Lifting the Resource Curse

How poor people can and should benefit from the revenues of extractive industries

Published: 24 November 2009

For countries rich in minerals and hydrocarbons, natural resources should provide an essential source of financing for development. However, in many cases, exploitation of such resources is linked to poverty, inequality, poor public services, and stunted economic growth.

Revenues from extractive industries represent a real opportunity as a complementary source of financing for achieving the development objectives of many countries. Using extractive revenues to produce teachers, midwives, medicines, clean water supplies, and sanitation should be a priority task.

This report analyses the main negative impacts on social, environmental, economic, and institutional conditions of a high dependence on extractive industries. It examines the often unfair distribution of profits between private companies and governments and the poor targeting of public spending in resource-rich countries.

Key recommendations

Oxfam International recommends a range of measures to bring about the changes that are needed to raise transparency standards throughout the extractive industries value chain.

Governments should work with the private sector and civil society to:

  • Upgrade legal and fiscal frameworks and renegotiate contracts with companies when needed;
  • Establish or reinforce public financial management systems where extractive industry revenues can be prioritised for social spending;
  • Minimise the social and environmental impacts of extractive projects.

These measures require:

  • Transparency all along the extractive industries supply chain;
  • Democratic public oversight and participation in the process (through the involvement of civil society and parliaments); and
  • Effective public institutions and mechanisms for control, monitoring, and sanctions where necessary.