Yasuní-ITT

Ecuador has been marketing for about three years a truly revolutionary proposal, Yasuní-ITT, consisting in asking the world for some of the resources it could obtain exploiting some important oil reserves so as not to have to exploit these, as they lie in a forest reserve that contains an extremely rich and valuable biodiversity. The proposal does not seem to be receiving as favorable response as it merits and I think I suspect some of reasons for that, besides that of having perhaps unnecessarily complicated the proposal with some technicalities.

During the 2009 UN conference on environment in Copenhagen I got upset seeing environmentalists from rich countries announcing that because the rich countries were the ones most to blame, they should and would assume the responsibility and pay for protecting the environment… which sounded just like global leftwing politicking, and effectively negated the poor the right to participate as human and equals in confronting something which from all perspectives would be a challenge to the human race.

In that respect it seems to me that the Yasuní-ITT proposal, because of its immense importance, should never have been presented as a government to government proposal, or one extended only to groups with environmental concerns, but should have been tabled as a proposal from the Ecuadorian citizens to all other indigenous people of the earth, meaning us, 1all other citizens. If the possible ecological damages of exploiting the oil in Yasuní-ITT are as serious as we are told, we cannot afford that the fight against these gets sequestered by other interests, agendas, or green Taliban.

Also, because the world needs oil and if not extracted in Yasuní-ITT it will do so elsewhere it would be good to have a study of the marginal environmental costs of exploiting oil in many different places. This would also be extremely important information if we later would like to replicate Yasuní-ITT.

The proposal was presented as having to select between a ferociously irresponsible oil extraction and a marvelous conservation of a habitat, and the truth is never that clear. It would be very important to know the cost and the significance of exploiting the oil in Yasuní-ITT in the most environmentally friendly way possible, so to also give the world the chance of accepting something that might sound more reasonable, or at least of knowing that this possibility has been analyzed. Since in Europe, the European taxman, by means of the taxes on its consumption derives more income from it than the country that gives up that resource for ever, it would seem quite reasonable that the European citizen could ask that at least a part of those taxes should go to help extract the oil in the best way possible. (Where is the oil company that specializes in green oil exploitation?)

But, more than anything, since no one likes to pay taxes to its own government much less would they like to pay a sort of an environmental tax to other governments, much less if these are rich in oil resources… the proposal should include that all funds, up to the last cent, should be given directly to the citizens of Ecuador… or in equal parts in cash, o through conditional cash transfer programs… for instance to all Ecuadorian children that go to school.

And I say this because as a Venezuelan I know very well that too much oil money in the hands of a government is bad… not only because it gets wasted, but mostly because, one way or another, involuntary or on purpose, that money ends up subjugating the citizens.

Translated from El Universal

Citizens of Libya

Give yourselves a fighting chance to become real citizens in your own country. Demand for the oil revenues to be paid out to you directly. If you so wish, you can then later hand it over to your government in taxes… but at least that way you make it clearer to your government that it works for you.

As an oil-cursed citizen I object the Revenue Watch Index 2010... They do recall cars, don't they?

The 2010 Revenue Watch Index on the transparency of governments in oil gas and mining industries prepared by Revenue Watch and Transparency International was released on October 2010.

And there I see that my country Venezuela ranked 14th among 41 countries with 63.0 points out of 100 possible. What does that mean? I have no idea except being absolutely sure it does not mean what it is supposed to mean.

The first and foremost reason is that there either is sufficient information for a citizen to have a reasonable understanding of what the government is up to, or there is not. What would happened if auditors could rank companies in terms of how much of the information they would need to complete an audit they receive?

I have insufficient knowledge of other countries but what is absolutely certain is that in Venezuela the citizen is not receiving the information he would require to even have a sketchy idea of what its oil industry is really up to and how it is doing. And so I absolutely object to the ranking and declare that the ranking itself is extremely little transparent.

Besides:

A fact such that the Venezuelan Government, even if it wants to market itself under the brand of 21st Century Socialism, gives away gas at the pumps for around US$ 5 cents per gallon and with that disappears a big chunk of Venezuela’s GDP, from those having nothing of nothing and gives it to the motorists, is not even reflected on the Index. Just that fact alone should have placed Venezuela among the last.

