Extractive Economies and Conflicts in the Global South

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EXTRACTIVE ECONOMIES AND CONFLICTS IN THE GLOBAL SOUTH

Extractive Economies and Conflicts in the Global South is dedicated to Mrs Elnora Ferguson for her selfless support to the work of the Africa Centre, University of Bradford, UK

Extractive Economies and Conflicts in the Global South Multi-Regional Perspectives on Rentier Politics

Edited by

KENNETH OMEJE University of Bradford, UK

© Kenneth Omeje 2008 All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise without the prior permission of the publisher. Kenneth Omeje has asserted his right under the Copyright, Designs and Patents Act, 1988, to be identified as the editor of this work. Published by Ashgate Publishing Limited Gower House Croft Road Aldershot Hampshire GU11 3HR England

Ashgate Publishing Company Suite 420 101 Cherry Street Burlington, VT 05401-4405 USA

Ashgate website: http://www.ashgate.com British Library Cataloguing in Publication Data Extractive economies and conflicts in the global South: Multi-regional perspectives on rentier politics 1. Investments, Foreign - Africa, Sub-Saharan 2. Political violence - Africa, Sub-Saharan 3. Mineral industries Africa, Sub-Saharan - Finance 4. Revenue - Africa, Sub-Saharan 5. Investments, Foreign - Developing countries 6. Political violence - Developing countries 7. Mineral industries - Developing countries - Finance 8. Revenue Developing countries 9. Africa, Sub-Saharan - Foreign economic relations 10. Developing countries - Foreign economic relations 1. Omeje, Kenneth C. 332.6'73'091724 Library of Congress Cataloging-in-Publication Data Omeje, Kenneth C. Extractive economies and conflicts in the global South: Multi-regional perspectives on rentier politics / by Kenneth Omeje. p. cm. Includes bibliographical references and index. ISNB: 978-0-7546-7075-9 1. Petroleum industry and trade--Developing countries--Case studies. 2. Mineral industries--Developing countries--Case studies. 3. Social conflict--Developing countries-Case studies. 4. Wealth--Developing countries--Case studies. I. Title. HD9578.D44044 2008 303.609172'4--dc22 2007031233 ISBN: 978-0-7546-7075-9 Printed and bound in Great Britain by MPG Books Ltd, Bodmin, Cornwall.

Contents List of Figures and Tables Acknowledgements List of Abbreviations About the Authors

1

2

3

4

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Extractive Economies and Conflicts in the Global South: Re-Engaging Rentier Theory and Politics Kenneth Omeje

vii ix xi xv

1

Rentier Politics, Extractive Economies and Conflict in the Global South: Emerging Ramifications and Theoretical Exploration Usman A. Tar

27

Anatomy of an Oil Insurgency: Violence and Militants in the Niger Delta, Nigeria Michael Watts

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Nationalization versus Indigenization of the Rentier Space: Oil and Conflicts in Nigeria Ukoha Ukiwo

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Greed or Grievance?: Diamonds, Rent-Seeking and the Civil War in Sierra Leone (1991–2002) John M. Kabia

93

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Politics and Oil in Sudan Peter Woodward

7

São Tomé and Príncipe: The Troubles of Oil in an Aid-Dependent Micro-State Gerhard Seibert

119

Rentier Politics and Low Intensity Conflicts in the DRC: The Case of Kasai and Katanga Provinces Germain Tshibambe Ngoie and Kenneth Omeje

135

Thugs’ Paradise, Agencies’ Guinea Pig and the Natural Resource Intrigue: The Civil War in Liberia T. Debey Sayndee

149

8

9

107

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Extractive Economies and Conflicts in the Global South

10 Resource Exploitation, Repression and Resistance in the SaharaSahel: The Rise of the Rentier State in Algeria, Chad and Niger Jeremy Keenan 11 Oil Sovereignties in the Mexican Gulf and Nigerian Niger Delta Anna Zalik

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12 Extractive Resources and the Rentier Space: A South American Perspective Julia Buxton

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13 Rentier States and War-Making: The United Arab Emirates and Iraq in Comparative Perspective Rolf Schwarz

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14 Rethinking the Rentier Syndrome: Oil and Resource Conflict in the Persian Gulf Dauda Abubakar

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Index

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List of Figures and Tables Figures 1.1 2.1 2.2 2.3 3.1 3.2 3.3 4.1 12.1 12.2

The rentier space in international political economy A framework for multifactor approach A framework for multicontext approach A framework for integrated approach Average annual crude oil production deferred in Nigeria 1999–2006 2006 oil disruptions in the Niger Delta Oil theft in Nigeria (2003–2006) Derivation and revenue allocation, 1946–1999 Venezuela’s Human Development Index Poverty levels in Venezuela

12 31 32 33 53 56 68 81 209 209

Tables 2.1 2.2 13.1 14.1 14.2 14.3

Underlying causes of internal conflict Socio-economic and political profile of resource rich countries in sub-Saharan Africa Oil revenues 1955–1977 as percentage of total revenues Oil production and reserves in the Persian Gulf, 1999 Global imports of Persian Gulf Oil, 1997 and 2020 (in million of barrels per day) US arms transfer agreements with selected Persian Gulf states, 1990–1997 (in millions of US dollars)

29 42 216 237 238 241

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Acknowledgements I am pleased to acknowledge the help I have received from different quarters in the course of this book project. My first debt of gratitude goes to my friend Dr Usman Tar with whom I repeatedly debated the concept paper of this book project when the idea was first conceived. Usman’s theoretical insights, especially on the concept of the rentier space were penetrating. I say a big thank you to Usman for his critical comments on all my draft manuscripts, and for supporting me in responding to comments from external reviewers. To all the contributors, reviewers and proofreaders in Ashgate, I say thanks for your critical insights, commitment and professionalism. I am grateful to my colleagues in the Africa Centre and the University of Bradford for their encouragement and goodwill – Dr David Francis, Prof Nana Poku, Professor Paul Rogers, Dr Joao Porto, Caroline Nwagwu, Grace Maina and Fatoumata Tambajang – to name a few. I am particularly thankful to Grace Maina for using her vast computer skills to facilitate the project. I am indebted to my loving wife, Ngozi, and daughters, Rejoicing and Chibia, for their unflinching support and understanding. To my parents, in-laws, close relatives and Christian brethren in Shipley, Bradford and elsewhere, I convey sincere thanks for your prayers and solidarity. Kenneth Omeje June 2007

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List of Abbreviations ADMS ANP ARAMCO ATROMPCON AU CAST CCPP CEO CEPE CFPA CFS CNP CNPC COSEDECS CPA CPEs CREPS CRS-BIC CSIS CTM CTNSC DRC DUP ECLA ECOMOG ECOWAS EEZ EFCC EITI EO ERHC EUCOM FIS GDP GNPOC GNU GWOT HDI

Alluvial Diamond Mining Scheme National Oil Agency (abbrev. in Portuguese) Arabian American Oil Company Association of Traditional Rulers of Oil Mineral African Union Consolidated African Selection Trust Chad Cameroon Petroleum Development and Pipeline Centre Chief Executive Officer Corporación Estatal Petrolera Ecuatoriana la Compagnie Française des Pétroles – Algérie Congo Free State’ National Petroleum Council (abbrev. in Portuguese) China National Petroleum Company Consolidated Council on Social and Economic Comprehensive Peace Agreement Complex Political Emergencies la Compagnie de Recherche et d’Exploitation Catholic Relief Services and the Bank Information Centre for Strategic and International Studies Confederación de Trabajadores Mexicanos Comité Technique Nationale de Suivi et de Contrôle Development of Coastal States Democratic Republic of Congo Democratic Unionist Party Economic Commission for Latin America ECOWAS Ceasefire Monitoring Group Economic Community of West African States Exclusive Economic Zone Economic and Financial Crime Commission Extractive Industry Transparency Initiative Executive Outcomes Environmental Remediation Holding Corporation European Command Islamic Salvation Front (abbrev. In Arabic) Gross Domestic Products Greater Nile Petroleum Operating Company Government of National Unity Global War On Terror’ Human Development Index

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IAG IBRD IFIs IGAD IHA INC INPFL IOCs IPE IYC JDA JDZ JDZ JEM JMC JMTF LCAs LFAs LGAs LICs LICs LNG MDGs MENA MEND NCP NDDC NDMC NDPVF NDV NNPC NOCs NPFL NPRC NYSC OCRS OMPADEC OPEC OTC PDTF PDVSA PEMEX) PGS PMMC

Extractive Economies and Conflicts in the Global South

International Advisory Group International Bank for Reconstruction and Development International Financial Institutions Inter-Governmental Authority for Development Integrated Holistic Approach Ijaw National Congress Industry (abbrev. In Spanish) Independent National Patriotic Front of Liberia International Oil Companies International Political Economy Ijaw Youth Congress Joint Development Authority Joint Development Zone Joint Development Zone Justice and Equality Movement Joint Ministerial Council Joint Military Task Force Limited Context Approaches Limited Factor Approaches Local Government Areas Low Intensity Conflicts Low Intensity Conflicts Liquefied Natural Gas Millennium Development Goals Middle East and North African Movement for the Emancipation of the Niger Delta National Congress Party Niger Delta Development Commission National Diamond Mining Company Niger Delta People’s Volunteer Force Niger Delta Vigilante Nigerian National Petroleum Company National Oil Companies National Patriotic Front of Liberia National Political Reform Conference National Youth Service Corps Organisation Commune des Régions Sahariennes Oil Mineral Producing Area Development Commission Organization of Petroleum Exporting States Oriental Timber Company Petroleum Development Trust Fund Petróleos de Venezuela Petróleos Mexicanos Pétrolières au Sahara Petroleum Geo-Services Precious Metal Mining Company

List of Abbreviations

PTF RSM RUF SADC SAP SLA SLST SPC SPLA/M SSA SSS STPRM TNCs TNOCs UAE ULIMO UMHK UNAMSIL UNDP UNMIL UNTCIP UPU YPFB

Petroleum Trust Fund Rentier State Model Revolutionary United Front Southern African Development Community Structural Adjustment Programme Sierra Leone Army Sierra Leone Selection Trust Sudanese Petroleum Corporation Sudanese People’s Liberation Army/Movement Sub-Saharan Africa State Security Services Federal Petroleum Workers Union (abbrev. In Spanish) Trans-National Companies Trans-National Oil Corporations United Arab Emirate United Liberation Movement of Liberia for Democracy Union Minière du Katanga United Nations Mission in Sierra Leone United Nations Development Programme United Nations Mission in Liberia Union of Professional Workers in the Petroleum Urhobo Progress Union Yacimientos Petroliferos Fiscales Bolivianos

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About the Authors Dauda Abubakar did his PhD in Political Science at University of WisconsinMadison. He taught at the University of Maiduguri, Nigeria and was the Chair, Department of Political Science from 1998–2002. In 2001, Dr Abubakar participated in the Ford Foundation sponsored South-South Scholar’s Exchange Program as a Research Fellow at the Centre for the Study of Developing Societies, New Delhi, India. He is currently a Visiting Assistant Professor in the Department of Political Science, Ohio University, where he teaches Comparative Politics and International Relations. He has published several chapters in edited books including A. Agbaje and L. Diamond (eds), Nigeria’s Struggle for Democracy and Good Governance (Ibadan: University of Ibadan Press, 2004) and contributed articles in refereed Journals. He is currently working on a book manuscript titled Oil, State and Democracy in Nigeria. His research agenda focuses on the interface of identity formation and resource conflicts in deeply divided societies and its implications for social cohesion, democratic consolidation, international peace and sustainable development. Julia Buxton received an MSc and PhD in Government from the London School of Economics. She is currently Senior Research Fellow in the Centre for International Cooperation and Security in the Department of Peace Studies, University of Bradford. A specialist on South America, democratization and commodities she has published (with N. Phillips) Country Case Studies in Latin American Political Economy and Developments in Latin American Political Economy (Manchester), The Failure of Political Reform in Venezuela (Ashgate), the Political Economy of Narcotic Drugs (Zed) and a special edition of the journal Democratization ‘Securing Democracy in Complex Environments’ (Frank Cass). John M. Kabia holds a PhD in Peace Studies from the University of Bradford and was until recently an Associate Research Fellow at the Africa Centre for Peace and Conflict Studies, University of Bradford. Jeremy Keenan is a social anthropologist specializing in the anthropology and political economy of conflicts associated with extractive industries in Africa, as well as the current ‘War on Terror’. Currently a Teaching Fellow in Anthropology at Bristol University and Visiting Professor at Exeter University’s IAIS, he has extensive experience of Africa, especially the Sahara and Sahel. His publications include several books on the Sahara, notably The Tuareg: People of Ahaggar, Sahara Man: Travelling with the Tuareg, The Lesser Gods of the Sahara and The Sahara: Past, Present and Future. Since 2001 he has worked almost exclusively on the nature and impacts of the ‘War on Terror’ in Africa. His latest book, Alice in the Sahara: Moving Mirrors and the USA War on Terror in the Sahara (forthcoming, Pluto), details both the way in which the US has fabricated the ‘War on Terror’ across the Sahara and Sahel and its impacts on local peoples.

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Germain Tshibambe Ngoie is Professor of Foreign Policy Analysis and International Relations theory and Head of the Department of International Relation Studies, University of Lubumbashi. He attended the same University where he obtained a first degree in English Literature and a Doctorate degree in International Relations. In 2002 he was awarded the Social Science Research Council of New York research fellowship and in 2005 he was Fulbright fellow at the Centre of International and Strategic Studies in the University of Delaware, United States. He has published six books and many scholarly articles on his core research interests, which include peace studies in the African context; migration, ethnicity and conflicts in Africa; regional integration, foreign policy, and state failure in the DRC and Africa. He is the author of La République Démocratique du Congo dans les relations interafricaines: La trajectoire de l’impossible quête de puissance (2005). Kenneth Omeje is Lecturer in African Peace amd Conflict Studies at the University of Bradford. He holds a Master’s degree in Peace and Conflict Studies from the European Peace University in Burg/Schlaining, Austria and a PhD in Peace Studies from the University of Bradford. He was previously a Research Fellow in Development Studies and Lecturer in Political Science at the University of Nigeria, Nsukka, and has held visiting research fellowship positions at the Centre for African Studies, University of Florida, Gainesville, USA (1992); Institute of Higher Education, Comprehensive University of Kassel, Germany (2000), the Law Department, Keele University, UK (2000) and Department of International Politics, University of Wales, Aberystwyth (2001). Kenneth has published in many peer-reviewed journals. He is the author of High Stakes and Stakeholders: Oil Conflict and Security in Nigeria (Ashgate, 2006) and has also recently edited StateSociety Relations in Nigeria: Democratic Consolidation, Conflicts and Reforms (London: Adonis and Abbey, 2007). T. Debey Sayndee is the Director of the Kofi Annan Institute of Conflict Transformation at the University of Liberia in Monrovia. Rolf Schwarz is Research Associate at the Programme for Strategic and International Security Studies (PSIS) in Geneva. He received his PhD from the Graduate Institute of International Studies (HEI) in Geneva. His academic interests include theories of the state, security studies and Middle Eastern studies. He has engaged in research in the areas of state failure, state reconstruction, and human rights promotion. With Oliver Jütersonke, he has recently edited a special section on post-conflict peacebuilding (Security Dialogue, 2005), which assembled leading scholars in the field of state-building. He is the author of ‘The Paradox of Sovereignty, Regime Type and Human Rights Compliance’, International Journal of Human Rights, 2004 (email: [email protected]). Gerhard Seibert earned his PhD in social sciences from Leiden University in the Netherlands (1999). He is a researcher at the Instituto de Investigação Científi ca Tropical (IICT) in Lisbon, Portugal. He has published extensively on various topics related to São Tomé and Príncipe. In addition, he has done research on

About the Authors

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African Initiated Churches (AIC) in Mozambique. Currently, he is working on a comparative analysis of the postcolonial development of Cape Verde and São Tomé and Príncipe. He is the author of Comrades, Clients and Cousins: Colonialism, Socialism and Democratization in São Tomé and Príncipe (Leiden, The Netherlands: Brill Academic Publishers, 2006). Usman A. Tar received a PhD in Peace Studies from the Department of Peace Studies, University of Bradford, and MSc in International Relations from the School of Graduate Studies, University of Maiduguri, Nigeria. He holds a Lectureship position in Politics at the University of Maiduguri but presently on leave of absence. Until recently, he was an Associate Research Fellow at the Africa Centre for Peace and Conflict Studies, University of Bradford. He sits in the Editorial Boards of the Review of African Political Economy (Sheffield); Information and Democracy, Society and Justice (London) and has previously served as contributing editor to Peace, Conflict and Development (Bradford). He is the author of The Politics Democratic Expansion: The State and Civil Society in Nigeria (London: I.B. Tauris, 2008). Ukoha Ukiwo is Research Fellow at the Centre for Advanced Social Science (CASS), Port Harcourt, Nigeria. He was CRISE Scholar (2003–2006) at St Cross College, University of Oxford where he earned his DPhil in Development Studies. He holds a Master of Science degree in Political Theory from University of Port Harcourt. Dr Ukiwo’s articles on democratization, ethnicity, social movements, vigilantes and African development have been published in reputable journals, including the Journal of Modern African Studies, International Journal of Educational Development, Democracy and Development: A Journal of West African Affairs, Polis and Oxford Development Studies. Michael Watts is Class of ’63 Professor of Geography and Development Studies, and Director of the African Studies Centre at the University of California, Berkeley where he has taught for 30 years. He has a long-standing interest in the political economy of Africa and is currently writing a book on the history of oil in Nigeria. Peter Woodward is Professor of Politics at the University of Reading. He formerly taught at the University of Khartoum, and has been a Visiting Lecturer at the University of Natal and the American University of Cairo. He is the author and editor of a number of books on north-east Africa, most recently US Foreign Policy and the Horn of Africa (Ashgate, 2006). He was editor of African Affairs, the Journal of the Royal African Society from 1986 to 1997, and has edited the British Documents on Foreign Affairs: Africa (University Press of America, 1994). Anna Zalik is Assistant Professor in Environmental Studies at York University in Toronto, Canada and a Ciriacy Wantrup Fellow in Natural Resource Studies at the University of California at Berkeley. Her ongoing research concerns social welfare interventions in oil producing sites of the Nigerian Niger Delta and the Mexican Gulf.

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Chapter 1

Extractive Economies and Conflicts in the Global South: Re-Engaging Rentier Theory and Politics Kenneth Omeje

Contextualization and Historicity This book primarily explores the anatomy of rentier politics in extractive economies and how the phenomenon relates to conflict processes – conflict formation, aggravation, prosecution, and escalation, as well as opportunities for resolution or transformation – in the global South. The global South comprises the post-colonial and predominantly poor countries of Africa, CaribbeanPacific, Latin America and Asia – countries that despite their abundant natural resource endowments are associated with the greatest political and developmental setbacks and challenges in modern history: dictatorships and instability, weak institutional structures, corruption and misgovernance, human rights deficits, hunger and starvation, environmental degradation, refugeeism and forced migration, widespread disease including HIV/AIDS pandemic, as well as high and low intensity conflicts. It is noteworthy that the regions described in this volume as the global South is often depicted with such others terms as Third World, transitional societies, developing countries, less developed countries, underdeveloped countries, and so forth. Some of these terms, in particular, ‘Third World’ and ‘underdeveloped countries’, have a marked derogatory or pejorative slant. The concept of global South is often used in contradistinction with the global North or developed and industrialized countries, which is not strictly a geographical category but a political economy characterization. Paradoxically, many extractive economies of the global South are amongst the world’s poorest and low-income countries, perennially beset with significant challenges in meeting their development objectives, including the United Nations General Assembly’s Millennium Development Goals (MDGs) and the Human Development Index (HDI). A number of recent studies have analyzed the paradox of poverty and wars amidst bountiful natural resource endowment– ‘the resource curse’ – that has blighted many developing countries (see Auty, 1993). Different theories, with varied explanatory powers and contextual relevance, have also tried

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Extractive Economies and Conflicts in the Global South

to explain the paradox and analyze the key drivers of conflict (see, for example, Terry, 1997; Collier and Hoefller, 2000). Some influential structuralist discourses, such as the neo-Marxist dependency mode,1 environmental scarcity theory,2 and greed versus grievance theory,3 have all tended to establish some degree of positive correlation between the structure of extractive economies dependent on primary commodity export, on the one hand, and patrimonial corruption, intergroup struggles for resources and dysfunctional conflicts, on the other. Another dimension of conflict amongst extractive economies is the conflict associated with the consequences of natural resource extraction for human livelihood, human settlement and the sustainability of the planetary ecosystem. Ecological conflict, as it is often branded does not, however, stand in isolation but is intrinsically related to structural conflict of groups and factional struggle for resources, including the mobilization of state power by privileged parties to advance the struggle. An apparent gap in most studies of note is a transhistorical multi-regional anatomy of rentier politics in extractive economies that rigorously explores the accumulation devices and tendencies of key stakeholders in their interplay with the structures of domestic and international political economy. It is this largely unexplored or overlooked aspect of politics in extractive economies that seems to have the most decisive implications for dysfunctional conflict (or lack of it) in different countries and regions of the global South. Extractive economies are ‘terminal economies’ dependent on non-renewable and the seasonally renewing but exhaustible bounty of the planet’s biosystems (see Berry, 1999). The globalization of production and trade in the late nineteenth century in the aftermath of the industrial revolution in Western Europe was the key factor in the emergence of dependent extractive economies in the global South. A great deal of historical studies exist on how European colonial rule and imperial governance created outposts of dependencies in the global South for the primary purpose of exploiting economic resources (mostly minerals and agricultural produce) as a means to provide the crucial raw materials necessary to advance capitalist production and industrialization in the metropolitan West. To consign a greater part of the global South to dependencies for extraction of vital natural resources during colonial rule, Western imperial powers supplanted the autonomy and sovereignty of the peoples, communities and states they colonized and instituted a regime of impunity conducive to unaccountable exploitation and primitive accumulation. Forced labour, compulsory cash crop production and delegation of sovereign power to transnational trading companies and individuals were all part of the regime of impunity widespread in the colonies. The colonizers equipped and supported many transnational companies with commercial and mining privileges and with the sovereign rights allowing them to raise taxes and maintain an armed force (Mbembe, 2001). Most of the colonial trading and mining companies recruited and maintained salaried armies for many years. The emergence of transnational business corporations that worked in tandem with the colonial state, oftentimes preceding the state as an agency of imperial governance, but at other times, backstopped and fronted by the state, was a crucial element in the historical transition of many economies of the global South from relatively self-sufficient ‘organic economies’ (Berry, 1999) to extractive economies.

Re-Engaging Rentier Theory and Politics

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Europe’s commercial interests in extractive resources from externally subdued territories predated formal colonial rule by between 150 to 300 years in various regions of the global South. The pre-colonial phase of European exploitation of the global South comprised the extraction of natural resources like gold, ivory, tobacco, sugar, salt and pepper; and the exportation of able-bodied men, women and children (mostly from Africa) as slaves to the Americas and Europe. It is a well established historical fact that the wealth and capital accumulated by European merchants and institutions through precolonial and colonial exploitation of the global South accelerated technological innovation and development in the global North, and by converse, dialectically produced and spread underdevelopment in the South (cf. Eze, 1997, p. 5; Ankie, 1997). Sub-Saharan Africa was evidently the worst hit with respect to underdevelopment because of the unprecedented scale and devastating consequences of trans-Atlantic slave trade (Rodney, 1972). Two significant features of the regime of impunity in the colonial era carried forward to the post-colonial period as features that contributed to fundamentally shaping the political economy of extraction were the preponderant corporatization of public law and the instrumental value of lawlessness at the top echelon of the state. In virtually all the colonial states, a montage of imperial edicts and laws informed by the corporate interests of the transnational mining and trading companies were systematically promulgated and ruthlessly enforced. These colonial laws, for instance, conceded on a platter a monopoly of exploration and mining rights over specific mineral resources in a colonial territory (e.g. gold, diamond, coal, oil, iron ore, bauxite, copper, etc.) to some privileged companies, mostly those founded or owned by powerful imperial families and networks of the colonizing states. Additional laws that, among other benefits, guaranteed unhindered access to land through compulsory expropriation, conscription of cheap labour, docility of exploited labour and generous tax incentives were put in place in various colonies to support the operation of the early transnational corporations. The full paraphernalia of the colonial state machinery was mobilized to extensively serve the interests of leading transnational companies. In fact, during the early stages of colonialism, there were convergence of interest and modus operandi between the lead transnational companies and the colonial state in many colonies of the global South: in other words, the transnational corporation was the state and the state was a mercantile company chartered by the metropolitan government. Some examples of the lead transnational companies more or less synonymous with the state in early colonial history include the Royal Niger Company and the Royal Dutch/Shell Group in Nigeria, the British East Indian Company in India, the Dutch East Indian Company in East Asia and the Indian Ocean Islands, the Companhia de Moçambique in the Portuguese colony of Mozambique, British South African Company in Northern and Southern Rhodesia (present day Zambia and Zimbabwe), French West India Company and Company of the American Islands in the French colonies in the West Indies and the Americas, British North Borneo Company in Malaysia, and the German East Africa Company in the pre-World War I German colonies of Tanganyika, Rwanda and Burundi.

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It is imperative to note that the preponderant corporatization of public law to serve the interest of capitalist accumulation by big businesses and mercantile companies at the expense of the underprivileged social groups and classes in society was not originated in the Western colonies of the global South. It was a phenomenon that already existed in varied proportions within most metropolitan states in the aftermath of the capitalist revolution in Europe. However, in the case of Europe, the phenomenon was devoid of the grotesque conflation of corporate power and state power. Colonialism created the necessary opportunity to drive this mercantilist tendency to its most pernicious conclusion. Regarding the instrumental value of lawlessness at the top echelon of the state, it is noteworthy that colonial transnational companies acting independently as agents of the sovereign or sometimes in collusion with local colonial officers could at will usurp and exercise state law for corporate or personal aggrandizement. Colonialism was in fact characterized by a profusion of obnoxious laws and gross abuse of law by colonial officials and agencies, including the big mining and trading companies. The ‘self-serving’ tendencies in rule making and rule application, coupled with the apparent confusion between public and private spheres provided colonial officials and their corporate collaborators a vital opportunity for accumulation of spoils. From fiscal stewardship, legal justice and human rights perspectives, colonial agencies presided over a regime of lawlessness, hypocrisy and unaccountable rule. The tendency to usurp the powers of the state for ‘prebendal’ purposes, Mbembe (2001) observed, was miniaturized and ubiquitous; it tended to occur in various guises and everywhere. According to Mbembe, both the colonizers and their local aides (catechists, interpreters, court clerks, office clerks, uniformed guards, butlers, etc.) were culprits of this phenomenon. The regime of impunity widespread in the colonies was a departure from the common law, individual rights and principles of legal justice that were already emerging in the metropole (Mbembe, 2001). The miniaturization of impunity and abuse of public office for prebendal gain resonates with the patrimonial tradition of politics in many pre-colonial societies in which social relations is essentially patron-clientelistic with its characteristic blurring of the modernist distinction between the public and private, the secular and sacred (see Omeje, 2006; Joseph, 1987, 1996). Both prebendal4 and (neo)patrimonial patterns of accumulation remain rife in many post-colonial states given their roots in traditional social structures and, more significantly, their institutionalization as acceptable modes of accumulation under the colonial state structures. It is the foregoing political economy of extraction, with its anomalies of unaccountable political superstructure, perverted political culture and a strategic corporate mining sector, that has vestiges of state figure, personality and mentality that most post-colonial states inherited at independence. As a matter of fact, many of the lead transnational mining and trading corporations, some of which have metamorphosed into global business conglomerates under different operational names, continued to preponderantly retain their colonial privileges well into the post-independence dispensation and even in contemporary history. Under the prevailing circumstance, perpetuating the inherited culture of usurping state power for prebendal accumulation becomes a convenient political capital for

Re-Engaging Rentier Theory and Politics

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the hegemonic post-colonial elites while taming and regulating the all-powerful transnational mining corporations becomes, for many states, a strategic dilemma in which diverse options are contemplated, weighed and explored. Confrontation and collaboration, nationalization and liberalization, co-investment and production sharing partnership, displacement and replacement of firms, to mention a few, are some of the strategic options that have been historically explored with mixed results.

Rents, the Rentier State and Rentierism in Contemporary Extractive Economies ‘Rents’ and ‘the rentier state’ are familiar concepts in International Political Economy (IPE). Rents are generally defined as exports earned or income derived from a gift of nature (Beblawi, 1990, p. 85). They are said to be external to the economy because they are not derived from the productive sectors of the domestic economy but thrive by courtesy of international capital. The rentier state, on the other hand, is one that, based on the nature of its political economy, is largely dependent on extractive resource rents, taxes and royalties paid by transnational companies (TNCs), and on profits from its equity stakes in TNCs’ investments (cf. Forrest, 1993, p. 142; Karl, 1997). Rentier states are significantly shaped by a combination of colonial legacy in the state structure and the luxury of natural resource revenues otherwise called the ‘rentier largesse’ (Omeje, 2006, p. 11). These revenues are generated and controlled by the governing elites who mainly expend it to their benefit rather than the welfare of society in general. Because a great deal of the debate on the rentier state has hitherto focused on the Middle Eastern oil-rich states – thanks to the pathbreaking works of Beblawi et al. – commentators have often been categorized into two different but sometimes conflated viewpoints, namely: (a) those that suggest oil wealth makes states less democratic; and (b) those that suggest oil wealth causes governments to do a poorer job of promoting economic development (see Ross, 1999, p. 330). The debate on the implications of the rentier state for democracy and development has raged for over two decades. Significantly, this book aims to contribute to the debate by adopting a broader conception of rent and the rentier state to go beyond the canvas of oil. A rentier state generally lacks a productive outlook in the sense that revenues from natural resources contribute a significant proportion of the gross domestic products and dominate national income distribution, usually at the expense of the real productive sectors of the economy. Many pundits regard the rentier state as a subset of the rentier economy, but there are others that treat the rentier state as epiphenomenal of the rentier economy (cf. Beblawi and Lucianai, 1987; Beblawi, 1990; Yates, 1996, p. 13). For obvious historical reasons of international dependency, ‘rentierism’ (i.e. the condition or syndrome of rent accumulation and rent dependency) is a phenomenon mostly associated with the extractive economies of the global South and one that severally precipitates a nexus of dysfunctional conflicts. A major feature of rentierism, and one that is often problematic, lies in its the tendency to develop a self-propelling energy capable of reconfiguring the structures of

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the political economy of a state, peripheralizing and displacing non-rentier productive forces, and generating a convoluted culture of accumulation and politics that conforms to the imperatives of ‘rents speak’. Beblawi (1990) called the latter ‘rentier behaviour’ (or mentality) which he argued was acquiring an inexorable transnational pan-regional current in the Persian Gulf and infecting both oil and (to a lesser extent) non-oil states alike because of the osmotic effects of oil rents. Evidently, in many rentier states there is a marked disconnect between rentierism and the well established developmental function of the state, a disconnect essentially informed and aggravated by the predatory machinations of the hegemonic elites and their external collaborators. This tendency provokes substantial deprivation, peonage and disillusionment among the underprivileged populations. Being in most cases heterogeneous transitional societies, the situation is often compounded by perceptions, feelings and sometimes experiences of marginalization, exclusion and repression based on some primordial identities among certain ethno-cultural and/or religious communities. Mobilization of the disgruntled for violence against the state and any community perceived as dominating and manipulating the state for all the wrong reasons is not far-fetched at this point. It is this structure of counter-hegemonic violence prevalent in many rentier states that diminishes the capacity of the state to maintain the Weberian monopoly of coercive authority in all areas within its territorial jurisdiction and, conversely, further compelling the state to increasingly rely on the use of military force to reproduce its authority to govern. The structure of the counter hegemonic violence and the state’s brutal response to it inadvertently leaves the political union to degeneratively crack and fragment into what Nikolas Rose (1999, p. 31) calls ‘governable spaces’ but which in reality are tinderbox outposts and fiefdoms of misgovernance, in which ‘identity, territory and rule are in contradictory play’ (Watts, 2005, p. 106 – my emphasis). Depending on the specific configuration and balance of power among the belligerent stakeholders, in some cases, generational forces (youth in particular) could be predominant; in others the clan, the kingdom (chieftainship), or the ethnic minority (indigenous peoples); subnational governments or radical (sometimes secessionist) insurgent movements can also provide the setting in which new political communities are incubated (Watts, 2005, p. 106). Based on a variety of contemporary specimens, conflicts associated with ‘rentierism’ have not only been complex and dysfunctional but also protracted and seemingly intractable – this is captured by the idiom of ‘resource wars’. This observed tendency has ignited a great debate in IPE on the ‘curse of extractive economies’ and the ‘tragedy of conflict goods’– oil, rubber, diamond, natural gas, and timber, to mention but a few notable conflict commodities. Nigeria, Congo DR, Colombia, Bolivia, Liberia, Sierra Leone, Angola, Turkmenistan and Sudan are some of the contemporary illustrations of the countries where abundant natural resource endowments have not enhanced sustainable development, security and peace, but instead aggravated the frontiers and scale of dysfunctional conflicts. Why is this the case? On the other hand, there are rentier economies where the patterns of conflict have been comparatively less virulent and more manageable, essentially because

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by courtesy of the huge rentier revenues, the state responsively undertakes extensive distributive and developmental functions for the benefits of the citizenry (Vandewalle, 1998). Libya, United Arab Emirates, Oman, Qatar, Kuwait, and increasingly Venezuela are some of the apparent examples. In other words, the governing rentier elites makes conscientious efforts to bridge the disconnect between rentierism and developmentalism with the object of improving the wellbeing of the underprivileged classes. While this neo-Gramscian tendency may not permanently obliterate the structures of dysfunctional conflicts, it apparently helps to ensure a broad measure of consensus necessary to reproduce the legitimizing ideology and hegemony of the governing elites. Why has rentierism proved more humane and manageable in some extractive developing economies relative to others? What best practices (if any) are to be learned from the states where ‘rentierism’ has not degenerated into or is able to transcend disruptive conflicts and how can such states be prevented from gravitating into the ruins of states marked by virulent conflicts? But beyond the conflicts associated with internal structures and contradictions in domestic political economies, rentierism is further linked to some wider geopolitical conflicts that have profound regional and international resonance. This category of conflicts is mostly connected with the interventionist roles of powerful external players in the global North that define or perceive certain extractive resources in the global South as part of their strategic national interests, and as such are determined to enforce their unimpeded access to, or control of these resources using all possible means. Dating from the early years of post-colonial history through the (post-)Cold War period, external interests in extractive rentier resources in the global South have led to involvement of different external actors or patrons in the politics of many rentier states through mechanisms such as: a) propping up of unpopular, repressive and corrupt clientelist regimes; b) complicity in reactionary coups d’etat and assassination of key anti-imperialist or nationalist leaders; c) strategic defence partnership and provision of military aid to strengthen the coercive capacity of clientelist regimes; d) mobilization of diplomatic support for clientelist regimes facing justifiable international opprobrium for wrongdoing and, conversely, international sanctions against defiant rentier regimes; e) outright military invasion, occupation and regime change to pave way for uninterrupted access to strategic resources. The US and Belgian-led intervention in the Congo in the early 1960s, and the US/UK-led invasion of Iraq in the second Gulf War are amongst the most striking examples of how external intervention in rentier economies could exacerbate internal state fissure and jeopardise regional and international security. Whereas the intervention in Congo in the early 1960s complicated the emerging ideological division of the newly independent African states along the cold war trajectories, the invasion of Iraq has certainly aggravated intra-civilizational discord between

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the moderates and theocratic conservatives in the Arab World, and intercivilizational friction between the Islamic world and the West – a confirmation of Huntington’s (1993) thesis (see also O’Hagan, 1995). Similarly, the increasing volatility of the Gulf region, aggravated by the post-9/11 US-led wars in Afghanistan and Iraq, has compelled the international oil economy to intensify the search for alternative sources of energy supply to the major oil and gas importing economies. For obvious reasons, the US is in the lead of this search, which has culminated in intensified exploration activities and expanded oil and natural gas discoveries and production in many parts of the world, especially in the Gulf of Guinea in the West-Central Africa region and the Gulf of Mexico in the Central American region. Oil and gas exploration and production activities in these two regions have doubled in the past decade (see Romero, 2004; Omeje, 2006, p. 179). This has far-reaching economic and political implications for many of the oil and gas producing rentier economies of the regions, in particular countries like Equatorial Guinea, São Tomé, Cameroun, Gabon, Chad, Mexico, Bolivia and Venezuela. One of such implications is the changing dynamics of natural resource mining and ecological management, resource struggles and conflicts within the various states. Specifically, how could conflicts associated with new or expanded oil and gas rents be managed and also prevented from feeding into, and complicating, old conflicts about identity, citizenship, leadership and governance in some of these countries? Most extant influential discourses of why many rentier economies of the global South have a marked proclivity to dysfunctional conflicts tend to anchor their explanations on the predatory nature of the rentier state, in particular, the ‘prebendal’ machinations of the local hegemonic elites (top state officials and private middlemen) believed to be in collusion with exploitative agents of international capital (cf. Turner, 1978; Beblawi, 1987, 1990; Yates, 1996). Most rentier states are dominated by self-serving hegemonic elites, whose interests in rent-seeking and prebendal accumulation determine a range of state policies, statutes and institutional practices. The disposition and inclination of the state towards neo-patrimonial, rentseeking or rent maximizing behaviour play into the hands of TNCs and other international stakeholders in the rentier economies in different ways. For instance, the phenomenon leaves little room for investment in strengthening the institutional capacity of the state to regulate the activities of TNCs with regard to such crucial issues as environmental practices and degradation, corporate social responsibility, and payment of compensation with respect to land alienation for extraction of natural resources and environmental damage. Consequently, the phenomenon encourages collaboration in corrupt dealings (kickbacks, over-invoicing, inflation of contracts, imports and supplies; under-reporting of export commodities and revenues, etc.) between the local state officials and agents of international capital. Overall, the interests of the ‘rentier elites’ (a generic name for the above predatory social classes) run counter to the survivalist needs, demands and aspirations of the subject classes, in particular, subalterns, proletariat, civil and ‘uncivil’ societies, and the imperatives of human and sustainable development. In this circumstance,

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argue most protagonists, counter-hegemonic discourses, agitations, protests and violent conflicts become inevitable.

