Foreign control of natural resources

Denial of sovereignty over natural resources

Nature

There are few means by which non-industrialized nations can participate in the decisions which affect the extraction of their resources. Paralysis or confiscation of the extraction system, while effective in some cases, is costly and dangerous.

Background

The issue of foreign control of natural resources gained prominence during the colonial era, when imperial powers extracted raw materials from occupied territories, often to the detriment of local populations. In the post-colonial period, newly independent states increasingly recognized the economic and political implications of external ownership and exploitation. Landmark events, such as the nationalization of oil industries in the Middle East and Latin America, highlighted the enduring global significance and contentiousness of foreign resource control.

Incidence

Since 1906 to 1968, its year of independence, Nauru's phosphate-rich soil was strip-mined by occupying powers Japan and Germany, and after WWI as mandated territory Australia, New Zealand and the UK. The phosphate will be exhausted by the mid-1990s, leaving the world's smallest country with a tenuous economic base and a barren landscape. In 1990, Nauru applied to the International Court of Justice for restitution of $56 million in damages from Australia, since neither Britain nor New Zealand accept full international court jurisdiction; it claims the other countries involved have moral rights to pay damages also.

Ethiopia, the source of more than 80% of the Nile's flow, currently uses less than 1% of it. This drought-ridden country now wants to take water from the Blue Nile, perhaps by damming its source, Lake Tana. But Ethiopia is not party to the Nile Water Agreement, made between Egypt and the Sudan in 1959, and its downstream neighbours acknowledge no right for it to dam the river's waters. Egypt's former foreign minister and later UN Secretary General, Boutros Boutros-Ghali, prophesied that the next war in the region would be over the waters of the Nile.

In 2001, Morocco awarded a contracts to prospect for offshore oil on the Western Sahara coast to two foreign companies, American and French. According to the United Nations, the treaty signed by Morocco and the decolonizing power Spain in 1975 did not transfer sovereignty of the Western Sahara and did not make Morocco the administrator for the territory, which may be called a "non-self-governing territory" whilst Morocco continues as an occupying power. The Saharawi people are also concerned about the exploitation of their fisheries resources by Spain in arrangements with the Moroccan government.

Counter-claim

The fear over foreign control of natural resources is vastly overblown. In today’s globalized economy, international investment brings expertise, technology, and jobs that benefit local communities. Ownership matters far less than responsible management and fair regulation. Nationalistic panic distracts from real issues like corruption and environmental mismanagement. Instead of obsessing over who owns resources, we should focus on ensuring transparency and sustainability, regardless of the investor’s nationality.