7/11/05 5:46 PM Page 1 2 Many countries rich in natural resources exploit and squander their wealth to enrich a minority majority impoverished. A special responsibility falls on civil society in such countries to push their governments toward transparency and spending that responds to public needs. The Open Society Institute and its Revenue Watch program published this report in collaboration with the Initiative for Policy Dialogue. It is the second in a series of guides published by Revenue Watch to promote government transparency and accountability. The first, Follow the Money, is a guide for nongovernmental organizations on monitoring budgets and oil and gas revenues. | A Reporter’s Guide to Energy and Development Covering Oil: A Reporter’s Guide to Energy and Development provides journalists with practical information about the petroleum industry and the impact of petroleum on a producing country. By helping the media inform the public about natural resource issues, Covering Oil seeks to contribute to lifting the “resource curse” that impedes the development of many impoverished countries. | COVERING OIL while corruption and mismanagement leave the 2 Initiative for Policy Dialogue COVERING OIL A Reporter’s Guide to Energy and Development Revenue Watch Open Society Institute OPEN SOCIETY INSTITUTE i PD LIFTING THE RESOURCE CURSE osico OSI Initiative for Policy Dialogue COVERING OIL A Reporter’s Guide to Energy and Development LIFTING THE RESOURCE CURSE 2 COVERING OIL A Reporter’s Guide to Energy and Development Edited by Svetlana Tsalik and Anya Schiffrin Revenue Watch Open Society Institute Initiative for Policy Dialogue OPEN SOCIETY INSTITUTE New York Copyright © 2005 by the Open Society Institute. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means without the prior permission of the publisher. ISBN 1-891385-45-3 978-1-891385-45-2 Published by Open Society Institute 400 West 59th Street New York, New York 10019 USA www.soros.org Distributed by Central European University Press Nador utca II, H-1051 Budapest, Hungary Email:
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[email protected] Library of Congress Cataloging-in-Publication Data Covering oil: a reporter's guide to energy and development / Revenue Watch, Open Society Institute. p. cm. — (Lifting the resource curse ; 2) “Initiative for Policy Dialogue.” Includes bibliographical references. ISBN 1-891385-45-3 1. Petroleum industry and trade—Developing countries. 2. Petroleum industry and trade—Government policy—Developing countries. 3. Journalism, Commercial. 4. Developing countries—Economic conditions. 5. Developing countries—Social conditions. I. Open Society Institute. Revenue Watch. II. Initiative for Policy Dialogue. III. Series. HD9578.D44C68 2005 070.4'493382728'091724--dc22 2005047727 Design by Jeanne Criscola/Criscola Design Printed in Hungary by Createch, Ltd. Cover photograph by Lester Lefkowitz/CORBIS Contents Foreword 7 Acknowledgments 11 1. Making Natural Resources into a Blessing rather than a Curse By Joseph E. Stiglitz 13 2. Understanding the Resource Curse By Terry Lynn Karl 21 3. A Primer on Oil By John Robert