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Introduction to resource transparency

 

For many developing countries, the sale of natural resources such as oil, gas and minerals, has the potential to provide vast sums of public money to lift millions out of poverty. Revenue from natural resources provides the best opportunity for economic growth and poverty alleviation. To put this in perspective: in 2008 exports of oil and minerals from Africa, were worth approximately $393.9 billion. This figure is nearly 9 times the value of international aid to the continent which amounted to $44 billion.

And that’s just an example of the evidence of the scale of wealth in Africa or in extractive industries in general. The potential wealth, on the other hand, may be far greater as Africa is considered the ‘next frontier’ in terms of discovering new resources.

It’s clear then that, natural resources simply dwarf aid spending. They are the best foundation that many impoverished countries can take advantage to build a better future.

But secrecy in the management of the massive revenues from oil, gas and mining companies in countries like the Democratic Republic of Congo, Nigeria and Angola has meant that the country's impoverished people have seen little or no benefit. For example in Angola, a Global Witness report in 2004 found that one in every four oil dollars earned went missing. At the same time one in four Angolan children died before the age of five from preventable diseases.

In fact, secrecy of payments made by companies to governments for the sale of these national-owned treasures often facilitates and even encourages corruption, violence and conflict. As a result, over half of the poorest billion people on the planet live in countries that are rich in natural resources.

The companies who pay governments for theses resources, and Western governments who regulate company financial reporting, could play a critical role in lifting this destructive veil of secrecy. By publishing what they pay to foreign governments for the right to operate in their territory, citizens of resource-rich countries would be able to ‘follow the money trail’ and use this information to hold their governments to account. It empowers them to demand better from the governments so that the revenues can be used for desperately needed services like schools and hospitals.

And this is what happened in the United States.

Last year the US took a landmark step towards greater transparency by introducing a law which requires all oil, gas and mining companies listed on the US stock exchange to disclose all payments they make to foreign governments.

The President of the United States, Barack Obama even mentioned it at the United Nations’ Millenium Development Goals Summit last September. To quote him in full,

We also know that countries are more likely to prosper when governments are accountable to their people. So we are leading a global effort to combat corruption, which in many places is the single greatest barrier to prosperity, and which is a profound violation of human rights. That’s why we now require oil, gas and mining companies that raise capital in the United States to disclose all payments they make to foreign governments.

If the US has done it. Why can’t the UK?

The good news is there is a movement of people, organisations and MPs that are pushing for the introduction of a similar law in the UK. Just like their US counterparts, they’re motivated by the desire to make it harder for corrupt officials to steal from their own people and stifle their development.

In the past two weeks three significant events occurred moving transparency off the shelf and into the mainstream.

First, as we blogged last week Finance Minister George Osborne announced that the government would be pushing for companies in the extractive industries to publish what they pay to governments in resource-rich countries.

Second, Anas Sarwar MP tabled a 10 Min Rule Bill in the House of Commons calling for similar legislation like that passed in the US requiring disclosure.

Third, across Europe an international coalition of organisations held a conference in Paris to discuss how to continue pushing for better and improved transparency standards.

The UK has the opportunity to be a leader on this campaign but we need to make it happen is demonstrated public support.

This is all happening now and you can be a part of it.

At the Global Poverty Project we will be playing a role in the public movement calling for greater transparency standards. That’s why we’ll be publishing a whole set of material around this issue because we want to see it change and together we can make it happen.

Join our Justice Campaign.

Posted by Perrin Wilkins (Corruption Campaigner) in What Can I Do? for column Issue Analysis on Mar 3rd 2011, 12:57

Ayiti: the Cost of Life (Part 4)

 

Hello again, dear readers. This is the fourth part of the story of my experience with Ayiti: The Cost of Life, a freely-available online game about poverty in Haiti. After failing to keep my family alive for the full four years, and watching them die one by one while desperately trying to turn things around, I started the game again in the last entry.

This time, I planned out a strategy that I hoped would avoid the hopeless scenario I drove the family into the first time around. It started out pretty well; let's see if they stayed that way.

Ayiti screenshot - construction work description

I saw that either Jean or Patrick could work as a construction worker if the family owned a bicycle; I figured the 350 goud cost of a bike would be a worthwhile investment. Jean left his job as a rum distiller for roughly equivalent pay in the healthier construction work. The cost of the bicycle ate up the family's profits for the season, but seemed to set them up well for the future.

A bumper crop in the hurricane season, combined with Marie's temporary switch to manual labour, helped the family's savings rise to 776 goud going into the dry season. This afforded them the opportunity to rest up. Marie headed off to Vocational School for some more education, while Jacquline worked as a farm hand to ensure money couldn't run out, and the rest went to a clinic.

