Everyone agrees that enhanced transparency—on payments, revenues, royalties and taxes—is essential to success in developing countries to turn earnings from oil, gas and mining into economic growth and poverty reduction. But that’s just the first step.
The ancient cities of Bagan, Myanmar, and Luang Prabang, of Lao PDR offer today’s travelers a nostalgic vision of South East Asia: timeless landscapes and exquisite architecture. This vision is in sharp contrast to the rapid pace of recent economic activity in both countries. Myanmar recorded very strong investor interest in last year’s bidding round for oil and gas blocks. This was a clear signal of the successful reform process undertaken so far. In Lao PDR, the mining industry has increased annual production from around US$ 10 million in the early 2000s to well above US$ 1 billion a decade later – contributing around 15 percent of Government revenues in recent years.
Many African countries face a dilemma. After a decade of consistent economic growth, often propelled by high commodity prices, half the continent’s population still lives in poverty. Even if rising demand for raw materials from the booming cities of China and India, among others, has driven growth in Africa’s mining sector, most of the continent has not yet translated mineral wealth into industrialization and widespread economic development. Most African countries continue to export raw materials and then pay a premium to import the products made with them.
At Indaba Mining, the annual gathering Feb. 3-5 in Cape Town of leaders of Africa’s mining sector—from government, corporations and civil society—the words “sustainability” and “stakeholder outreach” were ubiquitous. This focus on sustainability issues reflects impressive progress made in recent years around how mining can contribute to shared value.
In downtown Houston last month, flags were unfurled everywhere promoting LNG 17 - the biggest global gathering devoted to LNG, or liquefied natural gas, as well as its whole value chain. Bringing together industry, governments and experts on everything from "peak shaving" to floating liquefied natural gas facilities – to how LNG contributes to energy security, the conference proved a good platform to raise up and coming issues. To that end, a World Bank Group session at the conference reviewed our own gas activities, and featured a discussion on "Petroleum Contract Transparency - the new normal?"
The title for this blog post comes from Mr. Amadou Cisse, Minister of Mines of Mali, who said that the Extractive Industries Transparency Initiative (EITI) “was one of the most beautiful initiatives that the World Bank has ever supported.”
The Minister, along with many of his African peers, participated at the huge Investing in African Mining Indaba event, an annual gathering in Cape Town. Mr. Cisse went on to add that “if there is no transparency, there is no peace.”