Natural Resources and Violent Conflict - WaterWiki.net

getting it done 251standing and commercial relations it enjoys in relation to the country orinstitutions setting the conditions. Targeting the resource sectors themselvescan also increase the leverage of aid conditionality as businesseslose support for infrastructure work, for example. The risk, however, isthat aid conditionality may further resource exploitation as a revenuealternative and delay reforms.Aid conditionality was used with some degree of success onCambodia’s neighbor to restrict the trade in illegal logging, which wasfueling war in Cambodia. 36 Such pressure significantly contributed tothe demise of the Khmer Rouge movement.In 2000, following years of “quiet diplomacy” and aid commitmenttoward the Liberian government to improve human rights and regionalstability, the EU suspended about $50 million in aid on evidence ofgovernment involvement in arms and diamond trading with the RUF.This suspension reportedly had little effect on the trade itself but waspart and parcel of broader measures that convinced the RUF to laydown its arms. 37The Expert Panel on the Illegal Exploitation of Natural Resourcesin the Democratic Republic of Congo recommended the reduction ofaid to noncompliant governments hosting individuals, companies, andfinancial institutions involved in such activities. It is too early to see ifsuch aid conditionality will be uniformly imposed and achieve a lastingsolution to the conflict in the region, especially given the largenumber of regional actors involved and vested interests.It is difficult to assess the overall effectiveness of aid conditionality,as much will depend on the aid dependence of the target, its internationaltrading environment, and the coordination and cohesion of thedonor community. Success is probably more likely when it is possibleto apply pressure on transit countries playing a crucial role in conflicttrade, when the capacity for enforcement is relatively high, and whentargeted countries have a comparatively high stake in maintaininggood bilateral and multilateral relations.In addition to these initiatives, and within the framework of theNew Partnership for Africa’s Development (NEPAD) and the G-8Africa Action Plan (see box 6.2), the possibility of an agreement ona “partnership for transparency and accountability” among African,G-8, and Organisation for Economic Co-operation and Development(OECD) governments and companies should be examined,within the context of broader relevant agreements (for example, theCotonou agreement). Such a partnership could cover issues such ascorporate transparency on tax payments, banking disclosure andprocedures for repatriation of embezzled funds, and customs declarationsand be backed by access to export credit guarantees, assistance