The ‘State’ versus ‘Space’ in Explanation of Rentier Politics In spite of the merits in the foregoing ‘state-centric’ explanations, there are indications from some recent studies and empirical developments that nascent metanarratives focused on the nature and character of the rentier elites do not sufficiently explain the nuances and dynamics of dysfunctional rent-related conflicts in many extractive economies of the global South. It is apparent that in diverse ways and for various reasons (counter-hegemonism, insurgency, international pressures for devolution of power and resources, romance with populist ideologies), the rentier state in the global South has inadvertently stretched into unlevelled playing fields with a motley of contending social forces and stakeholders. Epistemically, the concept of the ‘rentier state’ seems inadequate to capture and analytically explain these long evolving realities. Most explanations centred on the rentier state and rentier elites pay insufficient attention to the role of non-state actors like local civil society organizations and insurgents and militia movements in engaging the state, in rent-seeking and accumulation, as well as in fomenting and prosecuting rent-related conflicts. It is the expansive unlevelled playing fields underpinned by specific rentier economies, and which subsumes the state and other rentier actors that more or less define the ‘rentier space.’ Even though the state is probably in majority of cases the most decisive and powerful player within the rentier space, it is significant that in trying to engage, combat or out-manoeuvre other contending stakeholders the state sometimes creates illusions of detachment from the ‘refractory space’ (from the state’s perspective) and contestation against it. But in reality, the rentier state is subsumed in the rentier space and essentially contends against other identifiably actors and stakeholders within the coveted space. However, there are circumstances in which the state could become extraordinarily powerful and totalitarian (e.g. in the pre-Gulf War Saddam Hussein’s Iraq) that it virtually captures the rentier space and takes it hostage to the consternation of other players, especially local stakeholders. The reverse is the case in a failed rentier state (e.g. post-Saddam Hussein’s war-torn Iraq) where the rentier space is free for grab, leading to a proliferation of contending forces, including forces struggling to capture the most decisive machinery of operation in the space – the rentier state. Under normal circumstances, the state exercises regulatory function in the coveted space, a role it often uses in many countries to create illusions of harmony, participation and inclusion, while in some others, to mask prebendalism, fragmentation, coercion and disorder. There are some intellectual precursors to the foregoing conception. Focusing on some of the oil-rich rentier economies, scholars like Terry Lynn Karl (1997), Michael Watts (1999, 2000) and Georg Frynas (2000) have demonstrated the centrality of oil and oil rents in shaping national political discourses and the broad rhythms of accumulation and social conflicts. Beyond the activities of the

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rentier elites, other scholars like Collier and Hoefller (2000) and Jenny Pearce (2002) in their studies on oil conflicts in a number of volatile rentier countries (e.g. Colombia, Angola), and on non-oil resource conflicts elsewhere, have argued that ‘greed and opportunities’ rather than ‘genuine grievances’, can account for the proliferation of predatory and militant groups, and that oil as a [largely] non-lootable but obstructable commodity is likely to increase the duration and intensity of conflicts. Writing in this volume and elsewhere, however, Michael Watts has convincingly debunked the argument of predation theorists that oil is a non-lootable commodity using the example of ‘oil theft through hot tapping of pipelines’ (otherwise called ‘oil bunkering’ in Nigeria) by ethnic militias and their syndicate networks in the Niger Delta, Nigeria. Based on a recent study of the Niger Delta oil conflict in Nigeria, Omeje (2006) has demonstrated how the activities of the subaltern classes that thrive and prosper on high stake petroviolence – real, orchestrated and amplified– contribute to fomenting conflict. The orchestrated and amplified dimensions of the ‘petro-conflict’ partly underlie what Ikelegbe (2005, p. 208) has aptly described as the ‘conflict economy in the Niger Delta, comprising an intensive and violent struggle for resource opportunities, inter and intra communal/ethnic conflicts over resources and the theft and trading in refined and crude oil, which has blossomed since the 1990s’. Many low intensity resource conflicts in the global South are driven and sustained not only by real grievances but by a convoluted culture of accumulation – i.e. entrenched patterns of predation and opportunism from ‘above’ (i.e. by the rentier elites) and ‘below’ (the subaltern classes). It is apparent that the observed convoluted culture of predation and opportunism in accumulation characteristic of rentierism is not limited to extractive resources and the rentier state. Expounding this thesis, for instance, many scholars focusing on the Arabian Gulf oil-rich and oil-poor states have expanded the concept of rent to include diverse forms of foreign aid and external development assistance otherwise conceptualized as ‘strategic rent’ for the simple reason that once secured most rentier states treat these non-rentier resources in the same prebendal way they treat natural resource rents (see Schwarz, 2004). Omeje (2006) has further demonstrated how the rentier culture informs patterns of accumulation within and beyond the ‘rentier space’.

The Rentier Space For the purpose of a more scholarly conceptualization, the ‘rentier space’ discursively subsumes and upholds activities related to the acquisition and control of rentier resources in a state, including the disposition, appropriation and utilization of any accruable funds, perquisites, dividends and opportunities. At the epicentre of the coveted space is the rentier state controlled by the rentier elites. The ruling and governing elites are a core part of the latter and broadly represent their interests. In addition to the rentier elites who dominate the rentier space, there are counter-hegemonic forces drawn from (un)civil and political societies who contest and compete for accumulation within the rentier space.

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There are usually different international stakeholders such as multinational corporations, governments of key foreign investors and some multilateral agencies that might have vested interests in the rentier space of a particular extractive economy. The interests of the rentier elites and the counter-hegemonic forces are in most cases in contradiction, likewise the interests of the latter and those of many external stakeholders. The interests of stakeholders in the rentier space are largely informed by issues of accumulation, welfare, development, resource distribution, land rights, environmentalism, etc. (be it in isolation or combination). Writing in Chapter 4 of this volume Ukoha Ukiwo delineates how the interests of the hegemonic rentier elites in Nigeria in ‘nationalizing’ the rentier space to centralize accumulation run into collision with the aspiration of the minority oilbearing communities of the Delta region whose main agitation is to ‘indigenize’ or ‘localize’ the rentier space for the exclusive benefits of the indigenes of the oil region. In highly malleable micro-rentier states like São Tomé and Príncipe where the governing elites hardly face any serious contestation and resistance from any domestic quarters over stakes in the rentier space, the space could be literally hostaged, privatized, bewitched or parcelled out by the governing elites. This is not far from the plight of the rentier space in totalitarian states save that the latter has greater propensity of rupture than the former. As part of the crisis of post-coloniality, a nexus of unsavoury devises, such as traditional witchcraft and voodooism often attend to accumulation in many rentier states. Similarly, the logic of predation and obstructibility of rentier resources often creates a robust ‘shadow economy’ that sustains intense dodgy and ‘black market’ accumulation alongside the formal state economy. A considerable degree of fluidity in most cases exists between the shadow and formal economies. Because of the huge stakes in extractive resources, the rentier space in many extractive economies is characterized by horizontal and vertical fragmentation often corresponding to the structure and canvas of politically relevant identities in the polity. Violent and disruptive conflicts in the rentier space often resonate with the subsumed structural contradictions. Most far-reaching conflicts are hatched in the womb of the rentier space but the delivery, prosecution and effects of the conflicts could encompass or affect the wider territorial state and regional and international systems. Depending on the specific configuration and interplay of interests, stakes and stakeholders within the ‘rentier space’, and how the latter triggers accumulation tendencies within the surrounding environment, the general orientation of social actors to structural issues and discourses may correspondingly reflect a perfusion of rentier mentality, calculations and manoeuvres. In this way, rentierism contributes to the (de-)structuring and vulgarization of a country’s political and national accumulation culture. Given its strategic intersections with the state, economy and society with respect to accumulation, the rentier space becomes a highly coveted political chessboard in which the positions, connections, roles and manoeuvrability of various actors and stakeholders at any given conjuncture principally determine or influence the amount of resources and patronage they could secure and dispose for a variety of ends, including ends that are completely prebendal and banal.

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Even though the rentier space is predominantly contextuated within the domestic political economy, there is a sense in which the push and pull of international politics impinges on its territorial configuration. In fact, rentier politics (both national and international) is the cauldron that transforms and converts the figuratives of rentier space into the realisms of concrete territorial space. Figure 1.1 is illustrative of the dynamics.

Figure 1.1 The rentier space in international political economy Whereas the subnational forces of micro-territorialization contend to pull the rentier space downward towards provincialization and localization, the

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supranational forces of macro-territorialization contend to disfigure and pull the rentier space upward towards supervised regionalization, internationalization and globalization. The rentier state is interposed between the two opposing forces with its own contentious agenda, usually to centralize, corner and control the rentier space for a variety of reasons ranging from prebendal advantages to regime security and measurable welfare developmentalism. Hence, beyond the state system and national sphere, it is significant that the combined forces of globalization and imperial governance increasingly exert ‘negative pressure’ (defined from the perspective of the weak rentier state) on the national rentier spaces of many weak states within regions that produce extractive resources considered strategic by the strong state actors. The observed negative pressure tends to disfigure and in some ways reconfigure the rentier space in two forms. At the domestic level, it tries to rupture and emasculate the rentier space by encouraging the weakening and extraversion of its principal structures and local stakeholders in a paradigm akin to the old ‘divide and rule’ tactics of classical colonialism. Externally, it tries to construct weak regionalized and internationalized rentier space in which the converging regional players are linked to the ‘globalizers’ within a mega-patron-clientelist framework. This is a form of ‘combine and rule’ – a reversal of the ‘divide and rule’ promoted in the domestic setting. From the perspective of the globalizers, regionalizing and internationalizing the rentier space– or simply globalizing the space– facilitates their governance of the strategic extractive resources they desperately seek. By implication, it also enables the globalizers to effectively monitor and supervise the security situation and policies of the clientelist rentier states, especially in this age of international terrorism scares from ‘below’ (the South). No where has the evolving regionalization and internationalization of the rentier space been so actively crafted and played out as in the Arabian Gulf, where as Dauda Abubakar aptly argues in this volume, some [Western] patrons motivated by their strategic interest in oil actively promote close economic and military alliances with the Gulf states. The alliances are structured in such a clientelistic and lopsided manner that they ultimately compromise the sovereignty and identity of the various rentier Islamic autocracies of the Persian Gulf. Internally, the process exacerbates the discord between the subservient pro-Western autocratic regimes and the more radical and often marginalized Islamist opposition groups, thereby provoking more contestational violence over the domestic political economy and rentier space. The fallout of the 9/11 2001 terrorist attacks, especially the US-led wars in Afghanistan and Iraq practically compounds the internal weakening of the rentier spaces of many Middle Eastern and Sahel-North African oilproducing states by intensifying the conflict between the pro-US rentier regimes and the anti-Western Islamist groups. Similarly, the war on terror accentuates the regionalization and internationalization of the rentier space in the Middle East and Sahel-North Africa by making the beleaguered pro-American regimes increasingly dependent on the US and the West for defence, military, economic and technological aid in return for greater surrendering of oil sovereignty. The brutal securitization of Middle Eastern and African energy resources by the US administration since the 2000s culminating in the creation and expansion

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of multiple security alliances for countries within these regions under the direct supervision of three of Pentagon’s Unified Combatant Commands – European Command (EUCOM), Pacific Command and Central Command (which also runs the wars in Iraq and Afghanistan)5 – is sufficiently strategic, from the standpoint of gaining greater supra-national control over the aligning rentier regimes and their energy resources. A new US Africa Command (AFRICOM) was recently created by the Bush administration in 2007 and consultations are under way with African leaders to establish a permanent military base for AFRICOM in one of the Gulf of Guinea states. Finally, the preceding discourse of the rentier space is by no means an attempt to enunciate a universal theory. There are a considerable number of rentier states that for reasons of context peculiarities may not fit into the schema depicted in the above diagram in the sense that they could have less contentious or more content subnational forces, more developmentalist and less prebendal hegemonic elites, less globalist and more responsible international stakeholders, etc. What is apparent from the foregoing analysis is that a rigorous appreciation of the configuration, operation and dynamics of the rentier space and rentier politics in general is important for deepening the understanding of the nature and nuances of disruptive conflict (or lack of it) in various extractive economies and regions in the global South.

Rentier Politics and Conflicts in Extractive Economies: Contending Perspectives and Empirical Trends across the Global South A large number of recent research publications by highly regarded scholars and leading multilateral institutions such as the World Bank clearly suggest that developing economies with high rate of dependence on extraction and export of natural resources have a correspondingly high propensity to corruption, poor governance, mass poverty, societal fragmentation and violent conflicts (including civil wars). Natural resources, in particular, oil and hard-rock minerals like coltan, diamonds, gold and other gemstones, are said to play a key role in instigating, prolonging and financing these conflicts (Ross, 2003, p. 17). Other non-mineral resources like timber and coca (hard drug) have also been linked to major conflicts. There are different ways in which natural resources contribute to conflicts. These include: •

• •

Struggle over ownership and control of specific natural resources or ‘extractive spaces’ by various stakeholders (the state inclusive) and groups within a state or between states, often compounded by external intervention or support for one of the conflict parties. Struggle over distribution and use of public revenues derived from natural resources by various local stakeholders and groups. Inability of weak state institutions to cope with large rents from natural resources coupled with prebendal looting, misappropriation and exclusion of significant sections of the society, leading to violent protests and resistance.

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•

•

•

• •

15

Use of official and unofficial revenues from natural resources by the state and its governing elites to build-up and finance strong repressive security machinery as a means to keep the hegemonic elites in power against opposition from counter-hegemonic forces. Use of legal and illegal rents from natural resources by splinter groups, disgruntled factions of the governing elites and opposition forces to sponsor anti-government insurgencies, secession movements and insurrection. Organized predation and extortion of big business (extraction and mining companies) by aggrieved militia groups protesting against issues of resourcerelated misgovernance, exclusion, biodiversity destruction and ecological damage. The blatant politicization and mismanagement of conflict-issues and legitimate grievances related to natural resources and the rentier economy. Interests and intervention of external parties and stakeholders, forces of imperial governance, predatory networks and militarist regimes on the extractive economy of a relatively vulnerable state.

As demonstrated in many contemporary civil wars and low intensity conflicts in rentier economies, the above factors are not mutually exclusive. As the various chapters in this study demonstrate, conflict instigating and aggravating factors in most affected countries are multiplex and context-specific just as the conflict stakeholders and protagonists are diverse and variable. Hence, a rigorous contextual analysis and multiregional comparison of the conflicts, a number of which can actually be classified as ‘complex political emergencies’ (CPEs) is essential. CPEs is a concept enunciated by the UN in the 1990s to describe the proliferation of major crises in transitional societies, the majority of which were intra-state conflicts, characterized by multicausality, and requiring multidimensional international responses, including a combination of military intervention, peace support operations, humanitarian relief programmes, high level political intervention and diplomacy.6 Theoretical Perspectives In addition to this introductory chapter that engages the question of theorizing rentier politics in the global South, Usman A. Tar in Chapter 2 ‘critically explores the frontiers of theories on rentier politics, extractive economies and conflict in the global South’, as a means to ‘advancing alternative perspectives.’ Based on a systematic critique of what the author describes as ‘the first generation theory’ (i.e. the Rentier State Model of ‘mainstream’ pioneer theorists like Mahdavy, Beblawi and Luciani) and ‘the new generation theories’ (i.e. ‘resource curse’ versus ‘paradox of plenty’, ‘greed and grievance’, and the political ecology paradigm) the author underscores the relative under-theorizing of causal relationships between extractive economies and structures/outbreak of violent conflicts. He attributes the under-theorizing tendency to acute methodological shortcomings associated with the dominance of limited factor approaches (LFAs) and limited context approaches (LCAs) in the study of rentierism in the global South. Tar delved into a review

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of diverse scholarly works to establish the main discursive features and flaws of LFAs and LCAs. He finally argues that ‘to comprehend the dynamic terrains of, and correlations between rentierism, natural resources and conflict’ there is need for an integrated holistic approach (IHA) that takes into account the broad range of factors (multi-factor) and contexts (multi-context and cross-cultural), as well as underlying causalities and correlations in rent-related conflicts. Country-Specific Studies In Chapter 3 Michael Watts ‘explores the relations between the political economy of oil – and the ancillary question of the Nigerian rentier petro-state … – and the rise of … militant movements (insurgency) in the oil-producing states of the Niger Delta over the last fifteen years’. Based on a critical analysis of the complexity of rentier politics and petro-violence in Nigerian against the backdrop of dominant theoretical explanations and discourses, the author repudiates the ‘foundational claims of predation theorists (state-insurgent, greed and grievance): namely, that greed is opposed to grievance, that peaceful protest stands in opposition to rebellion, that government opposes rebellion, and that rebellion equals organized crime’. He argues that ‘the simple binaries deployed by the predation theorists and the proposed political trajectories (from grievance to greed) are much too blunt and as a consequence fail to grasp the complexities of local political dynamics’. The local political dynamics at the root of petroviolence in the Niger Delta, according to Watts, include ‘the detonative impact of state violence, the constitutive role of corporate practice, the intersection of formal (especially the electoral cycle and enhanced powers of governors) and insurgent politics and the shifting force field of inter-generational struggles driven by the contradictions between chiefly powers and massive youth unemployment and alienation against an ideological backdrop of “oil wealth” and “our oil”’. Local claims and narratives about the indigenous ownership of, and right to, oil wealth is taken up by Ukoha Ukiwo in a latter chapter of this volume. These underlying local dynamics tie in with the cross-cutting interests of international development agencies and contemporary energy ‘scramblers’, as well as the interests of protagonist of the strong oil-related black economy to create what the author calls the ‘oil complex’, which he argues to be at the root of oil insurgency in Nigeria. The operations of the oil complex, as Watts submits, is a ‘zone of political and economic calculations’ that inter alia creates violent and unstable governable spaces marked by unbridled primitive accumulation and ‘a form of parcellized sovereignty’. In Chapter 4, Ukoha Ukiwo examines why and how oil generates conflicts in Nigeria, as well as the strategies deployed by the various socio-economic (classes) and socio-political (ethno-regional) groupings to gain access to or control over the strategic rentier space. He explores how the federal state and the hegemonic elites have systematically pursued and adopted policies aimed at ‘nationalizing’ the rentier space, especially since the end of the Biafra civil war. Had Biafra succeeded in its secessionist campaign, Nigeria would have lost a greater part of its oil wealth located in the former Eastern region of Nigeria that fought

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for a separate sovereign state in the civil war of 1967–1970. The architects and proponents of rentier space nationalization who form the most powerful segment of the hegemonic federal elites have their ethnic origins in the non-oil-producing states. Among the reasons advanced by the rentier space ‘nationalizers’ to back their case is the defeat of Biafra by the federal side, an episode that helped to preserve the oil wealth as a ‘federal good’. This argument irritates the bulk of the Niger Delta people (notably, youths and local elites) who, by reason of their increasingly violent anti-oil campaign, seek to de-nationalize and localize the rentier space ‘for the greater good of their indigenes’. The discourses on both sides of the rentier divide are couched in populist rhetorics that help to conceal the self-seeking and prebendal interests of protagonists. The federal side maintains a defensive lead of the discursive agenda, but not without the constant mobilization of the state’s material (oil wealth disbursement) and military resources to simultaneously placate and repress protagonists of rentier space ‘indigenization’ from the oil-rich Niger Delta. The oil industry, dominated by foreign transnational firms, seems to be at the crossroads of this political debacle. With huge deficits in corporate social and environmental responsibility over the nearly fifty years of oil extraction in the Niger Delta, the transnational oil companies are compelled by the disruptive violence of anti-oil protesters to become more responsive to the developmental needs of their host communities. They increasingly substitute for the development-provisioning obligations of what Ukiwo calls ‘the absentee state’ in the oil region (that is, the state that is supportive of foreign companies but is ‘not there for its citizens). However, the developmental contributions of the oil companies, on the aggregate, remain very insignificant relative to the social and infrastructural requirements of the impoverished oil region. The greatest challenge for the future, concludes the author, is how to ‘bring the state back in’ and ‘transform it to serve as a catalyst for sustainable development’. John Kabia’s analysis of the Sierra Leone civil war in Chapter 5 is an attempt to re-study the greed versus grievance theory advanced by Paul Collier and his colleagues. ‘Political economy analysts like Collier’, argues Kabia, ‘link the outbreak of civil conflicts in many transitional societies to greed and economic opportunism – in the case of Sierra Leone, a conflict over diamonds– rather than structural inequalities and deep-rooted grievances’. Kabia argues that Collier’s resource-based, reductionist theory widely embraced by large sections of the academia, international media, as well as policy and donor community is a ‘simplistic and inadequate explanation’ because it essentially ignores or underplays the key role played by the state in sowing the seeds of conflict. ‘It is therefore not surprising that Collier’s interpretation of civil war is embraced by most government officials who find it as a convenient way of deflecting attention on their own misdeeds and accusing rebels as greedy people lacking any political agenda.’ Kabia argues that such faulty diagnosis of this nature, has often ‘led to a lack of understanding of the fundamental causes of conflict and hampered the process of negotiating civil war peace settlements, implementing peacebuilding programmes and initiating feasible conflict prevention programme’. Based on a chronological analysis of the background to Revolutionary United Front (RUF) rebellion, Kabia argues that ‘the primary factors of the Sierra Leone civil war

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must be located in the grievances that were generated by the patrimonial and clientelistic politics that characterized post-colonial Sierra Leone; greed and economic opportunism can only be regarded as fuelling and aggravating factors’. Further, Kabia debunks the ‘rebel-centric’ explanation of conflict diamonds, and goes on to unveil the complexity of the war economy and how various actors in the civil war (rebels, officers of the Sierra Leone Army, the government, private military corporations and mercenary fighters, Charles Taylor’s National Patriotic Front of Liberia and individual combatants of the regional peacekeeping force ECOMOG) did at different times exploit and profiteer on conflict diamonds. This convoluted interest in rent-seeking was a dimension that clearly contributed to an aggravation and prolongation of the civil war. In Chapter 6, Peter Woodward looks at the historical context of economic and political developments in Sudan and how it has generated conflicts over issues of ‘marginalization’ of minority groups and control of natural resources, including the more contemporary dimension of oil resources. He argues that ‘the grievances of Sudan’s people, especially those in the “marginalized” areas of south, west and east, pre-date the development of the oil sector, but oil has exacerbated political mobilization on all sides’. In addition, since coming on stream in 1999, oil has also significantly affected the rhythm of Sudan’s national and international politics, a phenomenon that has even become more apparent since the outbreak of hostilities in Darfur in 2003. The struggle over control of oil resources between the central government in Khartoum and the Sudanese People’s Liberation Army/Movement (SPLA/M) in the oil-rich war-torn South, according to Woodward, ‘has increasingly resembled the prebendal and predatory state model’. Oil rents provided enormous wealth for arms purchases (mostly from Asia and Russia) to prosecute internal conflicts. Consequently, the major Asian countries involved in oil exploitation (China, India and Malaysia), as well as some Western countries (such as France) tended to condone ‘the widespread human rights violations associated with the development of the oil sector’ and allowed the Sudanese government ‘the use of their local oil infrastructure for military purposes, thereby effectively contributing to state violence’. Woodward underscores the ambivalence of certain Western governments in Sudan, noting that it was partly their interests in ‘pursuing commercial opportunities in the burgeoning oil sector’ and ‘concern over the humanitarian situation, that encouraged them to take a lead in international pressure towards peacemaking between north and south.’ However, the signing of the Machakos Protocol in 2002 that ended the SPLA war seems to have deepened and consolidated the interests of the rentier elites in Sudan’s north and south regions at the expense of other regional elites, the generality of the underprivileged populations and the popular aspiration for balanced economic development. This rentier tendency is a major threat to the survival of Sudan as a coherent state and the peace settlement between the north and south. Gerhard Seibert discusses the new frontier of rentier politics presented by oil in one of Africa’s smallest and poorest countries, São Tomé and Príncipe (see Chapter 7). The island-nation of São Tomé and Príncipe located in the highly coveted oil-rich Gulf of Guinea is a largely ‘aid-dependent micro-state’ of about

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155,000 people. Siebert argues that recent external interest in the country’s offshore oil resources is not the root of rentierism in the national political economy as ‘a rentier culture based on foreign aid and other external resources had already been firmly established’. The chapter analyses: (i) the complexity of negotiation of maritime boundaries for oil mining purposes between São Tomé and its offshore neighbours (Equatorial Guinea, Gabon and, especially Nigeria); (ii) international interest in bidding for acquisition of offshore oil mining spaces; (iii) the convergence of interest in oil rent between the Santomean governing elites and sections of the external stakeholders (mostly Western investors and Nigerian companies suspected to be fronts and speculators because of their insufficient technical capacity and experience in offshore exploration); and (iv) how the Santomean government’s lack of expertise in international negotiation and oil legislation adversely affects the outcome of their involvement in oil matters. The author finally explores the unique opportunities São Tomé and Príncipe has as a ‘newly emerging oil producing country to avoid the “resource curse” and negative consequences of oil wealth experienced by many other oil producing countries’. Already, there is considerable goodwill, support and pressure from the international community to help the government of São Tomé and Príncipe mitigate existing rent-seeking practices and aim at equitable national development. In another country case study in Chapter 8, Germain Tshibambe Ngoie and Kenneth Omeje explore the political economy of mineral resources in the Democratic Republic of the Congo (DRC) and the structure of conflicts it generates in the leading mining provinces of Kasai and Katanga. The chapter attributes the phenomenon of conflict goods in the DRC to the ‘deep-rooted patterns of patrimonialism and corruption’ in the postcolonial state ‘that disposes state functionaries to use their public offices and positions to accumulate both official and unofficial ‘revenues’ that are basically appropriated for personal and prebendal purposes’. ‘The recourse to, and exploitation of, primordial identity and cleavages such as ethnicity and provincialism as basis for conflict mobilization by rent-seeking elites serves as an aggravating factor.’ The DRC’s strategic mining sector and provinces have been historically conflict-ridden. The intensity of the conflicts has varied from time to time, but for a greater part of the post-independence history, the leading mining provinces have been characterized by low intensity conflicts (LICs). Writing in Chapter 9, T. Debey Sayndee examines how Liberia was plunged into a long-drawn-out vicious civil war, the operations and stakeholders of the war economy, as well as the key obstacles to peacebuilding in the post-war dispensation. Even though Liberia is the oldest self-governing democracy in Africa, the conditions for political instability and civil strife have been prevalent in the country for since the 1847 independence proclamation by the more privileged minority settlers (America-Liberians– emancipated black slaves from the Americas), who subsequently embarked on a regime of ethno-political segregation against the indigenous majority. Consequently, neo-patrimonial corruption and decline were systematically driven to a crescendo from independence through to the Samuel Doe era in the 1980s. Sayndee argues that it was against this historical

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background that Charles Taylor’s NPFL (National Patriotic Front of Liberia) was launched in 1989 and originally welcomed by many Liberians as a war of national liberation. But the so-called liberators not only despoiled and liquidated the country, but also plunged the entire West African subregion into a ‘Zone of Terror’, criminality, anarchy and war. The formal economies of the war-affected subregion were for the most part displaced by clandestine rent-seeking economies predicated on the massive exploitation of conflict goods (notably diamond and timber) by warlords, insurgents, mercenaries and a host of international business collaborators. Sayndee argues that although the war formally ended in 2003, peacebuilding efforts in the post-war dispensation is blighted by a host of structural factors, not least a collapsed economy, the continued illegal exploitation of natural resources, the lack of economic opportunities for the teeming number of militarized youth populations, as well as the complex nature of ethnic tension linked to struggle for scarce public and environmental resources. Consequently, international civil society organizations and the donor community have turned post-war Liberia into a theatre for experimenting assorted kinds of peacebuilding programmes that have marginal relevance to the needs and aspirations of the people. Cross-Cultural and Regional Studies Jeremy Keenan analyzes the evolution and contemporary dynamics of the rentier state in the Sahara-Sahel states of Algeria, Niger and Chad and how their rentseeking escapades in resource exploitation under various guises trigger grassroots resistance and conflicts (see Chapter 10). He argues that the destabilizing conflicts and wars in these countries, especially during the 1990s and 2000s would not have occurred, or if they did would have most likely been less severe and quickly resolved, had vital natural resources like oil (and in the peculiar case of Niger – oil and uranium) not been at stake. The heightened interests of major powers like the US, France and increasingly, China, in the Sahara-Sahel regions is chiefly because of the vital natural resources in the regions. On the part of the Bush Administration in the US, this energy interest, as Keenan argues, overlaps with and is expediently disguised as part of the global war on terror. Old internal political conflicts are exacerbated and new ones orchestrated in many countries of the Sahara and Sahel as a result of the interplay of imperialist interests in the exploitation of the rentier economies, regardless of how these interests are disguised. Within the two regions, Algeria is the largest and most audacious rentier state, with the hydrocarbon sector being the mainstay of its economy and pivot of accumulation and politics since independence. Keenan argues that regional powers like Algeria, and to a lesser extent, Libya, have long nurtured and pursued sub-imperialist interests across countries of the Sahel, ‘sometimes in partnership with and sometimes in competition to “western” companies’ and ‘global interests’, but impacting disastrously on existing structures of political and resource conflicts. Given the rentier nature of the states, the abundant natural resources revenues accruing to the Sahara-Sahel states, have practically benefited the governing elites who not only expand accumulation through corruption,

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but also increase military expenditure to ensure regime survival and continued suppression of all opposition forces (real or imagined). As all these are happening, the ‘global oil and mining companies are buying up exploration concessions by the dozen’ and ‘busily exploring and exploiting almost every corner of this vast but little known zone of Africa’. Hence, the regions remain sorely enmeshed in violent conflicts. In Chapter 11 Anna Zalik uses the examples of Nigerian Niger Delta and Mexican Gulf to demonstrate how two divergent constitutional frameworks for oil extraction have emerged historically to shape popular struggles for greater equity in revenue distribution and environmental protection. Whereas the Nigerian oil conflict has a strong ethno-regional base and is championed by a motley of ethnic minority groups of the oil-rich Niger Delta region, the push for the Mexican struggle has mostly emanated from organised labour and agrarian producers championing grassroots, working-class-oriented, antiimperialist interests. However, both movements employ the rhetoric of resource sovereignty, by which they demand greater control of oil resources and revenues by local populations inhabiting the region of extraction for their overall socioeconomic and ecological advantages. But the outcomes of the two resource sovereignty struggles are markedly different. In the case of the Niger Delta, the host communities’ anti-oil struggles (agitation for – greater oil revenues against the federal state; rapid developmental transformation of the impoverished oil region, etc.) are characterized by communal conflict (inter/intra-ethnic) and social fragmentation that resonate with the history and administrative structures of colonial and post-colonial rule and serve as a direct claim on the Nigerian state. With regard to Mexico in the revolutionary period, grassroots struggles partially unified organized labour and smallscale agrarian producers against forces of global capital and for a redistributionist state. In this respect, the Mexican nationalization of foreign companies’ policy of 1938 that prohibited oil exports for over three decades and employed the commodity for developmentalist ends was at least a partial victory for Mexican oil workers – whose ranks expanded to incorporate some under-privileged agrarian classes. Furthermore whereas resort to disruptive anti-oil violence by ethnic militias in the Niger Delta aims to demand benefits from both the state and operating oil multinationals, in Mexico, popular struggles for ecological and resource sovereignty in the present conjuncture seek to protect certain hard-earned privileges of the developmental state from neoliberal assault. In Chapter 12, Julia Buxton analyzes how the rentier space and rent-related conflicts have historically evolved in the different extractive economies of the South American region. She advances two critical arguments, namely – that with a couple of key exceptions: (i) ‘access to and opportunity for rent accumulation has traditionally generated intense competition for control of the state’ but ‘these antagonisms have historically been channelled on class, not ethnic lines (as in many African countries) and articulated through the ideological and conceptual lens of socialism, populism, anti-imperialism, military authoritarianism or neoliberalism’; (ii) ‘contending forces have typically argued that their motivation for power and resource control is ‘inclusivist’ …, hence, the South American

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discourse has always been framed (or disguised) as a positive sum game and legitimized through reference to the national interest’. Buxton analyses the various factors that have historically accounted for the low proclivity toward virulent resource-based civil wars in the South American region, much of which have to do with the relatively stable institutionality and settled territoriality of the state. This has systematically and increasingly helped to establish formal politics (as opposed to rebel insurgency) as the pivot of political competition and regime succession in most countries of South America. Buxton finally examines how the ascendancy of neoliberalism and revival of economic nationalism, especially since the 1980s and 1990s have directly and indirectly contributed to ‘a reconfiguring of the rentier space’ in Latin America at both the national and regional spheres. Capitalizing on huge oil boom in the 2000s, for instance, the President Hugo Chavez administration in Venezuela, in particular, has provided significant transformative and exemplary leadership at the regional level (to the utter irritation of the US administration) through ideological mobilization for regional integration and development cooperation and at the national level where the government ‘has fundamentally restructured the rentier space in Venezuela by displacing traditionally privileged elite sectors and foreign interests as the main beneficiaries of rent access and accumulation’, and uplifting diverse previously excluded underprivileged groups using well crafted social development policies and programmes. But problem of sustainability of social welfare-oriented programmes persists. This, as Buxton concludes, creates significant ‘potential for intensified conflict’ given ‘the possible inability of resource nationalist states (e.g. Venezuela, Bolivia, Ecuador, etc.) to meet the immense popular expectations that government and the commodity boom have generated’, coupled with the virtual ‘absence of institutions capable of mediating conflict and monitoring economic policymaking’. Rolf Schwarz in Chapter 13 analyses the history and dynamics of stateformation and state-building in the Middle East and argues that ‘oil rentier states’ defy the ‘war makes states’ theory of Charles Tilly et al. He presents a comparative analysis of two contrasting oil-rich Middle Eastern rentier states, Iraq and the United Arab Emirates (UAE). Schwarz argues that the massive influx of oil revenues during the 1970s enabled the bellicose regime of Saddam Hussein in Iraq to pursue a policy of ‘guns and butter’ – defined as, ‘extravagant spending on expanding its military-security machinery and on welfare benefits (social development)’. At the domestic front, the expanded military-security profile of the Saddam Hussein’s government in Iraq was designed to consolidate the dictatorship of the ruling Ba’thist party. On the external front, the bloated military-security complex was used to engage in aggressive foreign policies, which led to the outbreak of war with Iran (1980–1988). Most disastrously, it also culminated in Iraq’s abortive annexation of oil-rich Kuwait in Saddam Hussein’s bid to shore up Iraq’s rentier revenues as way out of the country’s fiscal crisis. The devastating Gulf Wars and UN sanctions provoked by Iraq’s bellicosity have seen the country decline from a boisterous rentier state to a failed state. On the other hand, argues Schwarz, ‘the UAE have tried to combine the positive attributes of a rentier state (huge oil investment and revenues) with those of a

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production-oriented welfare state’. As opposed to building a grandiose military infrastructure, the UAE have channelled their huge oil revenues to pursue an active policy of economic diversification to backstop the social welfare programmes the state has progressively taken on board since the oil boom period of the early 1970s. Consequently, ‘the UAE have managed to … develop a regional hub for foreign investment in the areas of construction, tourism, waste water treatment, desalination, natural energy exploration, and in the transportation sector and through the use of free trade zones’. Schwarz argues that whereas Iraq followed more or less the ‘war makes states’ Tillian model, and has gravitated from a boisterous rentier state to a failed state, the UAE, on the other hand, have not followed the Tillian model but tried to break away from both the resource curse paradigm of most rentier states by embracing perspective development planning have made a significant transition from a rentier state to a production-oriented welfare state. Schwarz finally identified and analyzed the major challenges facing developmentalist and production-oriented rentier economies such as the UAE. In Chapter 14, Dauda Abubakar introduces a fascinating regional dimension to the theoretical conceptualization and politics of rentierism based a searching critique of the orthodox intellectual paradigms. His focus of analysis is the oilrich countries of the Arabian Gulf. At the conceptual level, Abubakar argues that although the theory of the rentier state helps to elucidate the diverse impediments to the development of oil-dependent countries in the global South, the explanatory structures and discourses of the theory scarcely incorporate the critical trajectories of geopolitical conflicts, often aggravated by external interventionism and militarization. He therefore proceeds on the basis of a political ecology approach to resource conflicts and rentier politics to present a critical ‘interrogation of the interface between oil, state power and external militarization, and their implications for socio-political stability within the Arab Gulf states, as well as regional and international security’. Drawing extensive empirical illustrations from the oil-exporting states of the Persian Gulf – namely, Saudi Arabia, Kuwait, Iran, Iraq, Oman, Qatar, Yemen, United Arab Emirates and Bahrain – Abubakar argues that close economic and military alliances with external [Western] patrons, largely motivated by their greed for oil resources, perceptibly compromises the sovereignty and identity of the predominantly theocratic and Monarchical-Sultanic rentier plutocracies of the Persian Gulf. Consequently, this tendency precipitates and accentuates societal fragmentation, thereby deepening violent responses from marginalized youths and fundamentalist groups opposed to western ideologies of modernity and politics of interventionism. The resultant effects are the growing security problems that are now common-knowledge: escalation of military expenditures among the Gulf states, slash of social development budget and benefits, exacerbation of national and regional instability; intense anti-Americanism, counter-hegemonism and Islamist terrorism against western targets in the Islamic world and beyond, as well as unending militarization and globalist intervention in the name of the war on terror.

