EXPERIENCE IN REVENUE SHARING FROM HIGH VALUE RESOURCES
Peru, Sudan, Iraq, Sierra Leone
View PublicationNatural resources are not distributed equally in space. When the central government unilaterally controls resource extraction in areas of resource wealth that coincide with the territories of unique ethnic or religious communities, strong identity polarization and grievances that result can lead to violent conflict. This risk is especially high when the resources are high-value and their extraction causes local environmental damage (e.g., timber, oil, gas, minerals, and precious gems). In such cases, local communities often bear the costs of damage resulting from resource extraction while the profits are removed to the capital with little return investment or even delivery of basic services to extractive areas. Situations like these have contributed to the cause of self-determination and even secession movements around the globe.