As an oil cursed citizen who knows that the absolute worst part of the oil-curse is the creation of an independently wealthy government for which the citizens are almost a nuisance, what I would like to see standing out in any applicable index, is how much of the oil revenues are turned over to the citizens in cash, no questions asked, no votes expected. This has not even been referred to in the Index.

Finally if you really want to be transparent on oil, you would have to complement this index with a report of how much the foreign taxman receives from taxing gasoline because that income often exceeds the whole oil income an oil extracting country receives for sacrificing its natural resources.

I truly understand and believe that Revenue Watch and Transparency International produce this index with their best intentions, and I thank them for that, but unfortunately, when you are an oil-cursed citizen all the best intentions of the world do not cut it.

I shiver to think how many oiligarchs and petrocrats can and will use the index to convince their poor oil-cursed citizens that they are doing a great job, comparable to what the other resource countries do, and, if off-track, this is only marginally so… as the figures indicate.

I respectfully request the Revenue Watch Index 2010 to be immediately recalled because of serious and dangerous malfunctioning! They do recall cars, don't they?

Ps. If further proof about the index being totally faulty is required, it suffices to mention that in the just published Corruption Perception Index 2010, published by Transparency International my country appears as number 164 among 178.

Ps. During the recent conference “Extractive Industries and sustainable Development” organized by the Vale Columbia Center on Sustainable International Investment I had the opportunity to make some of the observation against the 2010 Revenue Watch Index to Karin Lissakers, the Director of Revenue Watch Institute. She admitted they also had serious doubts about it. But if they had serious doubts, why did they then go ahead and publish it? Have they never heard of “do no harm”?

Has the US Congress now sided with the petrocrats and the oiligarchs of the world?

The recently approved ‘‘Dodd-Frank Wall Street Reform and Consumer Protection Act’’… includes in SEC. 1504. Disclosure of Payments by Resource Extraction Issuers, a rule, sponsored by Senators Benjamin Cardin and Richard Lugar, which obliges US-listed companies engaged in oil, gas or minerals extraction anywhere in the world to report how much they pay to governments in their annual filing to the Securities and Exchange Commission. To be able to access the US capital market, companies - US and foreign - must publicly disclose all royalties, taxes, and other payments, project by project and country by country.

Since I am for transparency I see nothing wrong with that. In fact, as a citizen of an oil cursed country, Venezuela, I obtained the crucial information I needed on some of its investments only because its oil company, PDVSA, had to file that information with the SEC. (And that was even before the hugo chávez’ years).

BUT, according to this Act, those payments as determined by the Commission should be “consistent with the guidelines of the Extractive Industries Transparency Initiative (to the extent practicable)”, AND the Extractive Industries Transparency Initiative (EITI), for reasons that are unexplained, specifically states as its 2nd Principle the following:

“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.”

Which, as I read it, means that the US Congress, though most of the oil in the US has been exploited by the private sector, and it adheres to free market principles, is lending credibility to an organization that is lending credibility to the notion that oil revenues should be managed by authoritarian petrocrats and oilygarchs like hugo chávez.

That does not make it easier for those who like me are fighting for the sharing of the oil net income directly with the citizens of a country, as the single most important factor that could help to diminish the negative consequences of the oil-curse.

Besides EITI is little by little becoming just another Basel Committee, monopolizing the rulemaking and the debate, without anyone outside comprehending sufficiently where their globally reaching authority really springs from.

Like oil-cursed citizens

The asymmetrical empowerment of the authorities is by far the worst part of the natural resource curse.

Today I assisted another conference arranged by Oxfam and where they presented a report titled “People, Power, and Pipelines: Lessons from Peru in the governance of gas production revenues” This report tried to analyze what had happened to the about $1.13 billion in revenues generated by the Camisea natural gas project that were transferred to local governments between 2004 and 2009.

It is a good report and it reaches many correct conclusions. Unfortunately, when it quite traditionally ends with recommending “building subnational governments (SNGs) capacity for extractive industry revenue management” it evidences that this NGO at least has not yet achieved sufficient understanding of the “resource curse”, probably because most of their member have never been resource-cursed themselves.

