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Santanfara
3460 Posts |
 Posted - 04 Dec 2007 : 11:18:10
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forwarde by abdukarim sanneh
Empire of Oil: Capitalist Dispossession and the Scramble for
Africa
by Michael Watts
---------------------------------
Notes From
the Editors
---------------------------------
Michael Watts directs the Center for African Studies, University of
California, Berkeley.
---------------------------------
Blood may be thicker than water, but oil is thicker than both.
—Perry Anderson, “Scurrying Towards Bethlehem,” New Left Review,
July–August 2001
In his 2006 State of the Union address, George Bush finally put into
words what all previous presidents could not bring themselves to utter
in public: addiction. The United States, he conceded, is “addicted” to
oil—which is to say addicted to the car—and as a consequence
unhealthily dependent upon Middle Eastern suppliers. What he neglected to mention
was that the post–Second World War U.S. global oil acquisition
strategy—a central plank of U.S. foreign policy since President Roosevelt met
King Saud of Saudi Arabia and cobbled together their “special
relationship” aboard the USS Quincy in February 1945—is in a total shambles. The
pillars of that policy—Iran, Saudi Arabia, the Gulf oil states, and
Venezuela—are hardly supplicant sheep within the U.S. imperial fold.
With surplus capacity in OPEC at an all-time low and speculation
running rampant in the commodity exchanges, Big Oil is awash with money.
Corporate profits are historically unprecedented. Chevron netted a cool
$14 billion in 2005, and first quarter earnings in 2006 are 50 percent
higher than the previous year, a historic high obscene enough to have
Congress muttering about a windfall profits tax. So-called supply risks
in Iran, Venezuela, and Nigeria coupled with the speculative impulses of
the oil traders have driven up the price of oil to around $70 a
barrel, and a former oilman (surrounded by a posse of former oilmen) stalks
the halls of the White House. As if that were not enough, the New York
Times (March 27, 2006) reported that through a “vague law” the U.S.
government will waive, for the oil supermajors, about $7 billion in state
royalties over the next seven years. All of this takes us back to the
1973 oil embargo and President Nixon’s Project Independence,
designed to achieve U.S. self-sufficiency by 1980. The policy failed
miserably (U.S. dependency upon imported oil in the late 1960s was 20
percent and is expected to be about 66 percent by 2025) and Nixon
resorted to maximizing domestic supply and turning to reliable foreign
suppliers at minimal cost—just as George Bush intends to do.
It is no surprise, then, that alternative sources of oil should be
very much on the Bush radar screen (since conservation strategies or
increased gas taxes are conspicuously absent). Cheney’s National Energy
Strategy Report in 2001 bemoaned the U.S. oil habit—“a dependency on
foreign powers that do not have America’s interests at heart”—long before
the State of the Union address. A recent report in the Financial Times
(March 1, 2006) makes the new agenda crystal clear. Although Africa is
not as well endowed in hydrocarbons (both oil and gas) as the Gulf
states, the continent “is all set to balance power,” and as a consequence it
is “the subject of fierce competition by energy companies.” IHS
Energy—one of the oil industry’s major consulting companies—expects African
oil production, especially along the Atlantic littoral, to attract “huge
exploration investment” contributing over 30 percent of world liquid
hydrocarbon production by 2010. Over the last five years when new
oilfield discoveries were scarce, one in every four barrels of new
petroleum discovered outside of Northern America was found in Africa. A
new scramble is in the making. The battleground consists of the rich
African oilfields (see map).
Energy security is the name of the game. No surprise, then, that the
Council on Foreign Relations’s call for a different U.S. approach to
Africa in its new report, More than Humanitarianism (2005), turns on
Africa’s “growing strategic importance” for U.S. policy. It is the West
African Gulf of Guinea, encompassing the rich on- and offshore fields
stretching from Nigeria to Angola, that represents a key plank in Bush’s
alternative to the increasingly volatile and unpredictable oil-states of
the Persian Gulf. Nigeria and Angola alone account for nearly four
million barrels per day (almost half of Africa’s output) and U.S. oil
companies alone have invested more than $40 billion in the region over the
last decade (with another $30 billion expected between 2005 and 2010).
