Here in Papua New Guinea, the local media is filled with stories that economic growth in Asia will help the local people:
Papua New Guinea is well positioned and poised to reap huge benefits from the fast growing economies of Asia.
ANZ Group Bank chief executive Mike Smith said closer trade and investment ties with Asia, in particular China and India, can transform PNG’s economy.
Mr Smith, who arrived in Port Moresby on Tuesday and addressed a cocktail night at the Crowne Plaza Hotel, said PNG should continue to position itself to capture the expanding trade flows between Asia and the Pacific. Mr Smith is in Port Moresby to meet with customers, government representatives and ANZ bank staff.
Frankly, it’s hard to take these predictions seriously. Massive mineral wealth has brought little benefits for the vast majority of citizens in PNG. In Africa, per a new report, we see the same paradox:
This week, NGO Global Witness published its latest report on the oil, gas and mining industry in Africa. Running at 40 densely-written pages, the work looks in detail at the industry in three countries: Angola, Nigeria and the Democratic Republic of the Congo (DRC).
All three, says the report, have been afflicted by the Resource Curse, or ‘paradox of plenty’. The countries all have an abundance of natural resources, but suffer from extreme poverty.
Angola and Nigeria ‘are two of the largest oil producing countries in Africa’ – respectively, oil provided 63% of government revenues in 2009 in Angola, and 40% of government revenues in 2011 in Nigeria.
‘…their citizens, however remain amongst the poorest in the world, with approximately 70% of Angolans and 80% of Nigerians living on less than two US dollars a day.’
The DRC, meanwhile, ranks bottom on the UN’s Human Development Index despite a vast wealth of natural resources – particularly in mining.
The main problem in Angola and Nigeria, says the report, is the opacity of oil contracts in the two countries. While their governments have sought to ‘demonstrate greater transparency in the payments received from the oil sector’ over recent years, regulation and public scrutiny of allotted contracts is severely lacking. In addition, it appears that government officials could be shareholders of the very companies that have been awarded major extraction contracts.
In Angola, Global Witness unearthed a number of indigenous oil companies that have been able to obtain shares in oil. They ‘do not disclose publicly their beneficial owners, or, when they do, some of the shareholders have the same names as senior public officials’, the report reveals, ‘creating public suspicion’.