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Missing a Trick? Making Natural Resources Work for Development

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Next week, over 1,000 government officials, aid donors, NGO reps, and private businesses will descend on Mexico City for the first meeting of the Global Partnership for Effective Development Co-operation (GPEDC). It's basically a big get-together to discuss how well our aid money is being spent, and how it can work better.

You're unlikely to know anything about the GPEDC unless you work in development policy, but that does not mean it doesn't matter. It can be hugely influential on how tax-payer funded aid is used for everything from building schools and hospitals to helping communities recover from conflict. Crucially, it could also improve the way aid supports financial and natural resource management in developing countries so that in the longer term, the aid itself becomes unnecessary.

Some of the biggest aid recipients are countries that are rich in natural resources (think Afghanistan, DRC, South Sudan...). I've seen first-hand how much of the aid money coming in is focused on propping up desperately needed public services, while weak institutions and badly enforced laws leave corrupt individuals and predatory companies free to ransack the country's natural resources. As a consequence, the domestic wealth that should be funding services and development -- rather than leaving it to aid to do so -- is lost for those who need and deserve it most, and progress on fighting poverty is delayed even longer.

The importance of good natural resource management is hardly a new concept in development policy. For years, officials have paid lip service to the need for transparency and accountability, and bemoaned the fact that millions in technical assistance can be instantly undermined by a backdoor handshake or the flick of a pen on an ill-gotten oil or mining contract. And yet, targeted, informed, and consistent aid programs on this issue are few and far between.

The development community can and should be establishing a co-ordinated strategy for improving natural resource management. This should include support for stronger domestic oversight actors (e.g., civil society, journalists, and parliaments), meaningful efforts to publish natural resource revenues and contracts, and accountability for corrupt individuals and companies.

If only there was a high-level meeting where that conversation could happen...

Oh, right! Yes -- efforts like this are exactly what the GPEDC is designed to initiate. And given their potential to finance development in some of the world's poorest countries, natural resources should be a key feature of the event. Sadly, they aren't. The drafting of the conference's final communiqué saw an already fleeting reference to natural resources watered down between the second and third drafts.

Further, the planned session on 'Domestic Resource Mobilisation' -- basically how to maximise domestic revenues and their impact -- is focused almost entirely on tax administration and stopping money being lost to corruption. Tax is of course a big part of domestically-led development, and combatting illicit financial flows is critical for fighting the corruption that Global Witness campaigns to stop. But this is only part of the puzzle. Unless natural resource management is explicitly addressed as well, potentially transformational amounts of money will continue to be lost to poor countries.

The meeting of the GPEDC is a major opportunity to address this hole in development co-ordination. It should be used to rally some of the most influential people in the world around a new, more effective strategy for natural resource governance.

If governments are serious about using aid to end poverty, they must speak out on this issue and make concrete commitments to dealing with it. Now is the perfect chance to make it happen.

*You can follow me on Twitter at @dwilkinsgw where I'll be live tweeting the GPEDC conference.