The game said that the family ended the year in "poor shape," but I was pretty happy with the situation. They'd broken even with their savings while managing to gain some education -- Marie was now up to a rating of 3; the rest sat on 1 (which is one better than where they started). They were all happy. And their health was good -- although Marie was about ready for a trip to the clinic.

A volunteer position opened in the second year, which Yves promptly snapped up. The first half of the year was spent consolidating the family's assets and future well-being. A hurricane and unexpected illness almost destroyed all this effort, leaving the family with just 96 goud going into the dry season.

96 goud at end of hurricane season

Content that at least health was not an issue, I sent everyone off to work -- no-one could rest or go to school lest they enter extreme poverty. Knowing it could well be suicidal, I made sure they still had books for a little self-study -- even though it left them with just 46 goud.

For a change, nothing went wrong. The family earned more than double what they spent that season, bumping their savings way up to 733 goud. As a bonus, Yves's education rating rose to 2. This time, the game agreed with me: "After the second year, your family is in great shape."

Finally ready to raise the family's living conditions to "Good Living," which costs almost 300 goud extra per season, I looked to the future with hope. Construction work was unavailable, so Jean returned to his old job as a rum distiller and Patrick continued as a farm hand. Meanwhile, Marie went back to Vocational School and Jacquline went to the hospital. Much to my delight, Marie's education jumped from 3 to 5, earning her a technical certificate.

When summer came, I decided it was time to send both parents to a clinic -- their health was getting low. The children picked up the slack remarkably well, earning enough to bring the family's savings up slightly (even if that did require a hopefully-temporary return to "Decent Living").

No jobs were available for which Marie was qualified, so she went back to Vocational School. Revelling in the fact that I could rotate the family through the clinic to keep everyone healthy, I sent Patrick and Yves away to get some medical attention.

Ayiti screenshot - Marie earns a Baccalaureat

The good news kept on coming, as the family experienced another bumper crop and Marie earned her first Baccalaureat Degree. Perhaps now, I thought, she would be able to find some high-paying work that would allow the children to get a better education.

Posted by Richard Moss (Guest Blogger) in Poverty for column Ayiti: the Cost of Life on Mar 2nd 2011, 15:16

Reviewing DFID's Aid Review: Value for the Poor?

 

Earlier this afternoon, secretary of state for International Development Andrew Mitchell announced the results of DFID’s multilateral and bilateral aid reviews, which outlined the future of UK aid spending and emphasised the Coalition’s commitment to spend 0.7% of UK Gross National Income (GNI) on overseas development.

There is much to be proud of in light of the current economic climate that has forced drastic cuts in all but health and development. As Mitchell said, the Coalition’s promise to ring-fence development aid underscores its commendable pledge not to ‘balance the books’ on the backs of the poorest people on the planet.

We commend the Coalitiion’s commitment to maintaining 0.7% of GNI towards overseas development and turn our attention to where this will be spent.

Below are key summary points of key themes and outcomes of the reviews. Many of these focus on ensuring value for money and an increased focus on reducing poverty in many conflict affected states. When reviewing these for yourself, we encourage you to ask the question: does the Coalition’s approach deliver real results not just for the British public, but the poorest of the poor?

Value for Money

In line with the Coalition’s stated desire to deliver more tangible results to the UK taxpayer:

  • The UK is ending development aid to 16 countries: Angola, Bosnia, Burundi, Cameroon, Cambodia, China, Gambia, Indonesia, Iraq, Kosovo, Lesotho, Moldova, Niger, Russia, Serbia and Vietnam
  • Countries receiving substantial increases in bilateral aid include: Bangladesh, Nigeria, Pakistan, Ethiopia, Yemen and the Democratic Republic of the Congo  
  • Aid to India is frozen and assistance is being channelled only to its 3 poorest states  
  • Bilateral Aid will remain in the following 27 countries: Afghanistan, Bangladesh, Burma, Democratic Republic of the Congo, Ethiopia, Ghana, India, Kenya, Kyrgyzstan, Liberia, Malawi, Mozambique, Nepal, Nigeria, Occupied Palestinian Territories, Pakistan, Rwanda, Sierra Leone, Somalia, South Africa, Sudan, Tajikistan, Tanzania, Uganda, Yemen, Zambia and Zimbabwe
  • 4 multilateral agencies are losing DFID funding and 4 more are being warned to increase their accountability and prove their performance

National Interest

Mitchell argued that aid can be used to enhance UK security: “It’s very much in our national interest to tackle these effects of dysfunctionality and poverty, such as piracy, migration, terrorism and disease in Somalia. Tackling the causes of poverty upstream is much less expensive than sending in troops.”

In light of Mitchell’s September 2010 speech “Development in an Uncertain World,” the Strategic Defence and Security Review “Securing Britain in an Age of Uncertainty” released in October 2010, and today’s speech to the House of Commons, there is widespread concern about UK aid being prioritised for enhanced UK security.

