EDITORIAL: Natural resources must benefit, be seen to benefit the people

In our main story today we cover the issues and questions regarding diamond sales and their implications to the economy of Zimbabwe.

There is no doubt that this is a subject that has been with us for a long time and the question of benefits of diamonds and other natural resources has been extensively discussed.

Diamonds in Zimbabwe were discovered in their alluvial form around 2006 in Eastern Zimbabwe in the Chiadzwa/Marange areas, leading to a rush.

There are reports that they had been known to exist well before, and some people made fortunes in the cover of dark ignorance of the masses.

However, between 2006-08, the rush showed both the extent of the riches, and the depth of despair.

There was so much wealth. There was so much poverty around.

At the end, while people rushed in madly to collect what few stones they could in the free-for-all, eventually the elites came in and began restricting access.

Government made sure that the mining was dome properly, and in came a number of players, including Chinese and Russians.

While this regularisation has been done, the whole episode has left a sour taste in the mouth, as stakeholders struggle to pinpoint to the benefit of the resource to the national economy, or the immediate communities from which the diamonds were mined.

It’s a classic “resource curse”.

Using the political economy lenses to analyse how Government manages natural resources and their value chain, the concept of resource curse suggests that countries with abundant natural resources have tended to be poorer.

On paper huge amounts of natural wealth should be a boon.

However, in Africa and elsewhere in the Third World, perceived poor governance has led to ordinary people not benefiting from the resources while elites line their pockets.

At worst — as we saw in countries such as Sierra Leone and the DRC — violence, destruction and wars many actually break out over the resources.

At the end of the day, the resources do not benefit the people. Or, more specifically, the resources are not seen to benefit the people.

We are not of the simplistic view that abundant natural resources automatically translate to huge sums of money which communities and the country can enjoy.

The process of creating value out of unmined assets or any other natural resources requires capital and commerce. Even more critical, beneficiation and value-addition means that African countries can fetch higher prices that simply would have gone to the next buyer of the primary product.

Those who control the means of production line their pockets first, no doubt.

Even when there is no corruption to talk about — however unlikely — benefits tend to be lower and less impactful on communities and the country at large. This is where the problem, and paradox lie.

This implies that stakeholders must ensure that natural resources and other endowments and indeed the national purse, must benefit people — and be seen and felt to do so.

Now we have have reports from authorities that diamond revenues could reach US$1 billion by 2030, and that we are pushing lots of parcels.

People ask, for whose benefit? This is the trust deficit that exists.

In our coverage we carry another story in which the people of Arda Transau are bleakly living despite owning the land from which the resources are being extracted.

The problem extends to other areas as well.

It then leads to a lot of skepticism when people hear that Zimbabwe is among top producers of diamond, lithium, gold, etc.

For whose benefit?

This should be a challenge to policymakers, investors and other stakeholders.

They must uncover and unlock true value of these resources.

 

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