In the villages of the Amazon which were studied, before the SNGs received the resources, the villagers were most certainly very poor, but they were still an important part of society, and their collaboration must have been of great importance for their then similarly poor SNGs. But then the natural resource revenues empowered unduly their SNGs, and since then the citizens are not any longer needed and are most often treated as mere nuisances who just expect favors. It is precisely this asymmetric empowerment of the authorities that causes the absolutely worst part of the resource curse.

And so if SNGs (or central authorities) have been asymmetrically empowered with excessive resources, then those we really need to empower with the capacity of managing the resource curse are the citizens.

The last thing we want to hear is those SNGs who are already in possession of the resource moneys, also telling the citizens: “We are the ones who have been capacitated to manage these by the World Bank and Oxfam (or any other in the list of willing capacity builders). Therefore, if you do not understand the hedging of our Muni-fund exposure to the yen, don’t worry, be happy, and remember that it is in your best interests to vote for us next time too, since frankly you would never even begin to understand the level of sophistication that is required and that we have achieved.”

What do I propose? For a starter, in order to increase accountability and place expectations in a more correct perspective, to give each citizen a receipt that indicates exactly what is their share of the natural resource revenues that has been received in their name by their SNG; followed up by giving them more and more of the revenues generated, in cash, for the same reason you are better off giving the citizens a fishing rod for them to learn how to fish, than giving them the fish you so carefully and so very lovingly selected for them. It is always better to have capable citizens than capable governments!

Friends in Oxfam, please follow up the current report with one that specifically analyzes how the natural resource empowered SNG’s behave when compared to those less “blessed”. It might be an eye-opener! It might help to capacitate you on the true meaning of the natural resource curse.

A war with the neighbor is awful but less bad than a civil war

I just read a post in a blog that seemed to imply that Ghana and the Ivory Coast might fight over some border oil. No matter how sad that sounds it is nonetheless a thousand times better than the internal low intensity civil or uncivil wars for the oil revenues that will occur within the countries themselves… unless they can find an expedite and just way to distribute the oil revenues directly to the citizens.

A partial objection to the S. 2971 ‘Energy Security Through Transparency Act' currently being discussed in the US senate:

The Act reads: "SEC. 408. SENSE OF CONGRESS RELATING TO TRANSPARENCY FOR EXTRACTIVE INDUSTRIES: (2) the United States Government should commit to global leadership of transparency in extractive industries by supporting-- (A) multilateral pro-transparency efforts, such as the Extractive Industries Transparency Initiative, in revenue collection, budgeting, expenditure, and wealth management"

Now the Extractive Industries Transparency Initiative has, as it 2nd Principle, “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.”

Given that the oil in the US was and is exploited mainly by the private sector we do not understand how the US could lend support to such a principle.

And many of us oil-cursed citizens, though we certainly support and are appreciative of some of the initiatives of EITI, we do hope that the US will not support anything that has as a stated principle that oiligarchs, petrocrats or vulgar oil-thugs, and who feel themselves independently wealthy and consider most often us citizens as a nuisance, have to manage the natural resources in our interest.

EITI and Natural Resource Charter, I dare you to do a Full Monty on oil revenue transparency!

You, oil consumers of Europe wanting to solve our oil-curse with more transparency, why do you not dare to be real transparent about it and confess that you at your gas pumps are capturing much more of its value than what is received by the country who sacrifices its natural resource for ever… often only to end up depositing those lesser funds in the consuming countries banks.

You tell me… NGOs from Europe, why should I trust you good hearted oil curse fighters from consumer nations? Have you ever spoken out against your governments capturing too much of the value of the gasoline/petrol we give up for ever at your pumps?

What might be lost to corruption in the transaction between oil companies and the petrocrats, oligarchs or simple oil thugs of our governments, is but a fraction of what you collect in gasoline/petrol consumptions taxes at your pumps… often pouring salt in the injury arguing it is because you want to protect the environment, while at the same time subsidizing your dirty coal behind our backs.

The little receipt!

During the recent World Bank meetings in Washington (spring 2010), there were again several conferences relating to the question of why abundant natural resource richness translates into such poor results for their respective countries.

And again I had to submit to the smirking smiles with which those who have not the faintest idea of what an oil curse really means try courteously to hide they think it has to do with us being third class citizens.

And again I had to hear the barrage of arrogant and wise solutions offered by those who have never lived an oil curse.

