How can the west stop poor nations being exploited for their natural wealth?
Imagine a small nation, undeveloped yet fantastically rich in a natural resource that offers it a one-off chance of great wealth. An aggressive, sophisticated foreign power wants that commodity and is prepared to do anything it can – diplomatic or military – to get it. What hope does the nation have? You wonder if Paul Collier’s new book has been timed as a tie-in with the DVD of Avatar, the story of a gentle planet that suffers “resource curse”.
Extractables are a curse: no poor nation in modern times (except, perhaps, Malaysia and Botswana) has prospered as a result of them. Many, from Sierra Leone to the Democratic Republic of Congo, have been repeatedly ravished over decades because of the wealth under their soil. And the reversal of this rule provides Collier’s central question: how are we to redirect the whole sorry story of mankind’s inequitable and short-sighted plundering of the planet’s resources?
Policymakers in development love Collier, because he offers routes out of ideological thickets. Now a professor of economics at Oxford, he emerged from the World Bank, where he was director of research, to publish perhaps the most highly regarded – and certainly the most read – book on global poverty and its possible solutions of the last decade. The success of The Bottom Billion (2007) owed a lot to the fact that it took a middle way between the doctrines of the right and the left over development. Collier’s practical solutions offered a remarkable change from the one-size-fits-all doctrines of liberalisation that had driven 20 years of development.
The Bottom Billion‘s subtitle was “Why the poorest countries are failing and what can be done about it.” The Plundered Planet has one that promises even more: “How to reconcile prosperity with nature”. It’s a big sell, given that many people think that is already too late. The planet has too many people, and too many resources have been taken for such a proposition to be anything other than a theoretical exercise.
But Collier is an optimist and, for a political economist, unusually humane. In The Plundered Planet he again plays peacemaker between the ideologues. On the one side are the “ostriches”, who are sceptical about climate change and see the continuing exploitation of the planet’s natural assets as both necessary and our right. On the other side are the “romantics”, who are determined that the human race should change its lifestyle and make amends to the future for having despoiled and overheated the planet. Each are half-right, Collier says, but adds: “Run by the romantics the world would starve, run by the ostriches it would burn.”
Much of the book is taken up by a careful quest to establish absolutes. What should be the principles of ownership over the world’s common goods – those whose importance or geography transcends borders, like the Amazon rain forest, the Arctic oil fields or ocean fish stocks? And do we have a duty to conserve these resources for those who will use the planet after us?
Current principles of national ownership, Collier argues, do not provide an adequate ethical framework for managing these assets: Brazil has shown itself unable to exploit the rainforest in a way fair to Brazilians of today or tomorrow, let alone the rest of us. But more noble principles of managing assets for the good of all are useless because states are incapable of acting in a disinterested way. “Economic utilitarianism is best suited for Disneyland,” concludes Collier.
Instead, Collier proposes an “ethics of custody”, where rather than plundering the future, nations take responsibility for conserving and exploiting their resources for current and future citizens’ benefit. Assets that lie outside national boundaries, like the polar oil or pelagic fish, can only be managed by supranational bodies such as, in the case of fish, the UN World Food Programme. Both national and international custodians could use the natural assets for investment to sponsor growth. There are models in the trust fund systems set up in Norway and Kuwait to manage their oil revenues for the future.
The problem with this idea, of course, is that it is dependent on good governance and accountable government, and those are rarely notable features of resource-rich under-developed countries. In fact, as Collier shows, the more natural resources a country has, the less likely it is to sustain a democracy. And that is provably the only system that will reliably take a country down the long and complex road from poverty to wealth. This is a newish riff on the celebrated theme of Amartya Sen, who said in 1999: “No famine in the history of the world has ever taken place in a functioning democracy.” Though Collier is avowedly not a neo-con, his thinking here comes close to the agenda that started the wars of the last decade.
All this is absorbing stuff, but we’re a long way from “reconciling prosperity with nature”. And I’m not sure that promise is fulfilled. Casting a long shadow over this book, as it did over The Bottom Billion, is a resource-hungry non-democracy, China, which shows no signs of being open to Collier’s ideas. In one of the rare moments when he uses an example from the field, Collier explains this: “In December 2008 a coup in Guinea installed a young captain as president… The following September the regime shot dead 157 people gathered to protest at the lack of democracy. The very next month a Chinese consortium struck a $7bn (£4.7bn) deal with the government for resource instruction: plunder writ large.”
It is a familiar plot. The Chinese are now doing deals that foster clientalism, corruption and the exploitation of natural resources, just as British firms did in Nigeria over oil for decades. And the motive is the same – China needs the commodities because its politics demand growth. Collier says he expects citizens, in China and everywhere else, to use the new technologies to find and share better information and use it to discipline their leaders out of such thefts. “If people recognise a common responsibility for custody of the natural world, then governments will have to deliver it,” he says.
For Collier’s fans in development aid, I think this will be a disappointment. For a start, strategic donors, from the World Bank to Britain’s Department for International Development, will complain that they’ve already been doing these things – tying budget support aid with development work on governance, on fostering civil society and democratic infrastructure for years. Faith in the policing capacities of supranational structures like the UN or the World Trade Organisation is, with reason, at an all-time low. Interestingly, in Haiti the World Bank has just given a grant to an international mining company to exploit the country’s gold reserves – a process that has had no citizens’ scrutiny at all.
This is in part because there is now a worldwide scarcity of one commodity that Collier puts a very great value on – good information. The decline in traditional foreign reporting, and the rise in the volume of poor information through the internet, means that citizens are probably worse informed and more easily misled than ever before. And on Na’vi, the planet of Avatar, there were no journalists at all. Exploited natives and plundering capitalists had to duke it out – the traditional reconciliation mechanism.