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Niger Delta Human Development Report - UNDP Nigeria - United ...

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• payment of dividends (US $12.5 billion from 1982 through 2003 paid out to<br />

Alaskans)<br />

• inflation-proofing the reserved assets<br />

• increasing the size of the reserved assets<br />

Critics have argued that Alaska‘s fiscal policy should include the use of a portion of<br />

unreserved assets to support state services and programs. Paying out the same<br />

dividend to everyone does not take account of varying social or economic needs.<br />

On the other hand, the system ensures that the Government does not misuse the oil<br />

wealth.<br />

Transparency underpins the fund’s operations. The corporation publishes frequent<br />

reports and its Web site contains comprehensive information about legislation and<br />

governance.<br />

Source: Alaska Permanent Fund Corporation, 2004.<br />

Box 7.2: Nunavut Trust in Canada<br />

The Nunavut Trust illustrates not only how revenues can be shared, but also how a<br />

community can be compensated for the negative external consequences of oil and<br />

mineral extraction, and can turn this compensation into local development.<br />

Nunavut is the northernmost territory in Canada, bordered on the east by Greenland.<br />

The Trust was set up in 1993 as part of a land claim settlement between the Canadian<br />

Government and the native people of Nunavut. The settlement recognized native<br />

rights to land and resources, and reflected the right of native people to participate<br />

in decision-making concerning the use of such resources, including offshore.<br />

The settlement included a share of royalty payments from natural resource<br />

development in Nunavut. The Trust administers this as well as a compensation<br />

payment from the Canadian government for the negative local consequences of<br />

resource extraction. Some US $1.2 billion dollars in compensation money will pass<br />

from the federal government to the people of Nunavut over 14 years, ending in<br />

2007.<br />

The Nunavut Trust is unique because its beneficiaries run it independently of any<br />

government. It is a community-managed fund. Three regional Inuit civil society<br />

organizations—Kitikmeot Inuit Association, Kivalliq (Keewatin) Inuit Association<br />

and Baffin Regional Inuit Association—appoint the trustees.<br />

Unlike other funds, the Trust does not pay out dividends. Its designers feared that<br />

such a payment could lead to increased unhealthy spending on personal consumption<br />

such as alcohol. Separate non-profit organizations are responsible for spending the<br />

money, the largest of them being Nunavut Tunngavik Inc. Money has gone into<br />

health, sports, local business development, etc. Nunavut Tunngavik Inc. meets<br />

regularly with Inuit communities to discuss priorities for spending, so the locals<br />

appear to be heavily involved in the governance of the Trust.<br />

Current challenges include: increasing demand for spending; the end of transfers<br />

from the federal government in 2007; and possible pressure for borrowing from<br />

the principal.<br />

Source: Nunavut Tunngavik Incorporated<br />

152 NIGER DELTA HUMAN DEVELOPMENT REPORT

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