Mitchell has also emphasised that conflict is intimately linked with extreme poverty, as evidenced by the daily struggles of millions just to get by in the world’s most fragile states, such as the DRC and Afghanistan. As he stressed in his statement to the House of Commons this afternoon, the 27 countries that will continue to have bilateral UK aid programs account for ¾ of global maternal mortality, ¾ of malaria deaths, and almost 2/3 of children out of school. Unsurprisingly, these countries are a long way off track to achieve the MDGs.

DFID is trying to kill the two birds of poverty and insecurity with the one stone of aid with its prominent focus on conflict affected and fragile states. However, the Department must demonstrate that while UK development aid does have a natural relationship with peace-building and state building, it should not be subservient to military and security objectives. DFID must also prove to the UK public that its aid programmes are concerned with structural prevention of poverty and conflict, or aid that addresses the underlying causes and conditions that allow conflict to emerge.

DFID’s mission is to “manage Britain’s aid to poor countries and work to get rid of extreme poverty.” Therefore, the Coalition should, in the words of shadow secretary of state for International Development Harriet Harman, “ensure that countries which may not be beset by conflict but which are beset by poverty do not lose out.”  For example, DFID's bilateral aid programs to Niger and Burundi, home to some of the world's poorest people, are being completely eliminated under the new plan.   

 

We urge DFID to maintain its focus as a development agency that focuses on improving the lives of the world’s poorest people, and not become a tool for diplomatic means. For that we have the FCO.

We urge the public to join with the Global Poverty Project in holding politicians and the media to account when they misrepresent the myriad challenges facing the lives of those living in conflicted affected and fragile states. In keeping with the review’s emphasis on delivering 100pence of value on the ground for every 1 pound of taxpayer’s money, in the course of evaluation we should constantly keep in mind that aid to conflict affected and fragile states is often slow, difficult to measure, and potentially unquantifiable.

We must also remember that aid is not about charity, but justice. Justice for every family who is afflicted with HIV, for every child who is severely malnourished, and for every girl who is unable to receive an adequate education. It is about fulfilling the UK’s responsibilities to be at the forefront of the struggle for a fairer and more equal world.  This is real value for money.

 

 

For more details see:

ODI's Guide to the Aid Reviews

Full DFID Multilateral Aid Review

Full DFID Bilateral Aid Review

Posted by Ben Knopf, Becky Driscoll, Elisha London in Poverty for column 1.4 Billion Reasons on Mar 1st 2011, 18:08

Vaccines: The first step to Global Health

 


After first watching this short clip by the Bill & Melinda Gates Foundation, it is easy to think that we found the answer for saving a large portion of the 8.1 million children under 5 who die every year from preventable and treatable diseases.

The video explains that by scaling up vaccines over the next 10 years in the 5 countries where most children die (Afghanistan, Democratic Republic of the Congo, Ethiopia, India, and Nigeria), we would save 3 million children and nearly USD$3 billion in treatment costs. Based on this information, they contend that, “vaccines are the best investment in global health.”

I'd absolutely agree - and add that we have to ensure that they're not the only investment we make. Vaccines are the best short-term solution for global health issues, but vaccines alone cannot be our only long-term solution. Taking two diseases as examples - measles and rotavirus - here's why...

Measles
Let’s take the first example of measles. Although it is treatable, every child needs to be vaccinated against measles due to its highly contagious and potentially deadly nature. In the US, we have to receive the vaccination before we’ll even be admitted to school. So it is imperative that children in developing countries get this same access to the vaccination, so they are equally protected from this rampant disease.

However, severe measles, which is what can be deadly, is more likely among poorly nourished young children, particularly those with insufficient Vitamin A or weakened immune systems from other diseases. This means that more than 95% of the 164,000+ people who die from measles each year are children living in poverty in developing countries (WHO).

So as you can see, it’s not just lack of the measles vaccination that is threatening the lives of these children. We need to tackle the issues of hunger and access to Vitamin A in developing countries so that these children’s immune systems are strong enough to fight off the disease if they haven’t been immunised. As we’ve mentioned previously, we also need to address the issue of inadequate health services and infrastructures, which is currently keeping 1 billion people from ever seeing a doctor in their entire lives, making them more likely to become infected with preventable and treatable diseases that further weaken their immune systems.

So although vaccines are important and necessary on a short-term basis to protect children from measles, long-term investments in fighting hunger and improving health services are also necessary to help us get to the root of the problem.

Rotavirus
Another example of this situation is rotavirus, which along with E. coli is the most common cause of diarrhoea. Diarrhoeal disease is the 2nd leading cause of death in children under 5, taking the lives of over 1.5 million children every year. Although vaccinating against rotavirus will undeniably save the lives of millions of children, it is not the only answer to stop infection of this completely preventable and treatable disease.

