As newly resource-rich countries grapple with how to manage their resources well, questions arise on how governments can channel natural resource revenues into smart investments, as well as lessons learned from past experiences. At a Flagship event preceding the Annual Meetings, panelists came together to discuss “Making Extractives Industries’ Wealth Work for the Poor.”
If managed well, revenue from resources such as oil and gas in Tanzania and Mozambique, iron ore in Guinea, copper in Mongolia, gas and gold in Latin America, oil, gas, bauxite and gold in Central Asia, can contribute to sustainable development. When poorly handled they can present long-term challenges for governments, communities and the environment.
The panelists included Marinke Van Riet, International Director, Publish What You Pay; Ombeni Sefue, Chief Secretary of Government, Tanzania; Samuel Walsh, Chief Executive Officer, Rio Tinto; and Tan Sri Nor Mohamed Yakcop, Deputy Chairman, Nasional Berhad, Malaysia. The session was moderated by renowned energy expert Daniel Yergin, Vice-Chairman, IHS, and bestselling author of The Quest: Energy, Security, and the Remaking of the Modern World.
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Yesterday, I was reminded of what it means to be young again: eager faces, fresh idealism, and boundless energy animated the IFC auditorium as more than 300 young leaders from government, civil society, development, and academia packed the IFC auditorium for the World Bank Group’s Youth Summit on “The Need for Open and Responsive Governments.”
I had the pleasure of moderating the first plenary session of the summit – a lively discussion exploring how we can give youth a voice in the open government process and ensure that public services address their needs.
The panelists were Ahmad Alhendawi, UN Envoy for Youth; Edith Jibunoh, World Bank Group Civil Society Advisor; Nigel Chapman, President and CEO of Plan International; and Frank Vogl, Co-Founder of Transparency International.
Back in 2004, Extractive Industries Review noted that “the overall framework of governance within which Extractives Industries (EI) development takes place will be a major determinant of its contribution to sustainable poverty reduction.” The expert panel called for World Bank Group to do more on governance and transparency of the sector.
From September 17-19 the World Bank’s Governance Partnership Facility (GPF) and the Overseas Development Institute (ODI) hosted donors, researchers and consultants in London to look back at the GPF’s experience, and forward at ‘new directions’ in governance. The ‘governance crowd’ broadly agrees that their work, to be valuable and valued, must be connected to politically informed programmes, better services, and ultimately development outcomes. This consensus now even extends to the bastion of public financial management.
In practice, this connexion involves understanding political factors that drive institutional change and development, and using these understandings to improve development assistance: ‘thinking and working politically’. There are now many tools for political economy analysis, and there is a growing literature on what politically informed development programming can achieve, including a recent World Bank volume, and case studies from ODI, the Asia Foundation, and the Developmental Leadership Programme.
Today, we face a fundamental question: How can we ensure that development is done as effectively and inclusively as possible? Openness is the answer.
Openness captures the very essence of international development in the 21st century.
At its core, openness is the idea that citizens and governments can work together to achieve better results for all.
Open government - increased disclosure of information and enhanced citizen participation in government decision-making is a powerful way to address the complex governance and development challenges we have faced for so long.
Source: Getty Images/Sam Edwards.
In Africa, estimates indicate that an annual investment of $93 billion is required to address the continent’s basic infrastructure needs – more than double the current level of investment.
The lack of productive investment of resource revenues, with spending of these revenues often heavily tilted towards consumption, is a critical component of the so-called resource curse, the observation that countries rich in natural resources frequently have slow long-term growth. Following oil or mineral discoveries, as the expectation of increased wealth spreads, pressures to spend typically become hard for politicians to resist, public sector salaries go through the roof, wasteful spending increases, corruption may flourish, hidden foreign bank accounts may be established, and the number of unproductive “white elephant” projects grows.
How can resource-rich countries ensure that a large share of oil, gas, and mining revenues are used for productive investment rather than excessive or wasteful consumption?
In my first mission as senior director, I am participating in an event in London this week hosted by the Governance Partnership Facility (GPF). This multi donor trust fund includes the World Bank Group, along with donors that include the UK, Netherlands, Norway and Australia. This year’s program includes perspectives from civil society and academic institutions which will further enrich our understanding of what’s important to our client countries.
Despite relatively modest resources over the past five years the GPF has played a major role in helping to build the Bank’s Governance and Anti-Corruption strategy. The model of the trust fund is structured around four different “windows” in which competitive grant proposals are submitted by World Bank task team leaders across the different Practice Groups; these are then carefully vetted and submitted to a Steering Committee for approval.
These laws are commonly referred as the right to information (RTI) or freedom of information (FOI). The international community recognizes citizens’ ability to access public information as a human right.
, making their government data available to enable public scrutiny and citizen monitoring, and enhance government accountability. The Open Contracting community is devising Open Contracting Data Standard to enhance disclosure and participation in public contracting processes. In the U.S., the GovLab at New York University developed an OpenData500 project that has an interactive visualization of how U.S. companies are using government data for new business opportunities. It’s all a good start.
Despite all these developments on opening up data interaction, a critical question remains: how can we make sure that governments disburse public resources to those that need it most, and that public contracts are allocated in a transparent, accountable and efficient manner?
In response to such situations, development specialists typically call for sector-wide reforms. And the design of such reforms draws on sector policy analysis and on the assessment of service delivery arrangements and capacity. Increasingly, since the 2004 World Development Report, sector reforms also seek to make teachers, health professionals and other service providers accountable to citizens and communities.