Oil investment now represents over 50 percent of all foreign direct
investment (FDI) in the continent (and over 60 percent of all FDI in the
top four FDI recipient countries), and almost 90 percent of all
cross-border mergers and acquisition activity since 2003 has been in
the mining and petroleum sector. The strategic interests of the United
States certainly include not only access to cheap and reliable
low-sulphur oil imports, but also keeping the Chinese (for example in Sudan) and
South Koreans (for example in Nigeria)—aggressive new actors in the
African oil business—and Islamic terror at bay. Africa is, according to
the intelligence community, the “new frontier” in the fight against
revolutionary Islam. Energy security, it turns out, is a terrifying hybrid
of the old and the new: primitive accumulation and American militarism
coupled to the war on terror.
The Road to Serfdom
The backdrop to the new scramble is the calamity of African
poverty—in the language of Our Common Interest: The Report of The Commission on
Africa (2005), assembled by Tony Blair and Gordon Brown, “the greatest
tragedy of our time.” They dubbed 2005 the “Year of Africa.” In June of
that year the Live 8 concerts drew a global audience of two billion,
and a week later the G8 pledged to double aid to Africa ($25 billion by
2010) and forgive the debts of fourteen African states. African poverty
had forced itself into the international limelight aided and abetted
by a motley crew of humanitarians from Bono to Jeffrey Sachs to the
Pope. The milestones in the growing international visibility of the African
crisis include the United Nations Millennium Declaration in 2000; the
Millennium Challenge Account; the President’s Emergency Plan for AIDS
Relief (PEPFAR); and the African Growth And Opportunity Act, all
launched by President Bush; and now, the new World Bank African Action
Plan. Collectively these palliatives were belated responses to the
unacceptable face over two decades of globalization, reform, and the
search for the Holy Grail of good governance. On the continent itself, the
New Economic Partnership for African Development [NEPAD] (2001) and the
revamped African Union (formerly the Organization for African Unity)
offered the prospect that poor leadership (the pathologies of the African
postcolonial state variously described as patrimonialism,
prebendalism, predation, quasi-statehood, the postcolony, and politics of the
belly) were to be taken seriously by an African political class that
purportedly represented a new sort of democratic dispensation unleashed by a
raft of the political transitions during the 1990s.
To see the African crisis, however, as a moral or ethical failure on
the part of the “international community” (not least in its failure to
meet the pledges promised by the Millennium Development Goals of
reducing poverty by half by 2015) is only a partial truth. The real crisis of
Africa is that after twenty-five years of brutal neoliberal reform,
and savage World Bank structural adjustment and IMF stabilization,
African development has failed catastrophically.
William Easterly, former high-ranking World Bank apparatchik, in his
new lacerating demolition of structural adjustment—“a quarter century
of economic failure and political chaos”—boldly states that the entire
unaccountable enterprise of planned reform is “absurd”
(http://www.nyu.edu/fas/institute/dri/Easterly/). It was Africa after
all that was the testing ground for the Hayekian counter-revolution that
swept through development economics in the 1970s. It began with the
publication of Accelerated Development in Sub-Saharan Africa: An Agenda
for Action (known as the “Berg Report”), the first in a series of World
Bank reports that focus on the development problems of sub-Saharan
Africa. This was the first systematic attempt to take the Chicago Boys
experience in post-Allende Chile and impose it on an entire continent. The
ideas of Elliot Berg and his fellow travelers marked the triumph of a
long march by the likes of Peter Bauer, H. G. Johnson, and Deepak Lal
(ably
supported by the monetarist think tanks such as the Institute of
Economic Affairs and the Mont Pelerin Society, and the astonishing rise to
power from the early presence of Leo Strauss and Fredrich Hayek of the
“Chicago School”) through the development institutions like the World
Bank. Long before shock therapy in Eastern Europe or even the debt-driven
“adjustments” in Latin America, it was sub-Saharan Africa that was the
playground for neoliberalism’s assault. According to the United
Nations, twenty-six of thirty-two sub-Saharan states had a “liberal” economic
regime by 1998. Almost all had experienced some sort of structural
adjustment program in the wake of the Berg report.
If the 1980s were Africa’s Lost Decade with collapsing commodity
prices, deteriorating terms of trade, and the first crashing waves of IMF
austerity—then how might one characterize the last fifteen years, in
which the benefits of reform were to be finally felt, but in which life
expectancy across sub-Saharan Africa steadily fell and per capita income
has at best stagnated? And all of this during a period in which net
official overseas development aid fell by 40 percent (from $18.7 to $10
billion).
