George Soros introduced EITI to the audience in Kuala Lumpur last week. Malaysia has decided not to have anything with EITI but why? Was that the reason why AAB was avoiding seeing Soros?
I first heard about EITI from Dr Simon Zadek of the UK-based institution AccountAbility last Saturday at a dinner hosted by Anwar Ibrahim ( Honorary President of AccountAbility). According to Zadek, US$200 billion has gone missing (where else but ended up in some government leaders’ pockets) just from Nigeria alone.
There is something called “resource curse”- the very rich resources you have turns out to be the root cause that bankrupts you.
Can Malaysia spare the “curse”? Let’s look at some rough figures…
The Government says we produce about 700,000 barreals of crude everyday. And our daily domestic consumption is about 500,000 barrels. So we have some 200,000 barrels in surplus for export if we trust the Government’s figures. But Lim Guan Eng, the SG of DAP has gotten a figure elsewhere that shows that we actually produce slightly less than 1,000,000 barrels a day (so that we could avoid joining OPEC). If that’s true, who’s keeping the money from the sales of these extra 200,000 to 300,000 barrels?
And according to Najib and Mustapha, Malaysia will become a net oil importer by 2011. Our Carigali has not been successful in finding new oil fields the last few years.
It’s an open secret that Petronas has been selling oil and gas on long-term basis to Japan, taiwan and several other countries at a fairly low price (around USD 19 per barrel?) since the days of financial and economic crisis (in 1997). For every barrel they buy, they get a barrel or two FREE.
AAB recently signed a 20-year deal with Wen JiaBao to supply gas to Shanghai at a price undisclosed until today.
If you asked me, I would think that the leakage from oil and gas is certainly in the tune of billions. Author Kim Quek’s estimate has not been refuted by any of our government leaders until today.
And how many times our petrol money were used for bailouts for GLCs and cronies of the powers that be? Dear fellow Malaysians, I leave it to you to ponder…
Jeff Ooi (Screenshots) has a story on Soros and EITI…
‘Weak governance breeds corruption and poverty’
In a nutshell, the EITI supports improved governance in resource-rich countries through the full publication and verification of company payments and government revenues from oil, gas and mining.
The EITI website has this citation:
Many countries are rich in oil, gas, and minerals and studies have shown that when governance is good, these can generate large revenues to foster economic growth and reduce poverty. However when governance is weak, they may instead cause poverty, corruption, and conflict – the so called “resource curse”. The EITI aims to defeat this “curse” by improving transparency and accountability.
EITI holds the view that the primary beneficiaries of EITI are the governments and citizens of resource-rich countries.
“Knowing what governments receive, and what companies pay, is critical first step to holding decision-makers accountable for the use of those revenues,” EITI says.
“Implementing EITI as part of a programme of improved governance will help to ensure that oil, gas, and mining revenues contribute to sustainable development and poverty reduction.”
Corruption and political instability caused by the plundering of national wealth, and poverty, are two challenges facing companies and investors in the extractive industries.
Supporting EITI in countries where they operate, it is reasoned, can help mitigate these investment risks, which in turn threatens investments which are often capital intensive and long-term in nature.
Thus far, over 20 countries have committed to EITI principles and criteria since the EITI Lancaster House Conference in June 2003. Some countries — from Peru, to Trinidad and Tobago, Azerbaijan, Nigeria, and East Timor — are only beginning to launch the process, while others have published revenue and payments data.
‘Truth is relative’
Malaysia, with Petronas fast depleting the country’s natural sources for decades, is not one of these countries. Malaysia joins the rank of the USA and both do not commit to EITI principles and criteria.
And neither does our government-owned Petronas publish revenue and payment data related to its extractive activities.
“Natural resources belong to the people. Governments are just the managers (of these resources), so the people have absolute rights to question on the issues of revenue and payment derived from the extractive activities,” Soros told the KL audience.Soros also urged all governments, including Malaysia’s, to improve the governance on the extractive industries, and to ensure transparency and accountability. (Also see Bernama story on this.)
That is, tell the truth about how Nature’s riches are extracted and wealth derived are spent for mankind.
Henceforth, for better or for worse, that’s where the LSE Dinner Talk fell flat on Soros’s message.