Resource information
This report examines the benefits that a resource-rich country can derive from endorsing the Extractive Industries Transparency Initiative (EITI) and implementing its Principles. It also searches for courses of action that the EITI Board can pursue to persuade more countries to endorse EITI. Both issues are investigated in the context of Angola, Indonesia, and Trinidad and Tobago. The authors argue that EITI is particularly beneficial for countries that suffer from the so-called “resource curse”. In these countries the natural resource wealth paradoxically does not lead to growth and reduction of poverty. The reasons for this are poor governance and corruption, inappropriate expansion of public spending, excessive borrowing and the collapse of other sectors. Three principle recommendations are made to the EITI Board:
prioritise among countries. Focus on those countries that offer the potential to generate tangible results within the next three years.
position EITI as “good cop” and outsource the “bad cop” to civil society and media. Frame EITI as an institution that offers assistance and helps countries to placate critics. Create momentum for EITI by exercising pressure.
formalise EITI’s positive impact on sovereign risk ratings and offer improved access to private capital as an incentive for the implementation of EITI principles.