In Africa, the court of neoliberalism has been concluded, and the
verdict is in. The picture is not pretty. Over the last thirty years there
has been no growth in income for the average African. Life expectancy
is forty-six years. Twenty-three of forty-seven sub-Saharan states have
currently a GDP of less than $3 billion (ExxonMobil’s net profit in
the first quarter of 2006 was $8 billion). By 2005, thirty-eight of the
top fifty-nine priority countries that failed to make headway toward the
Millennium Goals were sub-Saharan states, and according to the Chronic
Poverty Report 2004–05, all sixteen of the most “desperately deprived”
countries are located in sub-Saharan Africa. Over 300 million people
live on less than $2 per day—and this is expected to rise to 400 million
by 2015. One-third of the population of the continent is
undernourished; stunting rates run at almost 40 percent. According to a United
Nations Food and Agriculture Organization assessment in January 2006,
twenty-seven countries are in need of emergency food relief. As I
write, the famine in Somalia is of the order of the catastrophic food
crisis that devastated the region in the mid-1980s; the nightmare in Darfur
has spread to Chad with the prospects of hundreds of thousands of
refugees being pushed and shoved across the greater Chad basin in a way all
too familiar to the central African crisis a decade earlier.
The neoliberal tsunami broke with a dreadful ferocity on African
cities, and the African slum world in particular. Reform—the privatization
of public utilities creating massive corporate profits and a decline in
service provision, the slashing of urban services, the immiseration of
many sectors of the public workforce, the collapse of manufactures and
real wages, and often the disappearance of the middle class—was
remorselessly anti-urban in its effects, as Mike Davis documents in Planet of
Slums (Verso, 2005). As a consequence, African cities confronted the
horrifying realities of an economic contraction of 2–5 percent per year
combined with sustained population growth of up to 10 percent per annum
(Zimbabwe’s urban labor market grew by 300,000 per year in the 1990s
while urban employment grew by just 3 percent of that figure). In Dar es
Salaam public service expenditures per capita fell by 10 percent a
year in the 1980s; in Khartoum adjustment created one million “new
poor”; and urban poverty in Nigeria almost tripled between 1980 and
the mid 1990s. No wonder that 85 percent of urban growth in Nairobi,
Kinshasha, and Nouakchott in the 1980s and 1990s was accommodated in the
slums barracks of sprawling and ungovernable cities. Everyone’s worst
urban nightmare—Lagos—grew from 300,000 to 13 million in over fifty years
and is expected to become part of a vast Gulf of Guinea slum of 60
million poor along a littoral corridor 600 kilometers stretching from Benin
City to Accra by 2020. Black Africa will contain 332 million slum
dwellers by 2015, a figure expected to double every fifteen years. The
pillaging and privatization of the state—whatever its African
“pathologies”—and the African commons is the most extraordinary spectacle of
accumulation by dispossession, all made in the name of foreign assistance. The
involution of the African city, notes Davis, has as its corollary not
an insurgent lumpenproletariat but rather a vast political
universe of Islamism and Pentecostalism. It is this occult world of
invisible powers—whether populist Islam in Kano or witchcraft in
Soweto—that represents the most compelling ideological legacy of neoliberal
utopianism in Africa.
As if to confirm the catastrophism of commentators like Robert
Kaplan, the calamity that is African development ran straight into another:
the HIV/AIDS epidemic. While new epidemiological data suggests that the
prevalence rates and possible demographic and socio-economic impacts
for much of western and northeastern Africa may have been exaggerated
(Guardian, April 21, 2006), the pall that the disease has imposed on some
regions is incontestable. The impact of HIV/AIDS—with an 8 percent
adult prevalence and 28 million infected, Africa accounts for 2.3 million
AIDS deaths per year—has transformed life expectancy in southern and
eastern Africa. Twenty years ago, a male child could reasonably expect to
live to sixty in Botswana; currently it is about thirty. By 2010 there
will be more than 50 million orphans in Africa.
Of course, there are those within the development business for whom
the failure of secular nationalist development is a result not of too
much neoliberalism, but not enough. The complaint here, typically from
those within the free-market establishment, is that adjustment and
stabilization has never really been implemented (a right-wing version of the
left-wing claim that adjustment was asking African ruling classes to
commit political suicide). There is, of course, some truth to this (but
the cry of any failure will always be “we were defeated by not going far
enough”). Despite the radically uneven geographical patterns of
neoliberal governance and rule, the overall tendency has been to increase
social inequality and expose the poor to austerity and marginalization.
