What if your company was so honest you could lose your job or you had to accept a lousy salary?

Sir, Michael Skapinker writes about someone who bought a company, discovered it was engaging in corrupt practices, disclosed it to the government, was told to correct it, and the company lost one half of its business. “What to do if you discover your company is corrupt” October 15.

What would you do if you discover your company, is so scrupulously correct with absolutely everything, even with the silliest regulations, that it begins to lose business and could disappear

Unfortunately, we do not live in a perfect world, in which all are scrupulously correct.

And sometimes I have even got the feeling that the corruption fighters themselves, are engaged in some very devious kind of corruption.

Am I not against corruption? Of course I am! But I am also absolutely sure that the best way of fighting corruption is to reduce the temptations. In other words not to require weak humans to be able to resist too big temptations.

I come from Venezuela. There the government receives 97 percent of all export earnings… and these, oil revenues, do not even come as a result of a productive effort of its citizens… it was given to us by God.

To impede corruption in Venezuela, the minimum minimorum needed, would be to share out all net oil revenues to all citizens. But that is not happening, because there is always someone in waiting for the opportunity to manage and exercise the power provided by those oil revenues... and there is always somebody there, like EITI, telling you that if only they supervise and the governments adhere to their principals, everything is going to be fine and dandy.

Let us not ignore that so many speaking out against corruption, do so out of a position of security, one that quite often was assured them and their countries by not so utterly clean means. So less preaching, and more practical action.

@PerKurowski ©

Where could Iraq have been today if each one of its citizens was receiving his monthly oil dividend check?

Sir, I refer to your “The nightmare emerging from Iraq” June 12.

When you write “If Iraq is in the throes of sectarian break-up it is because the country has lost any sense of a national narrative, a shared story”, and I think of that “The Iraq Study Group” report of May 2006, prepared by the US Congress stated: “There are proposals to redistribute a portion of oil revenues directly to the population on a per capita basis. These proposals have the potential to give all Iraqi citizens a stake in the nation’s chief natural resource” I feel like crying.

Can you imagine what different scenario we might be confronting in Iraq were each Iraqi citizen monthly receiving a check as an oil dividend? Can you imagine what kind of example that would have given citizens of other oil-cursed nations, like Venezuela where the government gets directly over 97 percent or all the nation’s exports?

Yes the Iraq Study Group also said about that possibility “but it would take time to develop a fair distribution system.... There is no institution in Iraq at present that could properly implement such a distribution system. It would take substantial time to establish, and would have to be based on a well-developed state census and income tax system, which Iraq currently lacks.” But when compared to all other pains and resources wasted, that seems ex post honestly like the mother of all bland excuses.

And then today I received a copy of a letter signed by 58 Democrats calling for the US to sign up on the Extractive Industries Transparency Initiative, which is a global effort designed to increase accountability and openness in extractive industries… as if that could really move our curse needle in any fundamental way.

By pure coincidence this is part of an Op-Ed I published today in Caracas in El Universal

“During the week I went to one of those conferences where the well-intentioned try to solve your problems with the "resource curse." And that conference versed primarily over how the United States, by means of the Dodd-Frank Act, and the European Community, through laws on corporate transparency, seek to impose on their oil and mining companies strong information requirements regarding their relationship with governments.

My position was, as always: "That sounds very nice but truth be told that for someone who lives under the guise of a giant oil-curse like Venezuela’s, being able to know more about what happens in each specific contract, may be interesting, but could divert the attention from what is happening in general. "

If you really want to help, better published monthly, in a newspaper of global circulation, your best estimates as to the value of non-renewable natural resources extracted, per citizen, per month, represents in each of the various governments around the world. And then let the citizens ask.

I beg of you, do not cause our citizens to believe that you are making their work for them.

With respect to the war against this curse, it is useless for you to strive to make your companies behave with dignity, if we cannot make our governments behave with dignity"

PS. “Oil revenue sharing for Iraq”

PS. A YouTube “Please, while you leave Iraq”

http://theoilcurse.blogspot.com/

http://petropolitan.blogspot.com/

G8, by championing the Extractive Industries Transparency Directive, might be selling snake-oil-illusions

Sir, I refer to Vanessa Houlder’s note “Extractive Industries” June 11, where she writes about Cameron urging his G8 partners to champion the Extractive Industries Transparency Directive, June 11.

