Real World Challenges
Edited by Tina Søreide and Aled Williams
Chapter 3: Resource grabs
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).
You are not authenticated to view the full text of this chapter or article.
Elgaronline requires a subscription or purchase to access the full text of books or journals. Please login through your library system or with your personal username and password on the homepage.
Non-subscribers can freely search the site, view abstracts/ extracts and download selected front matter and introductory chapters for personal use.
Your library may not have purchased all subject areas. If you are authenticated and think you should have access to this title, please contact your librarian.