflict.
Sitting behind your desk on day 1, it’s easy to be overwhelmed by the challenge ahead. The money is clearly out there, but it’s leaking into all the wrong places because of theft, mismangement, and poor decisions in the past.
You know that it could be different. Gazing into the middle distance, you’re reminded of a meeting you had with Norwegian officials just a few weeks before. They outlined to you how their country had turned oil revenues into national wealth and one of the world’s highest standards of living. As you chatted to them, you saw that these officials were no smarter, better educated or more honest than Nigerians, and that your country too could make resources work.
Grabbing out a pen, you start to scribble. You write out the decision process from exploration to discovery, extraction to export. You map out the key players involved – your government, the citizens who live in the resource-rich areas, local and foreign companies who do the extraction work, and the foreign governments and companies who buy the end products. With the help of advisors, you start mapping out where the money goes and why, who decides what to do, and how they do it.
With all this in hand, the question becomes – if this is the reality, what do we want to change? What are the guiding principles and ideas that should drive the resource extraction process so it benefits everyone?
Well, a group of the world’s leading economists, statesmen and entrepreneurs have done just that. They’ve developed the Natural Resources Charter, a set of twelve precepts setting out guidelines on how to best manage the economic opportunities created by natural resources. Driving the precepts are the reality that natural resources in a country are owned by the people. Therefore, the exploitation of a natural resource by a country should be designed to secure the greatest social and economic benefit for its people.
As President of Nigeria, the Charter has been written for people just like you. It’s designed as a tool for your Government to use to inform decision-making. Alongside this, the Charter places responsibilities on both the extraction companies and the home countries of these companies. It requires that companies consider the environment and social dynamics of the country they’re operating in, and avoid major human rights violations. It requires developed countries to push for a more transparent industry in the international arena and also regulate the behaviour of their companies at home and abroad by taking these measures into consideration.
Of course, you’re not really the President of Nigeria. But, as someone who cares about the end of extreme poverty, you’ve got an opportunity to see that natural resources are more often used for the benefit of people. Nigeria’s annual oil exports are greater than the total amount of annual aid to Africa, which means that ending poverty requires that these resources are used better.
That’s why we’ll be increasingly focused on natural resources, corruption and transparency at the Global Poverty Project in the coming months. We’ll be working with the Natural Resource Charter and others to outline what can and is being done to make resources work for the world’s poor, and what role each of us can play in making this happen.