Wednesday, May 30, 2012
How is the Dodd-Frank Act Hurting Emerging Markets?
The accompanying cartoon taken from Bloomsberg BusinessWeek shows an African guerrilla smiling as a village burns. In the spirit of hip-hop, the guerrilla is wearing a gold ring, gold bling , accented with gold teeth. The guerrilla is a big oil company who is getting rich from exploiting the resources of developing countries.
The Dodd-Frank Act, Section 1504, makes governments show how they spend their money. This disclosure shows if a dictator is keeping all of the money or sharing the wealth. For big oil, the Dodd-Frank Act would give competitors a competitive advantage. I think this section of the Dodd-Frank Act encourages countries and companies to find ways of breaking the law. The article mentions the land-locked country of Chad as an example.
Actions have consequences. If big oil does business with dictatorships, then big oil should be reasonably certain that they are enriching the regime and that will come at a human cost. Maybe it is time for the United States to pursue alternative energy. In the movie "Blood Diamond" men, women, and children lost everything because of the riches found in exclusive ownership of a resource. Oil is no different.