UN: Resources should finance development, not war

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Associated Press

Posted on June 19, 2013 at 8:32 PM

UNITED NATIONS (AP) — The United Nations' deputy secretary-general is urging countries to transform natural resource inequities that have fueled conflicts over oil, diamonds and precious metals and use those resources to finance economic development and provide basic services like health care and clean water.

In too many countries, Jan Eliasson said Wednesday, a wealth of natural resources has benefited a powerful few while communities and individuals pay a terrible cost in corruption, human rights abuses and environmental damage.

"Yet, managed wisely, extractive resources can — and should — be the foundation for sustainable development and lasting peace," Eliasson told the U.N. Security Council.

Former U.N. secretary-general Kofi Annan told the council that it's up to governments to effectively and transparently manage their resources to prevent conflict, fight corruption and promote sustainable development.

"Let us remember: Natural resources do not cause war," Annan told the council by videoconference from Geneva.

Annan also called for international rules to close down opportunities for tax avoidance and limit the use of shell companies and other tools that contribute "to secret, murky and exploitative deals."

Speaking as chair of the Africa Progress Panel, which promotes equitable and sustainable development for Africa, Annan said its report this year found that anonymous shell companies were used in five deals that cost Congo nearly $1.4 billion between 2010 and 2012.

"This sum is equivalent to almost double the country's combined budget in 2012 for health and education," he said.

World Bank Managing Director Caroline Anstey also pointed to the mismanagement of resources in Guinea, where the government recently reviewed mining contracts and identified a license given free in 2008 for Simandou, the country's huge iron ore mine.

"Two years later, the investor who was given that license free sold 51 percent of that investment at a price of $2.5 billion," she said. "Guinea's entire government budget in 2010 was $1.2 billion."

The World Bank is helping "fragile countries" negotiate contracts with companies that have legions of lawyers, and is promoting a transparency initiative for extractive industries that requires public disclosure of auction results and licenses, Anstey said. It is also promoting initiatives requiring disclosure of all public contracting, putting all mineral potential in Africa on a map and developing an index which aggregates open source information on companies.

Rebecca Grynspan, associate administrator of the U.N. Development Program, pointed to the "disappointing results" in economic growth and combatting poverty and inequality in many resource-rich countries.

"Since the 1990s, the number of oil-producing countries with ongoing conflicts has increased, while non-oil producing countries have become more peaceful," she said.

The Security Council deals with threats to international peace and security, and Grynspan noted that more than half the countries on its agenda are dependent on resources like oil, gas or minerals for over 25 percent of their exports.

Britain's U.N. Ambassador Mark Lyall Grant, the current council president who organized the debate, expressed disappointment that members could not agree on a statement on what he called a critical issue.

Diplomats, speaking on condition of anonymity, said Russia blocked a statement, which requires consensus of all 15 members, because it believes the issue falls outside the Security Council mandate.

U.S. Ambassador Susan Rice noted that "since 1990, at least 18 armed conflicts have been fueled by the exploitation of natural resources," including Congo and the Central African Republic, which are currently on the council's agenda.

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