Wednesday, November 25, 2009

EITI, please change your 2nd principle

I am an oil cursed citizen who has seen my homeland waste immense non-renewable natural resources for nothing and destroy all its social structures, all as a direct consequence of the oil revenues going directly to the state coffers making our governments independently wealthy and powerful.

And then the Extractive Industries Transparency Initiative (EITI) 2nd principle states:

“We affirm that management of natural resource wealth for the benefit of a country’s citizens is in the domain of sovereign governments to be exercised in the interests of their national development.”

To me any moment a government receives, for example, more than 4 percent of its GDP in fiscal income which does not proceed from the taxpayers, it is de-facto turned into a natural resource autocracy, a central planned economy and a communist state.

I cannot believe that the people supporting EITI are really aware about this, but if so, and they still agree with it, then we must fight against EITI, since it is clear that it will only serve as an instrument to create the illusions of change, to be used by the oil-autocrats to keep us citizen down.

The sum of many individual decisions on what to do each one with their part of the oil revenues is always going to be better long term that the central-planned decisions by some autocrats.

But if the oil revenues have to go to the government then, as a minimum, they have to take the route of first pass through the tax-payer’s pockets.

Most of the oil curse does not have its origin in the oil revenues per se but in their distribution. Distributing the oil revenues directly to the citizens will stop the citizens from becoming beggars of favours and the governments from becoming haughty grantors of favours.

Tuesday, November 24, 2009

My comments to EITI

This is what Jonas Moberg, the Head of the Secretariat of the Extractive Industries Transparency Initiative (EITI) wrote and below my comments:

In “EITI necessary but not sufficient” you say “I therefore find it disappointing when the impressive implementation work done in many EITI countries is criticised for not being the solution.”

Since I include myself among those criticizing EITI, in what I intend to be a constructive way, let me be clear that the critique has nothing to do with “the impressive implementation work done in many EITI countries.”

What I do criticise is that your 2nd principle establish “We affirm that management of natural resource wealth for the benefit of a country’s citizens is in the domain of sovereign governments to be exercised in the interests of their national development.”

That principle, inasmuch as it concentrates excessive power in the state, power that does not flow from the citizens, turns the countries into de-facto centrally planned statist nations, and there are many of us citizens that profoundly object to that.

You also say “we don’t consider that an initiative with big private companies and small NGOs on its board should be issuing requirements on how governments spend their money. It is for the citizens of that country, through democratic processes, to decide how public money should be spent.”

Indeed that is correct but just the same you must be totally aware that this is exactly what is happening and what many NGO´s are directly pursuing. In a recent conference on oil-curse a representative of one of the major NGOs and that appears among EITI supporters explicitly spoke about “a tripartite agreement between companies, governments and NGOs”. I do not hold that this is EITI´s direct responsibility but EITI must be aware that some major international NGOs are effectively usurping the rights of representation of the local citizens and act accordingly.

Indeed, to be even more specific, EITI's principle # 12 establishes “In seeking solutions, we believe that all stakeholders have important and relevant contributions to make – including governments and their agencies, extractive industry companies, service companies, multilateral organisations, financial organisations, investors, and non-governmental organisations.” And the question is... where is the citizen?

If EITI really wants to help the citizens in resource-cursed countries then the only thing it should be doing is empowering the citizens of those countries to fight the fights they need to fight on their own. Otherwise, sadly, there are objective reasons for us citizens to suspect you are more interested in imposing an ideological agenda or creating “opportunities” for your own supporters.

Time and time again EITI honestly declares that it is not the final cure but only an aspirin. Many thanks for that, but please do not forget that an aspirin a day can keep the final cure away.

You ask “those that mainly seem to find flaws with the EITI: Is it better to be negative about the world around us and keep dreaming of a silver bullet solution, or to actually contribute towards a real solution by building on the incremental changes that initiatives like the EITI are generating?”

I reject the implied tone of “those that mainly seem to find flaws with EITI” since as oil-cursed citizens we are much more directly affected by this than any of you policymakers there at EITI, and so we have the right and the duty to speak out as loud as we can.

If we think that finding systems by which to transfer to the citizens the power that is generated by the extraction of natural resources is a must, it is not because we are thinking of it in terms of a silver bullet but in terms of a prerequisite for any sustainable real solution. For instance, in Norway you have been able to find a way for controlling strictly how the oil resources flows to your government...and so why don´t you replace your 2nd principle with that?