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Notes 1 2 3 4

5 6

For a detailed discussion of neo-Marxist dependency theory, see Hoogvelt (1997), Chapter 2. For a detailed discussion, see Homer-Dixon (1994). For a detailed discussion, see Collier and Hoefller (2000). Prebendalism is a political tradition in which state offices are regarded as prebends that can be appropriated by office holders, who use them to generate material benefits for themselves and their kith and kins (Joseph, 1987; 1996). In the post-colonial setting, the entrenched politics of neo-patrimonialism is a reinvention of the traditional patrimonial forms of governance in which the differentiation of public and private spheres is institutionally obscured by the primordial considerations, interests and loyalties of public office holders. By and large, the conduct of politics and public administration in a neo-patrimonial state follows such primordial clientelistic patterns as family networks, clannism, cronyism and ethnic solidarity, without the necessary rational-legal institutional restraints against corrupt enrichment and abuse of office (see Erdmann, 2002). See Thompson (2007) for a more detailed discussion on the US growing securitization of energy resources in Africa and the Middle East. For a detailed discussion, see Francis (2005), pp. 14–15.

References Ankie, H. (1997), Globalisation and the Post-colonial World, London: Macmillan. Auty, R.M. (1993), Sustaining Development in Mineral Economies: The Resource Curse Thesis, London: Routledge. Beblawi, H. (1987), ‘The Rentier State in the Arab World’, in Hazem Beblawi and Giacomo Luciani (eds), The Rentier State, New York: Croom Helm, pp. 85–98. Beblawi, H. and G. Luciani (eds) (1987), The Arab State. New York: Croom Helm. Berry, T. (1999), The Great Work: Our Way into the Future, New York: Bell Tower. Collier, P. and A. Hoefller (2000), Greed and Grievance in Civil War, World Bank, http:// www.worldbank.org/research/conflict/papers/greedgrievance_23oct.pdf. Accessed on 28 April 2004. Erdmann, G. (2002), ‘Neo-Patrimonial Rule: Transition to Democracy has not Succeeded’, D+C Development and Cooperation, No. 1, January/February, pp. 8–11, http://www. inwent.org/E+Z/1997-2002/de102-4.htm. Accessed on 17 October 2005. Eze, E.C. (1997), ‘Introduction: Philosophy and the Postcolonial’, in E.C. Eze (ed.), Postcolonial African Philosophy: A Critical Reader, Cambridge, MA: Blackwell Publishers. Forrest, T. (1993), Political and Economic Development in Nigeria, Oxford: Oxford University Press. Francis, D. (2005), ‘Introduction’, in David Francis (ed.), Civil Militia: Africa’s Intractable Security Menace?, Aldershot: Ashgate, pp. 1–21. Frynas, J.G. (2000), Oil in Nigeria: Conflict and Litigation Between Oil Companies and Village Communities. Hamburg: LIT VERLAG. Homer-Dixon, T. (1994), ‘Environmental Scarcities and Violent Conflict’, International Security, 19/1, pp. 5–40. Huntington, S.P. (1993a), ‘The Clash of Civilization?’, Foreign Affairs, 72(3).

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Huntington, S.P. (1993b), ‘If not Civilization, What?’, Foreign Affairs, 72(3). Ikelegbe, A. (2005), ‘The Economy of Conflict in the Oil Rich Niger Delta Region of Nigeria’, Nordic Journal of African Studies, 14(2), pp. 208–34. Joseph, R. (1987), Democracy and Prebendal Politics in Nigeria: The Rise and Fall of the Second Republic, Cambridge: Cambridge University Press. Joseph, R. (1996), ‘Nigeria: Inside the Dismal Tunnel’, http://www.currenthistory.com/ archivemay96/nigeria.html. Accessed on 6 May 2005. Karl, T.L. (1997), The Paradox of Plenty: Oil Boom and Petro-Politics, Berkeley, CA: University of California Press. Mbembe, A. (2001), On the Postcolony, Berkeley, CA: University of California Press. O’Hagan J. (1995), ‘Civilization Conflict? Looking for Cultural Enemies’, Third World Quarterly, 1/1. Omeje, K. (2006), High Stakes and Stakeholders: Oil Conflict and Security in Nigeria, Aldershot: Ashgate. Romero, S. (2004), ‘US Bets Big on Oil in the Gulf of Mexico’, The New York Times, 24 March. Rose, N. (1999), Powers of Freedom: Reframing Political Thought, Cambridge: Cambridge University Press. See Chapter 1 on ‘Governing’, http://assets.cambridge. org/97805216/50755/sample/9780521650755wsc00.pdf. Accessed on 5 June 2007. Ross, M. (2001), ‘Does Oil Hinder Democracy’, World Politics, 53, pp. 325–61. See http:// muse.jhu.edu/journals/world_politics/v053/53.3ross.pdf. Accessed on 5 June 2007. Ross, M. (2003), ‘The Natural Resource Curse: How Wealth Can Make You Poor’, in Ian Bannon and Paul Collier (eds), Natural Resources and Violent Conflict: Options and Actions, Washington DC: The World Bank, pp. 17–42. Schwarz, R. (2004), ‘State Formation Processes in Rentier States: The Middle Eastern Case’, paper presented at the Fifth Pan-European Conference on International Relations, ECPR Standing Group on International Relations, Section 34, ‘International Relations Meet Area Studies’, The Hague, Netherlands, 9–11 September. Thompson, C. (2007), ‘The Scramble for Africa’s Oil’, New Statesman, 14 June, http:// www.newstatesman.com/200706180024. Accessed on 22 June 2007. Turner, T. (1978), ‘Commercial Capitalism and the 1975 Coup’, in K. Panter-Brick (ed.), Soldiers and Oil: The Political Transformation of Nigeria, London: Frank Cass. Vandewalle, Dirk (1998), Libya Since Independence: Oil and State Building, Ithaca, NY: Cornell University Press. Watts, M.J. (1999), ‘Petro-Violence: Some Thoughts on Community, Extraction and Political Ecology’, posted at the eScholarship Repository, University of California, Available: http://repositories.cdlib.org/iis/bwep/WP99-1-Watts. Accessed on 29 June 2002. Watts, M. (2000), ‘Contested Communities, Malignant Markets and Gilded Governance: Justice, Resource Extraction and Conversation in the Tropics’, C. Zerner (ed.), The Politics of Nature Conservation, New York: Colombia University Press, pp. 24–33. Watts, M. (2005), ‘The Sinister Political Life of Community: Economies of Violence and Governable Spaces in the Niger Delta, Nigeria’ in G. Creed (ed.), The Romance of Community, Santa Fe, New Mexico: SAR Press, http://globetrotter.berkeley.edu/ GreenGovernance/papers/Watts_SinisterPolitical.pdf. Accessed on 5 June 2007. Yates, D.A. (1996), The Rentier State in Africa: Oil Rent Dependency and Neocolonialism in the Republic of Gabon, Trenton, NJ: Africa World Press.

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Chapter 2

Rentier Politics, Extractive Economies and Conflict in the Global South: Emerging Ramifications and Theoretical Exploration Usman A. Tar

Introduction This chapter critically explores the frontiers of theories on rentier politics, extractive economies and conflict in the global South. In doing so, the chapter engages existing discourses, and advances alternative perspectives. A key concern of the chapter is to outline the linkages between ‘rentier politics’, ‘extractive economies’ and ‘resource conflict’ – which are relatively under-theorized in terms of their causal relationships. Similarly, the chapter advances conceptual frameworks of analyses, based on multifactorial, multicontext and integrated models, as a useful schema for ‘best practice’ in research, and for engaging the debate on rentier politics and conflicts in the global South. In a way, the chapter shadows the various contributions of this volume. The global South offers a rich empirical minefield for exploring issues of state building, resource management, power and underdevelopment. While a huge body of work has continued to accumulate, a lot needs to be done particularly in terms of a systematic analysis, and in bridging the gaps between theory and reality. Needless to say, developing world as a whole is subject to sketchy, rather than detailed and systematic, investigation. This chapter attempts to fill some of these gaps, and offers a blueprint for a more productive research. The second section of this chapter examines the key challenges that beset current approaches to studying rentier politics and resource conflict, and advances some alternative frameworks. The third section outlines key ground matters for comprehending resource conflict in the global South. The fourth part critically identifies and discusses a range of perspectives – classified as first generation and new generation theories – developed by researchers to understand the ecology and linkages of rentier economies and resource conflicts in the global South.

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Advancing the Frontiers of Rentier Theorizing: Conceptual Challenges and Alternative Frameworks There is need for an integrated holistic approach to comprehending the dynamic terrains of, and correlations between rentierism, natural resources and conflict. The key questions are: why are many natural resource-dependent economies in the global South largely conflict-prone or conflict-ridden? Why has rent-extraction not generated violent conflicts in developed economies, where rents and taxation are stably governed? What insights, if any, do current conceptualizations about rentier politics provide for understanding resource conflicts in the global South? Do nascent narratives such as ‘resource curse’ and ‘paradox of plenty’ provide appropriate explanations for understanding the nature of rent-related conflicts in the global South? A review of the relevant literature reveals two common but distinct approaches to studying rentierism and resource conflicts in the global South. The first is what could be termed limited factor approaches (LFAs). By this is meant approaches that draw predominantly on narrow sets of factors such as ‘rent’ or ‘power’ with scarce attempt to appreciate their causal linkages.1 A key setback is that other factors such as, the external environment of rents and global balance of power are either ignored or given limited attention. For instance, in the context of the Niger Delta oil conflict in Nigeria, different scholars emphasize different and often limited factors: marginalization of local ‘oil-bearing’ communities by dominant rentier elites (e.g. Fleshman, 2002; Omeje, 2004, 2006a; Ukeje, 2001; Welch, 1995 etc.); ‘youth and fetishization of violence’ (Ifeka, 2006, p. 721); environmental degradation perpetrated by oil companies and supported by the state (Ogri, 2001; Moffat and Linden, 1995; Obi, 2001); disparities in perception of security and local ownership of resources by the Nigerian state and indigenous communities (Ibeanu, 2000; Obi, 1997; Omeje, 2006a), etc. There is risk in the tendency to cherry-pick limited set of factors in explaining resource conflict. Idemudia and Ite note, whilst cautioning against LFAs in explaining the Niger Delta conflict: because their focus may be on either one or two variable as ‘explanation variable’ for the conflict, most [scholars and commentators] are unable to provide a complete picture of the nature, causes and dynamic of the conflict. A complete picture is however needed for the design of an effective policy geared towards conflict management and resolution. (Idemudia and Ite, 2006, p. 392)

The foregoing statement is supported by Ibeanu (2000) who argues that because the Niger Delta conflict and resource conflict elsewhere are caused by multiplex factors and issues, a systematic approach is needed to understand and account for conflict in a more robust way. Furthermore, ‘it is not clear if all the factors that are said to be responsible for the conflict are causal or mediatory, or if they are all causal factors, which are principal, secondary and tertiary. It is also not clear which factors are trigger, pivotal, mobilizing and aggravating’ (Idemudia and Ite, 2006). Table 2.1 shows an example of multifactorial analysis of conflict.

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Table 2.1

29

Underlying causes of internal conflict

Underlying causes Structural • Weak states • Intra-state security concerns • Ethnic geography Political factors • Discriminatory political institutions • Exclusionary national ideologies • Inter-group politics • Elite politics Economic/social factors • Economic problems • Discriminatory economic systems • Modernization Cultural/perpetual factors • Pattern of cultural discrimination • Problematic group histories

Proximate causes • Collapsing states • Changing intra-state military balances • Changing demographic patterns • Political transitions • Increasingly exclusionary ideologies • Growing inter-group competition • Intensifying leadership struggles • Mounting economic problems • Growing economic inequities • Fast-paced development and modernization • Intensifying patter of cultural discrimination • Ethnic bashing and propagandizing

Source: Porto (2002), p. 24.

On the other hand, a second problematic conceptual method is limited context approaches (LCAs), which refer to those perspectives that depend on a single or very few empirical spaces as templates per excellence for explaining similar and not-so-similar empirical realities – a method common amongst MiddleEastern rentier theorists (e.g. Beblawi and Luciano, 1987). A key example is Hossein Mahdavy’s analysis of the rentier state in pre-revolutionary Pahlavi Iran. Mahdavy (1970, p. 428) notes that Iran’s experience provides a template for the nationalization of petroleum economies not only in the Middle East but also in other regions of the world.2 A key reference point of Mahdaby’s analysis is the nationalization of Iran’s joint venture oil company, the Anglo-Iranian Oil Company founded by the National Iranian Oil Company in 1951. It generated what Douglas Yates refer to as ‘populist petroleum politics’ (Yates, 1996, p. 12), which involves the nationalization of the rentier space as a means of warding-off external domination and asserting autonomy the governing elites often through a patronage of populist narratives, even if the crude motive for such narratives are scarcely rooted in popular imagination and interest.3 Mahdavy (1970) further argues that Iran’s successful experience in ‘populist petroleum politics’ resonated, in a more or less similar fashion, in a number of rentier economies as the fashionable model for liberating the state. For instance,

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five years after the nationalization of the Anglo-Iranian Oil Company, Egypt’s Suez Canal was ‘nationalized’ in 1956 by President Gamal Abdel Nasser. This was followed dramatically by similar nationalization drives in a number of North and sub-Saharan African countries: Algeria in 1967; Libya in 1970 and Nigeria in 1976. Mahdavy’s analysis of the rentier state is further advanced by other rentier theorists (e.g. Beblawi, 1987; Beblawi and Luciani, 1987) is problematic for a number of reasons (examined in a later section). In the meantime, it is imperative to deconstruct one key assumption of the conceptual framework advanced by of Mahdavy and other Middle Eastern rentier theorists: namely, the apparent tendency to theorize rentier states using a deductive logic and to treat them as homogeneous. Needless to say, even within the Middle East, different states are cast in different mould in terms of socio-cultural, political and demographic composition.4 The point is it sounds problematic to counterpoise a particular theoretical conjecture on two different states without some qualifications. To overcome the foregoing dilemmas and limitations encountered by both limited factor approaches and limited context approaches, the following alternative frameworks are advanced as a schema that takes into consideration diverse factors and contexts. At issue is the need for multivariable and multicontext analyses which are sufficiently conscious of the existence of other intervening factors and contexts. The following frameworks are proposed: •

•

•

Framework 1: The case for multifactor analysis: the larger the range of factors taken into consideration in studying a particular case study or theme, the more robust the product of the study. Here I am in the company of Valerie Hudson who posits that ‘explanatory variables from all levels of analysis, from the most micro to the most macro, are of interest’ (2005, p. 2). A rationale for multifactorial approach is that it allows for a balanced configuration of insights from the broadest possible range of variables (see Table 2.1 and Figure 2.2). Framework 2: the case for cross-cultural analysis: all units of analysis must be equally treated. It should be pointed out that in cross-cultural analysis, quality rather than quantity should be hallmark – for instance, irrespective of the comparative cases chosen, (a) they should be thoroughly examine both individually and comparatively (b) generalizations should be adequately qualified and justified and (c) exceptions and gaps should be appropriately acknowledged (see Figure 2.3). Framework 3: The case of integrated (multifactor-multicontext) analysis: a synergetic framework involving an analysis of the widest possible sets of factors and contexts is vital in understanding more complex scenarios. This involves an appreciation for multidisciplinary approach drawing from or conscious of the widest possible range of academic orientations (see Figure 2.4).

It is imperative to outline the caveats for the proposed alternative framework. The frameworks provide a schema for improving the efficacy of research and analysis. They do not seek to rebuke the relevance of existing methods or

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31

Figure 2.1 A framework for multifactor approach knowledge generated using them; rather they advance a range of adaptive models for ‘best practice’. The models do not attempt to provide quick-fix for generating knowledge – the usual conventions and ground rules of research (for instance, on data collection, hypothesis-testing, qualitative/quantitative analysis, theoretic explanations, etc.) remain crucial. Finally, they seek to reinforce the relevance of the ‘grounds’ of research, defined by Hudson (2005, p. 1) as the ‘foundational level at which phenomena in the field of study occur [or are inter-related] …’.

The State, Rentier Politics and Conflict in the Global South – Parameters and Conjectures Resource conflict5 is one of several explosive phenomena that define many extractive economies of the global South, particularly since the end of the Cold War. The post-Cold War era has witnessed a proliferation of scholarly and policy interests on conflict in the global South. Some of the familiar discursive

32

Extractive Economies and Conflicts in the Global South

Figure 2.2 A framework for multicontext approach constructs enunciated to account for how extractive economies are coping with nascent state of affairs include: ‘intractable conflicts’, ‘new wars’, ‘resource wars’, ‘complex political emergencies’, ‘the coming anarchy’, ‘resource wars’, ‘greed and grievance’, ‘conflict trap’, ‘resource securitization’, ‘petro-violence’, ‘blood diamond’ (c.f. Collier et al., 2003; Kaldor, 1999; Kaplan, 1994; Nafzinger and Auvinen, 1996; Zalik, 2004). The consensus is that these conflicts are generated by the abundance of resources – ‘the paradox of plenty’ (Le Billon, 2001) – or lack of it. The paradoxical prevalence in many conflict-riven states of abundant resources appropriated for the benefit of specific privileged classes and, on the other hand, of acute privation foisted on the vast majority of the populations largely accounts for civil strife and instability (see DiJohn, 2002, p. 1). It is a paradox of no mean proportion, therefore, that a vast majority of conflict-prone and war-ravaged states in the global South, including those recently emerging from years of violent conflict, are extractive economies who are endowed with strategic natural and mineral resources yet could not avert

Emerging Ramifications and Theoretical Exploration

33

Figure 2.3 A framework for integrated approach declining into debilitating violence and war. Equally puzzling is the fact that while these states contribute essential inputs that oils the global economy, they largely remain underdeveloped and politically unstable with a sizeable majority of their citizens living on less than one dollar a day. Rick Auty (1993) aptly describes this phenomenon as ‘resource curse’. Are these paradoxes a coincidence of sorts or adverse manifestations of unequal national and international political systems? A number of foundational matters need to be unravelled in understanding the phenomena of rentierism and resource-based conflict in the global South. First is the nature of the state system and power relations. It is important to emphasize that there is a difference between developed and less developed countries in terms of the process of state-formation. In developed economies, states were preceded and built by societies through revolution (e.g. France, USA) and/or evolution (e.g. Britain, Sweden). In the less developed societies, however, the modern state is a more recent phenomenon which came into existence in the last quarter of the twentieth century following the scramble for and partition of hitherto autonomous societies of Africa, Caribbean-Pacific and Latin America by imperial powers: Belgium, Britain, France, Germany, Italy, Spain and Portugal. A related issue is the differences in rent-seeking culture. For instance, writing in the context of developed European states Tilly (1975) notes that the creation of strong states involved an elaborate construction of tax-generating and robust fiscal apparatuses predicated on the emergence of a ‘coercive monopoly’ (see also, North 1981 and Levi, 1988) – ‘extraction, coercion and bureaucratic institutions to regulate and regularize extraction have played crucial roles’ in the emergence of strong [rentier] state and mediating elites (Vandewalle, 1998, p. 7). Paradoxically, however, in much of the global South, whilst the rise of the rentier state and coercive elites is characterized by coercion, prebendalism and predation, there

34

Extractive Economies and Conflicts in the Global South

are no robust fiscal apparatus, efficient bureaucracy and/or benevolent elites to guarantee public welfare. Furthermore, with few exceptions, most states in the global South are a product of colonialism which brought together a welter of societies, some hitherto at war with each other. While different colonial masters adopted different strategies – e.g. France’s ‘Association and Assimilation’ policies; Britain’s ‘Direct and Indirect Rule’ – their colonizing missions were the same, namely to truncate existing structures of the pre-colonial states, submerge them into the mainstream colonial superstructure, albeit as appendages and ‘protectorates’ and allocate to them specific functions in the colonial political economy (e.g. the provision of raw materials and cheap labour for industries, and a ready market for finished products). Amongst the novel concepts introduced by colonialism was the ‘modern’ secular state, which worked well for the colonialist but proved devastating in the post-colonial era – this observation largely explains the situation in Africa. At independence the governing elites inherited what Mamdani (1996) calls the ‘bifurcated state’ characterized by ambivalent but contrasting structures of dualism: modern versus traditional; state versus society; elites versus citizens, etc. In this scenario, the state became both the subject and object of contestation between these pooling dual tendencies. The post-colonial governing elites transformed the state into a theatre of accumulation rather than an agent of development. David Francis explains why this was the case: The nature of domestic politics based on patron-clientilistic systems … have been driven by informal networks through which state resources were appropriated to support and consolidate regimes in power and their followers … Linked to the politics of clientilism are patrimonialism and neo-patrimonialism, … [defined as] the lack of distinction between public and private relationships and the general privatization and informalization of political life. (Francis, 2006, pp. 80–81)

A key feature of patrimonial states is that there is a ‘high degree of personalized rule, in which the ‘strongman,’ including the ruling and governing elites, are able to extract and redistribute patrimonial resources along regional, ethnic, religious and familial lines in order to consolidate political power and ensure regime survival’ (Francis, ibid.). Associated with the collapse of private-public dichotomy is the congruent loss of rational-legal institutional norms such as rule law, personal liberty, and dialogue and consensus. The personalization, informalization and commoditization of state structures meant that the stakes for power and its material benefit is deadly high. The governing elites used all sorts of devices – conventional or unconventional; moral or immoral; diplomatic or coercive – to negotiate access to state power and associated material benefit. This created a descent into a Hobbesian state of nature where might is right. A key insight from the foregoing analysis is the fact that the nature of power politics in the global South determines the evolution and legitimacy of the state. Another important foundational matter, which draws from the foregoing, is the nature of state-society relations. The inchoate nature of state politics had a trickle-down effect on society:

Emerging Ramifications and Theoretical Exploration

35

The patronage relationship connecting leaders and [divisive] clients provide the root which the state sink into society … Groups in control of the state also have a panoply of coercive instruments available to destroy competing incipient class fractions. (Kasfir, 1987, pp. 55–6)

This scenario created ‘crises of legitimacy’ in which aggrieved subaltern classes and a deprived citizenry were pitched against the state and the governing elites, with far reaching consequences. Paradoxically, most post-colonial states followed the path of ‘developmental state’ which served as a legitimizing ideology for the governing elites (see Castells, 1992, p. 55). An undergirding basis of the hegemonic state is that while the governing elites reserved the right to hegemony, subaltern forces were often subdued: the ‘developmental project becomes, in a Gramscian sense, a ‘hegemonic’ project to which key actors in the nation adhere voluntarily’ (Mkandawire, 2005). While the concept of the developmental state proved relatively successful in parts of Asia and the Middle East, it proved disastrous in Africa. In the latter, the developmentalhegemonic state failed to deliver any significant progress. If anything, by the 1980s most states plunged into structural crises, characterized by balance of payment deficit, spiralling debts, decline of social infrastructures, huger and starvation. In many rentier states, such as DRC and Sierra Leone the crises culminated in ‘resource wars’. This is principally because the governing elites failed to justify their claim to ‘development’ and, to a lesser extent, bring the state’s potential for socio-economic progress to bear in public welfare. Aside from developmentalism, many states have followed other hegemonic political cultures such as military rule and militarism, civil-military oligarchy, personal-tribal rule, and top-down ideological rule (see for instance, Alavi, 1982; Janowitz, 1977). These, too, were built on similar hegemonic systems, with equally similar predatory patterns.

Mainstream Theory: A Critical Exploration Extractive economies provide a useful but challenging space for theorizing on resource conflict. By extractive economies is meant societies who depend solely or partly on benefits accruing from exploration, extraction, marketing and distribution of natural resources – commonly described as rent which are typically generated from the exploitation of natural resources, not from production (labour), investment (interest), or management of risk (profit) (see Vandewalle, 1998). One of the earliest theoretical enterprises developed to understand the political economy of resource abundant states is the rentier state model. As argued below, this perspective has a number of shortcomings – for instance, it is state-centred – and in need of complementary framework that captures emerging realities. The model is argued to be somewhat limited, because it fails to take on board the function of the state vis-à-vis (civil) society; and conflict vis-à-vis stability.

36

Extractive Economies and Conflicts in the Global South

First Generation Theory: The Rentier State Model (RSM) Developed initially by scholars working on extractive economies of the Middle East, RSM is ‘a complex of associated ideas concerning the pattern of development and the nature of the state in economies dominated by external rent, particularly oil rent’ (Yates, 1996, p. 11). The concept was first coined by Mahdavy (1970) in a study of the rentier state in Iran. It was later advanced by other scholars such as Beblawi and Luciani (1982), Beblawi (1987), Schwarz (2004), etc. Mahdavy was particularly interested in the decisive effect of oil sector on other sectors of the economy. He identified two categories of rentier states. First are ‘extreme or mono-rentiers’ such as Kuwait and Qatar who dependent absolutely on oil rents. The second category is passive rentiers or multi-economies such as Iran who dependent both on oil rent, as well as other non-rent sectors, such as a strong manufacturing sector. In the 1980s, following the emergence of OPEC, oil embargo of 1973 and the discovery of oil in commercial quantity in many more states, Mahdavy’s theory was embraced by a new generation of scholars who both criticized and improved on his original version. For instance, Beblawi and Luciani argue that Mahdavy’s earlier conceptualization of the rentier state appear to be too simplistic: it views the state as synonymous, not counteractive, with society loosely implying ‘an entire social structure which in the case of a rentier state, is premised on the inflow of external rent’ (Yates, 1996, p. 13). Another key limitation, identified by Beblawi and Luciani, is that it sounds unreasonably grandiose of ‘state’ but oblivious of ‘economy’. Alternatively, they advanced the concept of ‘rentier economy’ as an appropriate model to capture the nature of the state and the function of rent and external economies (1987, p. 11). They also identified the rentier state as a subset of the rentier economy and made two further distinctions of the state (a) ‘overall system subject to government or power and (b) ‘the apparatus or organization of government or power that monopolizes the monopoly of the legal use of violence’ (p. 4). In particular, Beblawi (1987) identifies four essential features of a rentier state: • •

• •

‘Rent-seeking’ as a predominant factor influencing the behaviour of state actors and the structures of political economy. Externality: the origin of rents must be external to the economy. That is, rents must be from foreign rather than domestic sources. Where the state generates a significant percentage of its cumulative income through domestic taxation, it is not sufficient to characterize it as a rentier economy because ‘economic rent’ is a factor of income that only results from production (labour), investment (interest), and management of risk (profit) (Yates, 1996). Consumption culture: in a rentier state, only few are involved in the generation of ‘rent’ while majority are involved in distribution and consumption. Dualism: government serves as a mediating force for receiving oil wealth and distributing it through consumption. In doing so, the government actually serves the material interest of the elites, as opposed to the entire society.

Emerging Ramifications and Theoretical Exploration

37

RSM has been subject of criticism. Many argue that it says little about the potentials of resource conflict: it assumes that the state is capable of using rent to ensure hegemonic stability through a strategic combination of carrot and stick – that is, by buying citizens’ loyalty and/or coercing them into obedience (see e.g. Abubakar in this volume). The problematic assumption is that the rentier state is a fortified space capable of perpetuating peace and stability in the face of potential risks of domestic insurgence and foreign interference. The idea that rentier state are prone to violence is advanced by Mick Moore (1998, 2001), who argues that the abundance of natural resources and pathological rent-seeking generate contradictions in terms of a disproportionate relationship between elites and subaltern classes. He notes that because rentier states are predominantly dependent on rent appropriated by the governing elites, they have not developed any robust mechanism for domestic taxation and accountability thus creating a dichotomy of state from society and, by extension, elites from citizens. Moore further notes that the inflow of external rents creates increased predatory practices which enable elites the luxury to avoid political bargains particularly with deprived interest groups – indeed, the elites use a narrow coterie of loyal constituencies as a basis of rewarding loyalty and precluding dissents. In this scenario, aggrieved groups are likely to take arms against the state, regardless of the risk. In addition, there will be higher risks of economic sabotage by deprived citizens – such as smuggling, engaging in parallel or ‘black’ market, money laundering, oil bunkering and hostage taking – as a means of survival. In the long run, argues Moore, the risks of civil war and armed insurgency are real and inevitable. In a more recent work, Moore (2004, pp. 306–9) identifies the following ambivalent features or ‘political pathologies’ of rentier states, each capable of inducing conflict: •

•

•

Autonomy from citizens: the state apparatus, and the people who control it, have a ‘guaranteed’ source of income that makes them independent of their citizens. The governing class could afford to forgo or, at best, be selective regarding its obligations to citizens, including the institutionalization of democracy and rule of law. The end-result would eventually be protest and armed insurgency. External intervention: the strategic value of oil wealth has motivated significant intervention from the wealthiest nations in the affairs of oil-producing areas, leading to ‘external military and political support for regimes that enjoy little popular legitimacy’ (p. 306). In states where this trend had led to violence and insurgency, the following are at risk: (a) the state, its institutions and personnel for being privy to, and tools of, repression, exploitation and domination jointly perpetrated by the governing elites and foreigners; (b) the governing elites for being self-centred, predatory and beholden to foreign influence; and (c) foreign companies, investors and expatriate workers for conspiring with a predatory governing elites to cause social injustice and ‘structural violence’. Coupism and counter-coupism: there would be increasing tendency amongst elites to take over the state by force, which is thus institutionalized as the chief means of political negotiation. A number of further implications could be identified: (a) the military becomes dominant political institution and a

38

•

•

•

•

Extractive Economies and Conflicts in the Global South

power base; (b) massive opportunities are created for foreign influence as a means of securing international legitimacy and arms deals (increased defence expenditure at the expense of public welfare); (c) colossal state resources are channelled into protecting the governing elites against further coups; (d) society becomes aware of the significance of force and may become susceptive to recruitment as dissidents and insurgents; (e) marginalized elites and warlords may invest ill-acquired wealth to recruit dissidents and stage rebellion. Absence of incentives for civic politics: The institutionalization of violence stifles civic culture and the values of dialogue and rational behaviour. This provides a potential ground for the proliferation of irrational pathological behaviour, such as hooliganism, gun culture, militancy and, inevitably, insurgency and rebellion. Vulnerability to subversion: ‘The failure to tax the bulk of the population, and thereby bring them into the ambit of a regular civilian bureaucracy, leaves the state vulnerable to the (armed) organizational challenge of competitors: guerrillas, private armies based on the narcotics and arms trades, and nonstate movements of various kinds’ (p. 307). Non-transparency in public expenditure: rentier culture creates absence of financial discipline; income and expenditure are falsely presented or even hidden from public scrutiny leading to loss of legitimacy. Ineffective public bureaucracy: given that the responsibility for rent generation requires few technocrats, there would be little incentive to build a transparent and efficient bureaucracy driven by rational process. Indeed, the bureaucracy becomes an instrument and victim of prebendalism.6 Other limitations of RSM include:

a) it places disproportionate emphasis on state-society continuum: that is, because the state and its governing elites are couched in hegemonic terms, the agency of subaltern social actors and institutions are severely under-estimated. This limitation is correlated with the dominance of structuralist approach at the time RSM was first developed. In the 1990s, the rise of social movements, including armed insurgencies has raised questions about the need to rightly balance the relationship between structure (state, elites) and agency (civil society, militia, insurgent) – the latter have proved to be a force to reckon with in the political economy of resource wars; b) its emphasis on ‘oil rent’, often to the exclusion non-oil endowment such as diamond, uranium, coltan, gold etc. curtails the scope of strategic resources. Recent experiences have demonstrated the relevance of all forms of factor endowment as subjects of rent seeking.

