![Sample our Area Studies journals, sign in here to start your access, latest two full volumes FREE to you for 14 days]({"type":"image" , "src" : "/sda/5922/TOC-Subject-Sample-2021-Area-Studies.jpg"})
Abstract
The unsustainable aid dependency of war-torn countries – most of which are rich in natural resources – makes it imperative to start gradually replacing aid with foreign direct investment (fdi) and exports. This article identifies ways in which stakeholders – governments, the international community, including the UN development system, foreign investors, and local communities – could work together in a ‘win-win’ situation. Most crucial is avoiding conflict-insensitive policies that fuel discord by putting governments and foreign companies, often from emerging markets, in direct confrontation with local communities. The control of natural resources is often a root cause of conflict, and the latter’s exploitation can become a major challenge as wars end. The peculiarities of war-torn countries are discussed along with the specific impediments to attracting fdi into the exploitation of natural resources. An effective and fair legal framework is necessary to ensure that investors do not operate as ‘enclaves’, creating new conflicts.
Notes
1. See del Castillo, Rebuilding War-torn States.
2. For a detailed discussion, see ibid; del Castillo, The Economics of Peace; and del Castillo, Guilty Party.
3. del Castillo, Rebuilding War-torn States, 30.
4. For a comparison of aid levels, see del Castillo, “Is the UN System up to the Challenge?”
5. The term ‘indigenous communities’ is used in a broad sense to include not only indigenous peoples but also other farming communities that live near the natural resources and are dependent on them.
6. For proposals on how the different stakeholders might work together in Afghanistan and Liberia, see del Castillo, Reconstruction Zones; Castillo, Aid and Employment Generation; and Castillo, Guilty Party.
7. See Doyle, “Strategy and Transitional Authority,” 82.
8. See Humphreys et al., Escaping the Resource Curse.
9. unctad data are used for fdi outflows; information about the different modalities in which these companies operate is from the fdi Investment Profiles of the Columbia Center for International Investment.
10. Alden, “China’s New Engagement with Africa,” 22.
11. Kurlantzick, “China in Southeast Asia,” 207.
12. See Gilpin, Improving High-value Resource Contracting.
13. Downs, “China Buys into Afghanistan.”
14. See Bowley and Rosenberg, “Mining Contract.”
15. Kurlantzick, “China in Southeast Asia,” 207.
16. See, for example, the three reports of the United Nations Panel of Experts on the Illegal Exploitation of Natural Resources and Other Forms of Wealth in the DRC.
17. Reported by Agence France-Presse in 2005.
18. Janabi, “Row over Iraqi Oil Law.”
19. See Baker and Hamilton, The Iraq Study Group Report. See also del Castillo, Rebuilding War-torn States, chap. 10.
20. Lawler and Mackey, “Iraq Returns.”
21. For detailed information and data sources on Afghanistan in this and the following paragraphs, see del Castillo, Guilty Party.
22. Posted by wadsam, Afghan Business News Portal, April 25, 2013.
23. See also del Castillo, “Leveling the Afghan Playing Field.”
24. Lorenzo Cotula points out that the lack of transparency and of checks and balances in contract negotiations creates a breeding ground for corruption and deals that do not maximise the public interest. Cotula, Land Grab.
25. For a thorough analysis of concessions in Liberia, two in the mining sector and two in the agricultural sector, and their impact, see Lanier et al., Smell-No-Taste.
26. Clower et al., Growth without Development. For a detailed analysis and data sources on Liberia’s economy and why Clower’s term applies to the post-conflict period, see del Castillo, Aid and Employment Generation.
27. Siakor and Knight, “A Nobel Laureate’s Problem.”
28. Ghazvinian, Untapped.