And again I felt the so Venezuelan conflict of knowing oneself so chévere (great) and by the day being able to show less and less evidence of that. Heck even our hydro-electrical dam Guri, recently a source of national pride has with the electricity crisis turned into another symbol of ineptitude. What are we left with? Our beautiful women and the Ibis Escarlata?

And the worst part was that all of the solutions offered, outside and inside Venezuela, all sound like all recipes for the cooking by a distant great aunt whose food we never liked but of which we became fed up of as children.

“You need to diversify the economy; more agriculture; more manufacturing industries; you have to increase tax collections form the non-natural resource sector, even if that makes it more difficult to develop the non-natural resource sector; you must reduce income volatility by setting up funds; you need to invest in education”. Yes, yes and yes!

Bankrupted iron steel and aluminum industries; industrial zones that seem like desert towns in the wild west; tremendous education programs that have our professors teaching in the best universities abroad; investment funds with no funds?... well no, no and no! We have to find something new to do about it.

And having written so much on the subject and even promoting a global alliance of oil-cursed citizens I feel I would be satisfied if only those who always manage and sow the oil in our name, because they are such great sowers and we’re not, would only give, each one of us Venezuelans, a little receipt.

Mrs. Juana Rivera. Shack # 17, Path The Miracle; Village The Hope, Municipality The Fortune, State of Barinas, Venezuela

Dear Mrs. Rivera: In the name of our glorious Venezuelan nation allow me to inform you that last year, as administrators, we received in your name, in income from that your non-renewable oil, the amount of 178.98 US dollars per month, free and clear of all costs.

In relation to the same we also include here five receipts exactly the same and which correspond to your five children. The receipt of your husband is kept in our archives, as we have not been able to locate him.

Respectfully and expressing again the gratefulness in the name of our glorious nation your generopus contribution we remain,

Your sincerely

Your oiligarch, petrocrat or oil thug in turn.

From El Universal

What’s more important for a nation, good citizens or good governments?

Friends

March 3 and 4, 2010, I participated in a very interesting conference titled “Oil and Gas in Federal Systems” held at the World Bank in Washington D.C. organized by the World Bank and the Forum of Federations, with sponsorship from NORAD.

I believe all participants learned a lot about issues and facts related to how oil and gas revenues are and should be distributed to central governments, states and municipalities. I know I certainly did. Thank you all!


Unfortunately, the sharing of the oil and gas revenues directly with those citizens whom are always told that these resources belong to them was not considered, not even as a possibility.

I did my best to remind those present that if we were to heed the wise words of Amartya Sen telling us to look for the things we share instead of what separates us, we should remember that at the last count, we are all citizens. Sadly, this did not impress many of the aspiring government, state or municipalities’ consultants, or authorities present, and so I felt that, as an oil cursed-citizen, I needed to intervene more actively. I hope the organizers will still invite me the next time.

I spoke out along the following lines:

What is more important for the future of a country, good governments or good citizens? I have no doubts whatsoever that the right answer is “good citizens”. Therefore, in an oil rich country, it is more important that the citizens learn to manage the oil-richness than thyat their governments do. But how can the citizens learn when governments thinking them to be the experts and the responsible for us, insist on managing all those resources?

Only those who have lived as cursed citizens know what the oil-curse is really all about. Only they know what it is to have an independently wealthy government which often considers the citizens to be more of a nuisance standing in the way of their grandiose plans. Only they know how easy it is for the citizens to succumb to be simple observers holding immense expectations about what oil and gas revenues will bring them.

Constitutions are written in order to defend the citizens from the excessive powers of their government. Should therefore not any methodology of sharing oil revenues between central governments, states and municipalities have as its absolute first priority that of avoiding accumulating excessive powers anywhere?

Yes I am all for transparency but, let us be sincere, quite often we know perfectly well we are being taken for a ride without needing to know the details. On occasions I have held that for an oil-cursed citizen more transparency is sometimes like having the right of also seeing when ones nails are extracted by the torturer.

Having been an Executive Director at the World Bank (2003-2004) I am perfectly aware that the World Bank works directly for the governments and only indirectly for the citizens. That said I find no reason why the World Banks needs to be so accommodative to the governments so as to sign up on the 2nd principle of the Extractive Industry Review (EITI) which 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.”

