RWI: Some basics Securing the Benefits of Natural Resources Daniel - - PowerPoint PPT Presentation

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RWI: Some basics Securing the Benefits of Natural Resources Daniel - - PowerPoint PPT Presentation

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RWI: Some basics Securing the Benefits of Natural Resources Daniel Kaufmann & RWI colleagues Presentation at NRC workshop, Oxford, UK, December 6th, 2012 1 Basics on RWI in natural resource governance Why are we in this? What do

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RWI: Some basics Securing the Benefits of Natural Resources Daniel Kaufmann & RWI colleagues

Presentation at NRC workshop, Oxford, UK, December 6th, 2012

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Basics on RWI in natural resource governance

  • Why are we in this?
  • What do we do?
  • Where do we want to go next?
  • Multi-stakeholder approach, partnering
  • Attaining further impact: combining analysis,

capbuiding, TA, civsociety support, advocacy -- as an in-country catalyst?

  • Power of data, of intellectual capital, incl NRC

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Basic Question: extractives as a resource curse

  • r a resource blessing (or a resource question)

Longstanding central question:

  • 1. Natural resources foster worse institutions? or,
  • 2. Worse institutions foster worse natural resource

management outcomes?

  • If 1 is the case: extractives are a deterministic curse
  • If 2 is the case: it can go either way – it depends
  • - Literature not fully conclusive, but stronger case for

the latter (#2): resource curse not foregone conclusion

  • - Challenge larger when governance already weak
  • - And excessive dependency on natural resources

exacerbates governance problems when they exist

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  • 1.0
  • 0.8
  • 0.6
  • 0.4
  • 0.2

0.0 0.2 0.4 0.6 0.8 1.0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 WGI Control of Corruption, 2011 Extractive Countries with satisfactory Governance Non-Extractive Intensive Countries Extractive-Intensive Countries (All)

Control of Corruption in:

Trends in Governance among Extractive and Non-Extractive Intensive Countries, 2002-2011: Control of Corruption

Source: Worldwide Governance Indicators, 2012. The extractive countries with satisfactory control of corruption trend line (atop) includes a dozen countries. 4

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GDP per Capita in Extractive-Intensive & Other Countries, by Control of Corruption Tercile Groups, WGI 2011

Sources: Corruption Control data from Worldwide Governance Indicators (WGI), 2012. IMF 2010 Report on Resource-Intensive

  • Countries. GDP p.c. from World Bank World Development Indicators, 2012. Countries were grouped into terciles based on the WGI

control of corruption score for the sample of all countries in the world.

Poor Corruption Control Average Corruption Control Good Corruption Control GDP per capita (PPP), 2011

EXTRACTIVE OTHER

33.3% 11.1%

5,000 10,000

55.6% 25.6% 33.5% 40.5% 6,851 3,941 12,712 10,272 45,222 30,820

Note: The percentages inserted in each dark blue column represent the % of all extractives that belong to each control of corruption tercile (poor, average, good). Similarly, for light blue columns, the % of all other countries in each control of corruption category.

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RWI

  • RWI helps extractive-rich countries address their governance

challenges in oil, gas and minerals.

  • An increasingly comprehensive approach to improving the

governance and development of natural resources

  • Engaging with all key stakeholders among governments, citizens

and national and international oil, gas and mining companies

  • + New capacity building programs with parliaments and media
  • Working in dozens of countries in Africa, the Americas, East and

Central Asia. Offices in each region.

  • Intensive engagement in 12-15 countries: Afghanistan,

Azerbaijan, Bolivia, Indonesia, Iraq, Ghana, Guinea, Liberia, Libya, Peru, Sierra Leone, Tanzania, Uganda

  • Supports local NGOs, provides TA to governments, capacity

building to various stakeholders, and performs policy analysis.

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Getting a good deal Revenue collection Revenue management Sustainable development

Broken Links:

DRC 1/16th of the total asset value Zambia 1 out of 12

mining companies

pay profit tax Cameroon $27 billion

  • il rent

=

7 year recession EG $15,000

per capita GDP

YET

76%

population below poverty line

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WHICH AREAS SHOULD BE TRANSPARENT?

