Oil, mining and gas are critically important economic sectors in about 60 developing or transition countries. Oil and other commodities are fetching record-high prices, and yet the people living in these countries rarely benefit. Amongst the 3.5 billion people in these countries, some 1.5 billion live on less than US$2 per day and constitute over two-thirds of the world’s poorest people.
In many developing countries that are rich in natural resources, governments do not provide the most basic of information concerning natural resource revenues. This lack of transparency facilitates and even encourages corruption. Large sums of money that are not subject to oversight or disclosure are hijacked by corrupt leaders and are misappropriated, funding wars and inciting civil strife, diverting much needed funds from the citizens who own these resources. These citizens lack any method of recourse in holding the government accountable for their expenditures. The end result is a litany of corruption, social decay, increased poverty, reinforcement of authoritarian government and political unrest, which can ultimately lead to state failure and the spread of instability across regions.
Effective use of revenues is strongly linked to accountability, which in turn requires transparency of information. Improved transparency benefits all actors; civil society, host governments, governments of countries that use oil and gas, companies, financial regulators, regulating agencies and investors and international financial institutions (IFIs). On a purely humanitarian level, transparency in resource revenues is fundamental for poverty reduction and development projects.
For more on the resource curse and what we can do about it, visit the PWYP US and member organizations websites