The Iraq Study Group Report of May 2006 stated: “There are proposals to redistribute a portion of oil revenues directly to the population on a per capita basis. These proposals have the potential to give all Iraqi citizens a stake in the nation’s chief natural resource, but it would take time to develop a fair distribution system.... There is no institution in Iraq at present that could properly implement such a distribution system. It would take substantial time to establish, and would have to be based on a well-developed state census and income tax system, which Iraq currently lacks.”

Is it not exactly for this type of challenges that we have in the World Bank a “knowledge bank”? We all know that if there was a real will, a system to do exactly that could be designed and put in place quite expeditiously.

Finally I spend some time voicing some “wise” bullets and thumb rules.

When accounting for the government’s share, you must include what they give away, like for instance the value of the 25 percent of Venezuelan oil production that at US$ 8 cents per gallon is just given away to those who drive cars.

Having been there, I cannot see one single new proposal related to have centralized governments make better use of oil and gas revenues that has not been tried and proven to fail before.

Having been there, as a manager in the initial stages of the Venezuelan Investment Fund 1974, I know about the total worthlessness of any oil and gas fund that the governments could influence in even the most minor way… so please do not sell false potions.

Would Norway be today's Norway had they found their oil when kings were kings?

Please do not let perfection become the enemy of the good by working on turning oil and gas revenues into a blessing. Most of us citizens would feel more than blessed were we able to avoid just the worst parts of the curse.

The best way for citizens to guarantee their freedom is paying for their governments. No central government, state or municipality should receive more than 10 percent of their revenues from any other source that is not direct tax payments by the citizens.

Never provide a ruler or a bureaucrat with income that he feels he cannot be contested or held really accountable for. If governments need the revenues let them pay the full per capita oil or gas revenue check to the citizens and then explicitly withhold the taxes on such payments.

Corruption is not acceptable whether centralized or decentralized and bullies are bullies, whether in the central government, states or municipalities.

Any government that receives more than four percent of GDP in fiscal resources that have not passed through a taxpayer’s pocket becomes de-facto a communist state.

The problem is not about producing the miracle of a government that puts centralized oil and gas revenues to good use for a country and its citizens… It is about being able to repeat that miracle over and over again.

Friends, I thank you in advance for listening to me and I appreciate immensely any echoing of my voice by resending this message to anyone who could be interested in it… and to many of those who are not but should be.

Best regards

Per Kurowski
Just another oil-cursed citizen

PS. I told the conference that two of my daughters had moved to Canada, one to Ontario and the other to Quebec and that, after reading about Alberta’s centralized oil revenues, I was thankful they had not moved into another future Venezuela. Someone replied that in Alberta they would not have to pay taxes. He did not really get my drift… paying taxes is the only way a citizen can have a government that works for him... and not the other way round.

OAS - IACHR: Gasoline (petrol) subsidies should be defined as an Economic Crime Against Humanity

In Venezuela, no matter that huge accumulated inflation over 12 years, the price of gasoline is not increased, and sold today at about 2 cents per liter 8 cents per gallon, something like a hundredth of its price other countries. In addition, the consumers can buy vehicles at prices benefiting from dollars at a preferential exchange rate.

On could estimate that these public policies one can estimates have involuntarily transferred 10% of the GDP of the country from those who have no vehicles to those who do. In other words, it is an institutionalized theft that threatens any equitable distribution of national income and equal opportunities. Not to mention the environmental crime it represents.

Arguing that the above constitutes a violation of human rights, I will try to file a lawsuit against the government of Venezuela at the Inter-American Court of Human Rights (CIDH). Q. What has the "equitable distribution of national income and equality of opportunity" to do with human rights. A. A lot!

First, the Charter of the Organization of American States establishes among its principles that "the elimination of extreme poverty ... is the common and shared responsibility of the American States (Art: 3f)., And also to be" devote their utmost efforts ... to achieve equitable distribution of national income; (Art. 34.b).

Then the American Convention on Human Rights (1969) states in Article 26 that "States parties undertake to ... achieving progressively the full realization of the rights implicit in the economic, social, educational, scientific and cultural standards contained in the Charter of the OAS ... to the extent of available resources, by legislation or other appropriate means 

And finally, in the case of "Discharged and Retired Employees of the Comptroller vs. Peru" (2009) it has established case law when in the judgment read that the Commission "has jurisdiction to decide whether the State has incurred in a violation or breach of any of the rights recognized in the Convention, including in regard to article 26 of the same ".

