RWI applauds World Bank’s new transparency effort but cautions bank must overcome a legacy of mistrust in resource-rich nations

Source: The Revenue Watch Intstitute
Date: 12 Apr 2022

WASHINGTON, DC — The Revenue Watch Institute welcomes today’s World Bank announcement of a new comprehensive approach to helping resource-rich countries harness the current boom in oil and commodities prices for development.

The Revenue Watch Institute works with activists and governments in resource-rich countries around the world.

“The success of the Extractive Industries Transparency Initiative in shining a light on revenue flows has sparked demand for a broader approach to extractive industry reform,” said RWI Director Karin Lissakers. “Governments want to know that they have gotten a fair deal and that companies are paying what they should. Citizens want to know where the money is going.”

Lissakers cautioned that to succeed in this new campaign, the World Bank will have to overcome a legacy of mistrust.

“Revenue Watch stands ready to support this effort with our resources and expertise, but the Bank would do well to remember that its prior advice produced many of the national policies that now require reform. It can expect to find a deficit of trust among governments and citizen groups in the resource-rich countries that stand to benefit most from this new initiative,” Lissakers said.

A legitimate multi-stakeholder approach has been the key to the EITI’s progress to date. A similar approach will be needed for the World Bank’s broader scheme.

“Institutionalizing responsible resource wealth management and transparency across the entire value chain demands constructive engagement with the activist and civil society communities,” said Lissakers. “Only strong grassroots support will ensure that new policies take hold and endure.”

The World Bank plan would extend the standards underlying the EITI “upstream” and “downstream,” following the model proposed by Oxford University economist and Revenue Watch advisory board member Paul Collier. Professor Collier has identified five “decision points” in the value chain for effective management of natural resource wealth: the sale of resource rights; a tax regime free of corruption; real revenue savings; domestic investment of revenues; and a sound approval process for expenditures.

“Today’s commodity boom presents the most important development opportunity in generations for resource-rich countries,” said Lissakers. “It should not be lost through continued waste, misuse and misappropriation of these resources.”

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The Revenue Watch Institute (www.revenuewatch.org) promotes the responsible management of oil, gas and mineral resources for the public good. With effective revenue management, citizen engagement and real government accountability, natural resource wealth can drive development and national growth. RWI provides the expertise, funding and technical assistance to help countries realize these benefits.

Contact: Jed Miller, +212.548.0697 jmiller@revenuewatch.org
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