And the reality is that in Africa World Bank reforms, and the pressures
imposed by the WTO from the mid 1990s onwards, did have drastic
consequences for trade and investment—the litmus test of neoliberal
development—seen in the widespread dismantling of state marketing
boards and of trade protections. And here the picture is devastating. In
absolute terms African exports grew quite rapidly from 1963–2000, but at
a much slower rate than world trade generally. Africa’s share of world
exports fell from almost 6 percent in 1962 to 2 percent in 2000. In
non-oil products (food and manufactures) growth rates of exports between
1980 and 1998 were miserable. It has been argued that given African
conditions (income, geography, and socioeconomic conditions), the
performance is “average.” Yet it is incontestable that African exports are
characterized overall by a “disintegration from Northern markets” and
“isolation from more dynamic developments in the composition of international
trade” (Peter Gibbon & Stefano Ponte, Trading Down [Temple University
Press, 2005], 44). UNCTAD showed that of the exports from twenty-six
African states, the average concentration on primary exports has
remained basically unchanged (roughly 85 percent) since 1980. In all
categories, sub-Saharan Africa has failed to move up the value-added
chain away from primary commodities.
What is especially striking is that the fear that Africa was largely
marginal to the circuits of capitalist accumulation and global resource
flows during the 1980s and might be marginalized further, in some
respects, proved to be a massive understatement. It is almost shocking to
think that in the 1970s, Africa accounted for 25 percent of FDI to the
third world. By 2000 it had crashed to 3.8 percent (Africa’s share of
world FDI is currently less than 1 percent). Over the period 1981–85, FDI
inflow into Africa was running at $1.7 billion per annum; by 1991–95
it had grown to $3.8 billion. Yet as a percentage of all developing
country FDI inflow, the figure represented a secular decline from 9 percent
to less than 5 percent (all-in-all miniscule compared to South and
East Asia and Latin America). Between 1995 and 2001, FDI inflow amounted
to $7 billion per year but almost two-thirds of the portfolio was
destined for three countries (Angola, Nigeria, and South Africa, in
which oil FDI accounted for 90 percent of all FDI inflow, see figure
3). Half of Africa’s states had effectively none. Two-thirds of FDI was
derived from the same three countries (United Kingdom, Germany, and the
United States) that had dominated FDI supply in 1980. According to the
World Investment Report (2005), FDI into Africa is currently $18
billion; four countries account for 50 percent, and the top ten almost
three-quarters. To put the matter starkly, the vast bulk of private
transnational investment—the hallmark of success for the neoliberal project—was
monopolized by a quartet of mining-energy economies. The remainder of
the continent was essentially insignificant. From the vantage point of
the Year of Africa, investment flows into the continent have been a
grave disappointment.
The African accumulation crisis, and the dynamics of capital and
trade flows, are in practice complex and uneven. In addition to oil (and
the very few cases of manufacturing growth in places like Mauritius which
are little more than national export-processing platforms), the other
source of economic dynamism is the (uneven) emergence of global value
chains. This can be seen especially in relation to high-value
agricultures (fresh fruits and vegetables) in South Africa, flowers in Kenya,
green beans in Senegal. Such forms of contract production, typically
buyer-driven commodity chains in which retailers exert enormous power, have
created islands of agrarian capitalism that contribute to and deepen
patterns of existing inequality across Africa and further the interests
of business elites, which are often not African. The deepening of
commodification in the countryside in tandem with demographic pressures
(caused as much by civil war and displacement as high fertility
regimes) has made land struggles a vivid part of the new landscape of
African development.
It is no surprise that against this backdrop the development
establishment flails around wildly. On the one side stands former World Bank
economist William Easterly for whom all aid (“planning”) has been a total
(and unaccountable) failure. The solution is not to plan at all.
Rather than planners—in his view the IMF/IBRD stenographers are really
Stalinists in neoliberal garb—and the likes of Bono and Tony Blair, we need
to find a raft of “searchers” like microcredit guru Mohammed Yunus. On
the other stands the one-man industry otherwise known as Jeffrey Sachs
who seeks to expand foreign aid—$30 billion a year for Africa—and to
initiate a Global Compact by which “the rich will help save the poor,”
who are as much hampered by poor physical geography as governance
failure.
In reality what is on offer is an even bleaker world of military
neoliberalism. At one pole are enclaves of often militarily fortified
accumulation (of which the oil complex is the paradigmatic case) and the
violent, sometimes chaotic, markets so graphically depicted in the
documentary film Darwin’s Nightmare. At the other pole are the black holes of
recession, withdrawal, and uneven commodification. These complex
trajectories of accumulation are dominated at this moment by the centrality
of extraction and a return to primary commodity production.
