Every once and a while I read the Economist. I used to be a loyal follower through the early 1990s, but I noticed some slight editorial changes towards the end of the millenium and lost interest. Instead, I drifted back to the library where I would grab ancient copies of the magazine, from the 1940s for example, read a few editorials and wonder “how could they have been so smart?”
Today I noticed an article that reminded me of the glory days of the magazine and it set me right down in my chair. It is called “The curse of oil: The paradox of plenty”
I don’t mean to bore anyone with the details but it sets off with the suggestion that the discovery of oil, which is far more desireable as an export than anything else in a nation, can lead to development slow-downs, damaging financial turbulence, or even repression of freedom in a country.
Graham Baxter at BP says â€œthe curse of oil is a problem that BP recognises, and we have a part to play in helping our hosts deal with this wall of dollar-denominated cash coming into their fragile economies.â€? But AndrÃ© Madec of Exxon says: “We don’t like to call it the oil curse, we prefer ‘governance curse’. We are private investors, and it is not our role to tell governments how to spend their money.”
Once you peel back some of the layers of free-market versus regulated-market debate, the issue appears to be whether those flush with cash should be authorized to see where their money really goes. Apparently many are starting to say that the books should be open to review. Does that mean they will really want what’s best for those receiving the money? A representative of the World Bank is quoted as saying “countries have no justification for secrecy“:
The push for greater disclosure is, he says, already leading to demands for greater transparency in the power, water and construction sectors. If push really comes to shove, natural resources may yet become what they should be for some of the world’s poorest people: a blessing.
Really? That seems optimistic, especially when the US Administration is still arguing that national security in a war (related to oil, if not for control of it) must be placed above the public’s right to know. And what guarantees are there, even from a pure market standpoint, that the Exxon’s and BP of the world will actually give a whip about how the world’s poorest people make do? I think that’s a stretch, but you never know. Things do change.
Oh, and another thing: when was the last time that gas/petrol stations were willing to open their books to the public? I’d like to know how much of my money was going where (taxes, overhead, profit, etc.) so how do I go about getting that information. Come to think of it, I think I’d like to know why prices jump up so quickly on market news but take weeks to go down. Do energy companies have justification for their secrecy?