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Facing up to the oil curse

Facing up to the oil curse

“Oil can be a sunset or a sunrise,” said Cambodia’s Hang Chuon Naron, secretary general, Ministry of Economy and Finance.

That summed up the findings of Cambodia’s first major oil and gas conference that brought together more than 50 speakers from around the world to discuss with Cambodia a variety of options that it can pursue to maximize its eventual revenues from oil.

The idea is to avoid the so-called Oil Curse – what happens when new resources are discovered in poor nations and revenues that could go to poverty reduction vanish.

Luluk Sumiarso, with Indonesia’s Ministry of Energy, said in Indonesia after oil was discovered “we had to implement good governance. We had to eradicate corruption, or reduce the practice, in the government.”

Other advice:

  • sign the Extractive Industries Transparency Initiative
  • put revenues into a special fund, like Norway or East Timor to invest for the long term
  • don’t build an oil refinery because it will lose money
  • think long term.
  • get expert advice before negotiating contracts
  • make sure the new industry creates jobs for Cambodians
  • Robert Glofcheski, chief resident economist for UNDP in Cambodia, Laos and Vietnam, said the conference was a year in planning, but that “it was quite a success.” 

(Susan Postlewaite)

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