Natural resources—whether water, land, underground, or in the air—must be seen as common goods supposed to be shared by all. This means that their governance arrangements – which will be tailored to the specific properties of each resource – must be aligned at the local, national, regional and global levels to ensure that they are used sustainably and in a way that protects the environment and the people who depend on them. This has proven to be very complex.
Throughout history, harmonious sharing of common interests has rarely been achieved. Today’s major scramble for natural resources is nothing new. It stems from a long-standing and fundamental asymmetry between advanced and less developed economies—not only in terms of access to and demand for natural resources, but in terms of technological progress, military power, and state and private sector capabilities in general.
The race for natural resources to power the synchronized energy and digital transformations the world is witnessing rages among the major powers.
A good example is the competition between European empires in the nineteenth century for natural resources such as copper, tin, rubber, timber, diamonds, and gold. The advancement of steam-engine mobility has made it much easier to access and transfer these resources to these empires. The resources were necessary to run the industrial revolutions. The people in the colonies in which the resources are located have benefited little, if not at all. As a result, the former colonies have a complex history that a number of countries, including many in Africa, continue to struggle.
Fast forward to today. The race for natural resources to power the synchronized energy and digital transformations the world is witnessing rages among the major powers. Both transformations rely heavily on resource-demanding technologies such as rare earth metals for semiconductors, cobalt for batteries, and uranium for nuclear power. But the transitions also mean that historically valuable natural resources and associated investments — notably oil and other fossil fuels — will eventually become stuck, with serious consequences for countries that depend almost entirely on those assets, particularly those with weak state capacity. The The last super cycle for oil prices It may already be in progress, and its end can portend an increase in the number failed states.
This race for natural resources has become more intense as the major powers engage in strategic competitions – particularly between the United States and China, but also between China and Europe. This time, appropriate transnational management of natural resources is essential for orderly, sustainable and inclusive exploitation of natural resources so that these transformations do not leave people, particularly in developing countries, behind.
Developing countries have struggled to manage their natural resources – so much so that the term “resource curse” has been coined to describe the contrast between resource-rich countries doing worse than resource-poor countries. Volatility, loss of competitiveness, excessive indebtedness, internal and external conflicts are the reason behind the poor performance of resource-rich countries. Search It showed that good institutions, unsurprisingly, temper that curse. But which? There are two main areas:
- The policies and institutions that govern the openness of the resource sector to attract investment and thus generate revenues for the state.
- The quality of redistributive institutions that govern how the proceeds of exploiting these resources are used and benefit people, including in terms of human capital.
Moreover, regulation at the national level has often failed to address the issues of overexploitation of natural resources as well as displacement, environmental degradation and risks to biodiversity, which are often better managed by local communities. late work Elinor Ostrom Highlight the design of self-organizing user communities to achieve sustainability in the exploitation of natural resources.
Appropriate transnational management of natural resources is essential to achieving orderly, sustainable and inclusive exploitation of natural resources.
Many international initiatives have focused mainly on transparency. include Extractive Industry Transparency Initiative and the Natural Resources Charter. A number of NGOs have been very active in the space. Legislation in the United States and the European Union (EU) seeks to hold multinationals to account by requiring them to disclose their payments in the countries in which they operate. It is more difficult to hold SOEs accountable due to the lack of transparency and a complex web of interests and mutual support. Developing environmental and social standards and corporate governance rulesESG) — with their roots in the socially responsible investing movement that began in the 1970s — are means by which investors and others can measure how environmentally responsible a company is. But it is unclear whether ESG assessments are sufficient to compel companies to internalize the complex sets of external factors at different levels required to achieve sustainable behaviour. It is also not clear if and how these standards can be applied. One encouraging sign is that consumers in advanced economies appear to be changing their behavior regarding the environment. But the behavior of investors, especially in developing countries, may not be subject to change. The challenge in all of these initiatives is the difficulty of translating them into the right context and promoting ownership, particularly at the local and national levels. More needs to be done to integrate local, national, regional and global actors to achieve better results.
For example, the EU’s relationship with regions such as Africa and the Middle East – and especially with China – will be critical in shaping transnational governance of natural resources. Transnational governance must take into account the interconnections of peace, stability, global health, and climate issues in a world increasingly organized into blocks. If external factors are to be internalized, they will require:
- Transfer of technology from developed to developing economies to provide the tools needed to confront the threat of climate change and achieve climate goals.
- Access to international capital markets through, for example, green, natural or blue bonds rather than opaque resource-backed loans with non-traditional creditors such as China.
- Ways to ensure that foreign direct investment provides local satisfaction and jobs to address the growing discontent in communities where mining or other extractive industries operate.
In general, advanced economies such as the European Union must recognize the shift in the development paradigm from one centered exclusively on the extraction and export of natural resources to the enhancement of domestic productive capacities locally and thus good jobs. Specifically, the process of deepening African Continental Free Trade Agreement It must be accompanied by coherent arrangements at the regional level on tax, trade, competition and financial policies. EU integration holds valuable lessons in this regard that can be shared and learned. Focusing on the sectors of energy, agriculture and mineral resources as essential elements of that integration and partnership will ensure the sustainability of these investments for all parties.