Natural Resources and Violent Conflict - WaterWiki.net

288 john braythe 1990s and early 2000s mainstream Western companies have beenstung by fierce controversy over their activities in resource-rich countriesas diverse as Angola, Colombia, Indonesia, Myanmar, and Nigeria.Far from being seen as a blessing, mineral and petroleum resources areall too often seen as a curse to the countries that possess them—andinternational companies associated with these industries are taintedaccordingly.Petroleum and mining firms have been associated with poor governanceand conflict in two ways. First, as discussed in other chapters,companies operating on or beyond the margins of the law have helpedviolent factions to raise money through the sale of natural resourcessuch as “conflict diamonds” (chapter 5). Second, even mainstream internationalcompanies may—however unintentionally—contribute toconflict. All too often, income from natural resources has served toreinforce the powers of “predatory” states (see, for example, FridthofNansen Institute and Econ 2000). The wealth brought by mining orpetroleum is often restricted to narrow social or political groups ratherthan being distributed more broadly. Income from natural resourceshas tempted governments to neglect other economic sectors such asagriculture. The resulting inequalities are a source of tension, unrest,and—in extreme cases—civil war (chapter 2).Companies with existing investments have tended to resist pressureto leave when conflict breaks out or escalates. However, in the light ofrecent experience, it is much harder for companies that are sensitive totheir reputations to justify new investments in conflict zones.Equally, the petroleum and mining industries could—if properlymanaged—emerge as part of the solution to the problems of bad governance.Without balanced economic development, weak states aremore likely to become failed states. For many African countries in particular,minerals and petroleum offer the most substantial and readilyaccessible sources of income. Foreign investment and expertise canhelp to develop these resources and thus finance the institutions neededto ensure stability.The wider social and commercial case for investing in zones ofconflict is outlined in reports such as the United Nations (UN) GlobalCompact’s business guide for conflict impact assessment and riskmanagement (UN Global Compact 2002). Political changes in the late1980s and 1990s have opened up new markets to international business.Many of these are in developing countries that are exposed toconflict and might otherwise be considered unattractive. Nevertheless,as the business guide points out, these regions offer important opportunities:“It is in these areas of underdevelopment that we also findthe highest potential for business growth due to untapped pools of