Karin Lissakers, RWI director, spoke about the "Costs of Closed" at the inaugural meeting of the Open Government Partnership, on 20 September in New York. What follows are excerpts from her remarks.
This event is called the "Power of Open," and I want to speak for a moment about the "Costs of Closed." These costs are concrete and manifest in many of the countries where Revenue Watch works. These are countries rich in mineral resources that are owned by the state—that is, by the people—but from which the people see very little benefit.
In 2008, Africa exported natural resources worth some $400 billion. But how much of the economic return stayed in Africa? Very little. This is a cost of closed.
Until this past decade, when civil society launched a concerted campaign to open the minerals sector to public scrutiny, secrecy was the norm in oil, gas and mining. There were secret contracts, secret production volumes, secret revenue streams, secrecy between companies and the public; secrecy between the government and its citizens for whose benefit the minerals are supposed to be managed.
There was even secrecy between government agencies. I cannot tell you how many finance ministers have complained that they do not know how much money the mining or oil ministry, or the state oil company, is taking in.
We are dealing here with public assets, but over which the public has had very little say. Now that is beginning to change.
The Power of Open is being felt in the resource sectors thanks to public pressure on politicians, innovative initiatives like the Extractive Industries Transparency Initiative, to a new approach by national leaders and by industry, and to new technologies.
I can cite Guinea as an example—one of the poorest African countries that is rich in natural resources. A new government in Guinea has decided to change the game. It has created a new mining code that was drafted through public consultation, and the code reflects this public input. The new provisions in that code could bring the county as much $3 billion a year in extra revenues, just from iron ore.
The transparency and anti-corruption provisions of this new code mean that all transactions will be subject to public audit—greatly increasing the chances that this money will be used for the public good. At least people will be able to see if it is not.
We hope to work with governments and civil society in countries participating in the Open Government Partnership to create a tool allowing citizens to use their cell phones to click on any plot of land to see who has a license to mine there, how much they are producing per month or per year—and how much tax they are paying, and the value of the sales from that mine.
Then then we will see the full Power of Open at work, transforming wealth in the ground to development benefits for the people.
LEARN MORE
