Natural resources

You would think that countries that have oil, gold or diamonds would be wealthy but in reality, the opposite is frequently the case. Mineral resources are more of a curse than a blessing, because they encourage corruption, armed conflict and environmental pollution. The good news is that there are remedies.

The logic seems obvious: even though prices fluctuate, oil, gold, copper and diamonds are in demand on the world markets, so countries that have these commodities should be on the rich list. Many countries with a bountiful supply of raw materials – especially those in Africa – did not benefit from the boom and are still as poor as ever.

There are many reasons for this. Oil extraction and mining foster not only environmental pollution and corruption. They also cause conflicts over the control of wealth and resources – as Nigeria and Liberia graphically demonstrate. Hence the term “resource curse”, also known as the “paradox of plenty”.

SWISSAID has been working for many years to see money from the extraction of raw materials in developing countries directed towards reducing poverty. SWISSAID therefore supports civil society organisations in Chad, Niger and Guinea‑Bissau that are dedicated to precisely this goal. People must be informed how much their government earns for awarding extraction licences and from concession levies. That's why greater transparency regarding the flow of payments between government and companies is a vital first step. Eventually, this could also lead to less corruption since governments could be held accountable for the revenues generated by the extraction business.

For years, SWISSAID has been campaigning for more transparency in the commodity business, both in the countries of the South as well as by actively supporting two organisations addressing the issue on a global level.

  • The "Extractive Industries Tansparency Initiative" (EITI) establishes voluntary agreements between governments, companies and civil society organisations. The producing countries have to comply with a complex system of double-entry checks in order to be accepted into the scheme. Switzerland has joined the EITI as a supporter two years ago, basically due to  SWISSAID's lobbying.
  • The global Publish What You Pay (PWYP) campaign unites some 800 NGOs from around the world and pursues similar goals as the EITI initiative. But it takes the idea of payment disclosure one step further by asking for binding regulation in the jurisdictions of those countries  where extractive companies are incorporated or listed.  Laws of this kind have been enacted in the US, The EU, Norway and Canada. In Switzerland, a respective regulation is in preparation. SWISSAID is actively championing the inclusion of commodity trading which is dominating the commodities sector in Switzerland.