Again, without being a lawyer, I think there are possibilities to obtain a conviction; and the Commission may not even need to visit the country. 

However even in the case that is not achieved, I will have fulfilled the responsibility to report to the world what is amoral "The Asocialismo of the 21st century"; and that should have alerted the opposition to the issue.

Postscript. Thanks for any (free) legal advice for the drafting of the complaint.

Translated, quite lousily I presume, from El Universal

Ps. At this moment 2016 the price of milk in Venezuela is over 300 times the price of gas.

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.

My comments to EITI

This http://bit.ly/8JUZQP 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?

An open letter to His Majesty King Norodom Sihamoni of Cambodia from an oil cursed citizen

Your Majesty: 

I recently had the opportunity to attend a conference in Washington, D.C., arranged by Oxfam an international Civil Society Organization, an NGO. The conference was titled “Managing Cambodia’s Oil and Mineral Resources: Opportunities and Challenges for Development.” 

While listening to the excellent presentations made by Your Ambassador and by one of the spokesmen of the host organization, I felt tears coming to my eyes, hearing of exactly the same dreams and illusions that I had heard in my own country, Venezuela, thirty-five years ago, when oil prices increased dramatically. Those dreams have now been horrendously shattered by the awful realities of what is known as the oil-curse. 

Of course both speakers duly addressed the challenges and explained what “had to be done” in order to avoid this oil-curse, but the arguments; such as the need for transparency, good long term investments and setting aside funds for the future; and the determination with which they were made were also identical to those we made thirty-five years ago. All of it proved far from sufficient, did not serve us well and in fact only provided for the excuse of going down the wrong path. 

The real problem is that not one single of the precautions suggested has a real chance to stand up against the darkest forces of the oil-curse. No matter what you do, the fact is that oil revenues, when they are both generous and centralized in the hands of the State, provide for an independently wealthy government which does not need the citizens, and therefore becomes arrogant, and cruelly turns the citizens with very high expectations into beggars for favours. 

May I therefore respectfully beg of your Majesty to support the possibility that Cambodia’s net oil revenues be paid directly to the Cambodian citizens, in full and from the very first day. 

That article 58 of your Constitution states that mineral resources are the property of the State is no impediment for the results of the exploitation of those resources being paid out directly to the citizens. On the contrary, if the oil revenues were to remain in the hand of the State, that would effectively impede complying with article 56 that states “The Kingdom of Cambodia shall adopt a market-economy system” and, much more important, with article 51 that states “The Cambodian people are the masters of their country.” 

I am no one to remind a King of his duties, nor do I wish to presume to have royal wisdom, but having read in your Constitution that the King shall be the protector of rights and freedom for all citizens and shall assume the august role of arbitrator to ensure the faithful execution of public powers, let me in all humility say that, if I were the King of Cambodia, there would be no better legacy I could dream of leaving to my people and country than freeing it forever from the darkest side of an oil-curse. 

If there is an absolutely urgent need to initiate government projects, then allow the citizens to have the right to pay for these projects by giving back as income taxes a certain percentage of any oil revenues received, but please help your subjects to be and feel relevant to the future of their nation. 

Your Majesty, I would deeply appreciate any attention you give this letter and, if it is considered an undue intrusion into the affairs of Cambodia, please know that it has been written with utmost sincerity, thinking of a country that has gone through much suffering and destruction, and therefore truly deserves that oil helps, in the words of its Constitution, to turn “Cambodia into an “Island of Peace” . . . moving toward perpetual progress, development, prosperity, and glory” instead of forcing it to face new nation-destroying hardships. 

Sincerely, I remain, your Majesty’s humble friend, 

Per Kurowski 

Just another oil-cursed citizen. 

There is no such thing as an oil-cursed politician, oil-cursed government or oil cursed policymakers, on the contrary they are all most often shining examples of the blessings of oil... there are only oil-cursed citizens.

And here is "My minimum minimorum on exiting Iraq: 

Read it here at The Phnom Penh Post

Oil revenues belong to the citizens and should not be used to pay them off.