New Generation Theories: ‘Resource Wars’ In the light of theoretical gaps identified in the RSM, a number of new generation theories have emerged to provide a useful resource for understanding resource

Emerging Ramifications and Theoretical Exploration

39

conflict. Most of these later theories emerged in the 1990s, partly to explain domestic and international challenges posed by new realities – such as the end of the Cold War; shift in global balance of power dominated by the US and its allies, the rise of ‘War on Terror’ following the 9/11 2001 terrorist attacks on the US; global energy crises characterized by erratic supply of energy and fluctuations in the prize of oil and other mineral resources; and the scramble by US and its allies to literally conquer oil economies (such as Iraq) in the name of war on terror. The aim of this section is to fill the gaps identified in RSM. The following questions are pertinent: how could emerging ‘resource wars’ be understood? How could extractive economies and rentier states in the global South be better conceptualized in the context of new emerging realities? What role does ‘resource’ play in breeding conflict in rentier space? ‘Resource Curse’ versus ‘Paradox of Plenty’ – Scarcity, Surfeit and Conflict The lack of resources produces social and political problems. However, with regard to violent conflict several studies have proven that abundance is more likely to contribute to violence. (Basedau, 2005, p. 8)

The twin theories of ‘Resource Curse’ and ‘Paradox of Plenty’ emerged in the early 1990s to explain why some rentier states have not experienced significant socio-economic development and good governance and, conversely, why this state of affair serves as a potential motivation for conflict. The concept of the ‘paradox of plenty’ is attributed to Terry Karl (1997) who argues that the inability of resource-abundant ‘petro-states’ to translate abundance into development is the greatest paradox of our time. Other scholars have used similar concepts such as ‘the Honey Pot Hypothesis’ (Kahl, 2006) which proposes that: abundant supplies of valuable natural resources create incentives for conflict groups to form and fight to capture them. This may spawn attempts by regional warlords and rebel organizations to cleave off resource-rich territories or violently hijack the state. Once seized, control over valuable natural resources fuels conflict escalation by allowing the parties to purchase weaponry and mobilize potential recruits.

On the other hand, the term ‘Resource Curse’ was first coined by Richard Auty (1993) to describe how natural resource-endowed states were not able to use that wealth to boost their developmental fortunes but were, instead, characterized by indicators of underdevelopment. The key issue is that ‘resource’ has proved to be ‘curse’ rather than ‘blessing’. Another issue is the nature and scope of ‘curse’ and their implication for conflict. A key reference point here is Basedau (2005) who, writing on Africa, notes that resource curse is not a fortuitous phenomenon: it is the product of a dysfunctional system which evolved over time (e.g. ‘war economy’, ‘rentier state’) and that ‘there are certain transmission channels or causal mechanisms that might turn resources into problems’ (p. 9). Accordingly, Basedau (2002) developed a typology that captures four symptomatic dimensions of ‘resource curse’. He emphasises the adverse effects

40

Extractive Economies and Conflicts in the Global South

of rent-seeking on: (a) socio-economic development; (b) state institutions; (c) democracy and human rights; and (d) peace and conflict. These are discussed below in terms of Basedau’s and wider analyses. •

•

•

•

Socio-economic development: this dimension of resource curse encompasses the damaging effect of natural resources on other tradable sectors and sources of economic growth, as well as the lavish tendency to stimulate unwise economic policies and make the economy vulnerable to external shocks. State, institutions and governance: this entails the poor ‘quality’ of political institutions (such as the nature of property rights arrangements and the quality of state bureaucracy) which significantly determines the manner in which natural resource rents are managed and distributed – largely to the benefit of a predatory governing elites. Applied to extractive economies of the global south, the consensus is that the existence of neo-patrimonial culture has adverse effect on the state and elite’s capacity for social provisioning with far-reaching implications for violence. Democracy and human rights: the effects of natural resource abundance on democratization and human rights are relatively under-theorised, particularly in africa. However, a significant body of work exist in the context of other regions (e.g. Ross, 1999, 2001). Ross (2001) identifies three adverse effects of rentier culture on democratization namely (a) modernization effect – many rentier states embrace the principles of modernization, but are not able to achieve it for a host of structural constraints: ‘specific features of rentier states might well produce growth – at least initially –yet fail to bring about societal and cultural changes such as occupational specialization, urbanization and higher levels of education, since the (potential) source of wealth stems from a small and isolated sector in economy’ (Basedau, p. 15); (b) the rentier effect – this is discussed later in this chapter: in sum, ‘income from natural resources reduces the accountability of the state elite and the prospects for emerging countervailing powers to challenge the entrenched authoritarian governments’ (ibid.); (c) repressive effect – rents are strategically employed in securing the state and its elites, and in repressing the wider society. Peace and conflict: ‘the most fruitful connections between natural resources and conflict are related to (a) motives for violence and (b) means and opportunity for exert systematic violence and warfare’ (Basedau, p. 17).

Basedau tested the foregoing ‘symptoms’ using empirical data obtained from fourteen resource-rich countries in sub-Saharan Africa. His finding confirms that, on the whole, the socio-economic and political profiles of these countries (measured by economic growth; human development; governance; democracy; and peace) leave much to be desired: these countries are negatively (not positively) affected (see Table 2.2). A couple of criticisms could be identified on the ‘Resource Curse’/‘Paradox of Plenty’ hypotheses. First, this perspective seems to be too pessimistic, even dismissive, of the rentier states of the global South, who are castigated as incapable of breaking from the so-called rentier web and conflict traps.

Emerging Ramifications and Theoretical Exploration

41

Secondly, the generalizing tendency to assume that rentier states as perpetuating underdevelopment and conflict is problematic: there are exceptional cases where the rentier state have proved relatively peaceful – e.g. Malaysia. Greed and Grievance This concept, advanced by Paul Collier and his colleagues, is based initially on a World Bank-funded research programme on The Economics of Civil War, Crime and Violence at the Cambridge University. Collier and Hoeffler’s early work (1998), emphasize that the incidence of civil war increases with the dependence of a state on ‘natural resource exports,’ which includes all forms of rentable and exportable endowment: agricultural and mineral exports. Collier notes the enabling environment for the economy of war: ‘a country with large natural resources, many young men and little education is very much more at risk of conflict than one with opposite characteristics’ (Collier, 2000, p. 97). Thus he argues that economic agendas constitute a key causal factor in most recent civil wars (other factors remain insignificant or ceteris paribus). He argues that the ecology of civil wars in resource-rich states is influenced largely by ‘greed’ rather than ‘grievance’: ‘true cause of much civil war is not the loud discourse of grievance but the silent force of greed’ (ibid., p. 101). Warlords and rebel forces are driven by the opportunities of lootable resource rent as a means of survival and perpetrating the ‘war economy’, the latter described by Keen (1998) as economics by subversion. In doing so, there would be fortuitous confluence of subversive imagination embedded amongst groups motivated by ‘greed’ and ‘grievance’. Collier and his colleagues depend highly on econometric data in making their claims, an approach recently described as ‘statistics in command’ in determining the causes of civil wars (Lawrence, 2007, p. 168). For instance in a later work, based on data covering the period 1960–1999, they observed that while states that depend heavily on the export of oil and minerals face a risk of civil war (23 per cent for any given five-year period), states with no natural resource exports have remarkably lower risk of descent into civil war (0.5 per cent). That is, ‘in otherwise similar economies (controlling for income per capita, ethnic fragmentation, income inequality, etc.), dependence on oil and/or minerals increases the risk of civil war by 46 times!’ (DiJohn, 2002, p. 7). A number of criticisms have emerged against Greed and Grievance thesis. First, its consistent findings (namely: ceteris paribus, the greater the dependency on natural resource, the greater the risks of civil war) has been rejected by some scholars. For instance, in a survey of oil and gas exporting countries, Ross (2002) finds an ambivalent result: the incidence of civil wars in oil and gas exporters is not much greater than for other natural-resource exporters. In the period, 1990–2000, 32 out of 161 countries surveyed had civil wars; which means that for any random country, there was a 0.199 chance (i.e., approximately one in five) of a country suffering a civil war at some point in the 1990’s. Without controlling for income per capita, civil wars occurred at slightly lower rates among states that were highly dependent on resource exports in four different

Table 2.2

Socio-economic and political profile of resource rich countries in sub-Saharan Africa* Economic growth 1990–2003

Human development 2004

Governance 2002

Democracy 2004

Peace 1995–2004

Negatively affected areas (violent conflict)

Angola

Ø

–

–

–

–

4

Botswana

+

+

+

+

+

0

CAR

–

–

–

–

–

5

Congo DR

–

–

–

–

–

5

Congo R

–

Ø

–

Ø

–

3

E. Guinea

+

+

–

–

+

2

Gabon

–

+

Ø

Ø

+

1

Guinea

–

Ø

Ø

–

+

2

Liberia

+

–

–

–

–

4

Namibia

+

+

+

+

+

0

Nigeria

Ø

Ø

–

Ø

–

2

Sierra Leone

–

–

–

Ø

–

4

South Africa

Ø

+

_

+

+

0

n.a.

Ø

–

–

–

3

6

5

9

7

8

35

Sudan

*= Major oil and diamond producers measured against sub-Saharan mean: Chad only begun oil production in 2003 and has therefore been left out: Columns 2–5: + = above SSA mean; – = below SSA mean; Ø = around SSA mean: Column 6: + = no conflict; – = violent conflict. Source: see Basedau (2005), p. 21.

Emerging Ramifications and Theoretical Exploration

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categories of resource dependence: oil and gas; other mineral exporters (not including gemstones); food crop exporters; and non-food crop exporters. When controlling for income per capita (that is by dividing the resource export-to-GDP ratios by each country’s income per capita producing a figure that simultaneously reflects both resource dependence and per capita wealth), then resource dependent countries appear to have a noticeably higher risk of civil war … This evidence does not support the rentier state hypothesis. Mineral-dominant poor economies seem no more prone to political violence than non-mineral-dominant natural resource exporting poor economies. (See DiJohn, 2002, p. 7; original emphasis)

Other criticisms of the ‘greed and grievance’ thesis include: 1) Arbitrary language and measurement tools: a restrictive tool is used in defining largely contested concepts such as ‘conflict’ ‘war’ and ‘violence’. For instance, conflict is quantitatively described by the existence of 1,000 or more battledeaths in a year (Collier and Hoeffler, 1998) – this effectively excludes lower but significant figures (e.g. 999!) Many scholars have applied lower limits – for instance, de Soysa uses 25 battle-related casualties as a lower limit (reported in DiJohn, 2002). 2) Ambivalence between causality and reality: the ecology of civil war is determined by a host of factors, and the reality might appear to overwhelm the cause. For instance, the ‘war economy’ is likely to be perpetuated by warlords, whether or not initial causal factors are still active. Further, ‘since civil wars are not recognized as ‘beginning’ until they have generated at least a thousand combat-related deaths, they might be preceded by significant enough levels of violence and political conflict that is a disincentive to long-run manufacturing investment, generating a higher level of resource dependence before the civil war technically begins’ (DiJohn, 2002). 3) Misleading configuration of variables: the thesis is based on relationship between two key variables: civil wars (dependent) and natural resources (causal). It is argued that this linkage neglects the role of intervening variables such as corruption, predation, prebendalism, lack of fiscal discipline, lack of rule of law, etc. 4) The relevance of reverse logic: much as the existence of natural resources provides a causal factor for civil wars, by a reverse logic, it potentially provides an incentive for avoiding descend into war – this depends on the efficacy or otherwise of intervening variables. 5) Neglect of previous experience: the thesis assumes civil wars to be an a priori phenomenon detached from the past. However, as demonstrated in many African countries, wars have deep-rooted antecedents and have occurred in the past. Political Ecology Paradigm This perspective is attributed to Le Billon (2001), Colin Kahl (2006) and others who use a multidisciplinary perspective to capture the political ecology of resource-

44

Extractive Economies and Conflicts in the Global South

abundant states and attendant implications for conflict. Kahl, in particular, draws from the Marxian tradition in ‘political economy’ and the Foucauldian tradition in ‘cultural theory’ to map the complex ways through which global and local political economies interplay to structure the rentier space, assign value to this space, distribute them in particular ways, and shape the patterns of exploitation and violence. As Le Billon (2001, p. 576) notes, the exploitation-violence linkages characteristic of rentier political ecology involves: the restructuring of polities and commercial networks, as countries become selectively incorporated into the global economy, often in the form of resource enclaves, in a mutually dependent relationship which encourages and sustains armed conflicts, as the source of power becomes not political legitimacy but violent control over key nodes of the commodity chain.

An emerging strand of the political ecology paradigm is the rentier space model defined as ‘encompassing the acquisition, control, and disposition of oil and oil-related resources, including the financial benefits derived from them’ (Omeje, 2007, pp. 46–7). In this space, the driving logic is ‘accumulation’ which encompasses, again: a combination of the rent-seeking features of the economy with the neo-patrimonial traditions of the postcolonial state to produce a convoluted political culture marked by clientelistic desperation. The key stakeholders, clients, and partisans of the political economy seek to pursue, fast-track, secure, protect, and defend oil-related accumulation by desperate measures that may include the use and threat of violence, extortion, and outright plunder—not to mention traditional practices like witchcraft. (Omeje, 2007, p. 46)

In this complex scenario, a number of conflicting tendencies are visible – for instance, between the governing elites and deprived citizenry; within different fragments of the ruling class; between the state and ‘civil society’ and so on. There are further ambivalent manifestations: Because of the logic of fast-tracking and the unstable nature of the underlying political economy, the high stake rentier space is fluid and partly chaotic. The configuration and structure of stakeholders, social forces and actors, especially (but not exclusively) at the bottom and middle spheres of the rentier space is characterized by fragmentation, mutation, permutation and surprise. (Omeje, 2006, p. 8)

The rentier space model provides a useful framework for understanding what Abubakar describes in this volume as ‘territorialization’. This refers the complex range of encounters between disparate social forces with equally disparate interests, aptly portrayed by Omeje (2006) as ‘high stakes and stakeholders’. Ukoha, writing on Nigeria in this volume, identifies two contrasting categories of territorializing forces each seeking to grab and control the rentier space: (1) those in favour of nationalization – this comprise the governing elites, the bureaucracy

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and translational oil companies; (2) those in favour of indigenization – comprising mainly oil-bearing communities and their marginal elites. A key strength of the political ecology paradigm is that it is based on a multidisciplinary approach – relying on a combination of modern and postmodern analogies, as well as a range of cross-disciplinary tools, to advance the frontiers of thinking on rentier politics and resource conflict. However, in the context of the rentier space model, a lot needs to be done to test its efficacy and endurance over time – for instance, in a multicultural context using a range of frameworks advanced in an earlier section of this chapter.

Conclusion This chapter highlights the theoretical and empirical challenges of understanding rentier politics and conflict in extractive economies of the global South. First, the chapter underscores the theoretical challenges that confront scholars of extractive economies and conflict in the global South, and modestly advances a range of adaptable models for best practice in research. Secondly the chapter casts a ground scan of terrains covered in this book. It reveals that recent interest in ‘resource wars’ must be foreshadowed in the complex nature of politics and society in the global South. The chapter reveals that, on the whole, majority of countries in this part of the world are ‘new states’ created through colonial conquest and that after colonialism various forms of repressive and predatory political structures were developed by the emerging governing elites in exploiting and aggrandizing resource rent often at the detriment of the mass of society. Thus, in the long run, the potentials for conflict and war emanating from aggrieved members of society were not only inevitable, but also deeply embedded in the disequilibria associated with the post-colonial state system. Thirdly, the chapter shadows the remaining contributions of this book by identifying and discussing a variety of theoretical models developed in the field to study rentier economies and resource conflicts in the global South. Consequently, the following recommendations are proposed: (a) there is need to diversify conceptual and empirical spectrums, and break theoretical, ideological and cultural (contextual) barriers in understanding rentier politics and conflict in extractive economies of the global South. Put differently, it is imperative to expand the frontiers of research and discussion to take on board crossregional and cross-cultural realities; (b) in the global South, rentier politics and conflict are a function of diverse sets of factors. There is a need to identify and systematize these factors from a multiregional point of view; (c) the symmetric and asymmetric spatial parameters of rentier politics and conflict – namely internal and external discourses and policies – need to be more adequately explored and comprehended.

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Notes 1

2

3

4

5

6

LFAs are common in both in thematic and single-country studies. However, they are not uncommon in cross-country or area studies. The point is that there are flaws in attributing conflict to a single or few set of factors, no matter how strong. Mahdavy documents that the period 1951–1956 provides an historic ‘landmark’ in the economic and political evolution of the Middle East as a resource-endowed region: radical nationalization of petroleum economies within the region transformed Middle eastern countries from naïve countries beholden to ex-colonial moulds of statebuilding and governance (of which petroleum exploitation and marketing was central factor) to ‘fortuitous etatism’ (1970, p. 428) – that is, the phenomenal transformation of the state into a floodgate oil reserve and wealth. Apparently, Iran’s risky but revolutionary policy paid off in several respects: (a) it allowed the governing elites to effectively control the structures of petroleum economy without undue external interference; (b) the governing elites secured a freedom to siphon rent income accruing to the state, with little or no financial discipline, and to enjoy lavish lifestyles characteristic of oil Sheikhs; (c) the governing elites effectively secured the structures of the rentier state, including the instrumentality of prebendal accumulation. For instance, while Saudi Arabia operates monarchical-Sultanic political system and its population is predominantly Sunni Arab, Iraq was governed, until the demise of Saddam in 2003, by the dictator’s Ba’athist regime. Further, Iraq’s population is highly sectarian comprising Sunni and Shiite Arabs, as well as a Kurdish minority. In this chapter, resource conflict is defined as the whole range of scenarios which produce violence and instability associated with the ownership and distribution of scarce resources. Lewis Coser puts it better: ‘[Conflict is defined as] a struggle over values and claims to scarce status, power, and resources in which the aims of the opponents are to neutralize, injure or eliminate their rivals’ (1956, p. 8). The essential feature of conflict is aggressive hostility between stakeholders, and its manifestations range from low to high intensity conflict or ‘complex political emergency’ (see Basedau, 2005). Moore’s position is supported by many scholars (see e.g. Okruhlik, 1999; Ross 2001: see also Abubakar and Watt – both in this volume).

References Auty, R.M. (1993), Sustaining Development in Mineral Economies: The Resource Curse Thesis, London: Routledge. Auty, R.M. and A.H. Gelb (2001), ‘Political Economy of Resource Abundant States’, in R.M. Auty (ed.), Resource Abundance and Economic Development, Oxford: Oxford University Press. Ayoob, Mohammed (1995), The Third World Security Predicament: State Making, Regional Conflict, and the International System, Boulder, CO: Lynne Rienner. Basedau, Matthias (2005), ‘Context Matters – Rethinking the Resource Curse in SubSaharan Africa’, Global and Area Studies Working Paper Series No. 1, German Overseas Institute (DÜI). Beblawi, H. (1987), ‘The Rentier State in the Arab World,’ in Hazem Beblawi and Giacomo Luciani (eds), The Rentier State, New York: Croom Helm.

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Beblawi, H. and Luciani, G. (eds) (1987), The Arab State, New York: Croom Helm. Berdal, M. and D.M. Malone (eds) (2000), Greed and Grievance: Economic Agendas in Civil Wars, Boulder, CO: Lynne Rienner. Castells, M. (1992), ‘Four Asian Tigers with a Dragon Head: A Comparative Analysis of the State, Economy and Society in the Asian Pacific Rim’, in R. Henderson and J. Applebaum (eds), State and Development in the Asian Pacific Rim, London: Sage Publications. Cliffe, L. and R. Luckham (eds) (1999), ‘Complex Political Emergencies and the State: Failure and the Fate of the State’, Third World Quarterly, 20(1). Collier, P. (1998), ‘On Economic Causes of Civil War’, Oxford Economic Papers, 50, pp. 563–73. Collier, P. (2000), ‘Doing Well Out of Civil War: an Economic Perspective’, in M. Berdal and D.M. Malone (eds), Greed and Grievance: Economic Agendas in Civil Wars, Boulder, CO: Lynne Rienner. Collier, P. and A. Hoeffler (1999), Justice Seeking and Loot-Seeking in Civil War, Washington: World Bank. Collier, P. and A. Hoeffler (2000), Greed and Grievance in Civil War, Policy Research Working Paper 2355, Development Research Group, Washington DC: World Bank. Collier, P., V.L. Elliott, H. Hegre, A. Hoeffler, M. Reynal-Querol and N. Sambanis (2003), Breaking the Conflict Trap: Civil Wars and Policy Development, Washington DC: World Bank. Coser, L.A. (1956), The Functions of Social Conflict, Glencoe, IL: The Free Press. DiJohn, J. (2002), Mineral Resource Abundance and Violent Political Conflict: a Critical Assessment of the Rentier State Model, Working Paper No. 20, London School of Economics Crisis States Programme. Englebert, P. (2000), State Legitimacy and Development in Africa, Boulder, CO: Lynne Rienner. Francis, D.J. (2006), Uniting Africa: Building Regional Peace and Security Systems, Aldershot: Ashgate. Fleshman, M (2002), ‘The International Community and the crises of Nigeria’s Oil Communities’, Review of African Political Economy, 91, pp. 153–62. Hirschliefer, J. (2001), The Dark Side of the Force: Economic Foundations of Conflict Theory, Cambridge: Cambridge University Press. Hudson, V.M. (2005), ‘Foreign Policy Analysis: Actor-Specific Theory and the Ground of International Relations’, Foreign Policy Analysis, 1, pp. 1–30. Ibeanu, I. (2000), ‘Oiling the Friction: Environmental Conflict Management in Niger Delta, Nigeria’, Environmental Change and Security Project Report No. 6, Washington DC: Woodrow Wilson International Centre for Scholars. Idemudia, Uwafiokun and Uwen E. Item (2006), ‘Demystifying the Niger Delta Conflict: Toward an Integrated Explanation’, Review of African Political Economy, 109, pp. 391–406. Ifeka, C. (2006), ‘Youth Cultures and the Fetishization of Violence in Nigeria’, Review of African Political Economy, 110, pp. 721–36. Janowitz, Morris (1977), Military Institutions and Coercion in the Developing Nations, Chicago, IL: University of Chicago Press. Kahl, C.H. (2006), States, Scarcity and Civil Strife in the Developing World, Princeton, NJ: Princeton University Press. Kaldor, M. (1999), New and Old Wars: Organized Violence in a Global Era, Oxford: Polity Press. Kaplan, Robert (1994), ‘The Coming Anarchy’, Atlantic Monthly, February.

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Karl, T.L. (1997), The Paradox of Plenty: Oil Boom and Petro-States, Berkeley, CA: University of California Press. Kasfir, Nelson (1987), ‘Class, Political Domination and the African State’, in Zaki Ergas (ed.), The African State in Transition, London: Macmillan Press. Keen, D. (1998), ‘The Economic Functions of Violence in Civil War’, Adelphi Paper, 320, pp. 1–88. Lawrence, P. (2007), ‘Collier on War and Peace in Africa: Statistics in Command’, Review of African Political Economy, 111, pp. 168–76. Le Billon, P. (2001), ‘The Political Ecology of War: Natural Resources and Armed Conflicts’, Political Geography, 20. Levi, M. (1988), Of Rule and Revenue, Berkeley, CA: University of California Press. Mahdavy, H. (1970), ‘The Patterns and Problems of Economic Development in Rentier States: The Case of Iran’, in M.A. Cook (ed.), Studies in the Economic History of the Middle East, Oxford: Oxford University Press. Mamdani, M. (1996), Citizen and Subject: Contemporary Africa in the era of Late Colonialism, London: James Currey. Mann, Michael (1986), The Sources of Social Power, Volume 1: A History of Power from the Beginning to A.D. 1760, New York: Cambridge University Press. McNeill, William H. (1982), The Pursuit of Power: Technology, Armed Forces, and Society Since A.D. 1000, Chicago, IL: University of Chicago Press. Mkandawire, T. (1998), ‘Thinking about the Developmental State in Africa’, paper presented at UNU-AERC Workshop on Institutions and Development in Africa held at UNU Headquarters, Tokyo, Japan, 14–15 October. Moffat D. and O. Linden (1995), ‘Perception and Reality: Assessing Priorities for Sustainable development in the Niger Delta’, Ambio: Journal of Human Environment, 24, pp. 527–38. Moore, M. (1998), ‘Death without Taxes: Democracy, State Capacity and Aid Dependence in the Fourth World’, in M. Robinson, and G. White (eds), The Democratic Developmental State: Politics and Institutional Design, Oxford: Oxford University Press. Moore, M. (2001), ‘Political Underdevelopment: What Causes “Bad Governance”?’, Public Management Review, 3(3). Moore, M. (2004), ‘Revenues, State Formation and the Quality of Governance in Developing Countries’, International Political Science Review, 25(3), pp. 297–319. Mullins, A.F. Jr (1987), Born Arming: Development and Military Power in New States, Stanford, CA: Stanford University Press. Nafzinger, W. and J. Auvinen (1996), ‘Economic Development, Inequality, War and State Violence’, World Development, 30, p. 11. North, D. (1981), Structure and Change in Economic History, New York: Norton Press. Obi, C. (2001), ‘Oil Minority Rights Versus the Nigerian State: Conflict and Transcendence’, University of Leipzig Papers on Africa, Politics and Economics, 53, pp. 1–19. Ogri, R.O. (2001), ‘A Review of the Nigerian Petroleum Industry and Associated Environmental Problems’, The Environmentalist, 21, pp. 11–21. Okruhlik, G. (1999), ‘Rentier Wealth, Unruly Law and the Rise of Opposition: the Political Economy of Oil States’, Comparative Politics, 31(3), pp. 295–315. Omeje, K. (2004), ‘The State, Conflict and Evolving Politics in the Niger Delta, Nigeria’, Review of African Political Economy, 101, pp. 425–40. Omeje, K. (2006a), High Stakes and Stakeholders: Oil Conflict and Security in Nigeria, Aldershot: Ashgate.

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Omeje, K. (2006b), ‘Petrobusiness and Management of Security Threats in the Niger Delta, Nigeria’, Current Sociology, 54(3), pp. 477–500. Omeje, K. (2006c), ‘The Rentier State, Oil-related Legislation and Conflict in Nigeria’, Conflict, Security & Development, 6(2), pp. 211–230. Omeje, K. (2007), ‘Oil Conflict and Accumulation Politics in Nigeria’, Environmental Change and Security Project Report No. 12, Washington DC: Woodrow Wilson International Centre for Scholars. Porto, J.G. (2002), ‘Contemporary Conflict Analysis in Perspective’, in J. Lind and C. Stuurman (eds), Security and Surfeit: the Ecology of Africa’s Conflict, Pretoria, South Africa: Institute for Strategic Studies. Ross, Michael L. (1999), ‘The Political Economy of the Resource Curse’, World Politics, 51, pp. 297–322. Ross, Michael L. (2001), ‘Does Oil Hinder Democracy?’, World Politics, 53, pp. 325–61. Schwarz, R. (2004), ‘State Formation Processes in Rentier States: The Middle Eastern Case’, presentation for the Fifth Pan-European Conference on International Relations, ECPR Standing Group on International Relations, Section 34, International Relations Meet Area Studies, The Hague, Netherlands, 9–11 September. Tilly, C. (1975), ‘Reflections on the History of European State-Making’, in C. Tilly (ed.), The Formation of National States in Western Europe, Princeton, NJ: University Press. Ukeje, C. (2001), ‘Youth, Violence and the Collapse of Public Order in the Niger Delta of Nigeria, African Development, 26(1), pp. 337–66. Vandewalle, D. (1998), Libya since Independence: Oil and State-Building, London: I.B. Tauris. Welch, E.C. (1995), ‘The Ogoni and Self Determination: Increasing Violence in Nigeria’, Journal of Modern African Studies, 33(2), pp. 635–49. Yates, D. (1996), The Rentier State in Africa: Oil Rent Dependency and Neo-colonialism in the Republic of Gabon, Trenton, NJ: Africa World Press.

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Chapter 3

Anatomy of an Oil Insurgency: Violence and Militants in the Niger Delta, Nigeria Michael Watts

Blood may be thicker than water, but oil is thicker than both. (Anderson, 2001, p. 30) [I]f low income and slow growth make a country prone to civil war … why [?]. … low income means poverty, and low growth means hopelessness. Young men, who are the recruits for rebel armies, come pretty cheap … Life is cheap and joining a rebel movement gives these young men a small chance of riches. (Collier, 2007, p. 20) [People in the Niger Delta] with a sense of grievance were no more likely to take part in violent protest than those who were not aggrieved. So what did make people more likely to engage in political violence? … well, being young, being uneducated, and being without dependents. … [There] was no relationship between social amenities that a district possessed and its propensity to political violence. Instead, the violence occurs in the districts with oil wells. … [A]lthough the risk of violence jumps sharply if there is at least one oil well, if there are two oil wells in the district it starts to go down. And with twenty oil wells it is lower still… To my mind this looks more like a protection racket than outrage provoked by environmental damage. In the absence of an oil well there is no scope for extortion and so no violent protest. With an oil well the protection racket is in business. But the more oil wells … the greater the incentive for an oil company to pay up and buy peace. …. [O]ver time the situation has evolved. There is now a huge amount of money being directed by the Nigerian federal government to the Delta region and the oil companies are desperately paying protection money … Within the region local politicians are fighting it out for control of all this money and violent protest has become an orchestrated part of the political rent seeking. Grievance has evolved, over the course of a decade, into greed. (Collier 2007, pp. 30–31; emphasis added)

It is a measure of a certain sort of notoriety when Nigerian politics reaches the pages of Vanity Fair, penned no less by a prize winning journalist and writer who, to the best of my knowledge, knows nothing of Africa or in this case the Niger Delta (Unger, 2007). Sebastian Unger’s account of Ijaw militants operating in the oil-rich creeks of the Niger Delta is little more than tabloid journalism

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but the realities to which it speaks have been, over the last eighteen months, an extraordinary combination of the theatrical and the incendiary, worthy perhaps of any tabloid’s scrutiny. On 15 September 2005, the Governor of Bayelsa State (Diepreye Alamieyeseigha), a major oil producing state in the heart of the Ijaw homeland, was arrested by the British security agencies at London airport (a trip purportedly made to undertake cosmetic surgery) on three counts of money laundering (to the tune of one point eight million pounds). The Governor’s arrest – designed to send a signal to unruly Governor’s everywhere in the run up to the 2007 elections and Obasanjo’s ultimately fruitless effort to run for a third term – clearly involved close collaboration between the Obasanjo and Blair governments. Released on $1.25 million bail in early October, Alamieyeseigha dramatically escaped from house detention in central London (disguised as an old woman) and appeared rather magically in the capital of Bayelsa, Yenagoa, on 20 November to adoring crowds after, as far as we can tell, an extraordinary escape via Paris, Yaounde and finally by small boat along the creeks along the Cameroon-Nigeria border. On 9 December amidst considerable political confusion, he was seized by police in Government House after the state House of Assembly had voted 17–24 to impeach him – all under tight security presence of the Joint Task Force and the State Security Services (SSS). Shortly after the London arrest, on 21 September 2005, against a backdrop of deepening militancy and oil-supply disruption and undemocratic maneuvers by President Obasanjo to quite literally purchase the support from the senate for his third term ambitions, Alhaji Asari-Dokubo, the charismatic and savvy leader of the Niger Delta People’s Volunteer Force (NDPVF) – an insurgent militia force fighting, by its own account, for resource control and self-determination in the eastern Delta – was arrested by Federal forces on treason charges. Asari, a former Ijaw Youth Council (IYC) President, was arrested by police in the River State’s Governor’s house in a sting operation and was taken to Abuja in spite of the fact that ostensibly a peace settlement, between some of the Niger Delta militants and government, had been brokered in 2004 by Obasanjo himself. Asari has been held in Abuja in SSS custody and appeared in February 2007 to stand trial amidst claims that his previous unruly behaviour in court justified the decision to hold the proceeding with Dokubo in absentia. In something of a circus atmosphere, Asari referred to the Judge as ‘an idiot’ and the 80 security agents in the courtroom were unclear as to whether and how the accused was to be removed from the courtroom. And finally, in what proved to be a trifecta of political crises for the Ijaw community, the Central Bank reported to the Economic and Financial Crimes Commission (EFCC) on 6 October 2005 that the head of Allstate Trust Bank and Ijaw capitalist, Chief Ebimiti Banigo, was guilty of corruption. He was subsequently arrested and the bank was, as a consequence, closed (amidst the loss of substantial personal savings by many depositors in River State). All of these events – in effect the arrest and detention of three major Ijaw notables – were inevitably read as a political attack by Obasanjo’s government on a region (the Niger Delta) and people (the Ijaw) that had been at loggerheads with the federal centre, a hostility marked both by the collapse of the national CONFAB in

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2005 on the allocation of oil revenues (in which the Delta representatives walked out) and the rapid descent into violence and political ungovernability across the oilfields after 2002, although the militancy can be traced back to the early 1990s. The stable and regularized flow of oil, as a consequence, was placed in question in an historically unprecedented way (Figure 3.1).

Average Annual Crude Oil Production Deferred in Nigeria 1999 2006 700,000 600,000 500,000 400,000 300,000 200,000 100,000 0 1999

2000

2001

2002

2003

2004

2005

2006

Year

Figure 3.1 Average annual crude oil production deferred in Nigeria 1999–2006 Source: http://www.legaloil.con. 2007.

