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Jodi Liss: Peruvian People Power

This past month, two resource-rich countries saw political protests turn deadly as the people tried to reign in the autocratic dictates of an incumbent government. One country was, of course, Iran—where every day it seems the government strangles a little more life out of the people’s protests. With 24/7 news coverage of that disastrous election, you might be forgiven for not having heard about what happened in Peru, where for a change, the people won. Beginning in 2008, Peru’s president, Alan Garcia, issued a series of executive decrees to open up 210,000 square miles of the Amazon region, including some land legally protected, to foreign oil, gas, logging, and agribusiness investment. Garcia aimed to develop a multi-billion dollar industry to aid Peru’s growth (not in itself a bad thing) and saw the fertile and resource-rich Amazon as a golden opportunity, simply too good to waste. The president oversaw the signings of dozens of contracts with a wide variety of foreign officials and companies. In retrospect, it's easy to see why Garcia underestimated the vociferousness of his opposition. The Amazonian region is home to only 330,000 indigenous people (roughly 1 percent of Peru’s population) arrayed in some 60 tribes. In general, these Amazonians live in remote areas, speak different dialects, are much poorer than the national average, and lack political or social cohesion. But this time around, the indigenous people were organized and determined. They had spent years getting ready for Garcia's assault on their native land. Decades of negative experiences with oil extraction companies had forced them to come together, and to plan ahead. Past protests had not been taken seriously by Peruvian elites and legislative leaders, who merely ignored their claims or temporarily suspended action until the furor died down. Then, as always, they returned to business as usual.

Jodi Liss: Omar Bongo and the Big Vegetables

Every student of International Relations Theory 101 gets treated to Jean-Jacques Rousseau’s Parable of the Stag Hunt. You remember the tale: two hunters are sent into the woods looking for a stag to feed their starving village. To bag the animal, they must independently choose to work together or each can choose to snare a rabbit for themselves (which can be accomplished alone). In the end, they choose the lesser task: feasting as the villagers starve, foregoing the uncertain rewards of cooperation for more immediate, assured ends. Rousseau’s parable illustrates the all-too-prevalent triumph of self-interest over group loyalty. But it's also a perfect metaphor for corruption. Omar Bongo, the president of Gabon died last week. Few in the West had heard of him until his obituary appeared on the front page of The New York Times. Gabon is a small but oil-rich country on the Atlantic coast of Africa, and Bongo, who ruled for 41 years, was one of the smoother, most clever oil despots the world has ever seen. He sustained his power not by overt violence but by co-opting enemies and, allegedly, running a network of spies and informants. Gabon is a former French colony, and Bongo played on that nation's guilt and need for oil to keep in the West's good books. He and his family amassed a fortune on what should have been a civil servant’s salary. No one was fooled. Everyone knows Bongo’s story is scarcely unique in the developing world. Yet what Omar Bongo did is almost beside the point—it’s what he didn’t do in 41 years that matters. Simply put, he didn’t bother to create a functioning country. For years, we've heard the truism that developing countries needed Western aid to build successful economies. But has it worked? Despite billions in loans and gifts to developing nations, poverty is still rampant, especially in Africa. Since the beginning of the Cold War, international aid was often a fig leaf for payoffs and bribes to dictators to keep them in one camp or another. Rarely did the money spent trickle down to the people who needed it most. Economists now debate whether the West should continue to lend or give aid money to developing countries in the hopes that it will eventually help matters, or whether it just abets corruption and makes things worse. But dozens of countries haven’t truly needed aid....

Jodi Liss: Breaking the "Resource Curse" by Getting Contracts Right

Many countries in the developing world look to energy and mining to bring in foreign investment. The contracts that these countries sign with extraction companies often offer lop-sided terms when it comes to money, transparency, information, or in certain cases, environmental protection to the host country—all of which heighten the problems of the resource curse. The International Senior Law Project (ISLP) is a non-profit organization which volunteers world-class legal counsel globally on economic development, human rights, and access to justice. The group works with governments who need their services but are too poor to pay, and partners with large established non-governmental organizations (NGOs) to bring their skills to developing world civil society groups. They also offer commercial law skills training. They have worked on projects to deal with extraction related problems in several poor countries, including in Mongolia and Liberia. ISLP’s roster includes about 600 lawyers from the United States, Canada, and other countries. Jean Berman, the executive director, says, “We’ve been very lucky in finding the perfect lawyers for the situation.” Joseph Bell is the Secretary of the Board for ISLP.  He is also a senior law partner at Hogan and Hartson, and chair of the Advisory Board at Revenue Watch Institute, an NGO which works to counter the resource curse. His background is in commercial and regulatory practice, focusing on energy and mining. Recently, he led the ISLP team(s) that renegotiated several important contracts between the government of Liberia and interested multinational corporations, resulting in a great improvement of terms for the government. The following is an interview with him on negotiating with extraction companies for the world’s poorest countries. - - - - Jodi Liss (JL): What problems do developing countries face when negotiating contracts with these huge multinational corporations? Joseph Bell (JB): There’s the problem of asymmetry—in knowledge, information, capacity—between the government and the company. Some countries recognize this and hire outside counsel, which sometimes can help. JL: Do these countries have the existing legal frameworks to guide these contracts?

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