The Global Policy Academy at the CEU School of Public Policy (SPP) and the Natural Resource Governance Institute (NRGI) organized a panel discussion on April 13: “Falling Commodity Prices, Rising Tensions: Have Countries Learned From the Past to Navigate the Future?” CEU President and Rector John Shattuck made brief introductory remarks before introducing the four-person panel: SPP Distinguished Visiting Professor and Professor of Economics and Director of the Centre for the Study of African Economies at Oxford University, Sir Paul Collier; Daniel Kaufmann, president, NRGI; Juan Roberto Lozano Maya, originally from Mexico and now a researcher at Tokyo-based APERC (Asia Pacific Energy Research Centre); and Zeinab Camara, founder and president of Women in Mining Guinea.
Daniel Kaufmann opened the panel by noting that although there have been some exceptions, “governance, on the balance, has not improved in resource rich countries.” The first speaker, Sir Paul Collier, echoed this sentiment. He went on to say that he had spent a lot of energy during the last ten years trying to figure out why the commodity boom of the 1980s had been “a missed opportunity.” Although there have been changes since the last commodity boom, “I have to conclude that to a considerable extent, it [the most recent commodity boom] has been another missed opportunity,” Collier observed.
The panel discussed how the dramatic fall in the value of oil and other commodities over the past six months has impacted governments and communities in resource rich countries, and what they have learned from their experiences during previous periods of price crashes. Collier said that there was much greater international awareness than in the past, and a lot more transparency as well. Governments were also savvier in their negotiations with companies. “Where things went really badly wrong,” said Collier, “was in how governments used money.” He noted that in most cases, governments had borrowed for consumption, and not for productive investment. He faulted governments also for a failure to communicate to citizens. “The core message should have been around stewardship. Instead of building children’s futures, governments instead saddled future generations with debt,” he said.
Panelists Juan Roberto Lozano Maya and Zeinab Camara added country-specific perspectives to these comments. In his remarks, Lozano Maya observed, “the times are changing” in Mexico. For many years, he said, Mexico had “sipped” the Cantarell oil and gas field and “neglected many social priorities.” Although Mexico has recently enacted significant energy reforms, “the benefits to citizens are still very unclear.” He said that rules and institutions were not enough; “we need transparency and accountability.” Lozano Maya noted, “The lack of a free press is also an issue.”
Camara focused her remarks on Guinea, a country that has been dealing with natural resource governance issues since it gained independence in 1958. She said that there was enormous potential in Guinea now because of the election of a new government in 2010, but that the people had not yet benefited. Camara described the impact that the price volatility in the commodity sector has had on local governments and communities. She credited the government of Guinea with having made “a lot of progress in increasing governance of the mining sector.” Camara noted also that the government was slow to implement some measures and was not doing enough to educate the citizenry. Camara also decried the lack of a vision for the mining sector: “What I want to see is a strategy,” she said.
There was general agreement among the panelists that although there have been important changes in some areas, such as greater transparency, there is still a lot that governments in resource-rich countries could and should have done to improve governance. The recent fall in commodity prices offers these governments a second chance to learn the lessons they did not learn last time.
Watch the full panel discussion here: