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Poor Countries, Rich Resources*

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  • H.T.S.
    August 1, 2004 Poor Countries, Rich Resources* he World Bank has helped finance exploitation of oil, gas, coal and other minerals in the developing world,
    Message 1 of 1 , Aug 1 6:05 AM
      August 1, 2004
      Poor Countries, Rich Resources*

      he World Bank has helped finance exploitation of oil, gas, coal and
      other minerals in the developing world, mainly through its private
      sector lending arm, even though this has rarely advanced the
      institution's mission of reducing poverty. Indeed, it often makes
      poverty worse.

      Three years ago, the bank's president, James Wolfensohn, commissioned
      a panel of experts to investigate how the bank should deal with these
      extractive industries. The panel concluded that the bank should stop
      financing oil projects completely by 2008 and should immediately
      begin a policy of supporting oil or gas extraction or mining only in
      countries with a well-established rule of law and effective
      regulation to ensure projects are well run.

      The bank's management has already rejected these conclusions, instead
      promising it will take these issues more seriously when making such
      investments. The bank's board, which will make its final decision
      this week, is likely to echo that position. But the management
      response smacks of business as usual. While it would be unwise for
      the bank to use the word never, it should embrace most of the
      review's recommendations for ensuring that its projects help the poor.

      Saying never to oil financing is counterproductive, though it is
      understandable that some people should urge that out of anger and
      frustration. It has become clear that plenty of poorly governed
      nations, including Nigeria, Angola, Ecuador and Venezuela,* would
      probably have been better off had they never discovered oil or other
      valuable minerals. The discovery of these resources usually foments
      corruption, prevents the development of a diversified economy, props
      up dictators and fuels wars.

      But simply pretending those resources were never discovered is no
      development strategy. The challenge for the World Bank is to figure
      out how to help nations in the developing world take advantage of
      their natural riches, while making sure the poor benefit from them.

      Chad, one of the world's poorest nations, exemplifies why the World
      Bank's presence is desirable in some cases, even absent ironclad rule-
      of-law guarantees. As a partner in the development of oil fields
      there, the bank has forced Chad's dictator to accept a plan in which
      revenues are held in escrow abroad and will be directly spent on
      health, education and road programs. A revenue oversight committee of
      citizens is monitoring the process.

      The early indications do not suggest all this will be accomplished
      easily. The president spent part of the signing bonus on arms and the
      revenue oversight committee will include his brother-in-law as one of
      its members. But at least the plan is a step in the direction of
      giving the people of Chad a chance to benefit from their natural
      resources. In other places, like Equatorial Guinea, oil revenues go
      straight into the dictator's pockets. Countries like Chad have so few
      opportunities to develop that it seems prudent to leave open the
      possibility of bank involvement in some cases.

      Copyright 2004 The New York Times Company
      NOTE: *I may be wrong but its my view that when it comes
      to Haiti, Sudan, Congo, Ivory Coast, Niger, Nigeria, Cuba,
      Venezula et al that the "powers-that-be" --U.S., World Bank,
      IMF etc. -- are, at best, dulplicitous (downright treacherous!)
      The U.N.? Forgetabo'tit!

      Hotep: HTS
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