Pumping oil leads to poverty says Christian Aid
Pumping oil has led to greater poverty, a high likelihood of war and massive corruption - rather than bringing peace, wealth and prosperity for poor people, says a new report from Christian Aid.
The report 'Fuelling poverty - Oil, war and corruption', launched to mark Christian Aid Week 2003, examines the impact of the world's most sought-after resource on developing countries with oil reserves.
It concludes that, for these countries, oil is more often a curse than a blessing.
"Britain and America are pinning their hopes on Iraq's oil wealth to help provide the cash to rebuild the country's shattered infrastructure," says Roger Riddell, Christian Aid's International Director.
"But oil has often acted as the catalyst in a cocktail of poisonous ingredients - including corrupt, totalitarian governments or weak democracy - that make or keep people poor."
"Iraq has already drunk a deep draught of this lethal cocktail" says Mr Riddell.
"Its oil wealth must now be used to show that there can be a different deal on oil, one where the wealth it generates brings real benefits to poor people rather than simply a handful of dictators and oil barons."
Based on Christian Aid research in Angola, Sudan and Kazakhstan, and backed-up by a decade's worth of studies into the 'oil curse', the report calls for a high-level investigation into the role of oil in fuelling poverty, war and corruption in developing countries.
It also reveals that western governments support the oil curse with at least £1.25 billion a year out of the public purse.
"Oil is vital to the survival of Britain and other western economies and we all worry about the cost of a litre of petrol when we fill-up our cars," says Mr Riddell.
"But the cost to poor communities around the world of keeping supplies of oil flowing is very high. Unless a Global Oil Deal can be agreed, rich countries should at the very least stop funding oil projects from the public purse."
Christian Aid is recommending an international commission to examine evidence for the oil curse and draw up a Global Oil Deal containing new standards and criteria, to which all oil projects should conform. This should include says the agency:
ï New regulations compelling oil companies to publish full details of payments to governments of poor, oil-producing nations.
ï Strict transparency agreements to which the governments of poor countries must commit in order to benefit from loans and insurance for oil projects.
ï Sanctions if governments and companies do not conform to transparency agreements, including the withdrawal of public support for oil projects.
ï Trust funds to safeguard a proportion of a country's revenue from oil to provide for future development, when oil supplies are exhausted.
Finally, it will call for trade embargoes on 'blood oil' from countries where revenue from oil sales fuel war, dictatorship and corruption.