Petropolitics and the New African ‘Gulf States’
Currently Africa is the center of a major oil boom, an index of the
centrality of the primary commodities sector as the most important
source of capitalist accumulation on the continent. The continent accounts
for roughly 10 percent of world oil output and 9.3 percent of known
reserves. Though oil fields in Africa are generally smaller and deeper than
the Middle East—and production costs are accordingly 3–4 times
higher—African crude is generally low in sulfur and attractive to U.S.
importers. As a commercial producer of petroleum, Africa arrived, however,
rather late to the hydrocarbon age. Oil production in Africa began in
Egypt in 1910 and only in earnest in Libya and Algeria (under French and
Italian auspices) in the 1930s and 1940s. Now there are twelve major oil
producers in Africa—members of the African Petroleum Producers
Association—dominated, in rank order of output, by Nigeria, Algeria, Libya, and
Angola which collectively account for 85 percent of African
output. All of the major African oil producers are highly
oil-dependent. Among the top six African oil states, petroleum accounts for 75–95
percent of all oil export revenues, 30–40 percent of GDP, and 50–80
percent of all government revenues. Up until the 1970s North Africa
dominated production of oil and gas on the continent, but in the last three
decades it has moved decisively to the Gulf of Guinea encompassing the
rich on and offshore fields stretching from Nigeria to Angola. The
Gulf—constituted by the so-called West African Gulf States—has emerged as the
predominant African supplier to an increasingly tight and volatile
world oil market. The Washington D.C. think tanks and the phalanxes of oil
lobbyists are deeply concerned with Gulf of Guinea security, U.S.
interests, and U.S. engagement there.
Gabon and Equatorial Guinea are the only African oil producers with
high oil per capita (so-called petroleum endowments), comparable to the
oil rich and sparsely populated states such as Kuwait and Qatar. Only
Nigeria ranks within the world’s top fifteen oil producers. Nigeria,
Algeria, and Libya are respectively the world’s eighth, tenth, and twelfth
largest oil exporters. These three states and Gabon are all members of
OPEC.
All African governments have organized their oil sectors through
state oil companies that have some forms of collaborative venture with the
major transnational oil companies (customarily operated through oil
leases and joint memoranda of understanding). In general the international
oil companies operating in Africa have production share arrangements
with state oil companies (Nigeria is the exception which operates
largely through joint ventures). African governments guarantee the companies
a minimum profit according to geological, technological, and investment
criteria. The national company pays royalties for the quantity of
crude produced after deductions are made to cover the costs of operations.
All of these petro-states are marked by the so-called resource curse:
staggering corruption, authoritarian rule, and miserable economic
performance (see Ian Gary & Terry Karl, Bottom of the Barrel, Catholic Relief
Services, 2003). The deadly operations of the alliance between
corporate oil and autocratic oil states have helped force the question
of transparency of oil operations onto the international agenda. Tony
Blair’s Extractive Industries Transparency Initiative, the IMF’s Oil
Diagnostic program, and the Soros Foundation’s Revenue Watch are all
“voluntary” regulatory efforts to provide a veneer of respectability to a
rank and turbulent industry.
Nigeria: The Rise and Fall of an Oil State
Nigeria is the jewel in the African oil crown. Nobody would doubt the
strategic significance of contemporary Nigeria. One of every five
Africans is a Nigerian—the country’s population is currently estimated to
be 137 million—and it is the world’s seventh largest exporter of
petroleum providing the U.S. market with roughly 8 percent of its imports. A
longtime member of OPEC, Nigeria is an archetypical “oil nation.” With
reserves estimated at close to forty billion barrels, oil accounted in
2004 for 80 percent of government revenues, 90 percent of foreign
exchange earnings, 96 percent of export revenues according to the IMF, and
almost half of GDP. Crude oil production runs currently at more than 2.1
million barrels per day valued at more than $20 billion at 2004 prices.
Mostly lifted onshore from about 250 fields dotted across the Niger
Delta, Nigeria’s oil sector now represents a vast domestic industrial
infrastructure: more than three hundred oil fields, 5,284 wells,
7,000 kilometers of pipelines, ten export terminals, 275 flow
stations, ten gas plants, four refineries, and a massive liquefied natural gas
(LNG) project (in Bonny and Brass).
