27 July 2011

Fair Shares ~ African Participation in Bonanza!

The Guardian spotlights one of the truly biggest ideas in development finance and innovation in this analysis piece by World Bankers Shantayanan Devarajan and Marcelo Giugale -- How Africa can extract big benefits for everyone from natural resources -- something I've been calling Percapitization or Per Capita Participation...
"Transferring a portion -- or all -- of the income from Africa's natural resources directly to citizens could help to reduce poverty and fight corruption. [...] Is there a shortcut to better accountability in the management of natural resources? Yes, there is: direct transfers of resource dividends to citizens. Around 35 African countries already transfer cash directly to their poor -- through smartcards, debit cards, mobile phones, or in person. This is getting cheaper and safer. The coverage of banking and mobile phone services is expanding rapidly. So is biometric identification with mobile devices. Logistically, there is nothing that prevents governments from transferring a portion -- or even all -- of the income from natural resources directly to every citizen, not just the poor. This kind of direct dividend payment is not new -- Alaska has been doing it since the early 1980s. Why would giving people a share of commodity revenues help avoid, let alone reduce, corruption? Because if you know you are getting a portion of the oil revenues, you will surely be interested in the total amount -- not to mention in what the government does with its share. [...] Dividend transfers and fiscal integrity can go together [...] giving people a direct stake in their country's riches can buy time, and goodwill, for the slow-but-necessary construction of better governance institutions."
This is an epic and transformative prosperity policy! Distributing so-called "national" assets to the people is a far better pathway than having it be pocketed by corrupt politicians (e.g. Nigeria, Equatorial Guinea, Libya, etc) or squandered by an inefficient state (e.g. PEMEX, PdVSA, etc) or privatized to the rich (e.g. TELMEX, etc) or to outside MNCs. Percapitization is really the only moral and democratic pathway.

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