Out of this vortex of events – one part soap opera, one part machine-politics – there emerged in late 2005, in a most dramatic fashion, a hitherto unknown group of masked insurgents, reminiscent in many ways of Subcommandante Marcos and his indigenous cadres in southern Mexico but much better armed. Beginning with a pipeline explosion in December 2005, MEND (the Movement for the Emancipation of the Niger Delta) began calling for the international community to evacuate from the Niger Delta by 12 February, or ‘face violent attacks’. Two weeks later, the group claimed responsibility for attacking a Federal naval vessel and for the kidnapping of nine workers employed by the oil servicing company Willbros, allegedly in retaliation for an attack by the Nigerian military on a community in the Western Delta. More than 15 Nigerian soldiers were killed and between May and August 2006 there were at least three kidnappings per month in the first half of 2006 (typically the hostages have all been released following the payment of substantial ransoms by the government).1 In the last nine months the escalation of attacks – including electronically detonated car bombings, attacks on government buildings, and massive disruption of oil installations deploying sophisticated military equipment, and the kidnapping of workers sometimes from platforms 40–60kms off shore – have spiralled out of control. In a deteriorating

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environment in which many oil companies have withdrawn personnel and cut back production – currently there is a 500,000–600,000 barrel per day shut in – Julius Berger, the largest construction company operating in the country, announced its withdrawal from the Niger Delta in the middle of 2006. President Obasanjo has sent in additional troops to bolster the Joint Military Task Force (JMTF) in the Delta but it is clear that they are incapable of operating effectively within the riverine creeks. The violence has continued – indeed deepened; at least 60 militants were reported killed and another 100 arrested in two days of brutal fighting in Bayelsa State in late August 2006. According to the Centre for Strategic and international Studies (CSIS, 2007) 123 expatriate hostages have been taken since January 2006 (until early March 2007) and there have been 42 attacks on oil installations over the same period. As I write, the residence of the new VicePresident elect (the Governor of Bayelsa State) has been bombed, Chevron has temporarily shut down its operations, and following a massive pipeline explosion at Bomu, a total of 900,000 barrels of oil per day are currently shut in (30 per cent of official production). It is quite unclear, when located on this larger canvas, what Petroleum Minister Edmund Daukoru could possibly have meant when he announced to OPEC in February 2007 in Greece that ‘the worst is over’, that ‘it is a very, very temporary thing’ (United Press International, 28 January 2007, http://www.upi.com/Energy/analysis_nigeria_hopeful_for_oil_future). In summary, one might say that ten years after the hanging of Ken Saro-Wiwa and his Ogoni comrades, basic conditions across the oilfields have changed little – except that it’s worse. An Amnesty Report (2005) entitled Ten Years On: Injustice and Violence Haunt the oil Delta, noted that security forces still operate with impunity, that the government has failed to protect communities in oil producing areas while providing security to the oil industry, and that the oil companies themselves bear a share of the responsibility for the appalling misery and the political instability across the region (see also ICG, 2006a, 2006b). The UNDP report on human development in the Delta (UNDP, 2005) was unflinching in its assessment: the ‘appalling development situation’ (p. 2) reflects the uncontestable, and shameful, fact that after a half century of oil development ‘the vast resources from an international industry have barely touched pervasive local poverty’ (p. 1). A much-publicized Commission of Nobel Laureates on Peace, Equity and Development in the Niger Delta Region concluded that the ‘wealth earmarked for the region’ was ‘large stolen by politicians’; the frustration and violence, they concluded, was ‘rising … and getting worse’ (Vanguard, 2 December 2006, p. 1). It is all too easy to be apocalyptic in tone – and to endorse a certain sort of catatrophism that afflicts much writing about the continent, but if truth be told Executive Chairman of the Economic and Financial Crime Commission (EFCC) Nuhu Ribadu was surely right when he observed that the Niger Delta situation was ‘not being taken seriously’ and might ‘end up like … Somalia’ (This Day, 11 March 2007, http://allafrica.com/stories/200703110090.html). The rise of MEND – and a number of other ‘freedom fighters’ who apparently stand in some sort of ambiguous and often awkward relation to MEND, such as the Martyrs Brigade and the Coalition for Military Action in the Niger Delta (COMA) – marks something of a watershed in the turbulent history of the Delta

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oilfields, but it arises on the back of a long arc of deepening violence and protest across the oilfield, especially since the late 1990s. By any estimation, the costs of the oil insurgency – MEND is its most visible and most violent culmination – are vast. A report prepared for the Nigerian National Petroleum Company (NNPC) published in 2003 entitled Back from the Brink – before the latest insurgency took off – painted a very gloomy ‘risk audit’ for the Delta. NNPC estimated that between 1998 and 2003, there were 400 ‘vandalizations’ on company facilities each year (and 581 between January and September 2004); oil losses amounted to over $1 billion annually. Already by 2003 oil supply had been compromised by 750,000 bpd as a result of attacks on oil installations across the region. 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. Two so-called ethnic militia led by Ateke Tom (the Niger Delta Vigilante [NDV]) and Alhaji Asari Dokubo (the Niger Delta People’s Volunteer Force [NDPVF]), each driven and partly funded by oil monies and actively deployed (and paid) by high ranking politicians as political thugs during elections, have transformed the political landscape of the Delta. In early 2006 MEND claimed a goal of cutting Nigerian output by 30 per cent and has apparently succeeded. Within the first six months of 2006, there were 19 attacks on foreign oil operations and over $2.187 billion lost in oil revenues; the Department of Petroleum Resources claims this figure represents 32 per cent of the revenue the country generated this year. The Nigerian government claims that between 1999 and 2005 oil losses amounted to $6.8 billion but in November 2006 the Managing Director of Shell Nigeria reported that the loss of revenues due to ‘unrest and violence’ was $61 million per day (a shut-in of about 800,000 barrels per day), amounting to a staggering $9 billion since January 2006. By the end of 2006, the Minister for Petroleum resources Edmund Daukoru claimed that the costs of the insurgency was N7.5 billion ($50 million) per day.2 Against a backdrop of escalating attacks on oil facilities and a proliferation of kidnappings, the Joint Revolutionary Council (apparently an umbrella group for insurgents) threatened ‘black November’ as an ‘all out attack on oil operating companies’ (The Observer, 5 November 2006). A similar call was made in February 2007. The elections of April 2007 – even more fraudulent than the widely condemned elections of 2003 – and the emergence of an Ijaw politician, Goodluck Jonathan, Governor of Bayelsa State , as the Vice President has done nothing to dampen the ire of the militants. Since 1 May 2007 42 foreign workers have been kidnapped and four pipelines have been blown up (http://www.alertnet.org/thenews/news desk/L20301606.htm, 20 May 2007). To put the matter as starkly as I can: the object of my analysis is a vast oil basin – 300 oilfields, 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) sector – that is ungovernable. Nigeria meets its OPEC quota yet currently something like 900,000 barrels per day are deferred and something like 100,000 barrels per day are stolen – collectively this is over one third of output. This is the cost that the oil companies must carry for their ‘license to operate’ (as they put it).

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Figure 3.2 2006 oil disruptions in the Niger Delta Source: Bergen Risks, 2007.

The region confronts a major insurgency (characterized by a massive escalation in the quantity and quality of sophisticated arms operating in an environment (the mangrove creeks) in which the Nigerian security forces have admitted they can do absolutely nothing. On top of that many of the oil-producing communities across the Delta are wracked by all manner of internal conflicts and violence – the ‘restive youth problem’ as it is known in local parlance. It is really an extraordinary train wreck and represents not just the conversion of the Delta into what Ikelegbe (2001) calls ‘a region of insurrection’ – but the shift from the days of Saro-Wiwa’s non-violence to outright militancy and insurgency.3 The founding moment of this insurgency was not the Kaiama Declaration in 1998 drawn up by the Ijaw youth (or the Ogoni struggle in the early 1990s), nor the civil war between 1967 and 1970 to which the ethnic minorities of the Delta were often opposed, but Isaac Boro and his famous 12 Day Revolution launched in 1965 in which he reminded his followers to ‘remember too your petroleum which is being pumped out daily from your veins and then fight for your freedom’ (1982, 117). Boro’s much vaunted ‘Ijaw Republic’ lasted less than two weeks and ended with his arrest by Federal troops in Oloibiri –ironically the site of the first discovery and commercial exploitation of oil in Nigeria – and his untimely death fighting for Federal forces against Biafra. On this large canvas, then, one has to ask whether the historical repetition of violence of which MEND is the current expression is – to invoke Karl Marx rather than Sebastian Unger – tragedy or farce. The purpose of this chapter is to explore the relations between the political economy of oil – and the ancillary question of the Nigerian rentier petro-state

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posed by Omeje in his introduction – and the rise of an insurgency, or more properly of a number of militant movements, in the oil-producing states of the Niger Delta over the last fifteen years. My aim is not to provide a full accounting of MEND as such but to explore how MEND has emerged for a wider field of violence and conflict, and to trace the contours of this field of violence in relation to what I shall call the ‘oil complex’.

Predation, Looting, Obstructability and Rebellion To link oil and insurgency is to necessarily engage with the now large body of theoretical work on the ‘resource curse’ (Ross, 1999; Auty, 1990), which is preoccupied largely with the pathologies of oil-states. There is a popular version promoted by New York Times journalist Thomas Friedmann (2006); his ‘first law of petro-politics’ proposes a fixed relation between increases in the price of the barrel of oil and a decline in political and economic ‘freedom’. A more respectable and robust version looks at the curse specifically through the lens of conflict and war, and here more precisely the economics of civil war, mostly the important corpus of Paul Collier (2003, 2007) and his resource predation theory of civil violence. I wish to engage with three aspects of this rather diverse and variegated body of work,4 as a way of opening up a larger argument about how to understand the dynamics of oil-states, and specifically the relations between oil and insurgent politics. The first – I shall call the ‘the predation or rebellion as organized crime’ – speaks to the work of Paul Collier and his World Bank comrades (and more tangentially the work of Michael Ross (2003)) who address the crucial question of discourses of rebellion and whether they can say anything of consequence about the actual practices or interests of the belligerents. He focuses on the important question of financing violent politics and offers an argument that oil provides a ground on which rebels can finance rebellions (through looting of oil resources) which are self-interested and criminal movements against the state. The second – I shall call ‘the geography-territoriality claim’ – is associated with a body of largely geographical work (I shall use Philippe Le Billon’s (2005) pathbreaking research) which turns on the fact that oil has a specific materiality and a territoriality which shapes (through their location and degree of dispersion) particular sorts of political outcomes (coups or successions for example). And the third associated especially with Michael Ross (2003) – I shall refer to it as ‘the lootability-obstructability claim’ – examines the idea of an insurgency-resource nexus through the possibilities for looting or obstructing the resource (oil in this case) in question. In exploring (and departing from) these ideas I want to provide a rather different tack, and to try and shed some light of Mbembe’s observation, namely: The regions at the epicenter of oil production are torn apart by repeated conflicts. Without taking the form of classic warfare these conflicts sets communities against each other within a single country … Massacres (in the Niger Delta) regularly take place on the context of conflicts that are low intensity but costly in terms of human

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What is on offer, I want to suggest, is a recursive form of primitive accumulation (here I gesture to Hannah Arendt (1956) and her idea of the essential repetition of the ‘original sin of robbery’) which assumes a particular form through what I term the oil complex, and it is the forms of dispossession associated with the operations of the oil complex that are generative of a series of counter-movements aimed at reclaiming (violently) the political, economic, social and environmental losses associated with the generation of oil wealth. The material, geographical, organizational and technological characteristics of oil exploration, production and refinement shape the tactics deployed by insurgents and provide a discourse (‘resource control’) through which claims making occurs. So let me return to this trio of ideas and claims beginning with Collier and the economics of war (‘rebellion is large scale predation of productive activities’). Much could be said about this work: its deep cynicism (‘rebellion … is like organized crime’), its belief that motivation of conflict is unimportant what matters is whether the organization can sustain itself financially, its assumption that history can be reduced to rates of economic growth or the existence of prior civil conflict, its deep problems associated with the nature of the data and evidence (and sampling), and its claim that insurgent predation is ‘worse’ than state extortion (or exaction) and so on.5 I simply wish to focus on its foundational claims: namely, that greed is opposed to grievance, that peaceful protest stands in opposition to rebellion, that government opposes rebellion, and that rebellion equals organized crime.6 Philippe Le Billon adopts a different but complementary tack taking, seriously the geography and materiality of oil (Ross [see below] in other work also addresses these issues). He draws up a fourfold matrix in which resource proximity (to centres of power) and its geophysical character (point or diffuse) are key. In this way he deduces four political outcomes associated with resource couplets: warlordism (distant/diffuse), mass rebellion (proximate/diffuse), coups (proximate/point) and secession (distant/point). Oil is characterized by the latter two (it is a point resource that varies along the axis of its location with respect top power) for which Angola and Chechnya, and Colombia and Yemen are paradigmatic cases. Finally, Michael Ross (2003, p. 47) explores the dynamics of oil politics along two axes: lootability (understood to be ‘easily appropriated [resource] by individuals or small groups of unskilled workers’ and obstructability (that is to say the ease with which its movement or its productive networks can be interrupted or blocked). Oil (on shore and off shore) is unlootable; it is however readily obstructable (pipelines can be detonated, flow stations closed) on shore but not off shore. He holds open the possibility that oil (as an unlootable resource) may yield different types of outcomes (separatist in Cabinda, and non separatist in Sudan), but believes that non-lootability yields general associations; to wit: unlootability is likely to yield separatism (control the territory not the wealth), benefits to government (rather than the poor), reduced duration of conflicts, and enhanced army discipline.

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What is striking about these three related sorts of arguments all of which endeavor to attempt to suture oil and politics is that they fail to meet the most basic sorts of empirical realities to which they purportedly speak. Let me take the Nigerian case to suggest that the claims are not demonstrated in any robust way (to which I shall return later). Let me start with Collier. The first thing that needs to be said is that the very idea of an impermeable membrane separating or opposing two discrete entities – government and rebels – breaks down immediately. The so-called ethnic militias (the NDV and the NDPDF), for example, got their start by being supported (financially and with arms) by politicians in the oil-producing states; the decentralization of corruption, the rise of powerful gubernatorial machine politicians, and the ‘democratization of violence’ that mark post-1999 Nigeria all signal how porous is the state/rebel divide. The NDV and the NDPVF were deployed as political thugs to deliver votes and intimidate voters in the notoriously corrupt and violent 2003 elections (although they were also operative in 1999). Furthermore, a number of the arms used by the militias have been acquired from the Nigerian military (directly in relationship to electoral political thuggery and indirectly from a notorious corrupt and undisciplined army). And last but not least, the low level oil theft ‘(bunkering’) that is controlled by the rebels as one way of financing their struggle, is organized through a vast state-centred syndicate linking high ranking military, politicians, the security apparatuses, an the Niger Delta special military task forces, and the navy coast guard. The Nigerian state in its various expressions and the rebels are both oppositional and organically selfsustaining. The head of the Economic and Financial Crimes Commission [EFCC] Nuhu Ribadu put the issue with great precision: the true state of affair is ‘not even corruption. It is organized crime’ (The Economist, 28 April 2007, p. 56). In the same way, Collier’s (and Ross’s) claim that oil cannot be looted stands in sharp contrast to the existence of a vast oil theft industry. This is not the place to detail the dynamics of its structure (from low level bunkering territories policed by differing sorts of political actors up to the syndicates – global in scope – that orchestrate a vast criminal industry (an estimated 10 per cent of US imports are stolen). My point is that oil is looted and very effectively – at its peak in 2004/5 some 350,000 barrels per day were stolen perhaps inserting $4-5 billion per year into the system – and while the criminal proceeds are unevenly distributed along the commodity-chain, the fact is that both rebels and states (the political classes) benefit from it. There is no question that the oil bunkering trade embraces all manner of agents motivated by all manner of desires (greed, grievance, employment, excitement) but there is no reason in principle why organized crime – but not simply extortion and sabotage as the ‘obstructability’ thesis claims – and grievance cannot co-exist perfectly well (Cramer, 2007). Equally, oil theft (even if the scale has waxed and waned) has a long history in the Delta, and there is no evidence to suggest that there has been, as Collier suggests, a simple shift from grievance to greed (2007, p. 31). Le Billon’s model suffers in similar ways. His fourfold matrix is undercut by the fact that in its brief post-oil history (roughly 50 years) all four forms (including rebellion and warlordism) have occurred in Nigeria. None of this is to suggest that oil is not territorial – it is, and this has profound consequences.

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The pipelines, flow stations and installations given form to a particular territory of dislocation and interruption (or as Ross would say, obstructability). But oil, in this way, now becomes less of a point resource than a territory (‘diffuse’ in Le Billon’s jargon) of dispersed oil sites and oil’s proximate or distant qualities seems less a product of geography than of the dialectical relations between state and rebel powers and capacities. The fact that much on-shore oil is located in and around mangrove swamps accessible only by boat and in an operating environment that is a challenge to any military operation, constitutes a ground on which any guerillas must have a tactical upper hand (in the Niger Delta, the Nigerian military have conceded this point). Many of the insurgents can operate with impunity. Pipelines are almost impossible to police anywhere. Oil installations make easy targets (obstructability) but this has reduced the role of oil to a matter of military tactics rather than political outcomes. Many of these delta realities represents an empirical challenge to Ross’s conceptual claims about lootability. If indeed one were to consider oil in Nigeria unlootable it is not at all clear that it has contributed to army discipline (arguably one of the most corrupt and laughably undisciplined in the world); it may have contributed to separatism (the Biafran war) but it is equally associated with other non-separatist politics, and it is not at all clear it has reduced the duration of conflicts in any simply way. But the reality is that oil has been looted through theft of various sorts – organized and unorganized (hot tapping of pipelines by the poor). This structure of ‘predation’ has benefited a section of the militarypolitical class, sustained all manner of insurgents (and indirectly sections of the unemployed youth), further contributed to corruption and indiscipline within the military and contributed to a vast and complex field of violence encompassing as well-organized insurgents confronting the state, ethnic militias, vigilante groups resembling the Mafia, anti-chieftainship conflicts, inter-ethnic struggles, and criminal activities sometimes called ‘cultism’). Needless to say the very idea (taken from Ross) that offshore oil cannot be obstructed has been shown to be spectacularly wrong: in the last few days hostages were taken by MEND from a platform 30 miles offshore (and MEND’s charismatic PR man – Jomo – often refers to MEND’s abode as ‘200 miles offshore’). What is the most striking aspect of these articulations of oil politics and civil conflict is that the agency of the oil companies – whether the national oil companies (NOCs) or the super majors (IOCs – international oil companies) with whom they operate or the oil service/construction companies– have no analytical presence in the models of rebellion or civil war. At most they appear as the unfortunate corporate entities that are predated by rebels (extortion, sabotage, and kidnapping).7 Corporate practice and agency are conspicuously absent in any account of politics and this is astonishing because the companies themselves have acknowledged that they are a central part of the political dynamics of community conflict (most obviously in the internal reports by Shell and Chevron widely leaked in 2003 and 2004 [see WACS 2003]). This is not to suggest that corporations have deliberately instigated or encouraged rebellion. Rather, what passes as community development in the Delta and their related interactions with what is called ‘host communities’ is a central part of conflict dynamics. On

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the one hand, the companies are constitutionally obliged to pay rents to local communities in which they have operations and have typically cut deals with local chiefs (many of which operate as unaccountable fiefdoms). Community projects and Memoranda of Understanding to the extent that they exist at all are shrouded in secrecy and ambiguity, and corporate responsibility on the ground often appears as a raft of unfinished community projects all of which have contributed to festering resentments among the youth. And last but no least the policy of ‘cash payments ‘– used to pay for protection services from local unemployed youth, to buy off local opposition and to feed a vast networks of illicit payments – have had the effect of generating enormously violent conflicts among youth groups who compete to provide protection services for the company, or who attack corrupt local chiefs (that is to say they upend the system of gerontocratic customary rule at the village level) in order to gain access to the company rents and payments that flow from oil operations in their territories. I have elsewhere detailed this story in one community in Bayelsa State – Nembe – to show how corrupt chieftainship, militant youth groups, electoral politics and corporate practice (including the use of ‘standby payments’ in which companies pay youths to do nothing) have generated a perfect storm of violence in which the deep history of royal chiefly rule in Nembe has been replaced by a Mafia style vigilantism. I deploy the term Mafia as a form of privately organized violence which has arisen, as Anton Bloc’s (1970) brilliant study of nineteenth century Sicily shows, in the vacuum created by sharp class differences (and struggles), a weak local state, and a cultural history of organized violence. It is estimated that Shell spends $60 million per year on community development, yet cash payments amount to at least double that figure. In total these payments amount to perhaps $200 million per annum, perhaps 10 per cent of the operating budget; some companies spend up to 15–17 per cent on such activities.8 They represent in practice a massive infusion of cash designed to purchase consent or compliance – but in practice they help generate rebellion and community violence. Corporate practice and power – the political economy of the oil enclaves in which companies are seen in effect as local government, and the complex struggles by which differing communities (chiefs, youths, militias) position and fight among themselves to gain access to oil rents – is absent conceptually from Collier, Ross and Le Billon’s models,9 which turns on a binary view of conflict (state and insurgents) that radically misconstrues the actual dynamics and agencies of ‘oil politics’.

Nigerian Oil and the Gulf of Guinea’s Perfect Storm Let me then turn to a rather different way of thinking about oil politics taken again from the Nigerian case. A longtime member of OPEC, Nigeria is an archetypical ‘oil nation’ and the jewel in the African oil crown. With reserves estimated at close to forty billion barrels, oil accounted in 2006 for 80 per cent of government revenues, 96 per cent of foreign exchange earnings, 96 per cent of export revenues and almost half of GDP. Crude oil production runs currently at more than 2.1 million barrels per day valued at more than $40 billion at 2006 prices. Mostly

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of the oil is lifted onshore from about 250 fields dotted across the Niger Delta. Nigeria’s oil sector now represents a vast domestic industrial infrastructure: ten export terminals, 275 flow stations, ten gas plants, four refineries (Warri, Port Harcourt I and II, and Kaduna), 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 the civil war that ended in 1970. In the late 1950s petroleum products were insignificant, amounting to less than 2 per cent of total exports. Between 1960 and 1973 oil output exploded from just over 5 million barrels to over 600 million barrels. Government oil-revenues in turn accelerated from 66 million naira in 1970 to over 10 billion naira in 1980. A multibillion dollar oil sector has, however, proven to be a little more than a nightmare. To inventory the ‘achievements’ of Nigerian oil development is a salutary exercise: 85 per cent of oil revenues accrue to 1 per cent of the population; perhaps $100 billion of $400 billion in revenues since 1970 have simply gone ‘missing’ (the anti-corruption chief Nuhu Ribadu, claimed that in 2003 70 per cent of the country’s oil wealth was stolen or wasted; by 2005 it was ‘only’ 40 per cent). Over the period 1965-2004, the per capital income fell from $250 to $212; income distribution deteriorated 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 per cent to more than 70 per cent, 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 and Subramanian, 2003, p. 4). Over the last decade GDP per capita and life expectancy have, according to World Bank estimates, both fallen. 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. But the costs of oil are experienced not only in class terms but equally importantly, geographically. 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, says Ike Okonta (2005) – over 6,000 oil spills since 1970. The government’s presence, Okonta notes, ‘is only felt in the form of the machine gun and jackboots’ (2005, p. 206). The recent UNDP report on human development in the Delta (UNDP, 2005) was unflinching in its assessment: the ‘appalling development situation’ (p. 2) reflects the uncontestable, and shameful, fact that after half a century of oil development ‘the vast resources from an international industry have barely touched pervasive local poverty’ (p. 1). A much-publicized Commission of Nobel Laureates on Peace, Equity and Development in the Niger Delta Region concluded that the frustration and violence was ‘rising … and getting worse’ (Vanguard, 2 December 2006, p. 1). The legacy of oil-failure must be traced back to the heady boom days of the 1970s. The boom detonated a huge influx of petro-dollars and launched an

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ambitious (and largely autocratic) state-led modernization programme. Central to the operations of the new oil economy was the emergence of an ‘oil complex’ that overlaps with, but is not identical to, what is often dubbed the ‘petro-state’. The latter is comprised of several key institutional elements: (i) a statutory monopoly over mineral exploitation (the 1969 Petroleum Law and about 40 related pieces of legislation); (ii) a national (state) oil company that operates through joint ventures with oil majors who are granted territorial concessions, leases and licences; (iii) 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; (iv) the oil producing communities themselves within whose customary jurisdiction the wells are located; and (v) a political mechanism by which oil revenues are distributed. Within this nexus, the national oil company (NNPC in Nigeria) stands as the blackest of black holes: a vast sump of theft, corruption and fictional accounts. State oil, said one commentator, ‘is like a party with the lights out and the music on full blast’. The heart of the petro-state is unearned income, and its central dynamic is the fiscal sociology of the distribution of, and access to, oil rents. 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 State’s 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 shrivelled) 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 largely of ethnic minorities) have lost and the non-oil producing ethnic majorities have gained – by fair means or foul. The history of post-colonial Nigeria is in a sense the history of the reconfiguration of revenue allocation. Fiscal centralization is an unstable solution to the oil question, however. The turmoil and militancy across the Niger Delta oil-producing states, building upon the political momentum from below made through popular struggle for ‘resource control’, have exacted concessions from the federal centre, largely through expanded derivation. Since Obasanjo’s return to power in 1999, he has tried to maintain a balancing act – balancing a growing Niger Delta clamour for resource control backed by an insurgency against the array of political forces rooted in the hegemony of powerful northern and southern political interests – the Federal centre has increased derivation to 13 per cent. As a consequence, the oil boom has produced a vast influx of monies into the Delta through the state and local government structures (even though it is perfectly clear that the actual disbursement of monies and the flow of oil revenues from Abuja to the

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oil-producing states is marked by massive malfeasance and diversion). Currently Rivers and Delta States for example receive in excess of $1 billion in federal revenues each year. Since 2004 (until the present) the four largest oil-producing states have received at least $2 billion each year such that, to take one example, in the first six months of 2006 the 23 local governments in Rivers State received more than $115 million in federal allocations (including derivation). This flow of oil money is central to understanding the vastly enhanced powers of state governors and their political machines, and the radical decentralization of corruption since the oil boom of the 1970s. The revenue allocation process is a product of the political formation into which oil wealth is inserted and the dynamics of the oil complex. To grasp the ways in which unearned income and the politics of revenue allocation intersect in Nigeria, the work of Mamood Mamdani (1995) and his observations on postcolonial African politics is key. Colonial rule and decentralized despotism were synonymous says Mamdani. The Native Authorities consolidated local class power in the name of tradition (ethnicity) and sustained a racialized view of civic rights. The Nationalist movement had two wings, a radical and a mainstream. Both wished to de-racialize civic rights but the latter won out and reproduced the dual legacy of colonialism. They provided civic rights for all Nigerians but a bonus ‘customary rights’ for indigenous people. The country had to decide which ethnic groups were indigenous and which were not a basis for political representation, a process that became constitutionally mandated in Nigeria. Federal institutions are quota driven for each state but only those indigenous to the state may apply for a quota. As Mamdani puts it: The effective elements of the federation are neither territorial units called states not ethnic groups but ethnic groups with their own states … Given this federal character every ethnic group compelled to seek its own home its NA, its own state. With each new political entity the non-indigenes continues to grow. (2001, p. 661)

Through federal law, culture constitutes the ground of politics, and ethnicity becomes political force. As a consequence, in Nigeria clashes in the postcolonial period were not racial in character but ethnic, and such ethnic clashes, which dominated the political landscape in the last three decades, are at root always about customary rights to land, and derivatively to a local government or to a state that can empower those on the ground as ethnically indigenous (this is the so-called ‘indigeneity question’ [see HRW, 2006]). Oil was inserted into this firmament beginning in the late 1950s but most dramatically after independence. It produced not simply federal centralization, consolidation and the allocation of political largesse through rents in the name of development and modernization, but also a subtle reconfiguration of politics in which a national resource became the basis for claims making. As much as the state uses oil to build a nation and to develop, so do political communities use oil wealth to activate community claims on what is seen popularly as unimaginable wealth – black gold. The governable space of Nigeria was as a consequence ‘re-territorialized’ through essentially ethnic claims-making. Access to oil revenues amplifies what one might call sub-

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national political institution making; oil politics becomes a massive state-making enterprise. This partly explains how, between 1966 and the present, the number of local governments has grown from 50 to roughly over 700, and the number of states from four to 36. And of course, it is an endlessly recursive political logic. Nigeria as a modern nation state has become a machine for the production of ever more local political institutions which provide a constitutional basis for access to the revenue allocation process. The rentier logic is ineluctable and terrifying. Overlaid upon the Nigerian petro-state and its fiscal sociology is, in turn, a volatile mix of forces that give shape to ‘widen the oil complex’. First, the geostrategic 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). 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 lately 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 then a ‘zone of economic and political (regional and subnational) calculation’ – in essence a form of governmentality that corresponds more to a enclave than a modern nation state. But at this moment in history it must of course be situated on the larger landscape of the energy scramble for Africa. Cheney’s National Energy Strategy Report in 2001 bemoaned US oil habit – ‘a dependency on foreign powers that do not have America’s interests at heart’. 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 per cent of world liquid hydrocarbon production by 2010. Over the last five years when new oilfield discoveries were a scarce commodity, Africa contributed one in every four barrels of new petroleum discovered outside of Northern America. Energy security is the name of the game. No surprise, then, that the Council of Foreign Relation’s call for a different US approach to Africa in its new report More than Humanitarianism (2005), turns on Africa’s ‘growing strategic importance’ for US policy (p. xiv). It is the West African Gulf of Guinea, encompassing the rich on- and off-shore 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. Oil

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investment now represents over 50 per cent of all foreign direct investment in the continent (and over 60 per cent of all FDI in the top four FDI recipient countries) and almost 90 per cent of all cross-border mergers and acquisition activity since 2003 has been in the mining and petroleum sector (WIR, 2005, p. 43). Energy security, it turns out, is a terrifying hybrid, a perplexing doubleness, containing the old and the new: primitive accumulation and American militarism coupled to the war on terror (Harvey, 2003; RETORT, 2005; Barnes, 2005). Into this vortex of forces are a set of other global and imperial forces: on the one side, the presence of aggressive Chinese (and Asian) oil companies – coupled to Asian oil service and construction companies – and the new imperial intentions of the South African energy companies, on the other. Finally, put into the mix the resurgence of Islamism in northern Nigeria and across the Sahelian belt and the political clout of evangelical Christianity across the Niger Delta and one has the making of a perfect storm of violence and conflict.

The Anatomy of an Oil Insurgency: A Genealogy of MEND Let us examine with some latitude whether the state of development is to any extent commensurate with a tint of the bulk of the already tapped mineral and agricultural resources … Therefore, remember your seventy-year-old grandmother who still farms before she eats; remember also your poverty stricken people; remember too your petroleum which is being pumped out daily from your veins, and then fight for your freedom.10 (Isaac Adaka Boro, 1966)

How, then, can one grasp the transformation of the Niger Delta into a space of insurgency? I cannot provide a full accounting here but rather want to identify a key number of processes generated from within the heart of the oil complex. Each is an expression of a long and deeper geography of exclusion and marginalization by which the oil-producing Delta came to suffer all of the social and environmental harms of the oil industry and yet receive in return (until very recently) very little of the oil revenues. It is from the geopolitical contradiction of oil without wealth – a bequest of the oil complex – that the insurgency has drawn sustenance. In this sense, the insurgency does not appear to be a shining example of the influential predation theory of rebellion proposed by Paul Collier (2003) and his World Bank associates. From this viewpoint, insurgency is less about grievance than greed and rebellion is little more than organized crime. While, the Niger Delta has its fair share of predation and greed, to see the insurgency as a product of youth crime is to misconstrue its geopolitical and historical origins. What were the forces that emerged from this geopolitical contradiction? The first, not surprisingly in a region of forty or more ethnic groups and a powerful set of institutions of customary rule, was ethno-nationalism. This was central of course, to the Ogoni movement, but the banner has been taken up in the last decade or so by the Ijaw, the largest ethnic (or so-called ‘oil’) minorities in the Delta. Their exclusion from the oil wealth (and the federal revenue allocation process), to say nothing of bearing the costs of oil operations across the oilfields, became central

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to the emergence of a new sort of youth politics. The establishment of the Ijaw Youth Council in 1998 marked a watershed in this regard and it became the vehicle through which new generation of youth leaders took up the struggle. Many were mobilized in and around youth movements and came to assume local positions of power, including a number who took up an explicitly militant anti-state insurgent stance, especially in the wake of the hanging of Ken Saro-Wiwa when Gandhian tactics were, in some quarters, seen to have failed catastrophically. The second force was the inability and unwillingness of the Nigerian state in its military and civilian guises to address this political mobilization in the Delta without resorting to state-imposed violence by an undisciplined military, police and security forces. In this sense the history of the Ogoni struggle was a watershed too insofar as it bequeathed a generation of militants for whom MOSOP represented a failure of non-violent politics. The return to civilian rule in 1999 saw a further militarization of the region in which communities were violated and experienced the undisciplined violence of state security forces. The destruction of Odi (1999) and Odiama (2005) by military forces, and the violence meted out by the Joint Military Task Force based in Warri were the most dramatic instances of state intimidation. This unrelenting militarization of the region to secure ‘national oil assets’ further propelled the frustrations of a generation of youth who, in the period since the 1980s, had grown in their organizational capacities. Third, the militant groups themselves represented the intersection of two important forces. On the one hand, the rise of youth politics in which a younger generation whose economic and political prospects were stymied began to challenge both customary forms of chiefly power, and the corruption of the petro-state (whether military or civilian). These twin processes have a long history dating back at least to the famous Twelve Day Republic in which, in 1965 a group of young Ijaw men proclaimed, against a backdrop of expanding oil output, an independent Ijaw state. But the political mobilization of the youth turned from a sort of peaceful civic nationalism increasingly toward militancy and this, as I have suggested, was in turn driven by the violence of the Nigerian military forces but also by the politicians, especially the increasingly powerful governors, who sought to make use of the youth movements for their own electoral purposes (that is to say, political thugs to intimidate voters). Paradoxically, a number of the militias often got their start by being bankrolled by the state and politicians and indeed the NDV and NDPDF were both fuelled by machine politicians during the notoriously corrupt 1999 and 2003 elections. Fourth, the existence and proliferation of oil theft, known locally as ‘oil bunkering’, (Figure 3.3) provided a financial mechanism through which militants could (after being abandoned by their political patrons) finance their operations and attract recruits. The organization of the oil theft trade, which by 2004 was a multibillion dollar industry involving high ranking military, government official and merchants, drew upon the local militia to organize and protect the tapping of pipelines and the movement of barges through the creeks and ultimately offshore to large tankers. This is, on its face, a case of the sort of organized crime that Collier invokes in his account of the economics of rebellion – and indeed there are explicitly criminal elements and syndicates at work in the operations of a

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vast bunkering business in Nigeria – yet the theft of oil provided a lubricant for a ready existing set of grievances. Rebel organizations and insurgents were, in this sense, not merely criminal gangs. And finally, the operations of the oil companies – in their funding of youth groups as security forces, in their willingness to use military and security forces against protestors and militants alike, and the their corrupt practices of distributing rents to local community elites – all contributed to an environment in which military activity was in effect encouraged and facilitated. A number of companies used violent youth groups to protect their facilities (see WACS, 2003). Corporate practice, and community development, in particular, had the net effect of inserting millions of dollars of so-called ‘cash payments’ into the local economy by paying corrupt chiefs, violent youth groups or corrupt local officials in the hope that the oil would keep flowing.

Figure 3.3 Oil theft in Nigeria (2003–2006) Source: www.legaloil.com, 2007.

In practice the uneven record of community development projects and the corrupt forms in which cash payments were made, produced a growing hostility (expressed in the growth of oil platform occupations, attacks on pipelines, and more recently hostage taking) to the companies. Directly and indirectly corporate

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practice were essential to the dynamics of local violence and the escalation of insurgent activity. The emergence of MEND in 2005 represents the almost inevitable end-point of a process of marginalization and alienation that assumed a militant character during the 1990s. MEND has grown from an earlier history of increasingly militant youth embracing for example the ‘Egbesu Boys of Africa, the Meinbutu Boys and others in the Warri region, dating back to the early 1990s. It is now something like a ‘franchise’ insofar as it operates in a tense and complex way with other shady militant groups such as the Martyrs Brigade, and the Committee on Militant Action. What is important to grasp is that MEND cannot be understood outside of the operation of the quartet of forces that I briefly outlined, and yet at the same time MEND is inextricably linked to local politics: struggles among and between two key Ijaw clans (Gbaramantu and Egbema) over access to oil monies, struggles with Chevron over the lack of a Memorandum of Understanding for socalled ‘host communities’ in the clan territory, control of oil bunkering territories, and not least the complex politics of Warri city, the largest oil town in Delta State. Here is a multi-ethnic city than has imploded since the 1990s as warring ethnic groups (fuelled by machine politics) have fought for the establishment of new local government authorities as a basis for laying claim to federal oil monies (HRW, 1999). Into this mix was the catalytic effect of the Nigerian special military task force (‘Operation Restore Hope’) that came to quell the growing militancy across the region in which the Gbaramantu clan territory was repeatedly attacked and bombed (Courson, 2007). The insurgency across the Niger Delta, involving a welter of differing groups and interests, it needs to be said, is inextricably wrapped up with the intersection of generational politics, a corrupt and violent petro-state, irresponsible and short-sighted oil company practice, and the existence of a vast oil bunkering network. As Kalyvas (2001, p. 113) suggests, viewed from the micro-level these sorts of insurgencies – an oil insurgency in this case – resemble ‘welters of complex struggles’ in which the notion that the rebels are criminals who operate against law abiding states fails to capture the dynamics at work. Group interests are often ‘localistic and region-specific’ (Kalyvas, 2001, p. 112) yet, as I have tried to argue, their specificity emerges from the structured totality of the oil complex. It all makes for an enormously unstable and volatile mix of political, economic and social forces, now located on a larger and more intimidating canvas of global oil instability, and the Global War on Terror. What is striking about the MEND story is that oil politics is attached to territory in profound ways. In fact it discloses what Rose (1999, p. 31) calls ‘governable spaces’, that is, the spatialization of government (forms of rule in the Foucauldian sense) in which territory, identity and rule are cemented. The scales at which government is ‘territorialized’ – territory is derived from terra or land, but also terrere, to frighten – are myriad: the factory, the neighborhood, the commune, the region, the nation. As he says: ‘one can trace anomalous governmental histories of smaller-scale territories … and one can also think of these [as] spaces of enclosure that governmental thought has imagined and penetrated … how [does it] happen that social thought territorializes itself on the

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problem of [for example] the slum in the nineteenth century?’ None of these spaces need to be stable or particularly, ‘governable’ of course. More than anything, MEND, emerging from the oil complex and situated in political struggles over unearned income, points to overlapping and often contradictory governable spaces encompassing the oil theft, clans and chieftainship, insurgent spaces, local and state governments and the ethnic space of newly empowered ‘oil minorities’ – the latter being an invention of the politics of the post-civil war period.

