Corruption, Grabbing and Development
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Corruption, Grabbing and Development

Real World Challenges

Edited by Tina Søreide and Aled Williams

All societies develop their own norms about what is fair behaviour and what is not. Violations of these norms, including acts of corruption, can collectively be described as forms of ‘grabbing’. This unique volume addresses how grabbing hinders development at the sector level and in state administration. The contributors – researchers and practitioners who work on the ground in developing countries – present empirical data on the mechanisms at play and describe different types of unethical practices.
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Chapter 3: Resource grabs

Philippe Le Billon

Extract

Most developing countries do not reap the full benefits of their natural resource wealth, a major issue given the opportunities that arose from high primary commodity prices over the past decade. One major reason for this situation is a resource grab that benefits domestic elites and foreign corporations rather than local populations, thereby contributing to the resource curse (see Humphreys et al., 2007; Collier, 2010). This resource grab not only takes the shape of corruption but also illegal resource exploitation and tax evasion, which together constitute the main sources of illicit financial flows ñ money illegally earned, transferred, or used ñ draining wealth away from producing countries. Besides financial impacts, resource grabs also have many indirect effects, including negative environmental, social and political impacts. Many initiatives have sought to prevent such grabs, from tougher implementation of anti-corruption laws and resource nationalisation to revenue transparency norms. Recent high-profile cases included a USD†1.2†billion settlement imposed by US authorities on oil and gas service companies accused of corruption in Nigeria (Department of Justice, 2010). Presenting anecdotal evidence and conceptual interpretations, this chapter first highlights the three main ways of grabbing development from resource revenues and then discusses some counter-measures. Extractive sectors currently generate about USD†3.5†trillion in annual gross revenue, corresponding to around 5 per cent of global gross domestic product (GDP), the proportion of ëextractive productsí ñ fuels, metals and minerals ñ rising from 23 per cent to 34 per cent of global international trade between 2001 and 2011 (UNTACD, 2013).

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