UNDP's Strategy Note on Extractive Industries
Although many developed countries are teeming with natural resources, the management of extractive sectors (oil, gas and minerals) is a major challenge and opportunity for them. The exploitation of non-renewable natural resources has often triggered violent conflicts, degraded the environment, worsened gender and other inequalities, displaced communities, and undermined democratic governance. In contrast, there are plenty of cases where the effective management of a society’s natural resources has unleashed sustainable and equitable human development.
It is the design and implementation of a broad set of policies that determines whether countries can harness extractive resources for sustainable development for all. These include new or reformed legal and fiscal frameworks, reinforced public financial management systems, mechanisms for allocating revenues for high social returns and job-intensive sectors, measures to address displacement and mitigate negative social and environmental impacts, and establishing strategies to diversify production away from extractives.
This strategy proposes a United Nations Development Programme (UNDP) strategy to support the efforts of resource-rich developing countries to design and implement such policies. The importance of developing this strategy is underlined by the growing number of countries that seek UNDP’s support in managing the risks associated with natural resource wealth, and in transforming this wealth into advances in human development for all women and men.
- UNDP can work with Governments of developing economies to put in place policies that encourage better management of their extractive industries. It shares experiences and initiatives from both developing and developed economies to learn from.