Look fast: Global resources hidden behind poor governance

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If the contentment borne of the wealth of nature is doubtless, than the majority of resource-producing countries are leaving their citizens unknowing and dissatisfied.

In a global report issued by the Revenue Watch Institute (RWI), a New York-based policy institute, 80 per cent of countries with integrally global oil, gas and mining sectors “fail to achieve good governance,” displaying shortcomings in transparency, corruption prevalence and government accountability.

In the 2013 Resource Governance Index (RGI), the 58 nations responsible for producing 85 per cent of the world’s petroleum, 90 per cent of diamonds and 80 per cent of copper are weighted by the institution’s guidelines for transparent governance, charged with the belief that “mismanagement and corruption have many manifestations and can have dire consequences” to the public of countries with large extractive industries.

Falling at the bottom of the RGI are numerous nations known for giving rise to basket case dictators and nebulous systems of governance, such as Cambodia, Iran, Libya, Equatorial Guinea, Turkmenistan and Myanmar. Pointedly, also at the bottom of the barrel is Qatar, the world’s largest exporter of LNG and the fastest growing nation in the world in 2010.

Elsewhere in ASEAN, Indonesia and the Philippines, ranked 14th and 23rd, respectively, gained a “partial” score on the RGI, though still failed to meet the index’s standards.

While Indonesia passes in terms of its legal and regulatory framework, as well as its “guarding against conflict of interests,” the largest ASEAN economy, home to the world’s largest gold mine, follows below par in efforts to make the management of its natural resources transparent and fend off corruption.

In the Philippines, where vast deposits of diamonds, gold and copper are strewn across the archipelago, corruption is, as with Indonesia, the largest issue in obtaining adequate governance of resources.

Malaysia was ranked 34th and Vietnam 43rd, both scoring the lowest in efforts to protect against entrenched interests. Brunei was not included in the study.

Both the ASEAN nations scored highest for their legal and regulatory frameworks, with the report noting “comprehensive mining legislation,” despite the effectiveness of authorities to make activities transparent.

Of the 11 nations that passed the index’s assessment, many are classified as middle-income nations, indicating that good governance is not unique to developed countries.

Yet poor nations rice in natural resources that lack an efficient institutionalised form of governance are indeed more prone to violent conflict, including coups that result in efforts to seize the coffers being filled by funds from the sale of oil, gas and minerals.

Colombia, Chile and Brazil are among the passing middle-income nations that made it to the top of the ranking, with Norway, the UK and the US earning satisfactory scores across the board of the index.

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[caption id="attachment_9601" align="alignleft" width="300"] Click to enlarge[/caption] If the contentment borne of the wealth of nature is doubtless, than the majority of resource-producing countries are leaving their citizens unknowing and dissatisfied. In a global report issued by the Revenue Watch Institute (RWI), a New York-based policy institute, 80 per cent of countries with integrally global oil, gas and mining sectors “fail to achieve good governance,” displaying shortcomings in transparency, corruption prevalence and government accountability. In the 2013 Resource Governance Index (RGI), the 58 nations responsible for producing 85 per cent of the world's petroleum, 90 per cent of diamonds and...

Reading Time: 2 minutes

RGI1
Click to enlarge

If the contentment borne of the wealth of nature is doubtless, than the majority of resource-producing countries are leaving their citizens unknowing and dissatisfied.

In a global report issued by the Revenue Watch Institute (RWI), a New York-based policy institute, 80 per cent of countries with integrally global oil, gas and mining sectors “fail to achieve good governance,” displaying shortcomings in transparency, corruption prevalence and government accountability.

In the 2013 Resource Governance Index (RGI), the 58 nations responsible for producing 85 per cent of the world’s petroleum, 90 per cent of diamonds and 80 per cent of copper are weighted by the institution’s guidelines for transparent governance, charged with the belief that “mismanagement and corruption have many manifestations and can have dire consequences” to the public of countries with large extractive industries.

Falling at the bottom of the RGI are numerous nations known for giving rise to basket case dictators and nebulous systems of governance, such as Cambodia, Iran, Libya, Equatorial Guinea, Turkmenistan and Myanmar. Pointedly, also at the bottom of the barrel is Qatar, the world’s largest exporter of LNG and the fastest growing nation in the world in 2010.

Elsewhere in ASEAN, Indonesia and the Philippines, ranked 14th and 23rd, respectively, gained a “partial” score on the RGI, though still failed to meet the index’s standards.

While Indonesia passes in terms of its legal and regulatory framework, as well as its “guarding against conflict of interests,” the largest ASEAN economy, home to the world’s largest gold mine, follows below par in efforts to make the management of its natural resources transparent and fend off corruption.

In the Philippines, where vast deposits of diamonds, gold and copper are strewn across the archipelago, corruption is, as with Indonesia, the largest issue in obtaining adequate governance of resources.

Malaysia was ranked 34th and Vietnam 43rd, both scoring the lowest in efforts to protect against entrenched interests. Brunei was not included in the study.

Both the ASEAN nations scored highest for their legal and regulatory frameworks, with the report noting “comprehensive mining legislation,” despite the effectiveness of authorities to make activities transparent.

Of the 11 nations that passed the index’s assessment, many are classified as middle-income nations, indicating that good governance is not unique to developed countries.

Yet poor nations rice in natural resources that lack an efficient institutionalised form of governance are indeed more prone to violent conflict, including coups that result in efforts to seize the coffers being filled by funds from the sale of oil, gas and minerals.

Colombia, Chile and Brazil are among the passing middle-income nations that made it to the top of the ranking, with Norway, the UK and the US earning satisfactory scores across the board of the index.

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