The battle for natural resources

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African and Asian countries should manage valuable natural resources in a sustainable manner so that it contributes to economic growth and better living conditions for the whole nation.

The money from natural resources is not always put to good use

The money from natural resources is not always put to good use

Norway was in a similar situation in the 70′s, when the oil age surprisingly arrived to the country. In the beginning we needed experienced international companies to exploit oil and gas resources for us, But we made sure ​​of obtaining national control, set requirements for the transfers of expertise to Norwegian actors and introduced a tax system that secured the country a significant part of the oil and gas revenues.

This is unfortunately not the situation in many African and Asian countries. There is often a lack of necessary national management and control of the mineral extraction. The tax system is faulty and causes much of the financial revenues to disappear from the country and in addition, the mineral extraction cause major problems with contamination and pollution as a result of an inadequate legislation.

Pretext for preventing development?

New technology has led to the discovery of major natural resources in several African and Asian countries such as Uganda, Tanzania, Mozambique, Burma and Mongolia. The question now for the developing countries is: will natural riches contribute to development, increased welfare and hope for the future, or are these riches rather a pretext for preventing development?

A number of studies confirm that countries with large mineral wealth rarely find that this leads into positive development. Paradoxically enough, it is often the opposite: on average, resource-rich countries perform worse than countries without such resources in terms of economic development, social cohesion and employment.

Wage increases for employees in the mining industry, etc. easily destroy competitiveness in traditional enterprises. Export enterprises have problems due to a stronger currency and the corruption increases. Greater economic and social differences give rise to discontent and political tensions in society, which can translate into social unrest and violent conflicts that threaten stability and prevents the development of democracy in the country.

Equitable distribution

There is considerable interest in many developing countries for the Norwegian administration model: a licensing system for national control while ensuring important presence of international companies, a balanced tax system, strict environmental standards and guidelines that prevents overheating of the economy. The Norwegian model must of course be adapted to the situation in each country. But the principles are the same. It is about managing precious natural resources in a sustainable manner so that it contributes to economic growth and better living conditions for the whole nation. At the same time the values should be divided fairly between generations. It is not just that mineral resources, which are formed during several million years, shall be used up by a few greedy generations.

 

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