The single reason why I who have so actively been supporting oil revenue sharing by the citizen for years do not feel too optimistic about Nigeria’s current plan to pay 10 percent of the revenues directly to the Niger Delta citizens, is that it smells too much of a payoff, a societal bribe to some Nigerians; and leaves too much in the hand of too few.

Pay out 100 percent of the net oil revenues to all the Nigerians and if needed retain a percentage in taxes. That is the only way to put the citizens in charge of a democracy, as they are supposed to be in a democracy.

The frontier of curse-land

Any moment the State receives more than 4% of GDP in fiscal income directly from any extractive industry or similar, then the State has become too independently wealthy and the balance of powers needs to be restored by paying out all exceeding revenues directly to the citizens.

A letter to the Extractive Industries Transparency Initiative (EITI)

Dear friends,

By now you must know that though I harbor some reservations I support most of your initiatives, and most specially their spirit. That said…

In the video “Making resources work for people” that is posted on your web Obiagely “Oby” Ezekwesili says that “It ought to be the case that these revenues [from natural resources] can transform the life of the citizens but then you see the opposite happen.. It is the challenge to move the benefits of the natural resources out of the hold of a smaller club of people and instead diversify the opportunity that it offers to a larger number of people that is what will reverse the curse and that is the most important issue of the day for mineral rich countries.”

I could not agree more. And that is why I hereby express my deepest reservation about your second principle that says:

“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.”

The management of natural resource wealth for the benefit of a country’s citizens should be managed by the country’s citizens... otherwise, how will they ever learn how to manage it? The role of the government is to provide government not manage wealth for the voters.

Also, in the same video, Peter Sutherland Chairman of the Board of BP, talking sort of both for the consumers and the producers of oil, expresses that a steady predictable supply of natural resources at a reasonable price is in the interest of everyone... and that stability and predictability is dependent on good governance... for which transparency is a very important component.

I agree completely, on the first part, but instead of transparency on the status quo, and which I have equated to being able to see when the torturer extract your nails, I would much rather prefer that Peter Sutherland would help intermediate between oil producing and oil consuming countries in order to offer directly to all the citizens of an oil producing country, the true shareholders of oil, long term take up contracts, which would provide them with equitable and stable dividends and the consumers with equitable and stable oil prices.

Sincerely yours

Per Kurowski

An oil cursed citizen.

We don’t need more transparency

A new group of well intention academicians who want to help those countries blessed with natural resources to transform these in development and wealth for their citizens has recently been created. This group will summarize its conclusions in something named “The Natural Resource Charter”.

Just like the Extractive Industries Transparency Initiative, EITI, one of its guiding principles is that helping make more transparent the information of the origin and destiny of the funds obtained from the natural resources, will make the citizens request better results. Forget it!

We Venezuelans do not need more transparency to be absolutely sure that we are anchored in an infamous oil feudalism where or feudal lord on duty keeps all the seeds and shares out what is left or what he has digested. More transparency would be like the tortured clamoring for their rights to also be seeing how they extract their fingernails.

We Venezuelans do not need more transparency to be absolutely sure that the most we can expect substituting for the feudal lord on duty with another from the same tribe of the getoutoftheway-toplacemyselfs is that he will hopefully do just what the previous did a little bit better, though always running the risk he will do it worse.

We Venezuelans do not need more transparency to be absolutely sure that our lives are wasted fighting among each other for a share in our own net oil results, wallowing in a sort of eternal piñata at the feet of the benevolent on duty who distractedly observes us with a sarcastic smile.

We Venezuelans do not need more transparency to be absolutely sure that instead of a feudal system that administers our own net oil results we need a normal government that governs our country.

We Venezuelans do not need more transparency to be absolutely sure that we are much better off trusting each one of us a little, instead of trusting a chief so much that we elevated him to be our feudal lord.

In conclusion we Venezuelans do not need the slightest bit of more transparency to be absolutely sure that what we most need is the strength and will to free ourselves from this feudal oil state in which we are trapped by requesting they give us our oil results directly, so that we can plant them… instead of discussing so many stupidities and believing in so many pregnant birds.

Translated from “El Universal” Caracas, Venezuela, April 9 2009.

Plain awful

It is plain awful to be a citizen where the government is independently wealthy because of income from national resources and does not really need the citizens.