I certainly appreciate the efforts of the initiative but, as an oil-cursed citizen of a country like Venezuela, where over 97 percent of all the nations exports go directly into government coffers, I cannot but feel that selling the idea that that kind of transparency could solve our oil curse problems, is like selling snake-oil-illusions, something which can only help the ruler and his petrocrats.

Let me ask you, if the UK was in a similar position, would you settle for more transparency, or would you directly go for wrestling that excessive natural resource power out of your ruler’s hand?

By the way, in 2003 you published a letter in which I held that all European taxmen were, by means of gasoline/petrol taxes getting more revenues per barrel of oil than any country who gives up that non-renewable resource forever. And, since that is still true, even at current oil prices, I ask again why does not EITI’s call for transparency cover that?

FT, are you making fun of us Venezuelans?

Sir, as you well know, and as Francisco Toro writes opposite you in “Chávez leaves a legacy of economic disarray”, “96 percent of Venezuela´s hard currency earnings pass through state coffers”, March 7.

And yet you title an editorial “After Chávez, a chance for progress” and subtitle it “President´s death marks the end of a retrograde era”. Sir, are you making fun of us? Do you think that the Financial Times could even remotely live up to its motto “Without fear and without favor”, if 96 percent of UK´s hard currency earning passed through your governments coffers?

Indeed, we citizens can have more or less luck with the quality of the oiligarchs and petrocrats we have to live with, but such a concentration of economic resources makes it absolutely impossible to break out of a retrograde era. Any evidences of it, are just temporary Potemkin illusions, and we certainly do not need FT lending support to the notion that just a change of government would suffice.

In a land like Venezuela, our only hope for getting out of our abyss is by diluting the power of our oil revenues, by sharing it out directly to all the citizens, and who of course can then be partially taxed on that income.

http://theoilcurse.blogspot.com/

http://www.petropolitan.blogspot.com/

Sunshine rules might signify more darkness

Sir, those “Sunshine rules” you refer to August 23, namely the Sec ordering US-listed companies to disclose the payments they make to the host governments, are absolutely great news… for those countries where civil society is strong enough to matter... and governments have at least the intention of listening to it.

But, in those countries where civil society is truly weak, something which so often is the case of countries suffering the curse of abundant natural resources, those sunshine rules might only mean more darkness, as they would tend to exclude the sort of more reasonable or least unethical extractive industry corporations from participating, leaving the field open to the truly unreasonable and least ethical. 

Why not invest instead all these efforts in supporting the development of strong “independent” civil societies which can demand better results where it really matters, not in the corporate reports of companies listed in the stock-exchanges of developed countries, or in an annual report of a well intention NGO, but on their own oil-fields and mines? 

Now if the SEC would follow up this by approving a list of countries where a reasonable active participation of civil society existed, and in which therefore these sunshine rules would apply, and a list of those countries where they are impossible to apply, that could be more helpful, not only for us oil cursed citizens, but even for their own listed natural resource companies. 

PS. One of the main promoters of “sunshine”, which is good, is the Extractive Industries Transparency Initiative, and the Dodd-Frank Act even makes a direct reference to EITI. 

Nonetheless, EITI, as its second principle states: “We affirm that management of natural resource wealth for the benefit of a country’s citizens is in the domain of sovereign governments to be exercised in the interests of their national development.”, and that to me, as an oil-cursed citizen, is a totally unacceptable principle. 

I believe that the individual citizens will always, on average, make a better use of any natural resource blessings, than their government managing all of these… and using all of these so as to guarantee themselves some truly submissive citizens.

You need some warning labels on the transparency pills offered

Sir it is not “when citizens do not know how much the governments are paid” in resource revenues that lies behind the real resource curse… it is much more when governments get paid too much, like more than 5% of GDP, 15% of its exports, or 25% of all tax revenues received from the citizens, “Stop digging deep for the kleptocrats” March 7.

In those cases of evident lack of balance of the societal powers, those transparency pills that the Extractive Industries Transparency Initiative offers, will in the best of cases act as placebos, and it the worst, be feeding on those illusions of a better tomorrow that help maintain petrocrats and oiligarchs in power.