Insurgent Politics and Logics of Dispossession What does the MEND story have to say about the economics of civil war and the resource curse literatures with which I began? Minimally, one might say that there are many inconsistencies between the theory and the Niger Delta case. The unobstructable turns out to be obstructable (offshore oil platforms), the unlootable turn out to be lootable (oil theft), point resources can be seen to be diffuse, and the relations between geography and political outcomes is markedly under-determined. None of this is to suggest that questions about the financing of rebellion is not important, or that the terrain of the Delta (mangrove creeks11) and the character of oil infrastructure (a geography of nodes (flowstation, terminals) and networks (pipelines) do not shape insurgent tactics in their military struggle. But the causal relations between these phenomena and the causes of civil conflict are not clear. Oil neither produces, as some predict, successional tendencies (‘if oil is present a rebellion is almost certain to be secessionist’ [Collier and Hoeffler, 2005, p. 625]), neither was oil in a simple sense predated by the insurgents (oil rents were certainly extorted but it was also stolen through a highly organized bunkering trade in which the insurgents controlled the lower levels of these socalled oil syndicates). But more profoundly, oil did not play a determinative role – a sort of commodity determinism. Rather the insurgency emerged from the historically derived political struggles reinvigorated by the struggles over federally controlled and over centralized oil rents, a struggle in which party politics, the electoral cycle, inter-generational politics, organized oil theft and the history of ethnic exclusion played constitutive roles. More profoundly, I have suggested that the simple binaries deployed by the predation theorists (state-insurgent, greed and grievance) and the proposed political trajectories (from grievance to greed) are much too blunt and as a consequence fail to grasp the complexities of local political dynamics, specifically the detonative impact of state violence, the constitutive role of corporate practice, the intersection of formal (especially the electoral cycle and enhanced powers of governors) and insurgent politics and the shifting force field of inter-generational struggles driven by the contradictions between chiefly powers and massive youth unemployment and alienation against an ideological backdrop of ‘oil wealth’ and ‘our oil’. Indeed, Collier’s own project which attempts to link grand theory-type analysis with detailed case studies (Collier and Sambanis, 2005) have begun to expose these tensions in the same way that Ross’s (2004) compendium of oil and

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violence studies concludes, rather agnostically, with the suggestions that ‘resources and civil wars are linked by a variety of [causal] mechanisms’) (2004, p. 35). In the Niger Delta the politics of the minorities long preceded oil. The rise of the Ijaw Republic under Isaac Boro, as a time when oil was in its infancy, suggests that oil provided 40 years ago an idiom of expressing longstanding grievances. By the 1970s and especially the 1980s, looting – the theft of oil – began to provide a basis for recruitment but in a limited way. It was not until the 1990s and the failure of the Ogoni movements that oil theft, combined with the expansion of sometimes new tactics, pipelines detonation, kidnapping, provided one (bit only one) mechanism for the arming of these longstanding but incipient movements. Arms came from other sources – the government, the military and foreign supporters – but by this time there was a generation of Deltans whose prospects were bleaker than ever and who stood upon the ruins of forty years of neglect, despoliation and state violence. To see this complex force field as the product of state corruption/mismanagement of oil wealth or as organized crime, or as desperate youths in search of riches, or to see the insurgency as a big protection racket does not do analytical justice to either the role of oil or to its politics. To return to the question of, in what sense an oil insurgency, MEND, is clearly ‘about oil’: that is to say, it cannot be understood outside of the two decade long struggle for ‘resource control’, the creation of states and LGAs to gain access to oil revenues, the local conflicts between clans, chiefs and companies over land, compensation, cash payments and the like, the control of the oil bunkering trade (and more recently as the state has cut back on bunkering activities on the business of ransom and hostage taking of oil workers). But invoking oil in this way paints a very different picture of oil politics than that presented in the models of predation, looting and obstructability. I wish to conclude by emphasizing five rather different points of entry into the complex terrain of oil insurgency and petro-belligerents. The first point is that the oil complex is strongly territorial, operating through a geographical logic of oil concessions. The presence and activities of the oil companies constitute a challenge to forms of community authority, inter-ethnic relations, and local state institutions principally through the property and land disputes that are engendered, and via forms of popular mobilization and agitation to gain access to company rents and compensation revenues, and the petro-revenues of the Nigerian state largely through the creation of regional and/or local state institutions. Second, the oil complex is a sort of forcing house for the creation of new or refigured governable spaces – whether the space of bunkering or insurgency, or the vigilante space of overturned chieftainship and violent youth rule, or the endless search for new states and local governments as a means to gain access to the revenues flows from oil. They are for the most part violent and unstable sorts of governable spaces. A striking aspect of contemporary development in Nigeria is the simultaneous production of differing forms of rule and governable space – different politics of scale – all products of similar forces and yet which work against, and often stand in direct contradiction to one another. The third point is that each governable space seems to contain a dialectical tension within its linking of territory, identity and rule. The upending of

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chieftainship by militant youth groups overthrowing a crappy form of gerontocratic rule substitutes forms of privatized violence; the rise of ‘oil minorities’ contains both civic nationalism and a dark sort of ethnic xenophobia; the insurgents offer a vision of political and social justice draped in the cloth of car bombs and crime. Fourth, the overlapping and contradictory creation of violent governable spaces discloses the dialectics of oil rule itself: namely, that in the case of Nigeria, oil has held a politically volatile multi-ethnic state together and at the same time pulled it part. At Independence Obafemi Awolowo, the great western Nigerian politician, said that Nigeria was not a Nation but a ‘mere geographical expression’; forty years later this remained true but more so (as Wole Soyinka put it: ‘Abacha has no notion of Nigeria’). Nation-building – whatever its imaginary properties, whatever its style of imaging, rests in its modern form on a sort of calculation, integration, and state and bureaucratic rationality which the logic of oil politics works to systematically undermine. Lauren Berlant (1999) has said in her study of Nathaniel Hawthorne that every nation – and hence every governable national space – requires a ‘National Symbolic’; a national fantasy which ‘designates how national culture becomes local through images, narratives and movements, which circulate in the personal and collective unconsciousness’. My point is that the Nigerian National Symbolic grew weaker and more attenuated as a result of the operations of the oil complex. There was no sense of the national fantasy at the local level; it was simply a big lie (or rather a big pocket of oil monies to be raided in the name of indigeneity). What we have then is not nation-building – understood in the sense of governmentality – or a particular style of imagining but perhaps its reverse; the ‘unimagining’ or deconstruction of a particular sense of national community. MEND and the insurgency across the Delta can be productively read as a sort of unimagining of Nigeria, not through secession but through the violent propagation of another weakly articulated alternative imagined community. Finally, the operations of the oil complex and the violent and unstable spaces it creates seems to endorse David Harvey’s (2005) notion of accumulation by dispossession. The oil complex is a vast forcing house of primitive accumulation, repeating the original sin of robbery. It operates as if through a chain of enclosures, violent economies that dispossess at a variety of levels and through a raft of modalities. The rise of the resource control movement over the last fifteen years, the rise of the oil minority, and the complex mix of ethno-nationalism and insurgent politics across the Delta are the reactive – one might say Polanyian (1947) – double movements against Imperial Oil. What it has produced of course is a fragmented polity in which – to invoke Perry Anderson’s vision of feudal Europe – we have a form of parcellized sovereignty rather than a robust modern oil nation.

Notes 1

The companies and government have typically denied the payments of ransoms to militants but there have been reports in the press, by activists and others of payments

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in excess of $250,000. In fact the decline in oil bunkering since 2004 has seen militias turning to kidnapping and extortion as sources of revenues as bunkering income has fallen. 2 According to Timi Alaibe, Managing Director of the Niger Delta Development Commission (NDDCV), N1.7 trillion was lost to militancy between March 2006 and March 2007 (Vanguard, 23 March 2007, p. 1). 3 By insurgency I (following Fearon and Latin, 2003, p. 79) mean ‘a technology of military conflict characterized by small, lightly armed bands practising guerilla warfare from rural base areas’. Of late of course the delta militants are not simply lightly armed and operate in some way from urban bases. 4 I shall not address here the corollary questions of the duration and intensity of civil conflict, and relatedly the question of post-conflict recovery or recidivism (see Collier et al., 2003). 5 Parenthetically, this approach is related to Michael Ross’s (1999) claim about another aspect of the oil-politics, namely that it hinders democracy through rents (no taxation=no representation), militarization (oil-funded securitization), and service employment (as a way of purchasing ideological consent). 6 From this the fact it is claimed, as we shall see, that rebels cannot loot oil and must turn to extortion and through this extortion it is the figure of the warlord (‘the rebel leader’) who appears as the new predator associated with the notion of the ‘end of politics’ in the post-Cold War era. 7 In Nigeria in the last over 200 expatriates have been kidnapped, the ransoms for which have gone as high as $500,000 per person. 8 These figures were provided to me by an oil consultant with many years of experience in the Niger Delta. 9 There are a number of exceptions which refer to corporate practice (see Regan, 2003) but even in these cases what corporation do is rarely entertained as a sort of causal force in the analysis of violence and rebellion. 10 See Tebekaemi, 1982, pp. 64,116 and 117. 11 Collier, Hoeffler and Rohner (2006, p. 16) only refer to mountains as hospitable for militants, however.

References Anderson, P. (2001), ‘Scurrying Toward Bethlehem’, New Left Review, 10, pp. 5–31. Barnes, S. (2005), ‘Global Flows: Terror, Oil and Strategic Philanthropy’, African Studies Review, 48(1), pp. 1–23. Collier, P. (2003), Breaking the Conflict Trap, London: Oxford University Press. Collier, P. (2007), The Bottom Billion, London: Oxford University Press. Collier, P. and N. Sambanis (eds) (2005), Understanding Civil War, vol. 1, New York: The World Bank. Collier, P., A. Hoeffler and D. Rohner (2006), Beyond Greed and Grievance, CSAE WPS 2006–10, Centre for the Study of African Economies, Oxford University. Courson, Elias (2007), ‘The Burden of Oil’, Working Paper #15, Niger Delta Economies of Violence Project, University of California, Berkeley, http://globetrotter.berkeley. edu/NigerDelta/. Cramer, C. (2007), Violence in Developing Countries, Bloomington, IN: Indiana University Press.

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CSIS (2007), ‘Briefing on the Niger Delta’, Centre for Strategic and International Studies, Washington DC, 14 March. Fearon, J. and D. Laitin, (2003), ‘Ethnicity, Insurgency and Civil War’, American Political Science Review, 97(1), pp. 75–90. Harvey, D. (2005), A Brief Introduction to Neoliberalism, London: Oxford University Press. Harvey, D. (2003), The New Imperialism, London: Clarendon. ICG (2006a), ‘Swamps of Insurgency’, International Crisis Group, Working Paper, Brussels/Dakar. ICG (2006b), ‘Fuelling the Crisis’, International Crisis Group, Working Paper, Brussels/ Dakar. Kalyvas, S. (2001), ‘New and Old Civil Wars’, World Politics, 54, pp. 99–118. Le Billon, P. (2005), Fuelling War, Adelphi Paper 5, London: Routledge. Lipschitz, R., P. Lubeck and M. Watts (2006), Convergent Interests, Briefing Document, Centre for International Policy, Washington DC. Mamdani, M. (1995), Citizen and Subject, Princeton, NJ: Princeton University Press. Mamdani, M. (2001), ‘Beyond Native and Settler as Political Identities’, Comparative Studies in Society and History, 43(4), pp. 651–64. Mbembe, A. (2001), ‘At the Edge of the World’, Public Culture, 12(1), pp. 259–84. Okonta, I. (2005), ‘Nigeria: Chronicle of a Dying State’, Current History,May, pp. 203–8. Polanyi, K. (1947), The Great Transformation, Boston, MA: Beacon Press. RETORT (2005), Afflicted Powers, London: Verso. Ross, M. (2001), ‘Does Oil Hinder Democracy’, World Politics, 53, pp. 325–61. Ross, M. (2003), ‘Oil, Drugs and Diamonds’, in K. Ballentine and J. Sherman (eds), The Political Economy of Armed Conflict, Boulder, CO: Reiner. Ross, M. (2004), ‘How do Natural Resources Influence Civil Wars’, International Organization, 58, pp. 35–67. Sala-i-Martin, X. and A. Subramanian (2003), Addressing the Resource Curse: An Illustration from Nigeria, IMF Working Paper, July, Washington DC: IMF. Tebekaemi, Tony (ed.) (1982), The Twelve-Day Revolution, Benin-City: Umeh Publishers. UNDP (2005), Niger Delta Human Development Report, Abuja: UNDP. WAC (2003), Peace and Security in the Niger Delta, Port Harcourt, WAC: Global Services. Watts, M. (2005), ‘Righteous Oil? Human Rights, the Oil Complex and Corporate Social Responsibility’, Annual Review of Environment and Resources, 30, pp. 373–407.

Chapter 4

Nationalization versus Indigenization of the Rentier Space: Oil and Conflicts in Nigeria Ukoha Ukiwo

Introduction In 2005, President Olusegun Obasanjo inaugurated the National Political Reform Conference (NPRC) to brainstorm on the vexed national question and make recommendations for proposed constitutional review. The politics of power sharing and resource allocation dominated and eventually disrupted the confab after delegates from the South-South staged a walk-out over the refusal of the more numerous northern delegates to accept their proposal for the increment of revenue assigned to derivation from 13 per cent to 25 per cent. As critical stakeholders sought ways of breaking the deadlock, Professor Kimse Okoko, a delegate of the oil-rich Bayelsa State and President of the Ijaw National Congress (INC) was quoted as saying that: Without oil Nigeria will disintegrate. In fact, if oil were located in any of the major ethnic groups’ territory, Nigeria would have long gone into extinction. It is very clear, even to the blind that the oil and gas resource in the Niger Delta region is the reason why we are still together as one country … The demand for resource control is a wake up call for Nigerians to sit up. We cannot attain sustainable meaningful development as long as we continue to sit idly, waiting to share oil money at the end of every month.1

Nigerian patriots would point to the victory over secessionist Biafra in 1970, internal migration, market integration and the national football team as more important unifying factors. However, even if oil were not the reason of the Nigerian state, it is the major attraction in politics. This is evident in the response of a gubernatorial aspirant when asked: ‘why do you want to be a governor of your state …?’ Being a governor is not just somebody who is a local champion of his own state but somebody who can link up at the national level to be able to attract a fair share of dividends back to Benue indigenes. And I think I will be able to do that.2

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The distortions and contradictions that natural resources and oil in particular throw up in resource rich countries remain the subject of a growing literature. From a narrow focus on the rentier state as a phenomenon, scholars increasingly conceptualize the state as one, albeit critical actor, in ‘the rentier space,’ which includes other equally important subaltern actors in society (Watts, 2005; Omeje, 2006). Such a focus provides a discursive framework of not so much the form of the state as its content. It exposes the state for what it is: a contested terrain, as well as a mediator of group conflicts (International IDEA, 2001, p. 243). This is the approach adopted in this chapter, which explores the competing interests and social forces within the Nigerian ‘rentier space’ (for a more elaborate conception of the ‘rentier space’, see Chapter 1 by K. Omeje in this volume). This chapter is divided into three broad sections. The first section examines the evolution and structure of the Nigerian oil industry. In the second section, we examine the competing interests and social forces that deploy nationalist discourse to access the rentier space. This would be followed in section three by the competing groups that privilege the indigeneity discourse. In section four, we shall discuss the response mechanisms of critical stakeholders such as the state and oil companies. This would be followed by some concluding remarks.

Evolution and Structure of the Nigerian Oil Industry Oil exploration commenced in Nigeria in 1936 when the British colonial administration granted Shell D’Arcy an exploration licence to prospect for oil throughout the colony. Exploration activities yielded fruit in 1956 when commercially viable oil was discovered in Oloibiri. The first consignment of oil was shipped in 1958. At this time however, British firms no longer enjoyed a monopoly. Pressures from the United States government after World War II opened the gates to US oil giants Mobil (1955), Chevron (1961) and Texaco (1963). The French oil company Elf and the Italian oil firm Agip later joined the fray. These transnational oil corporations (TNOCs) remain the Big Players in the industry accounting for more than 90 per cent of Nigeria’s daily oil production. In 2004 when the output fluctuated between 2.5 million barrels per day (bpd) and 2.7 million bpd, Shell produced 1.0 million bpd, ExxonMobil 500,000 bpd, ChevronTexaco 450,000 bpd, Total (Elf) 235,000 bpd and Agip 200,000 bpd. Independent Nigerian firms such as Pan Ocean, Conoil, and Amni Petroleum contributed about 100,000 bpd (Oduniyi 2004). The two phases of the evolution of the industry are the phases of concessionaire and state participation cum capitalism. During the first phase (1914–1969), the TNOCs dominated the industry and government’s involvement was limited to making laws to regulate the industry and collecting rents and royalties from oil companies. These laws served the interest of the colonial state in protecting the monopoly of British firms in Nigeria and claiming ownership of minerals in the country.3 Even when the monopoly of British firms was broken by the entry of principal American actors, Nigerians remained onlookers in the industry. There was little or no linkage between the industry and the rest of the Nigerian economy.

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It was not until 1959 (the year before independence) when the petroleum profit tax ordinance, which provided for a 50/50 profit sharing formula between the oil companies and government, was enacted that the industry began to feature in public finance. This period also witnessed rapid improvements in outputs in the industry. For instance, between 1960 and 1961, output more than doubled from 20,000 bpd to 46,000 bpd. By 1965, the figure had jumped to 275,000 bpd. The issuance of prospecting licences to new companies boosted output as exploitation of offshore fields was very rewarding. The completion of the trans-Niger pipeline in 1965 gave added fillip to production which doubled in two years as the output reached an all time high of 400,000 bpd on the eve of the outbreak of the Nigeria civil war on 30 May 1967. There is still a debate on the precise role of control of oil in the outbreak of civil war (see, Adejumobi and Aderemi 2002). There is no doubt, however, that the experiences of the civil war where Lagos and Enugu contested the rights to oil revenues were instrumental in heralding the demise of the concessionaire phase. Nigerian domestic ruling elite realised that they could no longer allow the TNOCs a free rein as long as revenues flowed into state coffers. The state needed to assert its control of the industry (Ozo-Eson, 2000, p. 48). This new awareness influenced the decision of the victorious Gen. Yakubu Gowon’s regime to enlist Nigeria into the comity of the Organization of Petroleum Exporting Countries (OPEC) in July 1971. Admission into the oil cartel terminated the concessionaire phase because OPEC Resolution No. XV1.90 enjoined member states to acquire a minimum of 51 per cent of shares of the TNOCs. Consequently, the regime established the Nigeria National Oil Company (NNOC) in May 1971.4 The NNOC acquired the 51 per cent shares of the TNOCs on behalf of the Nigerian federal government in 1973. In 1976, the NNOC was merged with the Department for Petroleum Resources and renamed the Nigerian National Petroleum Corporation (NNPC). By 1979, the NNPC had acquired 57 per cent interest in the TNOCs and 80 per cent interest in Shell (Omeje, 2006, p. 34). The partnership between NNPC and the TNOCs is structured in two ways. The conventional approach which dominated from 1971 to the early 1990s is the joint venture model where the NNPC and the TNOCs shared operating costs in ratio of their shares. In the 1990s, a new structure known as production sharing contracts was introduced to allow the TNOCs bear all operating costs and share the output with the government. This was partly as a result of the failure of the government to commit funds in advance and the large arrears of ‘cash calls’, which government relinquished during sale of oil. Although this period also witnessed efforts to improve local content especially in the downstream sector, it has paradoxically been described as a period of ‘unprecedented state dependence on oil companies to increase oil exploitation’ (International IDEA, 2001, p. 243). This dependence which manifests in terms of technology and capital has, however, not inhibited state capacity to extract rents from the oil industry. The Nigerian government’s share of oil revenue is among the highest in the world. For instance, when oil is sold at $20 dpb, the prospecting company takes 5 per cent of the profit while the Nigerian government through NNPC takes 77.5 per cent (Roberts, 2004, p. 23fn).

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This high returns is probably a function of the cost of production in Nigeria which is among the lowest in the world given the lax regulatory environment. For instance, the percentage of gas flared in Nigeria in 1991 exceeded the world average by a whopping 72 per cent (International IDEA, 2001, p. 244). Successive governments have continually shifted the date for the enforcement of the maximum limits of gas flaring (Roberts, 1999). This leniency epitomizes the vulnerability of the state due to the hyper-dependence of dominant classes on oil revenues. Since the early 1970s oil has accounted for an average of 70 per cent of total government revenue. Such hyper-dependency raises the stakes for control and access to oil rents by different stakeholders. It ipso facto raises the stakes for controlling the Nigerian rentier state itself because the state is perceived as the vehicle for accessing the oil wealth. The competition to access and struggle to control the industry is so intense that it generates conflicts among the different stakeholders. In the sections that follow, we explore the strategies socio-economic (classes) and socio-political (ethno-regional) groupings have deployed to gain access into or control over the rentier space. This would be considered according to the eligibility criteria that Nigerian actors have presented as visas to the rentier space. These are the nationality criteria where Nigerian citizenship is privileged and the indigeneity criterion where indigeneship of an oil-producing region or community is advanced. While these criteria are immanently not mutually exclusive as the same person or group can simultaneously apply on the basis of both criteria, obfuscating the distinction between national citizenship and local indigeneship can be combustible.

Nationalizing the Rentier Space Nigerian business and the neo-colonial state largely remained onlookers in the accumulation process even after the first decade of independence. Little wonder then that the first struggle to access the rentier space was legitimised by a nationality discourse. The major class conflict in the Nigerian rentier space was that between the indigenous and the foreign bourgeois classes. It was this conflict that influenced the trend towards greater state involvement and attempts at ‘nationalizing’ the industry. The nationalization project had two components. The first was the dilution of foreign control by increasing participation of the Nigerian state and Nigerian citizens in the industry. The second was the nationalization of the identity of oil. Unlike the cash crops that were associated with regions, oil was assigned a national identity. The identity was reflected in the names assigned to oil-related parastatals, for instance, Nigeria National Petroleum Company and National Oil Company. It was presented as a national commodity that belongs to all Nigerians, not just to the regions or states of extraction. A corollary of this national identity was that all Nigerians, irrespective of regions or states, were entitled to the dividends of oil production. All Nigerians were entitled to both the physical commodity itself and the proceeds from sale of oil. An extensive distribution network was established to ensure that the cost of petroleum in Port Harcourt was the same as that obtainable in Kano

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through the construction of oil depots in all state capitals and pipelines. Through the establishment of the Federation Account, implementation of a Universal Primary Education Programme and National Youth Service Corps (NYSC), and distribution of federal universities, federal roads and other federal ‘projects’ to all states, all Nigerians were expected to benefit from oil revenues. One of the advertised objectives of the distribution of oil and its rents to all Nigerians was the promotion of national unity which assumed paramount importance after the botched Biafran secession. One of the oil marketing companies acquired through nationalization was named Unipetrol. Oil was not only deployed to attain national unity but also to facilitate the idealization and promotion of African unity. Oil became the lubricant for the country’s ambitious Afro-centric foreign policy. It is no happenstance that when the federal military government decided to sanction the British government for its pro-Apartheid policies, the regime nationalised British Petroleum and renamed it African Petroleum. Petro-naira was also used to host and fund the Festival of African Arts and Culture (FESTAC) in 1977 (Apter, 2005). It is important to underscore, however that the indigenous bourgeoisie is not monolithic but is made up of a motley of classes with antagonistic interests. The ascendancy of the comprador class ultimately undermined state participation and technological transfer in the late 1970s (Turner, 1980). This was possible because the objective of the national bourgeoisie was not technological development but access to the rentier space. Nigerianization and nationalization were decoys for capital accumulation. Little wonder that three decades after it was first mooted, Nigerianization remains top on the agenda of the indigenous dominant classes. The radical and nationalist rhetoric has been jettisoned because liberalization policies are geared towards wooing ‘foreign investments’ and the innocuous ideal of ‘improving local content’ has been adopted. Nonetheless the objective remains grooming a Nigerian bourgeois class by facilitating the access of Nigerians to the rentier space. As the NNPC explains: Nigerians have little share of the oil and gas business, local participation is very low and in order to arrest and dissuade capital flight, a local content policy is being developed. The objective of local content development is to significantly increase the contribution of the expenditures in the upstream sector to the GDP over a defined period of time. It is hoped that local content development would ensure that the quantum and percentage of locally produced materials, personnel, goods and services rendered to the industry are increased thereby generating more employment and economic empowerment.5

To avert the situation that prevailed in the 1970s when local interlocutors became ghost directors of foreign companies, the federal government established more stringent requirements for prospective investors looking for Nigerian equity investors. The government has also set a target for attaining local content. It envisaged that by 2005, 45 per cent of the local content programme would be achieved. This is expected to rise to 70 per cent by 2010 (Bello, 2007). It would seem, however, that the schedule is not being met. For instance, in 2006, it was estimated that 85 per cent of the $12 billion expenditure of the oil industry was

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spent outside the country (Okonji, 2007). Still, both government and oil business reports suggest that much progress is being made. For instance, Chevron Nigeria Limited (CNL) said it has established a Local Business Development/Global Procurement Unit to facilitate purchase of local goods and services. As a result of this initiative, the company announced a major turnaround in its expenditure profile. Whereas only 25 per cent of its procurements were supplied by Nigerian firms in 1999, the figure had risen to 80 per cent in 2001.6 While this may not reflect the trend industry wide, the companies have succumbed to pressures to reduce expatriate personnel and appoint Nigerians to managerial positions. Consequently, in 2005 Shell blazed the trail by appointing Mr Basil Omiyi as the first Nigerian Managing Director of Shell Nigeria. These are outcomes of struggles by Nigerian workers who have mobilized against casualization in the industry and canvassed the reduction of expatriate staff, appointment of Nigerians to managerial positions, and dollar denominated salaries. The transformation of the Nigerian oil worker into a labour aristocracy at a time when public and private sector wages are crawling behind galloping inflation amidst shrinking employment opportunities has raised the stakes for job in the oil industry. As we shall see, this has fuelled agitations for a change from nationality to indigeneity as the basis for recruitments into the industry. To be sure, several justifications and rationalizations have been advanced for the nationalization of oil (see Ofeimum, 2005). The centralization of ownership and control of oil was predicated on the concern that the puny states lacked the capacity to regulate a sophisticated industry controlled by TNOCs. The precipitous decline in revenue disbursed on the basis of derivation was justified on the need to ensure a minimum national standard of living and prevent regional inequalities. The nationalization of oil wealth was also rationalised as the dividend due to Nigerians for suppressing secessionist Biafra. The nationalisers have also argued that oil is a God-given natural resource. In Lockean terms, oil does not belong to oil producing Niger Delta because they did not add any value to it. Some have justified nationalization on the grounds that oil in the Niger Delta was formed by sediments washed down from the northern part of the country by the River Niger over several geological ages (Usman and Alkassum, 2000). Finally, it has been argued that minerals were vested in the crown and that at independence all concessions which hitherto belonged to the crown were transferred to Nigeria and not to ethnic nationalities. These ex post facto rationalizations have been advanced principally by the northern political establishment. The elites of the dominant ethnic groups have adopted several strategies to access the rentier space. The ethno-military class orchestrated the precipitous decline of derivation revenues in the post-civil war era. Figure 4.1 shows that revenue based on derivation dwindled from 50 per cent in the pre-military period to an all time low of 1.5 per cent during Buhari’s regime. Population, land mass, primary school enrolment and national minimum standard were emphasized. Other strategies adopted by dominant groups to access the rentier space include coups, laws that dispossess communities of oil-bearing land, electoral malpractices, award of oil blocs to allies and cronies,

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Figure 4.1 Derivation and revenue allocation, 1946–1999 Source: adapted from International IDEA, 2001, p. 24.

and creation of states and local government areas (LGAs). Since the share of contending social groups and forces depended on the number of states and LGAs they had, all groups have agitated for the increment of their quota of states and LGAs. Thus, from four regions in 1966 when the military intervened, there are now 36 states. The number of LGAs has more than doubled from 301 in 1976 to 774 in 1999. States and LGAs have enabled dominant social classes who cannot compete effectively at the federal level to access the provincial and local levels of the rentier space.

Indigenizing the Rentier Space The indigenization discourse, which is canvassed by social forces that are indigenous to the oil producing region, challenges the concept of Nigerian oil. They would prefer a designation such as Bonny light, which specifies the land or water from the oil is exploited. Its proponents argue that indigenes of oilproducing communities should be given privileged access to the rentier space. As far as the indigenes of oil-producing areas are concerned the nationalization discourse is a guise for internal colonialism (Naanen, 1995). It has been deployed by hegemonic ethnic groups to deprive oil producing minorities. The indigenizers adduce historical, environmental and social justice reasons to justify their agitation for privileged access to the rentier space. They argue that historically the regions controlled exploitation of resources and the revenues that accrued from them and only paid taxes to the federal government. They also posit that indigenes of oil-producing communities deserve privileged access to the rentier space because they suffer directly from the adverse environmental effects of oil exploration and exploitation.

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Indigenes of oil-producing communities have adopted several strategies to access the rentier space. First, oil-producing communities have approached the TNOCs for the provision of social amenities and economic empowerment projects. These include construction of jetties, classrooms, health centres, and roads; and provision of electricity. These demands became necessary because the state had abdicated its responsibility of providing public goods and services. The Nigerian state had transmogrified into an absentee landlord that siphoned royalties and rents without ploughing back resources for the development of the oil-producing communities. Unable to access the state in a context of a shrinking democratic space, community members began to confront the TNOCs to solve their problems. The fact that the TNOCs could not meet the full expectations of the people and often reneged on Memoranda of Understanding they signed with host communities often resulted in conflict. Thus, when dialogue failed to attract these amenities, community activists have attempted to stop oil production by occupying flow stations and blocking roads to oil facilities. This second strategy has often resulted in violence because the Nigerian state, anxious to protect its interests, has often deployed security forces to quell community agitations. Thirdly, the elites of oil-producing communities have demanded that some positions should be reserved for them. In particular, they have asked for the posts of Petroleum Minister and Group Managing Director of NNPC. These strategic appointments are deemed necessary if policies favourable to oil producing areas are to be adopted and implemented. The appointments are also expected to have a trickle down effect in the context where office holders deploy positions towards serving primordial and clannish interests. The fourth strategy that oil-producing communities have adopted to access the rentier space is the long-standing agitation for increment of the percentage of revenue allocated on the basis of derivation. Largely as a result of this agitation, the 1994 Constitutional Conference recommended that the revenue allocated to derivation should not be less than 13 per cent. This was subsequently entrenched in the 1999 Constitution and has been implemented since the return of civilian rule. Oil-producing communities have, however, continued to agitate for further increment because the current percentage allotted to derivation is much lower than the 50 per cent that obtained in the pre-civil war period. The fifth strategy that social groups in oil producing areas have deployed to enhance access to the rentier space is the introduction of indigeneity discourse aimed at excluding non-indigenes from the space. In addition to posts such as Minister of Petroleum and Group Managing Director of NNPC, they have asked for quotas in contracts and employment in the TNOCs. Oil company jobs have become more attractive because of the enhanced wages in the sector and declining employment opportunities in both the public and private sectors. The peoples of oil-producing communities are aggrieved that most of the jobs in the industry have gone to non-indigenes, especially those from the major ethnic groups.7 The dominance of non-indigenes in the industry is attributed to two principal factors. First, it is believed that the location of the headquarters of the TNOCs in Lagos (Nigeria’s former administrative capital) affected the employment of

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peoples from oil producing regions and benefited non-indigenous elements. The communities have therefore canvassed the relocation of the headquarters of TNOCs and establishment of employment bureaux in the oil-belt. Secondly, it is argued that the requirement of the NYSC that graduates should serve outside their state of origin is to the advantage of graduates from non-oil producing regions. As Olorogun Meshach Oroye, national treasurer of the Urhobo Progress Union (UPU) puts it: The system is so structured to oppress us. Imagine the NYSC, our people are posted to other states and villages. They serve as teachers and what have you while their counterparts elsewhere are posted to the oil companies here. At the end of the programme such corpers are retained as either contract staff from which are eventually made permanent. So by the time our young ones come back, the positions have already been filled by the corpers from other states who have known the system.8

Consequently, some oil-producing states such as Rivers State have stopped the NYSC from posting corps members to oil companies and other private sector organizations (Ukiwo, 2005). Such exclusionary strategies have also been used to stop the award of contracts to non-indigenes. In several communities in the region, projects have been stalled because community activists claim the contractors were non-indigenes. Such contractors have been forced to employ local labour, sub-contract some aspects of the project to indigenes or sometimes employ ghost workers from the community. The oil-producing communities have also objected to the inclusion of persons or states outside the ‘core’ Niger Delta in statutory bodies established to promote development in the region. Thus, when OMPADEC was established in 1992, there were protests over the inclusion of Abia, Imo and Ondo States, as well as the appointment of representatives of non-oil-producing states on the Board of the Commission. The inclusion of these states in Niger Delta Development Commission (NDDC), which replaced OMPADEC in 2000 and the appointment of Chief Onyema Ugochukwu from a non-oil-producing community in Abia State as the first chairman of the Commission also generated an uproar.9 The consensus amongst the peoples of oil producing region on the exclusion of non-indigenes from the rentier space should, however not be construed as an indication of unity. There are generational, gender, class, communal and ethnic differences which have generated different types of conflicts in the region. Such differences have constrained social mobilization towards the realization of such commonly desired programmes as resource control and the election of a SouthSouth president. The youths who increasingly became restive in the 1990s have accused the elders of corruptly enriching themselves at the expense of their communities. Such elders have been accused of selling jobs meant for indigenes to non-indigenes and appropriating compensation paid for land and for oil spillage. In some communities the youths have taken control of the community development committees (CDCs) and sacked traditional authorities. In one tragic incident in Evereni in Delta State, the youths decapitated their traditional ruler for allegedly appropriating community funds. With their control of the CDCs

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and establishment of several youth organizations, the youths have been able to extract resources from the TNOCs. Many youths have been put on the pay roll of oil companies without performing any duties (Peel, 2005). Others have been given security contracts to protect oil facilities. In 2006, there were reports that the President had awarded an oil bloc to some Ijaw youths in Warri. Such concessions have often led to emergence of other groups triggering a clash of interest and intra-communal violence (International Crisis Group, 2006). Moreover, some youth organizations with the backing of local chieftains and politicians have also been involved in vandalization of pipeline, kidnapping of expatriate oil workers, theft of crude oil (commonly called bunkering) and killing of security agents (Idemudia and Ite, 2007, p. 402). The oil companies are wrong in attributing all cases of pipeline vandalization and oil spillage to sabotage, given the age of the pipelines (Omoweh, 2005). Undoubtedly, however, some youth groups have been involved in pipeline vandalization. For instance, the Niger Delta Peoples Volunteer Force (NDPVF) under Mujahid Asari Dokubo does not deny involvement in bunkering and pipeline vandalization, which reduced Nigeria’s oil output by 25 per cent in 2006. Its members claim they are only taking a slice of what rightly belongs to their people. Sometimes pipeline vandalization is orchestrated for the purposes of attracting compensation and contract for clearing the spilled oil. Poor revenues from agriculture and the fact that the youths and elites are not involved in fishing and farming removes any restraint that interest in the conservation of land and water would have place on them. The women who, as farmers and fisherwomen, bear the brunt of environmental degradation have established cooperatives and organizations to cater for their peculiar needs. Unlike the elders and youths who have been more concerned with rents from the industry, the majority of the womenfolk in the region have been agitating for programmes and projects that would facilitate sustainable development. These include employment of youths, provision of micro-credit, improvements in transportation, provision of health and sanitation facilities, and construction of markets and food processing facilities. However, like their male counterparts, some female elites have established phoney women organizations which they have used to misappropriate funds meant for micro-credits. Others have established cultural organizations which are hired to entertain visiting dignitaries or sing the praises of some political personages. Though discredited as allies of the state and TNOCs, traditional rulers have managed to remain in the rentier space. By parading themselves as custodians of culture and titular owners of the land, they want to be seen as representatives of their communities that the companies should deal with. One source of rent to traditional rulers is the money paid by oil companies for the appeasement of the gods and relocation of sacred sites to make way for oil exploration and exploitation. The acquiescence of the TNOCs to such representation has triggered chieftaincy conflicts as different elites struggle for the position of traditional ruler (Kemedi, 2003). Traditional rulership position has also become more lucrative and contested because of the directive handed down to LGAs to devote a certain percentage of their monthly allocation to traditional rulers (Nolte, 2002). The local chiefs have established a body known as Association of Traditional Rulers of Oil

