oil and Gas, mine revenues for economic gorwth and poverty reduction

Oil and Gas, Mine Revenue will contribute to economic growth, and poverty reduction.

International and regional experts from 15 countries which their counties have received the revenue from the oil, gas and mine fields earlier this week participated in forum to discuss about contribution from those resources to the poverty reduction and economic growth of the country.

Mr. Brian Lund, Regional Director of Oxfam America in East Asia said at forum that governance is key to harnessing benefits of extractive sector. At the same time, he added that international development organization Oxfam is mobilizing regional forces from across the public and private sectors to address governance of oil, gas and mining resources in the Southeast Asia region. Only through a transparent and accountable process can the region harvest the potential to benefit poor people and ensure equitable development, he noted at the opening of its regional workshop - Governance of Extractive Industries in Southeast Asia.

Revenues from oil, gas and hard minerals can contribute significantly to the poverty alleviation efforts of developing nations by bolstering economic growth and improving the living conditions of people. With these revenues, governments can improve infrastructure, provide better access to healthcare and education, and expand other economic opportunities for the people.

‘There is a real potential that resource revenues gained from extractive industries can help people move out of poverty,’ Brian Lund, Regional Director of Oxfam America in East Asia said.

‘But for this to become a reality the issue of governance at national and regional levels must be addressed. This could be done by focusing on building the capacity of important ministries, creating an adequate legal and regulatory environment to manage this industry across its value chain –from extraction to revenue collection and spending,” he said, adding that the foundation of good governance rests on the quality of collaboration between the public sector, private sector and civil society as well as the support of relevant international development agencies. ‘Through consultation with wider civil society, grassroots contribution is critically informative in decision making and continued policy refinement.

“In addition, such engagement will help manage unrealistic public expectation of the sector,’ Lund said, adding that regardless of having a natural resource base for extraction, a significant contribution of the GDP for all members of ASEAN comes from this sector.

He stresses that ASEAN has shown commitment to ensure energy security for the region through several initiatives on oil, gas, and mining. Oxfam stands ready to engage with ASEAN responsible bodies as well as companies, national governments, and other stakeholders in order to foster a regional learning and sharing environment around governance and industries best practices. In Cambodia the revenue from oil, gas and mine corporation has not showed its figure and benefits yet .Most of data and information always announced about licensing and exploration research to private companies. Those resources are the main factors could accelerate the economic growth of the country. the revenue from oil and gas at offshore is still big discussion among the experts and international organizations about the major sectors that need the money to process its plan but oil is still in the sea bed so far. Several times the government explained that when the oil is at ground of sea, we should not talk about that.

H.E.Hang Chuon Naron, secretary general of ministry of economy and finance said in slide show at the seminar that mine resources sector is the seventh top priority of the economic growth of the country currently and other top priorities such as human resources development, agricultural development, tourism, physical infrastructure development, recycling industry, and other industrial sectors.

At the same time, H.E Naron said that oil and gas field in Cambodia has been exploring in six blocks by private companies. He highlighted that block A has been explored by three companies including Chevron with 55 per cent share, Moeco with 30 per cent, and GS Caltex with 15 per cent share. Block B belongs to four private companies including PTTEP with 30 per cent, and SPC with 30 per cent and Resourceful Petroleum) with 30 per cent and Cooper Energy with 10per cent. And block C is exploring by Polytec and block D China Petrotech and Block E exploring by three companies Medco with 60 per cent share, and Kuwait Energy with 30 per cent and JHL with 10 per cent and block F explored by CNOOC.
On March 29, Deputy Prime Minister and Minister of Economy and Finance Keat Chon met Mr. Thierry Phlimlin, deputy president of TOTAL on the talk of cooperation and investment. The investment plan on oil and gas and activities expansion from Total will help contribute economic growth in the present context of the economic growth. “The government has considered the private sector as main partners and driving force of economic growth and development as well as helping reduce poverty in the countr,”H.E Keat Chhon said.

The OXFAM also released the fact document about the oil, gas and mines fields with stressing that even relatively small, oil booms can provide large sums of money to developing countries to serve as a basis for poverty reduction and economic growth. These countries need to be prepared by building transparent and accountable systems for managing natural resource wealth.
“ Over 60 percent of the world’s poorest people live in countries rich in natural resources—but they rarely share the wealth,” it said, adding that twelve of the world’s 25 most mineral-dependent countries, and six of the world’s most oil-dependent countries, are classified by the World Bank as “highly indebted poor countries.” Moreover, it added that fossil fuels, much of which are extracted in developing countries, will continue to provide 77 percent of global energy by 2030, even if governments pursue aggressive measures to promote energy efficiency and renewable energy. “ Worldwide, three and a half billion people live in countries rich in oil, gas, and minerals and comparisons show that natural resource-dependent countries are almost a quarter more likely to have civil conflict, it emphasized. “More often than not, extractive industries contracts and revenues are not disclosed to the public. This lack of accountability facilitates, corruption, and revenue misappropriation, and has contributed to the industry’s failure to alleviate poverty,” it said, adding that the concept of Free Prior and Informed Consent (FPIC), which gives communities a meaningful role in decision-making about a project that would affect them, is rooted in international human rights law, such as the International Labor Organization’s Convention 169. It is also recognized by several national governments.” Only two countries (Australia and the Philippines) have laws that allow communities to say no to mining or oil operations on their lands, it noted.

The experts attend the forum this time coming from Cambodia, Loas, Burma, Thailand, India, Philippines, Indonesia, American, and UK, and Norway, Mongolia, Hong Kong, Papua New Guinea, Vietnam and East Timor.
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