Openness is just a placebo when lifting a real resource-curse

Sir, whenever a government receives in net resource revenues more than 5% of GDP, 15% of its exports, or 25% of all tax revenues received from the citizens, the balance of power has been fundamentally altered and real democracy cannot breath. In these cases the transparency of which George Soros speaks of in “Openness can help lift the curse of resources” March 4, is just a placebo. In fact transparency there amounts to little more than allowing the tortured seeing the pliers that is to be used to extract his fingernails.

That Extractive Industries Transparency Initiative, EITI, and that Soros speaks so highly of is without any doubt well-intentioned, but they have no idea of what the real oil-curse is all about. Anyone who did would not, as EITI does, proclaim the principle: “We affirm that management of natural resource wealth for the benefit of a country’s citizens is in the domain of sovereign governments to be exercised in the interests of their national development.”

That principle supports keeping on concentrating oil-wealth in hands like Gaddafi’s, while the only means of breaking an oil-curse of that size is handing over the oil revenues directly to the citizens. But what would a George Soros or an EITI know about that? … at the end of the day they are not really oil-cursed citizens.

PS. I’m from Venezuela. There the government, by means of oil revenues, has come to receive 97 percent of all national export revenues. In such cases you do not live in a nation, you live in somebody else’s business.

EITI, unwittingly, is an obstacle to other cursed-citizen's requests.

Sir I refer to your Oily transparency April 15. In the debate on what to do with an oil curse the Extractive Industries Transparency Initiatives occupies so much space it does not leave much room for others who like me want the oil revenues distributed directly to the citizens.

In fact EITI is more of an obstacle since it states as its 2nd Principle“We affirm that management of natural resource wealth for the benefit of a country’s citizens is in the domain of sovereign governments to be exercised in the interests of their national development.”

When seeing how much oil-richness has been wasted in the hands of oiligarchs, petrocrats or plain thugs it is truly amazing such a principle should exist. I guess it is because it is always more fun to talk to an oil blessed politician or technocrat than with a poor oil cursed citizens.

http://theoilcurse.blogspot.com/

If the net oil revenue that goes directly to government exceeds 5 percent of GDP, then oil is a curse

Sir Moisés Naím writes that “Oil can be a curse on poor nations” August 19 and of course he is right. That said I would hold that when net oil revenues amounting to more than 5 percent of GDP of a country goes directly to the government, making it independently wealthy, then simply put, the oil is a curse, on any nation, and any evidence to the contrary is just waiting for a disaster to happen.

You see when people hear about oil they think of richness and the citizens expect that richness to be distributed to them by the government, without really knowing how much they should get, and then all start jockeying for positions to be favoured by the mighty, and society breaks down.

I am the President of an NGO in Venezuela, Petropolitan, which starting in the last millennium has been working among other for oil revenue sharing. Notwithstanding more than 100 articles published on the subject our agenda has not move a lot forward and so lately we have been calling out for help to other countries trying to establish a global alliance of oil cursed citizens.

Do you know who represent some of our major obstacle? Strangely enough some of those well intentioned groups like Revenue Watch Institute and the Extractive Industry Transparency Initiative (EITI) and who, by somewhat naively pushing the illusions of good partial solutions, play right into the hands of our oil autocrats.

Force oil companies to adopt EITI principles in order to list and trade

Sir as a cursed citizen from an oil cursed nation (I guess you have never really seen a cursed government from an oil cursed nation) I do applaud your editorial "Fighting graft" since you there clearly state that if persuasion and coercion do not exist, nothing will happen any century soon. 

I for one am begging the developed countries to have their financial and commodities exchanges to ask for evidence of compliance with a set of minimum practices along the lines of the Extractive Industries Transparency Initiative, before any oil company is allowed to list or trade on them. 

That of course would do infinitely more than having to spend our next hundred years trying to convince individual companies and countries of the merits of such initiative.

That of course does not mean that I am in agreement with EITI’s obnoxious 2nd principle that states “We affirm that management of natural resource wealth for the benefit of a country’s citizens is in the domain of sovereign governments to be exercised in the interests of their national development.”

As a citizen I know that the worst part of any oil curse is the excessive concentration in the governments of our oil revenues.