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Mineral Producing Communities of Nigeria (ATROMPCON) to protect their interests. Their acclaimed titular ownership of land and waters has, however been challenged. In some communities, families with oil-bearing land have questioned the rights of the traditional ruler to collect rents on their behalf. Some of these families have formed associations such as the Association of Oil Well Landlords to facilitate direct access to the rentier space. Since 1999 politicians have joined forces with other social forces in the region to canvass for resource control. The Conference of South-South Governors has been vocal in demanding for more resource control. However, although massive resources have been released to oil-producing states on the basis of the derivation revenue, there is a discrepancy between the money allocated and the state of socioeconomic well-being of the people (UNDP, 2006). This is principally due to the alleged diversion and misappropriation of the funds. In 2005, the Governor of Bayelsa State was impeached for money laundering offences. The Economic and Financial Crimes Commission (EFCC) has also alleged that other governors are misappropriating oil wealth. From all indications, it would appear that by joining the bandwagon of the movement for resource control the politicians needed more resources for personal aggrandizement. Their objective was not to deliver development to their people. Not surprisingly, the federal government and some northern elites who are uncomfortable with the persistent demands for increase in funds allocated to the region have been quick to suggest that the problem of development in the region is not paucity of funds but the corrupt tendencies of the ruling elites. The politicians have used several strategies to siphon oil revenues allocated to their states and LGAs (Human Rights Watch, 2007). These include awarding contracts for gigantic projects, budgeting large sums of money as security votes, making returns to Godfathers, employment of ghost workers, sponsorship of foreign trips, diversion of workers’ salaries and budgeting funds for projects financed by other tiers of government, oil companies or multilateral agencies. Corruption thrives in oil producing areas partly due to ignorance about the revenues that accrue to the states and LGAs (Ibeanu et al., 2006). Since the government is not run on the taxes of the people, the people have not been assertive in demanding accountable and responsive governance. Rather, misappropriated public funds have been channelled towards co-opting vocal members of the community, especially youth groups. This has led to the proliferation of secret cults, gangs and militias funded by politicians and other power brokers to terrorise opposing groups (Ikelegbe, 2005; Peterside, 2005). Such nefarious activities give the lumpen proletariat access to the rentier space. Since the early 1990s, there has been a resurgence of ethno-political and communal associations that promote different ethnic and communal identities. Such identity mobilization is aimed at creating boundaries between indigenes and non-indigenes in order to restrict access to the rentier space. This is often associated with the rephrasing of local and ethnic history of settlement and migration with the express purpose of differentiating ‘aborigines’ from ‘settlers’. The bone of contention is ownership of oil-bearing land and water. Such disputes have often resulted in conflicts because contending communities want

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to access the rentier space as host communities. Designation and recognition as host communities attracts compensation payments, jobs, scholarships, contract opportunities and social amenities. Given the high stakes of becoming a host community, communities have fought over land and waters with oil deposits. Inter-communal conflicts have also been triggered by the decision of communities that are not recognised as host communities to refuse oil company personnel and contractors access through their territory to oilfields. Marginalized communities seek access to the rentier space by making oil companies pay rent or toll fees to pass through their territory. To prevent such conflicts, the Chikoko Movement, a pan-Niger Delta social movement, suggested that all communities in the region should be regarded as host communities.10 The struggle for access to the rentier space has encouraged the mobilization and transformation of ethnic identities. This occurs through two contradictory processes. On the one hand, ethnic elites cultivate a pan-ethnic identity by deemphasizing subethnic and communal identities. The objective is to present the ethnic group as a large group and increase its bargaining power and presence in the Nigerian state system. For instance, there has been a conscious effort by Ijaw nationalists to present the Ijaw as the fourth largest ethnic group in the country (Nwajiaku, 2005). This has been done by de-emphasizing salient subethnic identities. Once this is done, ethnic leaders aggregate the quantity of oil extracted from the ethnic territory and use it to make claims on the federal state. This is why several ethnic groups in the Niger Delta have claimed that they are the largest producer of oil and gas in the country. The great contribution of the ethnic group to the national income is often juxtaposed with the little benefits that have accrued to it. Often, this little benefit is contrasted with the huge rewards that go to non-oil producing ethnic groups. It is not just the quantity of oil exploited from the territory that is advanced by ethnic elites to justify the transfer of more oil wealth to their group but also the quality. Thus, while claiming that every Urhobo community is oil producing, an Urhobo commentator asserted that the ‘purest oil’ in the world is found in Urhoboland (Ukiwo, 2006). On the other hand, oil has also instigated centrifugal forces. Some elites from communities with oil-bearing land and waters have promoted a discourse aimed at de-linking their group from the larger ethnic group. This is especially the case when such sub-ethnic and communal groups feel they have not had their fair share of whatever accrues to the ethnic group. By distinguishing their group from the larger ethnic community, such elites intend to maximise gains from oil by excluding other groups who lay claims to indigeneity. This reinvention and reworking of identity is evident in several oil-producing states. In Bayelsa State, some communities such as the Ogbia have been cautious in uncritically embracing the Ijaw identity (Nwajiaku, 2005). Another aspect of ethnic mobilization triggered by the struggles to access the rentier space is the agitation for the change of the framework where states and LGAs constitute Nigeria’s federating units. This challenge has been mounted by minority ethnic groups who feel that the extant framework favours major ethnic groups. Such groups have agitated for decentralization of derivation revenues. For instance, the Itsekiri ethnic nationality in Delta State decry the

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present arrangement where derivation funds are paid to the state government and have demanded that the funds should be transferred directly to oil-bearing communities.11

Responses of Dominant Stakeholders to the Conflicts The responses of the Nigerian state to these conflicts have changed over time depending on the extent of threat that the dominant classes have faced. In the 1970s, the state, which had just suppressed a secessionist attempt, did not feel sufficiently threatened by the protests of minority oil-producing communities. This perception of the extent of threat posed by the oil producing region influenced the reduction of derivation revenues. Successive regimes also contained revolt by co-opting elites from oil-bearing communities. This option was problematic because only a few elites could be co-opted. In the circumstance, elites that were denied access to the rentier space or had lost their positions due to the frequent regime changes mobilized their communities against the state and TNOCs. The success of such mobilizations can be attributed to the failure of co-opted elites to make any difference in the life chances of their constituencies. For instance, although several elites from oil producing regions were appointed petroleum ministers and managing directors of the NNPC, they could neither influence the upward review of the percentage of revenue that accrued to derivation nor attract massive developmental funds to the region. What is worse, such appointees lost out in the power game and were often replaced by persons from non-oil-producing communities (Roberts, 2004). The perception that such appointees were powerless to make a difference has triggered a strong advocacy for a South-South president since 2003. Dominant stakeholders have also attempted resolving conflicts by establishing special bodies such as the Niger Delta Development Board (NDDB), OMPADEC, NDDC and the Consolidated Council on Social and Economic Development of Coastal States (COSEDECS) to administer development in the oil producing region. These special commissions and councils have recorded limited success in the task of promoting development in oil-producing communities. The popular belief in the Niger Delta is that they are conduits for siphoning monies that should have been used to administer development of the Niger Delta. This, for instance, is the reason why, according to its pioneer chairman, OMPADEC failed to develop the area (Horsfall, 1999). Oil-producing communities are not satisfied with such commissions because their chief executive officers are appointed by and responsible to the president. It is not surprising that the commissions have been avenues for awarding contracts to loyalists and allies of the head of government. Dissatisfaction also stems from the creation of parallel bodies to appease non-oil-producing communities. For instance, the creation of the NDDB was followed by the establishment of river basin development authorities across the country. Obviously these were financed with oil revenues. The establishment of the Petroleum Trust Fund (PTF) during the Abacha regime, financed from oil wealth, led to the eclipse of OMPADEC. An

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audit of the programmes of PTF revealed that a disproportionately high number of the projects were based in the northern part of the country. The Petroleum Development Trust Fund (PDTF), which is at the centre of corruption scandal between President Obasanjo and Vice President Atiku Abubakar, is also funding programmes and projects in all parts of the country. In cases where carrots did not work (and there are many), the Nigerian state has applied the stick. It has deployed soldiers and police to quell protests and demonstrations. It has arrested and detained community activists. It has been accused of instigating inter-communal feud. The Nigerian state has deployed soldiers and police force to occupy and destroy recalcitrant communities. Notable victims include the Ogoni, the Umuechem and the Odi peoples (see Human Rights Watch, 1999; Okonta, 2002). The resort to force has led to the militarization of the region. Militant groups in the region have acquired sophisticated weapons to wade off attacks from Nigerian security agencies (see Florquin and Berman, 2005; International Crisis Group, 2006). Dominant stakeholders from non-oil-producing regions have pressurised the state to fund exploration of oil in other parts of the country. For instance, millions of dollars have been spent in prospecting for oil in the Chad Basin and the Benue Trough. Such efforts have not yielded much fruits and the companies have abandoned the costly exploration activities (Roberts, 2004). Meanwhile, these companies have increased their budgets for corporate social responsibility programme in response to community protests. In addition to paying the state for oil prospecting licence, the companies have overcome their reticence in embarking on developmental projects, which is undoubtedly a responsibility of the state. Such projects are driven by the perception of the oil companies that they also need a social license to operate in these communities. For instance, Shell claimed it has changed its policy from community assistance to community development (Omuku, 2000). The new approach engages concerned stakeholders in the selection and implementation of projects. The TNOCs have also succumbed to pressures to reserve some jobs for their host communities. This includes both employment and contract opportunities. However, given the long years of neglect and the present over-sensitization and over-politicization of Niger Delta communities, community members regard what the TNOCs consider as massive investment in community development as mere drops in an ocean of poverty and alienation. It is clear that the TNOCs cannot step into the big shoes of the state or fill the vacuum created by an absentee rentier state, which is ultimately responsible for facilitating sustainable development.

Concluding Remarks The challenge therefore remains bringing the state back in. The state needs to be transformed to serve as a catalyst for sustainable development. Such transformation must necessarily begin with the democratization of the Nigerian state, as well as the democratization of civil society. As presently constituted as a veritable means of production, the Nigerian rentier state can hardly promote development. This is

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because it does not come across to the generality of the people as well-meaning and neutral. On the contrary, it is perceived as representing, serving and prosecuting the interest of particular groups. The Nigerian state is seen as an instrument for propagating and enforcing the worldview of the dominant ethnic groups. Activists in oil-producing communities consider the whole gamut of Federation Account, centrally controlled police force and military, centrally controlled states and LGAs creation exercises and centrally controlled oil licensing as evidences par excellence of ethnic domination. The nationalization discourse is perceived as decoy to mystify control of oil by dominant ethnic groups. This perception and suspicion would persist as long as oil is perceived by many as the raison d’etre of the Nigerian state. Consequently, there is need to deliver the Nigerian state and its dominant classes from their fixation and dependence on oil. Moreover, there is need for an upward review of the percentage of revenue allocated on the basis of derivation. Criteria such as population and landmass should be de-emphasised. Instead, the percentage allotted to internally generated revenue should be increased. This would encourage all states to concentrate more on harnessing and exploiting other resources and transforming them into income generating ventures. To ensure that funds allocated to oil-producing states do not end up in the bank accounts of governors and local government chairpersons, the Extractive Industry Transparency Initiative (EITI) should be extended to the grassroots. Civil society groups should be supported to monitor resource flows to states and LGAs. Budget making and implementation processes should be participatory and open.

Notes John Iwori, ‘Oil is the basis of Nigeria’s existence-Okoko’, Thisday, 2 July 2007. ‘How Benue will be reformed, by Gabriel T. Suswan’, The Guardian, 23 January, 2007. 3 While the monopoly of British firms was guaranteed by Oil Minerals Ordinance No. 17 of 1914 (amended 1925, 1950 and 1958), the Minerals Ordinance of 1945 vested ownership of all minerals in Nigeria land and waters on the British Crown. See Omeje (2006, pp. 35–7). 4 Nigeria still had observer status at OPEC at this time. 5 Accessed at http://www.nnpcgroup.com/opportunity.htm on 15 January 2007. 6 Accessed at http://www.api.org on 15 January, 2007. 7 Interview. Professor Onigu Otite. Warri, 20 August 2006. 8 Interview. 24 June 2005. Warri. 9 This was rationalised on the grounds that because ‘Abia’ is alphabetically the first state. The current chairman is from Akwa Ibom State, the next state in that order. 10 Interview. Mr Oronto Douglas, 13 March 2003. 11 See, Memorandum of the Itsekiri Ethnic Nationality to the National Political Reform Conference, Abuja, March 2005. 1 2

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References Adejumobi, S. and A. Aderemi (2002), ‘Oil and the Political Economy of the Nigerian Civil War and its Aftermath’, in E.Osaghae, E. Onwudiwe and R. Suberu (eds), The Nigerian Civil War and its Aftermath, Ibadan: John Archers Publishers. Apter, A. (2005), The Pan African Nation: Oil and the Spectacle of Culture in Nigeria, Chicago: University of Chicago Press. Bello, O. (2007), ‘Local Content Programme in Bumpy Ride to Failure’, Business Day, 27 January. Florquin, N. and E. Berman (2005), Armed and Aimless: Armed Groups, Guns, and Human Security in the ECOWAS Region, Geneva: Small Arms Survey. Horsfall, A.K. (1999), The OMPADEC Dream, London: Imprint Publication. Human Rights Watch (1999), The Price Oil: Corporate Social responsibility and Human Rights Violations in Nigeria’s Oil-producing communities, New York: HRW. Human Rights Watch (2007), Chop Fine: The Human Rights Impact of Local Government Corruption and Mismanagement in Rivers State, Nigeria, New York: HRW. Ibeanu, O. et al. (2006), ‘Improving Public Sector Oil Derived Flows in Abia State’, A Project Report on Monitoring Resource Flows in the Niger Delta, Port Harcourt: CASS. Idemudia, U. and U.E. Ite (2006), ‘Demystifying the Niger Delta Conflict: Towards an Integrated Explanation’, Review of African Political Economy, 109, pp. 391-406. Ikelegbe, A. (2005), ‘The Economy of Conflict in the Oil Rich Niger Delta Region of Nigeria’, Nordic Journal of African Studies, 14(2), pp. 208–34. International Crisis Group (2006), ‘Fuelling the Niger Delta Crisis’, Africa Report, 118, 28 September. International IDEA (2000), Democracy in Nigeria: Continuing Dialogues for NationBuilding, Stockholm: International IDEA. Kimedi, V.D. (2003), ‘Community Conflicts in the Niger Delta: Petro Weapon or Policy Failure?’, Berkeley Workshop on Environmental Politics Working Papers, Berkeley, CA. Naanen, B. (1995), ‘Oil-producing Minorities and Restructuring of Nigerian Federalism: The Case of the Ogoni Peoples’, Journal of Commonwealth and Comparative Politics, 33(1), pp. 47–78. Nolte, I. (2002), ‘Federalism and Communal Conflict in Nigeria’, Regional and Federal Studies, 12(1), pp. 171–92. Nwajiaku, K. (2005), ‘Oil Politics and Identity Transformation in Nigeria: The Case of the Ijaw of the Niger Delta’, DPhil thesis, University of Oxford. Oduniyi, M. (2006), ‘Nigeria’s Troubled Oil Sector’, http://www.thisdayonline.com. Accessed on 11 December. Ofeimum, O. (2005), ‘Resource Control and Beyond’, The Guardian, 18 and 19 July. Okonji, C. (2007), ‘85% of industry budget spent outside Nigeria’, http://www. independentng.online. Accessed on 3 January. Okonta, I.G. (2002), ‘The Struggle of the Ogoni for Self-Determination’, DPhil thesis, University of Oxford. Omeje, K. (2006), High Stakes and Stakeholders: Oil Conflict in Nigeria, Aldershot: Ashgate. Omoweh, D. (2005), ‘Petroleum Production, Environmental Degradation and Conflict in the Niger Delta’, in K. Fayemi, S. Amadi and L. Bamidele (eds), Towards an Integrated Development of the Niger Delta, Lagos: CDD, pp. 1–76.

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Omuku, P. (2000), ‘The Crises in the Oil-producing Communities: A Representative Perspective of the Oil Corporations’, in W. Raji, A. Ayodele amd E. Akinsola (eds), Boiling Point: The Crisis in the Oil-Producing Communities in Nigeria, Lagos: CDHR, pp. 197–205. Ozo-Eson, P.I. (2000), ‘The Political Economy of Oil Extraction in Nigeria’, in W. Raji, A. Ayodele amd E. Akinsola (eds), Boiling Point: The Crisis in the Oil-Producing Communities in Nigeria, Lagos: CDHR, pp. 46–52. Peel, M. (2005), ‘Crisis in the Niger Delta: How Failures of Transparency and Accountability are Destroying the Region’, Africa Programme Briefing Paper, No. 2. Peterside, S.J. (2005), ‘On the Militarization of Nigeria’s Niger Delta: the Genesis of Ethnic Militias in Rivers State’, African Conflict Profile, 1(2), pp. 30–51. Roberts, F.O.N. (1999), The State, Accumulation and Violence: The Politics of Environmental Security in Nigeria’s Oil Producing Areas, Ibadan: NISER. Roberts, F.O.N. (2004), Federalism, Hegemony and Petroleum in Nigeria’s Political Economy, Ibadan: NISER. Turner, T. (1980), ‘Nigeria: Imperialism, Oil Technology and the Comprador State’, in P. Norre and T. Turner (eds), Oil and Class Struggle, London: Zed Press, pp. 199–223. Ukiwo, U. (2005), ‘The Study of Ethnicity in Nigeria’, Oxford Development Studies, 33/1, pp. 7–23. Ukiwo, U. (2006), ‘Horizontal Inequalities and Violent Ethnic Conflicts: The Comparative Study of Ethnic Relations in Calabar and Warri, Southern Nigeria’, DPhil thesis, University of Oxford. United Nations Development Programme (2006), Niger Delta Human Development Report, Abuja: UNDP. Usman, Y.B. and A. Alkassum (2000), The Misrepresentation of Nigeria: The Facts and the Figures, Kano: CEDDERT. Watts, M.J. (2000), ‘Contested Communities, Malignant Markets and Gilded Governance: Justice, Resource Extraction and Conservation in the Tropics’, in C. Zerner (ed.), The Politics of Nature Conservation, New York: Columbia University Press, pp. 24–33.

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Chapter 5

Greed or Grievance?: Diamonds, Rent-Seeking and the Civil War in Sierra Leone (1991–2002) John M. Kabia

Introduction In March 1991, Sierra Leone erupted into conflict that lasted for over a decade and became the epitome of the so-called ‘new wars’ of the post-Cold War era. For Mary Kaldor, these “‘new wars” involve a blurring of the distinctions between wars … organized crime … and large-scale violations of human rights’ (Kaldor, 2001, p. 2). Political economy analysts like Collier link the outbreak of these conflicts to greed and economic opportunism rather than structural inequalities and deeprooted grievances. The conflict in Sierra Leone has therefore been presented in most academic and media circles as a conflict over diamonds. However, limiting the causal factors to economic opportunism certainly distorts a clear understanding of the underlying factors and further complicates the process of resolving conflicts. Whilst not outrightly dismissing greed and ‘conflict diamonds’ as contributing factors to the conflict in Sierra Leone, this chapter argues that the root causes of the civil war must be located in the patron-clientelistic politics that is characteristic of failed states. Greed can be better understood as a factor that fuelled and further protracted the conflict. It is in this context that the study and analysis of conflict diamonds becomes relevant. This chapter will attempt a critical analysis of the Sierra Leone conflict and engage with the debate surrounding the role of diamonds in igniting, fuelling and sustaining the conflict. Beginning with a review of the literature on the political economy of civil war, the next section will attempt to provide a working definition of conflict diamonds. This will be followed by an analysis of the neo-patrimonial and clientelistic politics that led to the outbreak of the conflict. The next section will examine the role of various warring groups and international actors in exploiting Sierra Leone’s war economy and how ‘conflict diamonds’ protracted and fuelled the conflict. Whilst most attention has been placed on the role of the RUF and its allies in exploiting ‘conflict diamonds’ in Sierra Leone, this section will reveal the extent to which other actors, including subregional peacekeepers and the legitimate government were involved in the illegal war economy.

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The Political Economy of Contemporary Civil Wars in Transitional Societies The end of the Cold War resulted in the decline of super power support for warring factions in many transitional societies. Consequently most governments and rebel groups have sought alternative forms of financing which include diaspora remittances, the trade in lucrative natural resources and capture of humanitarian aid. However the link between natural resources and conflict has dominated academic and policy discourse. The most notable of these is the work of Paul Collier who argues that ‘conflicts are far more likely to be caused by economic opportunities than by grievance’ (Collier, 2000, p. 99). In his quantitative study for the World Bank, Collier linked the outbreak of conflicts to high dependence of a country on natural resources. This analysis has led to the labelling of most African wars as ‘resource based wars’. He noted that ethnic or religious fractionalization is less likely to cause conflict. Instead he observed that conflicts are more prone in homogenous communities whilst ‘fractionalization seriously reduces the risk of conflict’ (ibid., p. 98). He regarded the mobilization of people to be more difficult in heterogeneous than in homogenous states. He is also of the view that conflicts are less likely to occur in states with authoritarian and repressive governments. He attributes the failure of grievance in igniting conflicts to three major factors which he labelled ‘the free rider, co-ordination and time-consistency problems’ (ibid., p. 99). Although people might have genuine grievances, they might prefer others to fight for them whilst they free-ride. The likelihood of grievance-motivated conflicts is further reduced by the fact that people are often sceptical of the rebel leader’s commitment to effect desired reforms once the rebellion is over. This scepticism therefore prevents most people from joining such rebellion. On the other hand, the lure of economic gain and opportunism that greed-motivated conflicts bring is attractive enough to draw a good number of recruits. However, many analysts have criticized Collier’s reductionist theory as it ‘has served to obscure a range of other issues which are equally, if not more, central to finding lasting solutions to these wars’ (Bourne, 2001, p. 1). Ballentine and Nitzshke (2005) regard Collier’s analysis as ‘rebel-centric’, ignoring the key role played by governments in sowing the seeds of conflict. They observe that ‘neglecting an analysis of state behaviour may in fact legitimise repressive and corrupt elites who may also profit from war at the expense of the population’ (Ballentine and Nitzshke, 2005). It is therefore not surprising that Collier’s interpretation of civil war is embraced by most government officials who find it as a convenient way of deflecting attention on their own misdeeds and accusing rebels as greedy people lacking any political agenda. In a similar way, International Financial Institutions (IFIs) like the World Bank and the International Monetary Fund (IMF) also support Collier’s greed-based interpretation of conflict as it serves as an excuse to deflect criticisms of their negative policies in fomenting conflict in developing countries. The complexities of modern conflicts require a comprehensive and eclectic analysis that takes on board various factors including political, economic, social and environmental causes. Natural resources can best be understood as factors that fuel and further protract a conflict. It is in this vein that the study of political economies underpinning diverse conflicts deserves attention.

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The study of political economies underpinning civil wars has attracted renewed interests over the past decade. These include the works of Goodhand and Hulme (1999); Kaldor (2001); Duffield (2001); Keen (2005); and Pugh and Cooper (2004). Though conflicts lead to the collapse of the formal and legal economy, they often result in the creation of a ‘parallel economy’ (illegal) based on predatory tactics and international or regional links. Duffield regards this parallel economy as ‘the emergence of entirely new types of social formation adapted for survival on the margins of the global economy’ (Duffield, 2001, p. 100). This has been facilitated by weakly regulated globalization which enables warlords to form alliances with criminal networks, arms traffickers and unscrupulous corporate bodies. Examples of such parallel economies abound and include the Revolutionary United Front (RUF) and Taylor’s trade in Sierra Leone’s diamonds, the Khmer Rouge’s smuggling of Timber and Gems across the Thai Border and Drug Cartels set up by rebel groups in Central and South America and the Taliban in Afghanistan. These parallel economies create what Goodhand and Hulme (1999) call ‘conflict entrepreneurs’: people who benefit from the lucrative trade and are bent on prolonging the conflict. But as Miall et al. (1999) observe, the wealth accruing from this trade is not used to pay the rank and file of the fighters but they are instead let loose to fend for themselves by looting and pillaging. In the process, these fighters commit widespread human rights abuses. In their frantic efforts to loot and extort, opposing factions often collaborate with each other. In Sierra Leone for example, the collaboration between the RUF rebels and government soldiers produced what became known in local parlance as ‘sobels’ (i.e. dodgy combatants that were allegedly soldiers by day and rebels by night). Humanitarian aid also becomes the target of warring factions in CPEs (Anderson, 1999). There are many instances of looting of humanitarian aid warehouses by warring groups. These groups even loot aid supplied to civilians. Some fighting groups force aid agencies to pay what Kaldor (1999) calls ‘custom duties’ for the passage of aid convoys through their areas of control whilst others solicit payment for providing security for NGOs. An example is the case of aid agencies in Somalia paying local armed security agents called ‘technicals’ to provide security (Jonah, 1993). The above analysis has shown that an understanding of the political economies of conflicts and their various beneficiaries and ‘conflict entrepreneurs’ is necessary in the drive to formulate effective response mechanisms to these conflicts.

Conceptualizing ‘Conflict Diamonds’ Contrary to the traditional view of diamonds as symbols of love, they have helped fund and fuel conflicts across Africa, especially in Sierra Leone, Liberia, Congo DR and Angola. Their small size makes it possible for warlords, terrorists and unscrupulous business people to easily smuggle them across porous borders. This has been achieved with the complicity of the diamond industry. DeBeers defines conflict diamonds as ‘diamonds that originate from areas in Africa controlled by forces fighting the legitimate and internationally recognized government of

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the relevant country’ (DeBeers, quoted in Bourne, 2001, p. 2). This definition is, however, problematic as it restricts the term to ‘Africa’ and also excludes other actors involved in exploiting diamonds to support their war efforts. For instance, in the case of Sierra Leone and Congo DR, government, as well as regional peacekeepers have all been implicated in exploiting diamonds to fund their war efforts and enrich their leaders. An acceptable definition should therefore cover any area in the world where diamonds are used to fund war and also expand the application of the term to include other actors such as governments and peacekeepers involved in exploiting the diamond war economy. The recent international focus on conflict diamonds started with the publication of Global Witness’ report, A Rough Trade, in 1998 which exposed the role of diamonds in financing the UNITA rebellion in Angola. This was followed in 2000 by The Partnership Africa Canada report, The Heart of the Matter: Sierra Leone, Diamonds and Human Security and the Fowler Report on Angola (UN, 2000). The campaign that followed brought together a number of NGOs, governments and the diamond industry in a forum called the Kimberley Process. But the link between diamonds and armed conflicts in Africa is not a new phenomenon as the cases of Congo and Angola in the 1960s and 1970s show.

Beyond Greed and Grievance: Analyzing the Sierra Leone Conflict Based on Collier’s analysis discussed above, a number of academics and media commentators have been quick to label the conflict in Sierra Leone as a war over diamonds. The New York Times for example described the conflicts in Sierra Leone, Angola and the Democratic Republic of the Congo (DRC) as ‘Africa’s Diamond Wars’. Ian Smillie et al. (2000) regarded diamonds as ‘The Heart of the Matter’, arguing that they are the root cause of the country’s decade long civil war. They dismissed analysis of the conflict linked to state failure and patrimonialism on the basis that ‘… similar problems elsewhere have not led to years of brutality by forces devoid of ideology, political support and ethnic identity’ (Simillie et al., 2000, p. 3). This argument is also echoed by Joe Alie (2005), an eminent Sierra Leonean academic. In a special issue of Africa Development, a number of Sierra Leonean intellectuals also supported the view that the Sierra Leone civil war is a product of ‘lumpen criminality’ (Abdulah, 1997). Successive Sierra Leone governments have also analysed the conflict in a similar vein. For example, Ibrahim Kamara, Sierra Leone’s Permanent Representative to the United Nations opined that ‘the root cause of the conflict is and remains diamonds, diamonds and diamonds’ (Kamara, quoted in Keen, 2005, p. 50). For James Jonah, former Finance Minister, ‘… the war in Sierra Leone is simply about diamonds’ (Jonah, quoted in Francis, 2001, p. 117). This simplistic analysis of the Sierra Leone conflict have fed into international responses and deflected attention to the fundamental political and socio-economic causes of the war, thereby protracting the process of conflict management, resolution and peacebuilding. Whilst diamonds played a key role in financing the activities of the RUF and other warring factions, they cannot be regarded as the root cause of the war. The background to the formation of the RUF supports

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this view. Abdullah traced the beginning of the RUF to exiled former students of Fourah Bay College (FBC) with genuine socio-political and economic grievances against the ruling APC elites (Abdullah, 1997). Student radicalism heightened in the mid-1980s resulting from government’s suppression of their demonstrations and the exposure to new ideas, mostly those of Colonel Qadafi as expressed in his Green Book. In the absence of opportunities and avenues for organized forms of democratic opposition and dissent, violence became the only means to seek redress. Following the expulsion of 41 university students in 1985 allegedly for having links with revolutionary cells sponsored by Qadafi, between 25 and 50 Sierra Leoneans were reportedly taken to Libya for training in revolutionary warfare. Amongst them was a semi-literate Foday Sankoh who was later to hijack the movement and kill most of its founding members. From then on, the anticipated social and political crusade lost its true meaning as the RUF became devoid of any credible political agenda and committed unspeakable acts of savagery. Besides, greed and resources did not form a major part of the rebellion during the initial stages of the war. In fact the RUF spent the first four years of the war in the agricultural districts of Pujehun and Kailahun in South Eastern Sierra Leone. As the next section will show, diamonds and greed only became part of the conflict after 1995 when the RUF first occupied Kono district. Greed and opportunism cannot therefore adequately explain why war erupted in March 1991. The link between diamonds and the outbreak of the Sierra Leone conflict can better be understood as part of the widespread grievances felt by Sierra Leoneans. For instance, there was widespread frustration arising from the inequitable distribution of proceeds of the diamond trade. Another factor was government’s inability to raise revenue from diamond proceeds due to smuggling and corruption. These problems were part of a wider set of challenges facing the state linked to patrimonialism and clientelism. The Sierra Leone conflict can therefore be better interpreted as a product of the ‘politics of decline’ which is characterized by patrimonialism, clientelism, corruption and state failure. Francis calls this a ‘patron-clientelist system … based on a web of informal networks through which state resources were appropriated to supporters and followers’ (Francis, 2001, p. 145). Richards shares this view when he noted that ‘[T]he political elites build support through distributing resources on a personal basis to followers. Relatively, few resources are distributed according to principles of bureaucratic rationality or accountability’ (Richards, 1996, p. xviii). Thompson (2004, p. 115) aptly defines patrimonialism as ‘a form of political order where power is concentrated in the personal authority of one individual ruler … The state is their private property, and the act of ruling is consequently arbitrary’. In Sierra Leone and indeed much of Africa, the politics of patrimonialism led to growing tendencies towards authoritarian rule. Any opposition was branded as unpatriotic. Members of the opposition were suppressed, intimidated and jailed. In several countries such as Ghana and Guinea, crude sedition laws were formulated to suppress the activities of the opposition. The press was heavily censored and freedom of expression was curtailed. And as Chazan et al. (1999, p. 49) observe, ‘opposition itself was considered to be immoral. Unity was equated with uniformity, disagreement with treason’. The role of the national legislature

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was reduced to rubber-stamping the decrees and wishes of the President. In these circumstances, there was no basis for the establishment of Max Weber’s legalrational source of legitimacy as the state was personalized and the divide between private and public became blurred. In the absence of political legitimacy based on legal-rational governance, support for patrimonial rulers is based on clientelistic networks aimed at buying off opposition and rewarding followers. Christopher Clapham (1982, p. 4) describes clientelism as ‘a relation of exchange between unequals’. It is a mutually beneficial relationship between the patron and client. Thompson (2004) refers to this relationship as a form of political contract: whilst the patron rewards the client with public office, security and resources, the client reciprocates with support that helps to legitimize the patron’s position. Clientelism in Sierra Leone resulted in a seriously flawed process of distributing the state’s scarce resources. Successive governments succeeded in building strong patron-client relationships that meant that only supporters of their regime benefited from state resources. This guaranteed the support and loyalty of key institutions like the army and police on whose loyalty the regimes relied for survival. But it also led to inefficiency and massive corruption in the running of the state. Inefficiency permeated the entire state structure as appointment to public office was not based on qualifications or merit but on association with the ruling elites. The meagre resources available for nation building were diverted to sustaining the patron-client networks. As Reno (1999, p. 1) aptly observes, political leaders ‘convert wealth into political resources, buying the loyalty of some and buying weapons to coerce others and thus gather more resources and so on’. In these circumstances, corruption became rife as clients used their positions for rent-seeking. This involves taking bribes for performing their ‘official’ duties, kick-backs on contracts, fraudulently selling off government property for private gain or diverting large sums of money to private Swiss accounts. The consequence for the masses was a state of declining social services, dilapidated infrastructure, weak and collapsing economy and widespread poverty. The increasing ‘informalization’ of the state also led to a weakening of state institutions and subsequently state failure and collapse. The political and economic discontent generated by this collapse sowed the seeds of the conflict that gripped Sierra Leone for more than a decade. William Reno (1999) coined the term ‘shadow state’ to explain the relationship which existed between corruption and politics in Sierra Leone. This state of affairs can be traced as far back as 1968 when President Siaka Stevens took over power. He effectively turned politics in Sierra Leone into an affair for and on behalf of supporters of the ruling All Peoples’ Congress (APC) party. The state was virtually privatized within a patrimonial network of unscrupulous Lebanese Businessmen and close associates of the ruling circle. Public services and corporations withered in the midst of neglect and massive corruption. The President himself publicly justified corruption by his now infamous saying ‘wu sai den tie cow na dae e dae eat’, Creole for ‘a cow grazes where it is tethered’. In his autobiography, What Life Has Taught Me, Stevens himself gives a revealing explanation for this patrimonialism and corruption, which needs to be quoted in length:

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As far as an African is concerned, once he is elevated to a position of authority he is expected to support a horde of hangers-on … He must hand out largesse, educate not only his own children but those of family members … It is all part and parcel of his new position. Money slips through his fingers like quicksilver and he can never have enough of it to satisfy his dependents. When it can be had so easily, when all that is required of him is his influence in tipping the scales in the award of a contract or manoeuvring some other proposition in favour of the donor, the temptation is enormous and it seems foolish to him to refuse such an offer. Fresh in his memory, too, is the hardship he suffered on the way up the ladder, the years of poverty and near starvation he endured and the longed-for education he could never afford … With plenty of money in the Bank at least his own children would be spared such a deprivation. (Stevens, 1984, p. 163)

But despite this massive officially sanctioned corruption, Stevens’ tight grip on power and intimidation of dissidents prevented a credible challenge to his authority. However, the stage for rapid descent into civil war was set when Stevens handpicked his army chief, Joseph Momoh as his successor. Momoh’s apparent weak and inept leadership increased the incidence of corruption to alarming levels. With dwindling resources, the state was incapable of fulfilling even some of its most basic tasks like paying workers and running hospitals and schools (Reno, 1999). The ensuing economic hardship drifted thousands of unemployed and disgruntled youths to the diamond-producing region of Kono where they became socialized in a climate of violence, drugs and crime (Pratt, 1999). With endemic poverty and growing unemployment, most of the country’s youths became easy prey for would be rebel leaders. The RUF was therefore able to recruit the bulk of their fighters amongst these disillusioned youths; in fact onetime RUF Field Commander, Sam ‘Maskita’ Bockarie was one of such youths. Based on the above analysis, the Sierra Leone conflict can be linked to the patron-clientelistic politics that is characteristic of most war-affected African countries. The corruption and inefficiency that underlie this system often lead to state collapse and breed discontent and conflict. In this context, whilst diamonds played a key role in financing the war efforts of the various warring parties as the section below will show, they cannot be considered to constitute the primary or root cause of the conflict.

