NOBEL LAUREATE SPEAKS TO REPORTERS ABOUT NEED FOR TRANSPARENCY OF OIL REVENUES

November 17- Nobel laureate Joseph E. Stiglitz told reporters Monday that nations should view oil wealth as part of the national endowment and something that belongs to all citizens and generations, not exclusively to the current government or generation. Governments that use these resources for their own benefit are robbing their nations of a patrimony that belongs to everyone.

"Leaders inside and outside government share a responsibility to promote this sense of stewardship in resource-rich countries," Stiglitz said. He added that "the desire by government leaders to control wealth generated by natural resources often discourages the development of democracy and undermines stable economic development." Stiglitz was speaking at the opening of a three-day workshop for reporters on covering oil wealth and the impact it has on development.

Stiglitz, who was awarded the 2001 Nobel prize in economic science for his ground breaking work on the economic imbalances caused by asymmetric information, said that it's important for governments to release information about how much money they receive from selling natural resources and to tell the public how these monies are being spent. He also urged governments and international institutions to adopt accounting frameworks that would make it easier to trace whether economic growth is sustainable or whether it stems from the short term depletion of resources.

"Companies have strong incentives to maximize profits and the opacity that surrounds oil contracts and payments can lead to abuse," warned Stiglitz, a professor at Columbia University in New York.

Professor Stiglitz was a member of the Council of Economic Advisors from 1993-95, during the Clinton administration, and served as CEA chairman from 1995-97. He then became Chief Economist and Senior Vice-President of the World Bank from 1997-2000. His book, Globalization and Its Discontents, (Norton June 2001) has been translated into 20 languages and is an international bestseller. His new book, The Roaring Nineties-A New History of the World's Most Prosperous Decade, was published in New York in October.

Stiglitz was the keynote speaker at the "Covering Oil Wealth" being held on November 16, 17 and 18 at the Conference Hall, Alatau Sanatorium some 30 minutes outside of Almaty. The event is being organized by the Initiative for Policy Dialogue, an international network of economists based at Columbia University in New York and the Kazakhstan Press Club.

Other speakers on first day of the workshop were Meruert Makhmutova, director of the Public Policy Research Center, Dariusz Zietek the director of Soros Foundation-Kazakhstan and Uraz Zhandossov deputy Zhannat Yertlessova as well as MP Galym Bainazarov. The conference is being held to help reporters enhance their coverage of the effects that resource wealth can have on Kazakhstan and to raise awareness about the need for improved transparency and corporate governance.

Managing oil wealth is a challenge for developing and transition countries that are lucky enough to have these resources. Nations need to decide how they can deal with influxes of large revenues without producing distortions of income inequality, corruption, misallocation of resources and macroeconomic imbalances such as high inflation and low growth. Kazakhstan is a test case and could become a role model for other countries with large energy resources depending on how its leadership decides to handle the challenge.

The journalism workshop is part of a series of workshops and meetings being planned by Caspian Revenue Watch. CRW is part of the Open Society Institute and in June released a report "Caspian Oil Windfalls: Who Will Benefit". A copy of the report in Russian is on http://www.eurasianet.org/caspian.oil.windfalls/

Kazakhstan Press Club was responsible for organizing the logistics of the meeting and inviting local reporters to participate. IPD journalism training director Anya Schiffrin prepared the program, invited the guest speakers and will be responsible for follow-up activities. IPD has organized workshops for journalists in Vietnam, Moldova, Washington DC and New York City. More information about IPD's journalism training activities can be found on www.journalismtraining.net. For more information about the Initiative for Policy Dialogue please see www.policydialogue.org.

The event is being funded by the OSCE Centre in Almaty, Soros Foundation--Kazakhstan, the International Center for Journalists in Washington DC, the Initiative for Policy Dialogue and the US Embassy in Kazakhstan.