The rise of Nigeria as a strategic player in the world of oil
geopolitics has been dramatic and has occurred largely in the wake of the
civil war that ended in 1970. In the late 1950s petroleum products were
insignificant, amounting to less than 2 percent of total exports. Between
1960 and 1973 oil output exploded from just over 5 million to over 600
million barrels. Government oil-revenues in turn accelerated from 66
million naira in 1970 to over 10 billion in 1980. A multi-billion dollar
oil industry has, however, proved to be a little more than a nightmare
(Nigeria: Want in the Midst of Plenty, Africa Report 113, International
Crisis Group, 2006). To inventory the “achievements” of Nigerian oil
development is a salutary exercise: 85 percent of oil revenues accrue to
1 percent of the population; of $400 billion in revenues, perhaps $100
billion have simply gone “missing” since 1970. The anti-corruption
chief Nuhu Ribadu, claimed that in 2003, 70 percent of the country’s
oil wealth was stolen or wasted; by 2005 it was “only” 40 percent.
Over the period 1965–2004, income per capita fell from $250 to $212;
income inequality increased markedly over the same period. Between 1970 and
2000 in Nigeria, the number of people subsisting on less than one
dollar a day grew from 36 percent to more than 70 percent, from 19 million
to a staggering 90 million. According to the IMF, oil “did not seem to
add to the standard of living” and “could have contributed to a decline
in the standard of living” (Martin & Subramanian, Addressing the
Resource Curse [IMF, 2003], 4). Over the last decade GDP per capita and life
expectancy have both fallen, according to World Bank estimates.
What is on offer in the name of petro-development is the terrifying
and catastrophic failure of secular nationalist development. It is
sometimes hard to gasp the full consequences and depth of such a claim. From
the vantage point of the Niger Delta—but no less from the vast slum
worlds of Kano or Lagos—development and oil wealth is a cruel joke. These
paradoxes and contradictions of oil are nowhere greater than on the
oilfields of the Niger Delta. In the oil rich states of Bayelsa and Delta
there is one doctor for every 150,000 inhabitants. Oil has wrought
only poverty, state violence, and a dying ecosystem. It is no great
surprise that a half century of neglect in the shadow of black gold has made
for a combustible politics. All the while the democratic project
initiated in 1999 appears ever more hollow.
The nightmarish legacy of oil politics must be traced back to the
heady boom days of the 1970s. The boom detonated a huge influx of
petro-dollars and launched an ambitious (and largely autocratic) state-led
modernization program. Central to the operations of the new oil economy was
the emergence of an “oil complex” that overlaps with, but is not
identical to, the “petro-state.” The latter is comprised of several key
institutional elements: (1) a statutory monopoly over mineral exploitation,
(2) a nationalized (state) oil company that operates through joint
ventures with oil majors who are granted territorial concessions (blocs),
(3) the security apparatuses of the state (often working in a
complementary fashion with the private security forces of the companies) who
ensure that costly investments are secured, (4) the oil producing
communities themselves within whose customary jurisdiction the wells are
located, and (5) a political mechanism by which oil revenues are
distributed.
The oil revenue distribution question—whether in a federal system
like Nigeria or in an autocratic monarchy like Saudi Arabia—is an
indispensable part of understanding the combustible politics of imperial oil.
In Nigeria there are four key distribution mechanisms: the federal
account (rents appropriated directly by the federal state); a state
derivation principle (the right of each state to a proportion of the taxes that
its inhabitants are assumed to have contributed to the federal
exchequer); the federation account (or states joint account) which allocates
revenue to the states on the basis of need, population, and other
criteria; and a special grants account (which includes monies designated
directly for the Niger Delta, for example through the notoriously corrupt
Niger Delta Development Commission). Over time the derivation revenues
have fallen (and thereby revenues directly controlled by the oil-rich
Niger Delta states have shriveled) and the states joint account has
grown vastly. In short, there has been a process of radical fiscal
centralism in which the oil-producing states (composed of ethnic
minorities) have lost and the non-oil producing ethnic majorities have gained—by
fair means or foul.