Diarrhoea is a symptom of infections caused by faeces-contaminated water. Human faeces from sewage, septic tanks and latrines can contaminate water sources that are used for drinking, cooking and cleaning and easily spread disease.

Sounds pretty gross, doesn’t it? Not as gross as the fact that we allow 2.6 billion people in the world to go without access to adequate sanitation, which is the reason why this water is getting contaminated (WaterAid). We need to address the issue of access to safe and clean drinking water and adequate sanitation as well to get at the root of the rotavirus problem, so that we can tackle the disease on a long-term basis.

Then what should we do?
We need to start by supporting organisations like GAVI to increase the number of vaccinations distributed across developing countries. Their work has saved over 5.4 million lives in some of the poorest countries in the world through increased vaccinations.

But we need to do that while also addressing the root causes of these issues, which stem from the aspects of living in poverty. We need to fight hunger (Action Against Hunger), improve access to health services (Oxfam), and ensure that everyone has clean water and decent toilets (WaterAid).

Vaccines work, and they work even better when complemented by fighting the causes of poverty across the whole community.

Posted by Ashli Alberty in Global Health for column Issue Analysis on Feb 28th 2011, 22:26

Ayiti: the Cost of Life (Part 3)

 

The one-and-a-half years of the Guinard family's journey covered in the previous two diaries (part 1, part 2) was full of both ups and downs, but seemed to be skewing more towards the downs. At the conclusion of the last entry, Jean, the father, was seriously ill, but the family's sizeable debt prevented him from getting treatment. With their health fading, I hoped the rest of the family could earn enough to repay the debt and buy food -- if not pay for medical treatment.

The end of the road

The community centre opened, and the family managed to climb out of debt, but all of this came too late for Jean. He died from cholera, leaving Marie to raise Jacquline, Patrick, and Yves alone. To make matters worse, all four of them were sick. I needed to figure out a way to get everyone serious medical treatment for the measly 138 goud at their disposal.

Ayiti screenshot - Jean dies from cholera

I'm no miracle worker, so things didn't look good. I gambled on a home remedy helping to stave off disease, then sent them all to a clinic for illness. Unsurprisingly, money ran out well before the season ended. Marie was sent home, while the others remained at the clinic -- presumably because no-one will refuse treatment to a child if they can avoid it.

The second year ended with the family clinging to hope by a bare thread. Debt had spiralled to 465 goud. Yves, Patrick, and Jacquline were no longer sick, but all were in poor health nonetheless. Marie's chances of survival were pretty grim, with her illness compounded by a rating of 0 happiness.

Jacquline, the healthiest of the group, went to work on the family farm, where she rapidly deteriorated. Trying to fight her way through a cold, she got bloody diarrhoea, then died from cholera when she returned home. Toeing the line, Patrick reduced the debt to 306 goud, but got a cold and vitamin deficiency in the process.

Ayiti screenshot - Christmas without money

All three -- Patrick, Marie, and Yves -- struggled on for two more seasons, with both boys contracting cholera. Marie died shortly after Christmas. Now orphans in desperate need of medical attention, Patrick and Yves held little chance of survival. But that will remain a mystery, since the game ended there -- if both parents die, you lose.

If at first you don't succeed

Feeling awfully depressed that I could do nothing to save even one of the family members, I took a moment to think about just how firmly the odds were stacked against them. Living so close to the edge, it seems to take just one mistake or misfortune to leave the entire family standing on the brink of collapse. I thought it would all work out, but I overestimated how much work the family could accomplish in poor conditions before succumbing to illness.

Thankfully, being a game, I had the opportunity to undo my mistakes. So I started again, hoping that this time I wouldn't let the family down.

The lack of education caused problems in the previous play-through, since the family could only work the tough low-paying jobs, so I decided to place greater emphasis on education. I also aimed for the more expensive "Good Living" conditions, in hopes that it would enable the family to work harder for less of a health impact. To pay for that education and better living, though, I needed to bring in more money. (And to bring in more money, I needed someone with more education -- it's a vicious cycle.)

I had heard that the women could work as secretaries if given enough education, so I made that the initial target. Marie went off to Vocational School, while Jacquline drew the short straw and signed on as a market woman. I sent both boys to work: Patrick as a farm hand and Yves as a labourer on the family farm. Jean took one for the team and became a rum distiller. I bought books so that everyone would gain a little education.

Ayiti screenshot - starting again

It worked out well. The family's savings rose from the initial 300 goud (minus 50 for the books) to 586. Marie's education level rose to 2. All set to continue as before, I entered the second season hoping that she will soon have enough education to become a secretary.

Posted by Richard Moss (Guest Blogger) in Poverty for column Ayiti: the Cost of Life on Feb 24th 2011, 10:14