Global and Regional Mechanisms for Governing the Resource Curse in Africa

Governing the Resource Curse in Africa

Global and regional mechanisms for natural resource governance such as Publish What you Pay (PWYP), Extractive Industries Transparency Initiative (EITI), the Kimberley Certification Process (KCP), the U.S. Congress’ Frank-Dodd Act, and the African Mining Vision (AMV) have evolved against the backdrop of ideas and practices undergirding the resource curse. The latter has been popularized to capture the conflicts, instabilities, and economic equities faced by poor countries endowed with natural resources.

To address these negative outcomes, international and regional actors have sought to craft governance mechanisms that promote sustainable utilization of natural resources. But recent news items illustrate the tremendous obstacles that these instruments have confronted. First, the Kofi Annan African Progress Report 2013 entitled Equity in Extractive Industries revealed that between 2010 and 2012, the Democratic Republic of Congo (DRC) lost over $1.3 billion in revenue through the undervaluation of assets and sales to foreign investors in “highly opaque and secretive deals.”" name="_ftnref1" title="">[1]   This figure was equivalent to double DRC’s health and education budgets combined.   In response, the DRC’s minister for mining asserted that the “country had lost nothing . . . the assets were ceded in total transparency.”" name="_ftnref2" title="">[2] Second, the same report charged that between 2005 and 2009, 500,000 copper mine workers in Zambia paid a higher rate of tax than major multinational mining firms.

Third, amidst reports by the Canadian NGO, Partnership Africa Canada (PAC), that Zimbabwe’s President Robert Mugabe and his ZANU-PF allies had plundered the country’s diamonds to the tune of R16 billion, former South African President Thabo Mbeki urged members of the African Diamond Producers Association not to allow Western powers to abuse the Kimberley Process to overthrow Mugabe’s government.  In seeking to strike a balanced voice on Zimbabwe, Mbeki “implored the Zimbabwean government to ensure that the country’s diamond industry is not governed by predatory elite that uses access to power to enrich itself in collusion with mining companies at the expense of the public.”" name="_ftnref3" title="">[3]  At the same time, in his 2012 budget, Zimbabwe’s finance minister claimed that while the government had promised $600 million in diamond revenues to finance crumbling health care, education and other public services, he had received only one-fourth of that pledge." name="_ftnref4" title="">[4]   Finally, the African Development Bank (AfDB) and the Global Financial Integrity (GFI) observed in March 2013 that Africa lost $1.4 trillion in illicit financial flows between 1980 and 2008, far exceeding foreign aid over the same time period." name="_ftnref5" title="">[5]

These reports underscore the efficacy, legitimacy, and credibility crises of global and regional mechanisms for resource governance. An interesting question to ponder is why despite their proliferation, these institutions have hardly addressed the enormous problems around natural resource governance. Why are these instruments weak and how can these weaknesses be overcome? This paper attempts to probe questions of the evolution and performance of these mechanisms from the perspective of international regime formation.  When and how do international governance regimes emerge? How do these regimes define the problems and how do these definitions affect problem-solving approaches? How does the coalescence of actors and institutions around these regimes affect their ability to perform effectively?

The paper suggests that global and regional natural resource governance mechanisms face severe constraints for two reasons. First, they are fundamentally regimes of restraint that seek to contain errant and predatory elite behaviour in weak, corrupt, and dysfunctional states. Crafted largely in the context of civil wars, these mechanisms have increasingly hampered the evolution of practices anchored in solid local frameworks of responsibility and national ownership. Second, as governance mechanisms, regimes of restraint have been weakened by the inordinate fixation with transparency at the expense of accountability and participation.  In overcoming the flaws in regimes of restraint, this paper proposes regimes of responsibility which potentially privilege the construction of consensual, collective, and participatory mechanisms on natural resource governance without the overweening hand of external actors. Unlike regimes of restraint, regimes of responsibility also entail a broad conception of governance that better links transparency to accountability and participation. The assumption that the benevolent hands of external actors can restrain local actors needs to be replaced by creative efforts toward building strong African institutions that govern natural resources.

The paper proceeds thusly. The first section addresses the conceptual debates on the evolution of global transparency, a salient component of the regimes of restraint. The objective is to assess how important actors have articulated these regimes; this section also outlines the major assumptions of the alternative regimes of responsibility. The second section examines the major global and regional mechanisms through an assessment of strengths and weaknesses. The conclusion briefly revisits the conceptual debates on balancing restraints with responsibilities in light of on-going debates around natural resource governance. 




" name="_ftn1" title="">[1] Africa Progress Report 2013, “Equity in Extractives: Stewarding Africa’s Natural Resources for All,”

" name="_ftn2" title="">[2]Allafrica.com, 

" name="_ftn3" title="">[3] “Mbeki Stirs Zimbabwe Gem Pot,” South African Press Association, November 13, 2012. For the PAC report see “Zimbabwe’s Marange Diamond Funds Plundered,” Duetsche-Welle, November 13, 2012.

" name="_ftn4" title="">[4]Political Analysis South Africa, “Report States that Zimbabwe’s Diamonds Revenues go Into the Pockets of Political Elites,”

" name="_ftn5" title="">[5]African Development Bank and the Global Financial Integrity, “Illicit Financial Flows and the Problem of Net Resource Transfers from Africa 1980-2009,” May 2013,

 

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