Transforming Society through the Extractive Industries

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Extractive industries have real potential to transform societies for the better. However, fulfilling this potential is neither assured nor automatic.

The extraction of nonrenewable natural resources (notably oil, gas and minerals) has often led to political instability, revenue management challenges, corruption and increased social tension. It is therefore necessary for resourcerich countries to improve legislative and regulatory frameworks, build institutional capacity and strengthen governance, in order to ensure that the natural resource blessing does not become a curse.

Illustrated by case studies of good practice from across the Commonwealth, this book will help government decisionmakers ensure that the extractive industries transform society for the better, while also minimising the risk of instability and conflict.



Summary of Policy Recommendations

This paper has discussed some of the issues and challenges that governments of resource-rich countries face in ensuring that the extractive industries can transform society for the good and avoid instability and conflict. While there are some common issues at central versus local levels – the need for strong, well-functioning institutions being a prime example – the nature of the challenges are generally distinct and the government response should be tailored accordingly. Centrally, for example, governments must concentrate on maintaining macroeconomic and socio-political stability. At the local level, governments must respond to the wide range of socio-economic and environmental challenges relating to the presence of extractive activities that may be unique to the local setting, in often remote rural areas. This concluding section summarises some of the key policies that can bring long-term benefit to the country without creating significant additional burdens for the government, and which are in line with international standards and the expectations of EI companies.


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