Oil, power, headlines and curses

If only they sold the Sunday New York Times in the Manila airport. It really would have made the 20 hours of flights home go faster. (For those of you keeping score, an update: the Pacific? Still really big.) There were two articles in the Week in Review – the only section I read every word of every week – that caught my eye as I read them on the T today. (I’ll post about them in separate entries, one today, one tomorrow.)

One is on everyone’s favorite hot topic – $75 a barrel oil. Jad Mouawad notes that the tightness of oil supply gives political influence to nations that are otherwise highly marginal. The graphic associated with the piece mentions five African nations, four of which we basically never hear about: Chad, Equatorial Guinea, Mauritania and the Congo Republic. I’m embarrased to admit that I had no idea that Republic of Congo (the little one, not the one that used to be Zaire) exports more oil than Chad. The risks associated with the oil supply from Congo? “Unchecked corruption.”

Actually, Republic of Congo does pretty well, according to the 2005 TI corruption perception index – 2.3, which ties it for 130th with Venezuela, as well as other well-governed states like Cambodia and Burundi. (For the sarcasm-impaired, that was a joke. 130th = really, really bad.) But Sudan, Angola, Nigeria, Equatorial Guinea and Chad all score worse. (Chad scores dead last, tied with Bangladesh.) Mauritania isn’t listed on the index, but it’s not exactly Iceland as far as corruption is concerned.

It’s possible to have natural resources and not have rampant corruption – Botswana is blessed with an abundance of diamonds and outranks many European nations on the TI index – but the nations who pull it off are the exception, not the rule. It’s a reminder that mineral wealth is a curse as much as a blessing – there are very, very few nations that go the path of Norway, rather than the path of Nigeria.

But before we bash Congo for “unchecked corruption”, it’s worth asking the question, “Just who are the folks paying these bribes?” Someone’s buying that Congolese oil and shipping it to the US.. and they’re probably paying the government both under and over the table to do so. Is Congo so corrupt because it’s yet another African basket case… or is Congo a corrupt African basket case because multinational oil companies are willing to make under the table payments to do business there. (If you chose “C – both”, award yourself two points.) (To fend off any libel and defamation suits – I have no information that suggests that any of the oil companies linked above have knowingly paid bribes while doing business in Congo. I mention them because they’re some of the companies with oil interests in the nation. )

Revealing these sorts of payments is the purpose of the Publish What You Pay initative. Founded by a core team of anti-corruption NGOs, including Transparency International and Global Witness, the initiative is doing a great deal of work behind the scenes to ensure that global energy dealings are more transparent, making it harder for these deals to take place under the table. (Disclosure: PWYP is funded in no small part by Open Society Institute, who I consult for.)

Congo-Brazzaville was briefly held up as an international model of transparency in oil accounting, praised by the International Monetary Fund for their public disclosures. That was before audits by Publish What You Pay and others revealed roughly $300 million in oil profits that somehow failed to make it into the government’s coffers – that’s an enormous amount of money, especially in the context of Congo’s official oil revenues of $974 million.

Needless to say, when you reveal corruption on this scale, your life and liberty are in danger. You’ll be shocked to hear that two of the leaders of PWYP in Congo – Brice Mackosso and Christian Mounzeo – were detained earlier this month on (trumped up) charges of misappropriating NGO funds. (There’s been basically no coverage of these ongoing detentions in media outside Africa, with the notable exception of the Boston Globe, which ran an excellent series on oil and corruption in Africa last year.)

$75 a barrel oil means more money lining the pockets of corrupt politicians and oilmen. It also means more guns for Sudan, Chad and their proxies. But it also means overnight debt repayment for Nigeria under a new deal with the Paris Club of creditors… which is either good economic news for the country, or a scandal, depending on who you ask.

Personally, I think anti-debt campaigners are missing the point. Yes, there’s something pretty absurd about Nigeria making a payment to wealthy nations that dwarfs the annual aid provided by the G-8 to the whole continent. But Nigeria’s about to become a very, very wealthy nation if oil stays north of $60 a barrel. The question isn’t whether Nigeria pays its debts or educates its youth with this particular pot of money – the question is what it does with oil profits going forwards. The prognosis – as reflected by the pitiful state of development in the Niger Delta – isn’t good. If the wealth generated by oil in states like Nigeria and Angola isn’t well spent, it’s nearly as great a tragedy as if it simply lines the pockets of dictators and cronies.

OPEC nations changed the international political landscape in the 1970s by demonstrating they could cause the US a great deal of pain by turning off their pumps. Middle East oil politics displaced Cold War domino theories as the central narrative of geopolitics. Will the new political power nations like Chad, Congo and Nigeria exercise in a world of $75 oil put them on the front page for a change? And will this because they’re paying their debts and educating their populations? Or because this wealth is ripping the nations apart as the world watches?

Damned if I know. But it’s certainly been novel to see “N’Djamena” in headlines, and it would be roughly as novel to see “Brazzaville” sometime soon as well.