Financial Transparency Coalition

Task Force member and TJN fellow, Nicholas Shaxson, co-authored a piece which appeared in the Financial Times last week.  Amazingly, I didn’t pick it up until just now.  Anyway, from the FT:

Countries too dependent on extractive industries face three problems. Large foreign exchange inflows lead to the “Dutch disease”: local costs go up, so imports undercut domestic manufacturing and agriculture. Gyrating commodity prices play havoc with budgets. And mineral rents infest politics with corruption and conflict. As everyone fights over the mineral cake, good governance falls apart.

The solution is simple but radical: distribute extractive revenues directly and equally to all citizens. Instead of fighting each other for oil rents, political elites would have to bargain with the people for tax revenues. If the government did not tax everything back, direct distribution would dram­atically transfer wealth to the poor. This has nothing to do with privatisation: the government could still get funds for roads and schools – but with pressure to spend the money well.

Continue reading the article at FT.com…