Countries all over the world, regardless of their economic development, are striving to achieve and maintain successful operation of the economic, socio-cultural and political stability and integrity within its boundaries. This goal is undoubtedly the mail prospect of countries' officials and its people in most developed and prosperous countries. An entirely different picture can be observed when looking at the African continent or at almost any South American country. Why is that so? This report will attempt to discover the answers to this question.



This paper will consider one developing country in the context of its history, political situation, social background and ethnical issues that it is currently facing. Analyzing the facts and historical data, certain conclusions as to why Nigeria's economy is in such a horrible state is one of the major goals of this reports. Another important aim is to attempt the presentation of possible solutions for the situation that is currently taking place in Nigeria's Delta region.

Executive Summary

Nigeria is one of the largest oil producers in the world and the first biggest one on the African continent. Being a country with rich natural resources it has not yet enjoyed even a decade of political or economic stability due to the particularities of its government's rule. Corrupted politicians and non-transparent laws have made oil production process into a constant struggle of nationals with foreign companies. The debates over who is right and whose profits should oil production benefit are not helping the county's economy. At the same time Nigeria is suffering from continuous ethnic rivalries and undergoing dangerous environmental changes. This paper is going to view these issues in more details.

Results

Taking into consideration current situation in Nigeria and particularly in the Niger Delta, certain laws and regulations must be implemented for the preservation and proper maintenance of its natural resources. Clearly oil is country's best natural resource that could be traded for the wealth of its people and stable economic growth. On the other hand it can only happen in a country with established political structure, ethnical identity, developed infrastructure and lawful approaches to business decisions. It is a known fact that Nigerian government usually "entrusts the oil companies almost entirely to provide the information on such matters as land claims and its valuation, environmental impact assessments, terms of compensation for property and labor usage, damage claims, etc." (Journal of International Affairs, 1999,pp. 281). This data proves that all of the vitally important processes associated with oil production are in the hands of the company and a few politicians who are interested in it for personal financial reasons. At the same time the county's poorest find themselves receiving whatever compensation they are offered without a right to protest. Also such companies are often giving away compensations without making sure of its legal and correct distribution, thus a big portion of the funds end up in the wrong hands never reaching those who need it the most. It is worthy to state that there are autonomous law bodies that are trying to monitor process described above however previous years' practice proves that security force harassments and office raids have badly impacted their initiatives.

Findings

In countries like Nigeria- with a clearly distinctive problem of human rights violation and political corruption, corporations come into play and proclaim their aims as noble and in the long run able to change the current situation. In reality though instead of providing needed help for environmental preservation and sustained oil usage and production, companies adapt to the local rules and do little to change the situation. This happens because oil moguls do not want to risk their multi-billion profits for the sake of human rights and call these issues "highly political" underlying their inability to be involved in such matters. At the same time oil producers must be responsible for such problems as human rights, especially if working together with the domestic governments. Instability in the community, such as protests of its certain layers causes both players: governments and oil companies lose profits. Therefore both have to cooperate producing good for the community and country in general. However the real situation in many countries and particularly in Nigeria is drastically different. The level of secrecy that surrounds all agreements of Nigerian government with foreign oil companies is absolutely absurd. There is only one publicized document that was issued by Shell regarding the "internal guidelines on security and international human rights standards" (Journal of International Affairs, 1999,pp. 281). At the same time none of the companies operating in Nigeria publish reports that include claims of environmental damage, compensation declarations, protest actions or any military actions occurring in the vicinity of their facilities. It seems that these companies are completely unaware of the political situation in the country and accusations of the communities they operate their business in. Clearly such position is a mere convenient shield of producers from unnecessary trouble.

Conclusions

Sustainability of Nigeria as a developing country will greatly depend on what decisions its government and its entire nation will make concerning their main wealth-oil. Right now the only smart solution for the central government seems to be the assignment of a fixed proportion of oil revenues to the development across the entire onshore production region (Ford, 2003). It appears to be logical that the more oil is extracted from their land- the more local people will benefit from it and thus will not sabotage work of oil installations. It is vital for the inhabitants of these regions to make their desires and requests to the companies, as well as the governments, well known in order to receive what they can based on their rights. Only in this case of community's joint forces the county will be on the way to the economic stability and more or less balanced social structure.

It is important to note that the mere absence of the fully outlined legal regime is not essentially an obstacle to the successful development of country's natural resources. There are instances where oil industry has developed greatly in places where there were no laws and written regulations on ownership of resources and their development. On the other hand the presence of inconsistent claims of ownership can be a big problem, especially in countries like Nigeria where it can easily lead to military confrontations. One of the most successful business practices in terms of cooperation between two countries is joint development arrangements. Most of such arrangements fall under one of the three major categories: 1) each state has the authority to license its own nationals to operate within the join zone, with condition for compulsory joint ventures between these licensees; 2)a joint authority with licensing and regulatory powers manages development of the resources on behalf of both states; 3) one of the states controls development of the resources on behalf of both with the other state's participation limited only to revenue sharing and monitoring (Journal of International Affairs, 2005, pp. 81)

Under the conditions provided above Nigeria and other developing countries with the similar situation has a chance to become a real economic power. Finding a balance between government's regulations, human rights, ethnic differences and oil industry's interests along with clear specifications as to resources' ownerships will lead to regeneration of the economic strength and stability in the country.