In Haiti, we must make mining revenue work for us

Agent-x - July 2 2012, 4:01 PM

According to guardian-co-uk on 2 July 2012, As Haiti awaits a financial windfall from its natural resources, it must ensure a fair share of the money benefits its people

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Haitian schoolchildren in Port-au-Prince
Haitian schoolchildren are among those who should benefit from mining revenues.

Photograph: Mario Tama/Getty Images

Haiti is reportedly on the cusp of a gold rush, with exploration proceeding apace for an estimated $20bn worth of precious minerals buried beneath the soil.

This is a great opportunity, but also a challenge for a country such as Haiti.

The potential tax revenues that could be generated from mining copper, silver and gold are enormous.

However, ensuring that a fair proportion of the revenue generated ends up benefiting the people of Haiti is far from a foregone conclusion.

The drive to attract the foreign investment needed to exploit these resources often leads governments to bow to pressure to negotiate deals that are far more favourable to the investors than they are to their own people.

In Bolivia, for instance, when trillions of cubic feet of gas reserves were discovered in the mid-1990s, the state industry was privatised.

The rationale was that fresh capital was needed to exploit a greater volume of the reserves and thereby generate more tax revenue for state coffers.

The trouble was, the tax regime was so generous to the foreign investors that the country ended up losing revenue.

The perceived government mismanagement of these valuable reserves was a significant factor in the violent protests ushering in several new presidents in Bolivia in the past decade

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