Minister says oil can be viewed as a blessing to developing countries
Minister Gillian Merron claimed today that oil has a tremendous potential to contribute to development, despite a history of negative impacts, and the role of oil exploration in climate change. She was speaking as the Ditch Dirty Development campaign was debated in Parliament.
Oil fire in the Niger Delta
Stakeholder Democracy Network
Today’s debate, on ‘Development Aid and Oil Extraction’, took place at the request of Andrew Smith, MP for Oxford East, following a meeting with the Oxford Uni P&P group. Under Secretary of State for International Development, Gillian Merron, responded on behalf of the Department for International Development (DFID).
The Minister took a strong line, defending the UK Government position that support for oil extraction is a legitimate use of development aid money. She argued that:
“it is quite possible to view oil as a blessing to developing countries… Oil, gas and mineral resources are major natural benefits for any developing country.”
This position flies in the face of evidence that oil extraction has historically had negative economic impacts in developing economies. In Nigeria, for example, as Andrew Smith pointed out in his speech, revenues from oil have increased 10 times since 1965, while GDP per capita has remained static in the same period. The Minister did not give any examples of countries which have achieved poverty reduction as a result of oil extraction projects.
The DFID position on oil extraction is obviously a hard one to defend, as the Minister failed to answer key questions raised by Andrew Smith during the debate. Her response to repeated questioning on why DFID does not support targeting aid where it can have the most impact in transforming the life chances of the poor, was to say “I certainly accept that those searching questions need to be asked and answered.” Later she responded to Andrew Smith in similar vein: “my right honourable friend makes a robust argument and important points. I put it back to him that those are the questions.”
The questions that Gillian Merron was seemingly unable to answer were these:
- Whether support and subsidies from the international community, particularly the World Bank, for fossil fuel extraction projects, are a better use of money to alleviate poverty than alternative methods?
- Would it make sense to have searching criteria against which both multilateral and bilateral support for projects should be assessed?
- Even if DFID will not accept an immediate moratorium, should we set targets for the reduction of support for fossil fuel extraction?
- Does DFID accept that it would be better to invest public money, bilaterally and multilaterally, in projects that actually get electricity to the poorest people in the poorest countries? Investment in oil extraction and pipelines is a rather convoluted way of generating export earnings, which might end up being used for electricity projects, if not spent on weaponry or sent to some offshore account. Why not target the aid where it can have the most impact in transforming the life chances of the poor?
These are questions that DFID and its Ministers should be able to answer. Failure to do so exposes their current position as flawed. As Andrew Smith argued in his speech:
“We need revenues to be spent on reducing poverty and on providing health care, clean water, housing, education and basic infrastructure. We must ask why the international community is putting so much into fossil fuel extraction, when there is so little evidence of poor people benefiting at the other end and when the imperative of tackling climate change points in other directions altogether.”
- Read a full transcript of the debate.
Take action
People & Planet’s Ditch Dirty Development campaign calls on DFID to end support for fossil fuel extraction and to switch support to genuinely sustainable renewable energy and energy efficiency. This debate came about as a result of student campaigning.
Keep the issue alive in Parliament and within DFID by writing to your MP and asking them to raise these issues with DFID Ministers.