Monday, October 17, 2005

Good Use of Adam Smith's Legacy

Nice to read something that refers sensibly to Adam Smith and correctly uses his legacy to make an important contemporary point.

“Global Energy Challenges In The Coming 30 Years” By Lord Browne,

(Extract from from the Dewhurst Lecture, delivered by BP’s Group Chief Executive Lord Browne to an audience at the World Petroleum Congress in Johannesburg on 29 September.)

“As well as investing in exploration, production and processing facilities worldwide, the industry is shifting its geographical base and in the process is beginning to learn how to operate successfully in complex areas, in countries in transition, and in emerging markets. We’re beginning to understand that if you want to manage the risks of a very long term investment it is important to be engaged with the countries in which you are operating. Not just extracting resources and paying taxes, but also playing a part in the successful development of those countries. Being transparent about what you pay; staying out of politics and making no political contributions. Avoiding bribery and facilitation payments and working with local communities to develop enterprise and education – to ensure that countries are ready and able to make full use of the wealth which resource development can bring.

We’re beginning to understand how to help the countries in which we work avoid the resource curse – the negative impact of suddenly becoming what Adam Smith would have regarded as a rentier, with a huge inflow of unearned income which can swamp all the incentives which shape an economy.”

Full Text is in Middle East Economic Survey VOL. XLVIII No 42 17-October-2005 (http://www.mees.com/postedarticles/oped/v48n42-5OD01.htm)

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