Bernice Lee of Chatham House Proposes Resources 30 (R30) Group

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February 1, 2013

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In a guest post for the Financial Times' "Beyond Brics," blog, Bernice Lee of Chatham House proposes that the world's top 30 resource-producing and resource-consuming nations form a Resources 30 (R30) group to cooperate on global natural resources management and to tackle problems like resource price volatility, competition, and social and political conflict.

Read Lee's exclusive article, "The Geopolitics of the Modern Resource Boom," in the recently-launched Winter 2013 issue of Americas Quarterly on natural resource extraction in Latin America.

Guest post: let's start an R30 Group to manage global resources

by Bernice Lee 

Resource insecurity is back with a vengeance. It is time for world leaders to respond to burgeoning demand from emerging economies, which has driven up commodity prices and made them more volatile, and led to supply disruptions, environmental degradation and political tensions.
 
Governments have mostly reacted with unilateral – and often myopic – policies, alongside vague attempts at collaboration. This is not enough. The world’s top resource-producing and resource-consuming nations should establish a Resources 30 (R30) Group, and cooperate in managing global natural resources.
 
As my forthcoming article in the new issue of Americas Quarterly argues, the world needs a ‘coalition of the committed’ which would comprise 30 countries critical to the stability and functioning of resources markets.
We at Chatham House, drawing on our Resources Futures report released last month, envision the R30 as an informal forum – with smaller working groups – in which governments, experts, and other stakeholders would tackle urgent issues. There would be plenty to keep them busy.

Resource price volatility should be at the top of the list. Volatility in commodities markets is now higher than it has been at any time in the past century. While brief periods of volatility are not uncommon, the sustained high levels since the early 2000s are unprecedented. Existing international institutions have proved incapable of addressing the problem.
 
Price volatility increases risk, which can deter long-term investment in production, potentially leading to more limited supply down the road. More immediately, it can cause trade and investment disputes, and trigger diplomatic tensions among nations.
 
Driven partly by this volatility, we are witnessing a new wave of resource nationalism. Resource-rich countries are pushing aggressively for greater control and a higher share of profits from their natural resources. Governments are not shying away from declaring contracts void, expropriating assets, or making investments through state-owned enterprises. At the same time, key suppliers of raw materials, including China and Indonesia, have used export controls to support their industries. Brazil and India are considering similar measures for iron ore.
 
Read the rest of the article here.
 




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