Transparency across the value chain

The basis for any decision to permit exploitation of a mineral deposit should be set out clearly in published laws and regulations Contract terms, including fiscal terms should be made public Financial information on revenues into the public domain will facilitate enforcement and reduce tax avoidance Disclosure of

  • perations and

financial data

  • f savings,

stabilization and investment funds The disposition

  • f extractive

revenues should be fully transparent

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Government Assistance

  • Government Assistance on legal/economic/strategic issues, including legislative

drafting and policy reform to contract modeling and negotiation support.

  • Portfolio in 16 resource rich countries: Afghanistan, Bolivia, Ghana, Guinea,

Indonesia, Iraq, Liberia, Libya, Mongolia, Nigeria, Peru, Philippines, Sierra Leone, Tanzania, Timor Leste and Uganda Getting a Better Deal.

  • Advice on oil and mineral fiscal policy
  • Counsel countries on the development of fiscal legislation
  • Support on contract negotiations (w/ law firms & mining engineers)
  • Example: RWI helped a government secure a 20 percent increase in its expected

share of revenues from major mining projects. Institutional Arrangements, Transparency and Accountability.

  • Design of rules and institutions that promote effective and accountable sector .
  • Example: advice to a major oil producer on the design of licensing rounds

Managing Volatile Resource Revenues.

  • Advice on the establishment of transparent revenue management legislation
  • Example: RWI advised an oil-rich country on reforms of oil revenue management

system, helping country mobilize additional revenue for domestic investment + promoting transparency standards & protections vs over-spending.

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DO GOVERNMENTS GET A GOOD DEAL?

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% N

  • r

w a y T i m

  • r

L e s t e N i g e r i a E q u a t

  • r

i a l G u i n e a Y e m e n C a m e r

  • n

C

  • n

g

  • G

a b

  • n

A z e r b a i j a n K a z a k h s t a n M a u r i t a n i a I v

  • r

y C

  • a

s t

Average Government share from oil producers

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Regional Capacity Building and Training Hubs

  • An informed, active citizenry is critical to good governance in

countries rich in oil, gas and minerals.

  • Promoting strategies for oversight of these industries, RWI

has regional hubs in partnership with academic institutions to

  • ffer training and support to oversight groups.
  • In partnership with the Natural Resource Charter, Oxford

University, Duke University and the Central European University, RWI is also developing a training program for government officials from resource rich countries.

  • 1st hub in 2008 (Africa) ; 4 in 2012 ( 2 in Africa, 1 in Latin

America, 1 in Central Asia); 6 in 2013 (Asia and MENA)

  • Hundreds of trainees from 25 RWI in recent times

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Evidence-based Advocacy & Analytical Work

Evidence-based Advocacy

  • A leader in advancing good resource governance, internationally and nationally
  • Example: US Dodd-Frank; EU Transparency Directive; EITI in Iraq, Afghanistan, US
  • RWI helped build PWYP network and has trained & supported civil society

coalitions to participate in the multi-stakeholder processes such as EITI Analytical Work

  • Applied policy research and analytical work on natural resource management.
  • RWI Index (later session)
  • Databank on minerals management
  • EITI rule changes, the divergent quality of EITI reports, and the first comparative

analysis of revenue data from EITI reports.

  • EITI online data tool assesses quality of 57 reports from 28 countries against a

common set of quality indicators, for cross-country comparison of revenue data.

  • Policy briefs and empirical reports on natural resource governance in resource rich

economies from Ghana to Iran, Liberia, Nigeria and Russia.

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Some forward-looking tenets for discussion: Towards next level on impact on the ground

1. Multi-stakeholder, collective action approach: working more in tandem with gov’ts, civil society, parliaments, media, private sector 2. Partnerships with organizations in natural resource governance field: NRC, SPP/CEU, EITI, PWYP, GW, Industry groups, OGP, Oxfam, ONE, IFIs, etc. 3. NRC as a potent diagnostic tool in our work: further integration? 4. From rigorous analysis to concrete action and policy-making: evidence- based -- including development of databank, indices 5. Multi-pronged & integrated products: capacity building, T.A., local NGO grants, operational research, policy analysis & advocacy 6. Expanding scope of work within the natural resource value chain + deeper

  • nto rest of governance (beyond narrow transparency)
  • Ex. of ongoing program: Course ‘Reversing the Resource Course: Theory & Practice’

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