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Wednesday, November 07, 2007

Oil curses Africa, what about Guyana?

Business Books: Striking oil is a curse on Africans

Thu May 10, 2007 8:00am EDT

WASHINGTON, May 10 (Reuters) - The United States and other developed countries are increasingly turning to West Africa in their scramble for oil, but for Africa the oil boom is like a disease that creates poverty, conflict and corruption.

That's the diagnosis of Nicholas Shaxson, an Africa expert whose book "Poisoned Wells - The Dirty Politics of African Oil" (Palgrave Macmillan, $26.95) tours some of Africa's poorest and most violent hot-spots.

From simmering conflicts in the Niger Delta to civil war in Angola to rampant corruption in Gabon and Equatorial Guinea, Shaxson contends that these countries are worse off than they were before they struck it rich.

Traveling the region for 10 years as a freelance oil reporter, including for Reuters, Shaxson gathered a cast of characters for his book, including Nigerian musician Fela Kuti, who rages against the oil-bloated bureaucracy as he cavorts with a harem of admirers.

There are cameos by now-disgraced Washington lobbyist Jack Abramoff and former U.S. President Jimmy Carter's son Chip, who blesses a rigged election in Equatorial Guinea and promptly goes fishing with the winner -- President Teodoro Obiang Nguema Mbasogo.

These characters put a compelling face on the well-documented "oil curse," in which some countries in Africa draw in more money from oil than they do from foreign aid but tend to get poorer and more violent over time, while their rulers jet off on shopping excursions to Paris.


Given the current state of geopolitics, the effect of the curse is unlikely to lessen, Shaxson says, pointing out that by 2008 ExxonMobil Corp. (XOM.N: Quote, Profile, Research) will produce more oil from Angola than it does from U.S. soil.

Shaxson's prescriptions include distributing oil wealth directly to the people, as has happened in Alaska, and then encouraging governments to tax local businesses to raise money for schools, bridges and other development needs.

That solution is "extremely impractical," argues Ian Gary, an Africa oil expert at Oxfam, a development group, who notes that Africa's governments are too hollowed out by corruption to run such a complicated distribution mechanism.

Another prescription is for world leaders to unite to stop international banks from helping African rulers set up tax havens to sock away "mischief money" out of public reach.

Shaxson peoples his story with mercenaries like Simon Mann, the creator of private military company Executive Outcomes, and Jacques Foccart, the spymaster who laid the foundation for oil company Elf Aquitaine to be an African policy tool for the French government.

Gabon President Omar Bongo, in office since 1967, gets a chapter to himself in which Shaxson makes the case that for decades oil money was a corrupting influence on French politics.

Opus Dei and the Freemasons play roles, along with Air France stewardesses and land-mine victims.

But perhaps the most poignant scene comes in Equatorial Guinea, where a taxi driver implores him, "You, journalist! You must help us! You must tell the world what is happening in my country!" Shaxson sets out to do just that.

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