Riches Should Help the Poor
By Desmond Tutu
and Jody Williams
28 April, 2004
International Herald Tribune
is a cruel irony that countries around the world that suffer from some
of the highest rates of poverty, disease, corruption, violent conflict
and human rights troubles are also - at least on paper - some of the
richest. Paradoxically, their wealth in natural resources like oil,
natural gas, gold, diamonds and copper, has helped fuel many of their
this phenomenon the "resource curse" or the "paradox
of plenty" and have struggled for years to come up with ways to
deal with it. Now after much study and analysis, the World Bank, the
world's most important poverty-reduction institution, has perhaps the
best opportunity ever to help poor countries break out of this trap.
But for this to happen, its board of directors and its president, James
Wolfensohn, must exert the leadership necessary to assure that the earth's
riches help the world's poor.
Some countries have
been able to convert their natural wealth into improved standards of
living for their citizens. But in the vast majority of cases, this has
not happened. The money generated from natural resources has helped
perpetuate civil wars, as in Sierra Leone and Angola, or has been squandered
by corrupt government officials - perhaps most spectacularly in Nigeria,
which lost which lost an estimated $4 billion in government funds, 90
percent derived from oil, during the dictatorship of Sani Abachi in
In addition, the
spills of oil and toxic chemicals used in mining, such as cyanide, can
cause grave damage to poor communities near mines or oil installations
that depend on subsistence farming or fishing to sustain themselves.
Such communities rarely see any trickle down benefits from
such operations. A lack of transparency in accounting for oil and mining
revenues makes graft and corruption harder to address effectively.
The World Bank has
played a central role in opening the economies of poor countries to
investment by foreign oil and mining companies. The bank's theory has
been that such investment would generate the money needed by poor countries
to help lift them out of poverty.
The reality has
proven far different. According to several studies, including some by
the bank itself, poor countries that depend on oil and mining resources
actually grow more slowly than those that do not. Additionally, they
have lower education and higher malnutrition rates and a much greater
tendency to violent conflict.
To its credit, the
World Bank began to recognize these problems several years ago. In 2000,
prodded by environmental and human rights organizations, the bank began
a major review of its policies for its oil and mining projects.
The review, conducted
by a former Indonesian environment minister, Emil Salim, produced a
sweeping set of recommendations for overhauling the bank's involvement
in these sectors. These include doing more to protect human rights,
requiring that oil and mining companies obtain the consent of local
communities before setting up operations and avoiding investing in areas
are reasonable and necessary if the World Bank wants to improve the
impact of its investments. These changes have broad support from a range
of interests, including religious leaders, renewable energy companies,
socially responsible investment firms and nongovernmental organizations
such as Oxfam and the World Wildlife Fund, as well as local organizations
from around the world.
these policy reforms could dramatically change the way the bank does
business in the oil and mining sectors and could significantly improve
the chances that this natural wealth could benefit the poorest populations.
But to overcome the inertia of the bank's bureaucracy - which has squelched
previous reform efforts - Wolfensohn and the World Bank's shareholders
must take steps now to ensure the adoption of the review's recommendations.
The time for action
is now. The world's poorest, who suffer daily from the negative impact
of these industries while being denied the benefits they could bring,
cannot wait any longer.
Tutu was awarded the Nobel Peace Prize in 1984 and Jody Williams in
2004 the International Herald Tribune