Many low-income countries are in the midst of commodity export booms. The sums dwarf aid flows and are their biggest opportunity for transformation. Yet the booms of the 1970s turned into a curse. It is vital that history should not be repeated and so Robert Zoellick, president of the World Bank, has rightly made it a priority. What, in practice, can the bank and the International Monetary Fund do?
Forget conditionality: governments now have sufficient revenues to breathe the air of freedom and China is offering unconditional money in abundance. So any international standards for resource extraction must be voluntary. Fortunately, in this area voluntary standards have a good record. The Extractive Industries Transparency Initiative, launched in 2002 as a standard for revenue reporting, has a wide take-up. Standards provide rallying points for reformers and a benchmark for performance and promote competition between governments.