Overlaid upon the Nigerian petro-state is, in turn, a volatile mix of
forces that give shape to the oil complex. First, the geo-strategic
interest in oil means that military and other forces are part of the
local oil complex. Second, local and global civil society enters into the
oil complex either through transnational advocacy groups concerned with
human rights and the transparency of the entire oil sector, or through
local social movements and NGOs fighting over the consequences of the
oil industry and the accountability of the petro-state. Third, the
transnational oil business—the majors, the independents, and the vast
service industry—are actively involved in the process of local development
through community development, corporate social responsibility and
stakeholder inclusion. Fourth, the inevitable struggle over oil wealth—who
controls and owns it, who has rights over it, and how the wealth is to be
deployed and used—inserts a panoply of local political forces
(ethnic militias, paramilitaries, separatist movements, and so on)
into the operations of the oil complex (the conditions in Colombia are an
exemplary case). In some circumstances oil operations are the object of
civil wars. Fifth, multilateral development agencies (the IMF and the
IBRD) and financial corporations like the export credit agencies appear
as key “brokers” in the construction and expansion of the energy
sectors in oil-producing states (and latterly the multilaterals are
pressured to become the enforcers of transparency among governments and oil
companies). And not least, there is the relationship between oil and the
shady world of drugs, illicit wealth (oil theft for example),
mercenaries, and the black economy.
The oil complex is a sort of corporate enclave economy but also a
center of political and economic calculation that can only be understood
through the operation of a set of local, national, and transnational
forces that can be dubbed as “imperial oil.” The struggle for resource
control that has taken center stage over the last decade in Nigeria as the
Niger Delta has become more ungovernable (because the struggle has
assumed a more militant cast) grows precisely from this mix of forces that
constitute the oil complex.
Imperial Oil: The Contradictions of U.S. Oil Security Policy
On this canvas of African oil security and the conspicuous failure of
postwar U.S. petro-policy, recent events in Nigeria—and most
especially in the oil-producing Niger Delta—have necessarily grabbed the
headlines (and the attention of the oil markets). The fragility of Nigeria’s
oil economy was thrown into dramatic relief by the walkout by political
representatives from the oil-producing region from a national meeting
on the distribution of oil revenues; the arrest of a Delta militant and
insurgency leader on treason charges in late 2005; and a major
escalation in violent attacks on oil installations in December 2005 and
January–February 2006 by Ijaw militants that included the taking of hostages
by a largely unknown militant group, the Movement for the Emancipation
of the Niger Delta (MEND). By early 2006, 630,000 barrels per day were
compromised by political instability and attacks. But this turbulence
must itself be placed on a larger historical landscape. Since the
late 1990s, there has been a very substantial escalation of violence
across the delta oil fields, accompanied by major attacks on oil
facilities. Civil violence among and between oil producing communities and the
state security forces is endemic (it is estimated that more than one
thousand people die each year from oil-related violence).
Over the last decade, the Niger Delta has been wracked by
insurrection. An industry analysis prepared for the Nigerian National Petroleum
Company (NNPC) and published in 2003 was entitled Back from the Brink. It
painted a gloomy “risk audit” for Big Oil. A leaked report by Shell in
the same year explicitly stated that their “license to operate” in
Nigeria was in question. And with good reason. The NNPC estimated that
between 1998 and 2003, there were 400 “vandalizations” on company
facilities each year (581 between January and September 2004), and oil losses
amounted to $1 billion annually. The tactics and repertoires deployed
against the companies have been various: demonstrations and blockades
against oil facilities; occupations of flow stations and platforms;
sabotage of pipelines; oil “bunkering,” or theft (from hot-tapping fuel lines
to large-scale appropriation of crude from flow stations); litigation
against the companies; hostage taking; and strikes. A large group
of Ijaw women that occupied the Chevron oil refineries near Warri in
2002, demanding company investments and jobs for indigenes (New York
Times, August 13, 2002), reflected the tip of a vast political iceberg.
Mounting communal violence in the following year resulted in many deaths
and widespread community destruction and dislocation around the Warri
petroleum complex. Seven oil company employees were killed in March
2003, prompting all the major oil companies to withdraw staff, close down
operations, and reduce output by more than 750,000 barrels per day (40
percent of national output).
These events in turn provoked President Obasanjo to dispatch a large
troop deployment to the oil-producing creeks. Ijaw militants,
struggling to get a cut of the illegal oil bunkering trade (some estimates
suggest that this innovative form of oil theft siphons a staggering 15
percent of national production), threatened to destroy eleven captured oil
installations. In April 2004, another wave of violence erupted around
oil installations (at the end of April, Shell lost production of up to
370,000 barrels per day, largely in the western delta), this time amid
the presence of armed insurgencies, specifically two ethnic militias led
by Ateke Tom (the Niger Delta Vigilante) and Alhaji Asari (the Niger
Delta People’s Volunteer Force). Each of these were driven, and partly
funded, by oil monies and highly organized oil theft. Ten years after the
hanging of Ken Saro-Wiwa and the militarization of the Ogoni oilfields
little has changed. Conditions across the oilfields remain the
same, only worse. Security forces still operate with impunity, the
government has failed to protect communities in oil producing areas while
providing security to the oil industry, and the oil companies
themselves bear a share of the responsibility for the appalling misery and the
political instability across the region.
