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Weak governance often results in failed efforts to transform wealth to prosperity – Natural Resource Governance Institute
…says more needed than understanding of economics
Kaieteur News– “Too often the transformation of resource wealth into prosperity fails not because of a lack of the correct economic policies, but because of a weak underlying system of governance.”
Weak governance often results in failed efforts to transform wealth to prosperity – Natural Resource Governance Institute
This is according to the Natural Resource Governance Institute (NRGI) in its second edition of the Natural Resource Charter. The document offers policy options and practical advice for governments, societies and the international community on how best to manage resource wealth. Such guidance can ensure that resource-rich countries are not alone in facing these challenges, but rather that they can draw on accumulated experience to learn from history and avoid the mistakes of the past.
The Charter contains 12 precepts on how a country and its government might manage natural resources and explores the functions of extractive companies.
According to NRGI, a successful strategy for resource management not only requires an understanding of the economics, but also an appreciation for accountability, the structure and capability of government institutions, and the relationship with civil society.
It was keen to note that resource-rich countries have a great opportunity to harness their natural wealth for transformative and sustained prosperity; however, if mismanaged, resource extraction can impose severe costs on a country.
“As stewards of their extractive resources, it is typically the responsibility of governments to manage those resources for current and future generations. Effective and sustainable resource management requires an inclusive and comprehensive national strategy,” the Institute pointed out.
To achieve this, it was explained that governments must make a series of key decisions that will affect different groups and set choices extending far into the future. “To avoid making decisions in a piecemeal fashion and to build a shared sense of direction, governments should, in dialogue with stakeholders, use a national strategy process to guide extractive resource management decisions,” NRGI said.
Notably, this national strategy should take a long-term approach, recognizing the fact that the transformation from wealth in the ground to wider societal benefits can take many years, and present many challenges and surprises along the way.
In the meantime, this strategy is likely to be more successful if it is the product of inclusive processes that are open and participatory. For instance, the Institute explained that a debate in public will expose policy conflicts and inconsistencies sooner, constrain self-dealing and corruption, and render inevitable course corrections less disruptive.
Importantly, decision makers should seek to incorporate the inputs of other stakeholders, ranging from government departments, parliament, and citizens directly affected by extraction, to civil society more broadly, as well as the extractive companies and private sector businesses in general, NRGI said.
The Natural Resource Governance Institute is a non-profit organization that supports informed, inclusive decision-making about natural resources and the energy transition.
(Weak governance often results in failed efforts to transform wealth to prosperity – Natural Resource Governance Institute)
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