The new violence and instability is something of a watershed however.
Among MEND’s demands were the release of two Ijaw leaders of note, the
Ijaw being the largest and most militant minority group in the
Nigerian Delta. On January 29, 2006, these hostages were released unharmed
although the Ijaw leaders in question remained under arrest in Abuja, the
Nigerian capital. By the first week in February MEND was calling for
the international community to evacuate from the Niger Delta by February
12, or face violent attacks. Two weeks later MEND claimed
responsibility for attacking a federal naval vessel and for the kidnapping of nine
workers employed by the oil servicing company Willbros, apparently in
retaliation for an attack by the Nigerian military on a community in the
western delta. The Nigerian government claimed they had attacked barges
involved in the contraband oil trade. MEND’s stated goal was to cut
Nigerian output by 30 percent. Within the first three months of
2006, $1 billion in oil revenues had been lost; and twenty-nine
Nigerian soldiers had been killed in the uprising and as I write, forty
hostages were taken from an AGIP flow station in Bayelsa State. The
situation across the oil fields is now as fraught as at any time since the end
of the civil war in 1970. By late July 2006 oil production had been cut
by 700,000 barrels per day (see The Swamps of Insurgency: Nigeria’s
Delta Unrest, Africa Report 115, International Crisis Group, 2006).
The current crisis points to the fact that the oil-producing region
in Nigeria now stands at the center of Nigerian politics—for four
reasons. First, the efforts led by a number of Niger Delta states for
“resource control” expanded access to and control over oil and oil revenues.
Second, there was the struggle for self-determination of minority
peoples in the region and the clamor for a sovereign national conference to
rewrite the constitutional basis of the federation itself. Third, there
is a crisis of rule in the region as a number of state and local
governments are rendered helpless by militant youth movements, growing
insecurity, and ugly intra-community, inter-ethnic, and state violence
which—as the recent events point out—can threaten the flow of oil and the
much vaunted energy security of the United States. And not least, there is
the emergence of a so-called South-South Alliance making for a
powerful coalition of small and hitherto politically marginalized oil
producing states (Akwa Ibom, Bayelsa, Cross River, Delta, Ondo, and
Rivers) capable of challenging the ruling ethnic majorities (the Hausa,
the Yoruba, and the Ibo) in the run-up to the 2007 elections.
Not surprisingly the deadly operations of corporate oil, autocratic
petro-states, and the violent potentialities of the oil complex have
forced the question of transparency and accountability of oil operations
onto the international agenda. Tony Blair’s Extractive Industries
Transparency Initiative, the IMF’s oil diagnostics program, and the Soros
Foundation’s Revenue Watch are all (voluntary) efforts to provide a veneer
of respectability to a rank and turbulent industry. But the real
action lies elsewhere. The danger is that the ongoing U.S. militarization of
the region could amplify the presence of mercenaries and
paramilitaries, creating conditions not unlike those in Colombia. In February 2006
Nigeria’s Vice President Atiku Abubakar unsuccessfully requested two
hundred patrol boats and a military package from the United States. In
turn, Nigeria appealed directly to China for military aid, citing that the
United States was slow to support them in this area. The
Financial Times (March 1, 2006) cited the Africa director at the
Washington based Center for Strategic and International Studies, Stephen
Morrison, to the effect that the “Chinese are very competitive players and
we have to come to terms with that. They are going to places that
really do matter.”
The availability of arms to both government and insurgent groups has
“democratized” the access to the means of violence in the struggle for
political power. In the run-up to the 2007 elections the windfall oil
revenues will, as in 1999 and 2003, fund all manner of political
thuggery and the arming of political parties and local militants who will be
expected to deliver votes and intimidate voters. The prospect of U.S.
militarization in the south to protect the oil fields, and in the north
to control Islamic terror through the Pan Sahel Counter Terror
Initiative, is a recipe for massive political violence. Nigeria provides, in
this sense, a microcosm of the new scramble for Africa under military
neoliberalism and the war on terror. It might well be the next Iraq.
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Surah- Ar-Rum 30-22
"And among His signs is the creation of heavens and the earth, and the difference of your languages and colours. verily, in that are indeed signs for men of sound knowledge." Qu'ran
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