Diamonds and Conflict in Sierra Leone Diamonds were discovered in Sierra Leone in 1930 and their commercial exploitation began in 1931. In 1934, the British Colonial authorities handed over control of the country’s diamonds to the Consolidated African Selection Trust (CAST) through its subsidiary, the Sierra Leone Selection Trust (SLST). The SLST was granted a 99-year monopoly to mine and prospect for diamonds. However, this monopoly was broken in 1956 with the introduction of the Alluvial Diamond Mining Scheme (ADMS) which allowed individual alluvial mining and small scale mining by ‘Native Firms’. Following widespread illegal mining, this

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Scheme represents a pragmatic attempt to protect SLST lease whilst at the same time encouraging local participation in diamond mining. In 1970, the Sierra Leone government took over 51 per cent of SLST’s shares and established the National Diamond Mining Company (NDMC). The remaining shares of SLST were sold in 1984 to an associate of President Siaka Stevens, Jamil Sahid Mohammed who formed the Precious Metal Mining Company (PMMC) (Gberie, 2002) During the 1960s and 1970s, diamonds dominated the economy of Sierra Leone accounting for about 70 per cent of the country’s foreign exchange earnings. At its peak in 1960, annual diamond production stood at 2 million carats but by 1988, official exports dropped to US$22,000 (Francis, 2001). This reduction in official diamond export was mainly due to rampant corruption, smuggling and the inability of the state to effectively control the diamond industry. As stated above, diamonds have been at the centre of the patrimonial and clientelistic politics that dominated post-colonial Sierra Leone. Successive governments since independence have used diamond proceeds and mining rights to build strong patrimonial networks of supporters and financiers. These include Lebanese and other West African nationals mostly Marakas. Consequently, corruption and smuggling dominated the diamond industry with no serious attempt by the government to bring it under control. Established smuggling routes were created via neighbouring West African countries like Liberia, Guinea and The Gambia. To take advantage of this phenomenon, as early as 1954, DeBeers established a Diamond Buying Office in Monrovia, Liberia (Gberie, 2002). Whilst diamonds may not be considered the root cause of the conflict, they have certainly funded the activities of the various warring parties and served to fuel and further protract the conflict. Since 1994 when they first seized the diamond-rich district of Kono, diamond mining has been the RUF’s primary fund raising activity. Before this time, it was done at a sporadic and mostly individual level. Estimates of RUF annual diamond exports vary widely from as little as $25 million to as much as $125 million (UN, 2001). DeBeers estimated that in 1999, the RUF exported $20 million worth of diamonds. Whatever the estimate, it represents significant source of income to fund their war efforts. The RUF have used proceeds from diamond sales to purchase drugs, arms and ammunitions, and maintain strategic alliances both at home and abroad through a series of unscrupulous middlemen and rogue states. Besides funding their war efforts, top RUF leaders have also used proceeds from diamond sales to enrich themselves, thereby becoming intransigent in implementing peace accords. For instance, a key factor behind the near collapse of the Lome Accord was Foday Sankoh’s continued exploitation of diamonds and the lucrative deals he entered into in his capacity as the head of the diamond commission. Documents found after peace campaigners ransacked his house show a host of shady diamond deals he entered into with South African, American and East European companies. There are very strong connections between diamonds in Sierra Leone and the proliferation of small arms (UN, 2001). The UN Panel of Experts have extensively documented the network of companies, individuals and states involved in this arms-for-diamonds barter trade. This barter trade also has a regional dimension. Several UN and NGO reports have implicated the former Liberian President

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in exploiting Sierra Leone’s diamonds through his relationship with the RUF. Liberia, with fewer deposits than Sierra Leone, was used by the RUF as a conduit for diamonds mined in Kono. Other countries such as Guinea, Cote d’Ivoire and The Gambia are also implicated in this sub-regional network of illicit diamond exports from RUF controlled areas. Reliable data is hard to come by but the following figures put the problem into perspective (Smillie et al., 2000): • •

•

while the government of Sierra Leone recorded exports of only 8,500 carats in 1998, the HRD records imports of 770,000 carats; annual Liberian diamond mining capacity is between 100,000 and 150,000 carats, but the HRD records Liberian imports into Belgium of over 31 million carats between 1994 and 1998 – an average of over six million carats a year; Cote d’Ivoire, where the small diamond industry was closed in the mid 1980s, apparently exported an average of more than 1.5 million carats to Belgium between 1995 and 1997.

In 2002, an overlooked dimension of conflict diamonds was also uncovered by the Washington Post: its links with global terrorism. Douglas Farrah (2001) exposed the links between the RUF, Taylor and al Qaeda. In the months following 11 September, the report alleges that al Qaeda used diamonds to move and store their assets. The RUF and its allies were not alone in exploiting Sierra Leone’s ‘conflict diamonds’. Renegade elements of the Sierra Leone Army (SLA) were also heavily involved in diamond mining. By the mid-1990s, some members of the SLA were actively colluding with the RUF in promoting their common diamond mining interest. This earned them the pejorative label, ‘sobels’. This collision became pronounced in May 1997 when sections of the SLA and RUF joined forces to overthrow the government of Tejan Kabbah. The pro-government Kamajor militia has also been accused of involvement in diamond mining around the diamondiferous Tongo Field and areas surrounding Kenema. Successive governments have also used proceeds from diamonds and mining rights to secure strategic military alliances with Private Military Companies. This goes as far back as April 1995 when the then National Provisional Ruling Council (NPRC) Military government hired the services of the South African Mercenary firm, Executive Outcomes (EO). As part of the deal, the NPRC granted Branch Energy, EO’s mining arm, a prospecting and mining lease (Musah, 2000). The government of Tejan Kabbah is also implicated in the ‘blood diamond’ saga. Whilst in exile in Guinea, President Kabbah was reported to have held discussions with representatives of a London-based Private Military Company, Sandline International in the presence of Nigerian military representatives and the UK High Commissioner to Sierra Leone, Peter Penfold. The deal involves a Vancouverbased businessman Rakesh Saxena financing the Sandline Operation with US$10 million in return for mining concessions. Sandline shipped an estimated 35 tons of Bulgarian weapons for the use of the pro-Kabbah Kamajor militia and provided logistics and intelligence support to ECOMOG (Africa Confidential, 1998). This

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deal sparked a major row for Prime Minister Tony Blair’s government in the UK and undermined New Labour’s ‘Ethical Foreign Policy’. Whilst most of the literature has focused on the role of warring factions and rogue foreign elements in exploiting conflict diamonds, little has been written about the role of international peacekeepers. In Sierra Leone, as was the case in Liberia, ECOMOG troops were accused of involvement in exploiting the country’s diamonds. In a leaked report on the situation in Sierra Leone, the former UNAMSIL Commander, Gen. Jetly first brought this issue to international attention. The report implicated key Nigerian ECOMOG officers with complicity in exploiting the war economy, claiming that ‘the Nigerian army was interested in staying in Sierra Leone due to the massive benefits they were getting from the illegal diamond mining’ (Jetley, 2001). Whilst this claim might have been exaggerated, there is ample evidence to support allegations that the Nigerian army was involved in diamond mining in Sierra Leone. Many eyewitnesses of the RUF attack on the Kono district, in December 1998, seem to suggest that ECOMOG forces were caught off guard due to their concentration on diamond mining. In his memoirs, the former Nigerian Commander of the 24th Brigade responsible for Kono district acknowledged this fact: Most of the personnel of units deployed at Kono district except those located at Njaima Nimikoro were deeply involved in illegal mining of diamond. Our boys forgot our main mission in Sierra Leone and opted for material gains due to the influence of the SLA soldiers. The allure of having a few gem stones in their pockets was too tempting to resist, especially as the only gratification to take back to Nigeria was a paltry $150 as opposed to $900 they often collect while on UN operations. This unprofessional attitude reduced their will to fight tremendously. (Adeshina, 2002, p. 143)

Africa Confidential (1999) was blunter when it claimed that: the involvement of some Nigerian officers in diamond-mining operations in the east did not just distract them from peace-keeping and frustrate their troops … but also caused major security breaches. Several clandestine RUF militants, male and female, offered their services to the Nigerian officers in their diamond-mining operations as a means of gathering information about ECOMOG troop deployment. (Africa Confidential, January 1999)

However, it would be hard to substantiate claims of ECOMOG complicity with the RUF in the diamond trade, due to the sensitive nature of this trade. Most of the evidence seems to confirm that this was not a formal policy but a decision taken by a few corrupt officers. As recent examples have indicated, this situation is not unique to ECOMOG. SADC forces in the DRC have also come under attack of involvement in exploiting the illegal war economy. But this involvement in exploiting the illegal war economy risks eroding the credibility of the force and distracts the troops from their task of safeguarding lives. Whilst most academic and media attention has been focused on the RUF and its allies, the above discussion has shown that the exploitation of the Sierra Leone war economy goes beyond a single group. The involvement of various factions

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such as the legitimate government, mercenaries and Sub-regional peacekeepers warrants a broadening of the conceptualization of conflict diamonds as argued above. This expanded conceptualization of conflict diamonds will ensure more effective strategies aimed at curbing the exploitation of illegal war economies.

Conclusion Collier’s greed-based analysis of conflict has attracted intense debate within the academic, NGO and media circles. It has received wide support from several Western governments, media, IFIs, NGOs and even embattled governments in conflict zones who use it to deflect criticisms of their own conflict-generating policies. Critics have argued that limiting the causal factors of conflicts to economic motives provides a simplistic explanation for the complex web of factors that underpin most of today’s complex political emergencies. Consequently, this reductionist analysis has led to a lack of understanding of the fundamental causes of conflict and hampered the process of negotiating civil war peace settlements, implementing peacebuilding programmes and initiating a feasible conflict prevention programme. In the case of Sierra Leone, this analysis has fed into most scholarly and media interpretation of the war. However, as the above analysis has shown, diamonds cannot be regarded as the ‘Heart of the Matter’. Firstly, the background to the RUF rebellion has revealed that there were genuine grievances by the students who started the movement. Secondly, diamond mining was not a key feature of RUF operations in the initial stages of the conflict. The fact that diamond mining became a key part of the RUF war strategy post-1995 does not provide enough explanation for the outbreak of war in 1991. This fact points to the inadequacy of Collier’s greed-based interpretation of conflict. Instead, the primary factors of the Sierra Leone civil war must be located in the grievances that were generated by the patrimonial and clientelistic politics that characterized post-colonial Sierra Leone. Greed and economic opportunism can be regarded as fuelling and aggravating factors.

References Africa Confidential (1998), ‘Sierra Leone: Freetown Fracas’, 39(5), March. Africa Confidential (1999), ‘No Surrender, No Deal’, 40(2), January. Abdullah, I. (1997), ‘Bush Path to Destruction: The Origin and Character of the Revolutionary United Front (RUF/SL)’, Africa Development, 22(3/4), Special Issue: ‘Lumpen Culture and Political Violence: The Sierra Leone Civil War’. Alie, J.A.D. (2005), ‘The Egbesu and Bakassi Boys: African Spiritism and the Mystical Re-traditionalisation of Security’, in D. Francis (ed.), Civil Militia: Africa’s Intractable Security Menance?, Aldershot: Ashgate. Anderson, M. (1999), Do No Harm: How Aid Can Support Peace – or War, Boulder, CO: Lynne Rienner. Ballentine, K. and H. Nitzshke (2005), ‘The Political Economy of Civil War and Conflict Transformation’, in M. Fischer and B. Schmelzle (eds), Transforming War Economies:

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Dilemmas and Strategies, Berghof Research Center for Constructive Conflict Management, http://www.berghof-handbook.net. Bourne, M. (2001), ‘Conflict Diamonds: Roles, Responsibilities and Responses’, Peace Studies Working Paper No. 2, Department of Peace Studies, University of Bradford. Chazan, N., P. Lewis, R.A. Mortimer, D. Rothchild and S.J. Stedman (1999), Politics and Security in Contemporary Africa, 3rd edn, Boulder, CO: Lynne Reinner. Clapham, C. (1982), ‘Clientelism and the State’, in C. Clapham (ed.), Private Patronage and Public Power, London: Pinter. Collier, P. (2000), ‘Doing Well Out of War’ in M. Berdal and D. Malone (eds), Greed and Grievance: Economic Agendas in Civil Wars, Boulder, CO: Lynne Rienner. Duffield, M. (2001), Global Governance and the New Wars: The Merging of Development and Security, New York: Zed Books. Farrah, D. (2001), ‘Al Qaeda Cash Tied to Diamond Trade’, Washington Post (November). Francis, D. (2001), The Politics of Economic Regionalism: Sierra Leone in ECOWAS, Aldershot: Ashgate. Gberie, L. (2002), ‘War and Peace in Sierra Leone: Diamonds, Corruption and the Lebanese Connection’, Working Paper No. 6, The Diamond and Human Security Project, Partnership Africa Canada. Global Witness (1998), A Rough Trade: The Role of Diamond Companies and Governments in the Angolan Conflict, London: Global Witness. Goodhand, J. and D. Hume (1999), ‘From Wars to Complex Political Emergencies: Understanding Conflict and Peacebuilding in the New World Disorder’, Third World Quarterly, 20(1), pp. 13–26. Jetley, V.J. (2000), ‘Report on the Situation in Sierra Leone’, http://www.sierra-leone.org. Accessed on 15 March 2004. Jonah, J.O.C. (1993), ‘Humanitarian Intervention’, in T.G. Weiss and L. Minear (eds), Humanitarianism Across Borders: Sustaining Civilians in Times of War, Boulder, CO and London: Lynne Rienner. Kaldor, M. (2001), New and Old Wars, Cambridge: Polity Press. Keen, D. (2005), Conflict and Collision in Sierra Leone, Oxford: James Currey Ltd. Miall, H., O. Ramsbotham and T. Woodhouse (1999), Contemporary Conflict Resolution, Cambridge: Polity Press. Musah, A.-F. (2000), ‘A Country Under Siege’, in A.-F. Musah and J. Kayode Fayemi (eds), Mercenaries: An African Security Dilemma, London: Pluto Press. Pratt, D. (1999), Sierra Leone: The Forgotten Crisis, Report to the Minister of Foreign Affairs of Canada. Pugh, M. and N. Cooper with J. Goodhand (2004), War Economies in a Regional Context: Challenges of Transformation, Boulder, CO and London: Lynne Rienner. Reno, W. (1999), War Lord Politics and African States, Boulder, CO and London: Lynne Rienner. Richards, P. (1996), Fighting for the Rain Forest: War, Youth and Resources in Sierra Leone, Oxford: The International African Institute. Smillie, I., L. Gberie and R. Hazleton (2000), The Heart of the Matter: Sierra Leone, Diamonds and Human Security, Ottawa: Partnership Africa Canada. Stevens, S. (1984), What Life Has Taught Me, Abbotsbrook, Bourne End: Kensal Press. Thompson, A. (2004), Introduction to African Politics, London: Routledge. UN (2000), Final Report of the UN Panel of Experts on Violations of Security Council Sanctions against UNITA (The ‘Fowler Report’), New York: United Nations, S/2000/203.

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UN (2001), Report Of The Panel Of Experts Appointed Pursuant To UN Security Council Resolution 1306 (2000), Paragraph 19 In Relation To Sierra Leone, New York: United Nations.

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Chapter 6

Politics and Oil in Sudan Peter Woodward

Introduction The central idea of this chapter is that issues of resource extraction and exploitation have been central to political relations in Sudan since a state roughly corresponding to the present one was established in the nineteenth century. Oil especially has become a central ingredient of Sudanese politics and conflict in the past 25 years, but it was not actually the original cause of conflict so much as a pouring of petrol on the flames. The major question of politics and conflict from the mid nineteenth century was the relationship between north and south which developed with the formation of the state under the Turkish-Egyptian occupation from 1821 to 1885, the Mahdist state that succeeded it and the Anglo-Egyptian Condominium from 1898 to 1956. Although oil was obviously not involved in those early days, the precedent of exploitation of resources was there from the outset. Turco-Egyptians, Europeans and northern Sudanese Arabs were involved in moving south from the new capital of Khartoum in search of the riches of the southern Sudan as it became known: at first ivory was the main target, but by the 1850s this had moved on to slaves who were both exported to Egypt and Arabia and used in domestic slavery in the northern Sudan itself (Gray, 1961). The Mahdist state, which had little control of the south, also perpetuated the traditions of a violent relationship with the region. The British, who dominated the Condominium, subdued the south, often by force, and ended the slave trade, but contributed to the sense of cultural and racial differences between north and south. While the north was perceived as largely inhabited by Arab tribes which were followers of Islam, the south was seen as an area that was characteristically Negroid and African and whose paganism would permit the activities of Christian missionaries who were not allowed to proselytize in the north. Thus by the end of the Condominium, northern and southern Sudanese were increasingly perceiving themselves as members of two distinctly different parts of the country. At the same time, the economic and political developments had widened the gap between the two parts. Economically, the central northern Sudan became the backbone of the modern sector of the economy, especially the cotton growing Gezira scheme; while the south was largely neglected being seen as geographically remote with few resources then attractive to the imperial economy. Politically, Britain’s great fear after a revolt in northern Sudan in 1924 was the growth of

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nationalism in the country as a whole inspired by Egyptian nationalism to the north. The response was classic divide and rule, which meant for the south an attempt to isolate it from the north, known from 1930 as the isolationist Southern Policy (Beshir, 1968). Some thought at that time that it would lead to separation and a new attachment of the south to British East Africa, but that possible objective was never pursued. When Sudanese nationalism finally took off in World War II it was northern based, but determined to try to incorporate the south in the emerging state. The path to independence was tortuous but included growing tension between northerners and southerners with the latter fearing political domination. Violence flared in the south in 1955, and when independence came in 1956 promises were made to look at constitutional alternatives that would be more acceptable to the south than the unitary state that was in operation. However, the promises were never enacted making southerners ever more distrustful of the north and inclined towards the alternative of violent resistance (Woodward, 1979). By the early 1960s civil war was developing in the south, essentially over political demands. It grew during the remainder of the decade, especially as successive northern governments increasingly tried not only to defeat the insurgents militarily but also to restrict the activities of Christian missions and promote Arabization and Islamization. It was clear that war in the south was also destabilizing northern politics and finally a military regime under President Nimeiri decided to negotiate with the major southern movement known as the Anyanya. The Addis Ababa agreement, as it was known, of 1972 established regional autonomy for the whole of the south and hopes were high that the deep-seated conflict of the past had finally been addressed and peace and stability would at last reign.

Enter Oil Throughout the rest of the 1970s there was peace in the south, but economic deterioration nationally. It was also clear that there were economic resources in the south that were now ripe for exploitation, especially water and oil. The waters of the White Nile had long been regulated primarily in the interests of northern Sudan and particularly Egypt. However, one project that had been on the drawing board for many years but never implemented was the building of a canal at Jonglei to take water around the great swamp known as the Sudd with its high evaporation. For domestic and international reasons in both countries Sudan and Egypt were moving closer by the mid-1970s, and one area in which they agreed to cooperate was the building of the Jonglei Canal (Collins, 1990). However, it soon became clear that there was growing suspicion in the south that it was being exploited for the benefit of its northern neighbours, including violent outbursts provoked by rumours that surplus Egyptian peasants would be moved south to take the lands beside the new canal. While water had long been a crucial economic resource for Sudan, oil was a new one. With rising world oil prices major companies were keen to extend exploration and two took concessions in Sudan, Chevron and Total, with the

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former more advanced in its development by the end of the 1970s. It appeared that the most likely areas were in the south, including concession blocks that soon became subject to dispute. There were unresolved issues pertaining to the boundaries of the three southern regions and the north as bequeathed by the British at independence in 1956. In addition President Nimeiri had introduced a new ‘federal’ system which broke up the old regions into a number of states. One of the areas Chevron was developing around the small town of Bentiu, hitherto a part of the old southern Upper Nile region, was now declared to be part of a new Unity State and attached to the north. It was also announced that instead of the proposed oil refinery being built at Bentiu it would be established at Kosti, a town unambiguously in the north. In reality even that did not occur and instead a pipeline to Port Sudan for the export of crude was announced in 1981 to help the deteriorating northern-dominated national economy. In support of what was increasingly seen as Nimeiri’s exploitative plans for southern resources he also meddled in southern politics to fragment and destabilize the system of southern autonomy of which he himself had been the architect in 1972. By the early 1980s southern politics was in disarray and confusion, and violence was beginning to surface once more (Alier, 1990). At first it looked like a repetition of the Anyanya of the earlier civil war, but in 1983 it became far more challenging. Following a mutiny amongst southern troops in Bor a new force called the Sudan Peoples Liberation Army (SPLA) emerged. It was led by a strong figure, John Garang de Mabior, with a vision of a less exploitative ‘New Sudan’, and backed in its early years by Marxist Ethiopia, then actively supported by the USSR while Sudan had moved ever closer to the USA (Khalid, 1987). Two of the early targets of the SPLA were the Jonglei Canal and Chevron’s oilfield around Bentiu, and it was powerful enough to force the shutting down of both. The reverberations not only stopped the exploitation of two of the south’s major resources, they also contributed to the popular uprising of 1985 that overthrew Nimeiri’s regime (Johnson, 2003, pp. 69–71). Conflict had triumphed over development.

Re-enter Oil Nimeiri’s downfall ended the dreams of resource-led development and instead had seen a renewal of conflict. And his departure did little to improve prospects. Following elections in 1985 Sudan returned to its old liberal-democratic system that produced coalition governments dominated by traditional northern-based parties that had always been a recipe for indecisive rule and now perpetuated the civil war in the south. In 1989, just when peace talks at last looked to be making some headway, another coup occurred. The Muslim Brotherhood had been a growing factor in Sudanese politics for years, including backing Nimeiri’s desperate introduction of Islamic law in 1983 (El-Affendi, 1991). They had also been practising entryism in many areas of the state apparatus and decided to strike in July 1989 partly to pre-empt peace with the south and with it possible northern retreat from Islamic law. There had never been a military regime like it in Sudan. Its aim, guided by its eminence grise Hasan al-Turabi, was to use

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the state to promote Islamization and Arabization at home and abroad and it did so in a violent and repressive way (including hosting Osama bin Laden from 1991–1996). Needless to say conflict with the south intensified, though without a breakthrough in the military deadlock, and there was little prospect of exploiting the country’s natural resources (Woodward, 1997). But as with many highly ideological regimes, years in power induced a degree of pragmatism, especially as Sudan’s economic situation went from bad to worse and the new rulers proved as keen to line their own pockets as all their predecessors. The oilfields straddling the north-south border were particularly tempting, and the regime had no compunction in manipulating local ethnic conflicts in the areas involved and arming local militias. Such tactics had been used by successive regimes in the course of the civil war from 1983, and now could be used to advance the cause of oil with the intention of pushing the war zone southwards away from the oilfields. In addition to violence against local communities there was systematic land clearance. Factors like these inhibited and even prevented major Western oil companies from returning to the scene where Chevron had been so badly burned. In addition to the caution they induced, American majors were also blocked by US sanctions arising from its designation of Sudan as a state supporting international terrorism (Woodward, 2006). In spite of this a number of Western juniors went into Sudan, though they found themselves under criticism from various domestic critics for their involvement. These included Arakis and later Talisman Oil from Canada, Lundin Oil from Sweden and the Austrian company OMV (Patey, 2006). However, instead of relying on the West Sudan looked east. Demand for oil there was growing with rapid economic expansion, and China in particular was keen to become involved and not just in oil. China had had relations with Sudan for decades but they had been relatively low key (Large, 2005). China’s most conspicuous activity in Africa had been in the 1960s as Maoism was promoted around the Third World and China’s activities in East Africa, including the building of the ‘Tan-Zam’ railway, were particularly prominent. But by the 1990s it was trade not ideology that was at the top of China’s agenda, at the same time as Sudan’s Islamist government was becoming more pragmatic and greedy. China was especially eager for oil and saw Africa in general and Sudan in particular as ripe for development. In addition, behind the façade of non-interference in the internal affairs of business partners, China had no inhibitions in accepting and indeed facilitating, through the use of the infrastructure it was building, Sudan’s use of force in establishing oil production. As the oil minister, Awad Ahmed Jaz, was quoted as saying, ‘The Chinese are very nice. They don’t have anything to do with any politics or problems. Things move smoothly, successfully. They are very hard workers, looking for business not politics’ (Washington Post, 23 December 2004, quoted in Large, 2005). China had much to do by way of infrastructure since the area of the first oilfields had had scarcely any development hitherto and the little that had been in place was largely destroyed by the war. But major companies moving into Sudan had always faced that challenge as seen both in Chevron’s earlier attempt at oil development, and LONRHO’s creation of the vast Kenana sugar scheme,

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and the Chinese were not to be put off, offering soft loan facilities for a variety of infrastructure projects. From 1996 the China National Petroleum Company (CNPC) became the largest partner with a 40 per cent stake in the Greater Nile Petroleum Operating Company (GNPOC). By 1999 Sudan was an oil exporter and by 2006 production was up to 500m bpd; with the Sino-Sudanese field having proven reserves of 220 million tonnes (Taylor, 2006, p. 949). Its largest customer was China; while for China, Sudan was its fourth largest source of oil imports providing 10 per cent of its total. In addition to oil and related infrastructure, China embarked on a range of other activities including major involvement in construction of a range of public buildings and projects, as well as becoming Sudan’s largest overall trade partner; and Sudan was China’s largest partner in Africa, a continent in which it was making rapid strides. Trade links also included extensive arms exports, and it was noted that many of the weapons and vehicles being used by all parties to the Darfur conflict were of Chinese manufacture. At the same time, China was opposed to UN involvement in the Darfur crisis, or to the use of sanctions against the country.

Oil, Politics and the State China may claim non-interference in the internal affairs of countries with which it does business but its involvement, in practice, affects both domestic and international politics. Essentially the Islamists had governed Sudan by taking a hard grip on a weak state. This had involved endeavouring to combine ideology and repression in a way that justified violence both against fellow Muslims in the north and ‘unbelievers’ in the south (Woodward, 1997); but time had reduced the impact of ideology and the state’s weakness was such that regional opposition, especially in the south and later in Darfur, had risen rather than been conquered. However, oil wealth and economic liberalization under government control was changing the character of politics. In particular, it allowed a return of the politics of patronage and clientelism, which had long been a major feature of the country (Woodward, 1990). Patronage allowed a return of factions of the old political forces that had been forced out following the coup of 1989. Leading figures in the old political parties had then suffered property losses designed to weaken the financial and political power they had once wielded. However, their influence had not entirely been removed and in the late 1990s some factions, such as the Hindi faction of the Democratic Unionist Party (DUP), were offered carrots to return, even including government positions. Divide and rule, the other side of the coin, also involved encouraging the factional splintering of the old parties. There were also new clients to be brought on board. One feature of social change for about three decades had been the rise of new neo-sufi Islamic movements. Although ideologically this should have been anathema to the ruling Islamist National Congress Party (NCP), it came to realize the difficulty of repressing these increasingly popular groups, and instead they were selectively patronized with concessions of various kinds with the hope that this too would weaken the old parties with their popular bases in sufi and neo-sufi movements (El Obeid,

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2006). As well as using the new found wealth to reward clients in the north, similar divide and rule tactics were employed for the protection of the extraction of oil, the source of much of the new wealth. In and around the new fields that straddled the north-south frontier, ethnic factions of groups such as the Baggara, Nuer and Dinka were armed by the government and used both to clear local communities considered potentially hostile and to protect the oil infrastructure (Coalition for International Justice, 2006). The ability to extend patronage networks, especially in the north, also meant less need to rely on sticks. The regime remained at heart a security based secretive cabal, but it also was able to offer some relaxation in what had hitherto been the most repressive experience Sudan had known since independence. The media was able to expand in scale and content, though still prone to unpredictable government interference. Islamic law, though still the last ideological vestige of the regime, especially after its split with its original godfather Hasan al-Turabi in 1999, was more loosely practiced. And a number of the regime’s critics in exile were encouraged to return. Such changes were even to become a part of the eventual moves towards peace with the south, of which more shortly. As well as using oil wealth to affect the country’s politics, the state itself experienced changes. Officially the Sudanese Petroleum Corporation (SPC) is part of the Ministry of Energy and Mines, but in practice it functions autonomously and is the most powerful department in the ministry. It runs effectively as a company rather than a civil service bureaucracy having its own direct access to the highest reaches of the regime, of which the responsible minister, Awad Ahmed Jaz, is an integral part. It also oversees the companies involved in the movement, marketing and distribution of the oil, including the three state-owned refineries. Overall, it is at the centre of what had become by 2006 one of the fastest-growing economies in Africa. In addition, by generating wealth for arms purchases, mainly from Asia and Russia, and investment in arms production facilities it helped to keep the controllers of those arms, the various military and security arms of the state, at the core of the regime; a situation that became particularly apparent when the Darfur crisis exploded in 2003. In contrast, little if any money was going into public services and disparities in wealth both nationally and regionally grew rapidly. Oil also influenced Sudan’s international politics. The Asian countries most involved, China, India and Malaysia, appeared unconcerned by the widespread human rights violations associated with the development of the oil sector. Indeed, in selling arms and allowing the use of their local oil infrastructure for military purposes they were effectively contributing to state violence. They also gave some political cover from Sudan’s international critics, especially China with its permanent seat on the UN Security Council. And while the US maintained sanctions that kept its businessmen out of Sudan, several European countries, including Britain, France and Germany, were more equivocal, deploring the violence while encouraging their companies to pursue commercial opportunities, including those in the burgeoning oil sector. It was in part this opportunity, together with concern over the humanitarian situation, that encouraged certain

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European countries to take a lead in international pressure towards peacemaking between north and south.

Oil and Peace Just as oil had played a part in conflict: so it was to play a part in peacemaking as well. There had been numerous attempts at a negotiated peace between north and south but none had proved successful. However, some groundwork had been done, including the acceptance by both sides of the possibility of a referendum for the south on full independence following an agreement. Yet militarily deadlock had persisted and with it the failure both to address the real grievances felt by southerners and also the failure to capitalize fully on the possibility of greater oil wealth to the benefit of both sides. From the government side, although they had recruited militias and cleared people from around the new oilfields there were still attempts by the SPLA to attack them and security of the fields and the pipeline to the coast could not be guaranteed. At the same time there was the prospect of further fields that would greatly increase revenues, especially in the south. Only ending the war could make many of these accessible. Meanwhile the existing deals with Asian partners, while the only ones available, were not on the best international terms; and the companies involved were not the most technologically equipped and capable of the fullest exploitation of the fields. Only peace would lift US sanctions and increase Western investment in Sudan to develop a more competitive, efficient and therefore profitable oil sector. As for the SPLA, while some of its leaders had done quite well from the conflict, they were aware both of war weariness across the region, and that oil development in the south could mean big rewards. While the situation in Sudan offered some prospects for peace, it took international pressure at different levels to help bring agreement. At the regional level, several of Sudan’s African neighbours had been involved in efforts to bring peace since 1994 under the auspices of the Inter-Governmental Authority for Development (IGAD). IGAD provided the forum and the framework of ideas, but it was Western pressure, especially from the USA, that pushed talks forward. The Bush administration was strongly committed to peace in Sudan, less because Bush was an oil man than because of the long and growing involvement of American evangelicals in the course of the southern Sudan, including a number of prominent politicians, as well as the Bush family and close friends. Bush appointed a special envoy for Sudan, John Danforth, and progress was soon made (Woodward, 2006, pp. 111–33). The agreements began with the Machakos Protocol of July 2002, which said that there would in effect be ‘one country: two systems’ and that six years after the final agreement the south would have a referendum on unity or independence. It took until January 2005 and a number of protocols before finally a Comprehensive Peace Agreement (CPA) was signed. One of those protocols had involved wealth sharing and one of the central issues had been that of oil. The oil clauses in the protocol covered: existing contracts; future management of oil resources; and sharing of oil revenue. On existing contracts there would be a

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Technical Team to scrutinize existing contracts. These would not be renegotiated, but possible social and environmental problems would be examined. In fact a problem soon grew up over a new claim by a new company, UK-registered White Nile Petroleum, which had support amongst the SPLA, and the French Total company which claimed to have an existing concession signed with the government to the same block in the south. White Nile has deliberately sought investment from SPLM leaders through its Government of South Sudan (GOSS)-owned Nile Petroleum, and argues that the Total claim had lapsed. White Nile also talks of a future pipeline to Kenya and greater autonomy for the south with closer links to East Africa, an agenda that plays into choosing separation in the referendum and is very popular in the south. The national government, however, says that the Total claim is still valid and comes under the ‘no renegotiation’ clause in the wealth sharing protocol. Legal proceedings between the two foreign-based countries began in 2006. For the future there has been included a National Petroleum Commission to oversee developments. However it was slow to be established and seemed dominated by the existing ministry. Moreover, there has been a lack of transparency in the complex affairs and accounting of the oil sector and it is not clear how far the Commission will be able to establish a full picture of what has been going on. On revenue sharing it said that 2 per cent would go to the local state from where the oil was being extracted with 50 per cent of the remainder from oil found in the south going to the new government in the south and 50 per cent to the national government. Early in 2006 the President of GOSS, Salva Kiir Mayardit, who is also the national First Vice-President, complained publicly that the south was not receiving its expected share of revenue. The position is not helped by the uncertainty about the volume of oil produced and revenues earned, though the National Petroleum Commission promised to investigate. Clearly oil is a central aspect of the implementation of the CPA and could be very significant in the eventual question of Sudan’s continuance as one country, or its split into two as allowed for in the Machakos Protocol.

Oil and the Darfur Crisis Darfur was known to have some significant mineral deposits, especially copper, but they had never been developed and oil was not amongst them. However, as soon as the Darfur crisis became openly recognized early in 2003, the oil question became a dimension of the problem. The crisis itself grew from local, national and international factors (Flint and de Waal, 2005; Prunier, 2005). Within Darfur rising population and environmental degradation had created a growing problem for decades, as indicated by the famine of the early 1980s. It had also led to growing tension between herding and farming communities that exacerbated the complex ethnic identities and rivalries. Violence had been growing since the 1980s reflecting the decay of local authorities and the rise of banditry. At a national level, the SPLA’s vision was not of a separate south, but a ‘New Sudan’ in which all the ‘marginal areas’ – outlying areas that had been economically neglected or exploited – would receive their just rewards. SPLA

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support had contributed to a revolt in Darfur in the early 1990s that had been vigorously repressed by the government. There were to be contacts between the SPLA and the new rebels of 2003. In addition, a widely circulated book, The Black Book 1: Imbalance of Power and Wealth in Sudan had appeared in Khartoum in 2000 thought to be by Darfur activists which proclaimed the dominance of a small minority of people from the riverine north over the country since independence. The signing of the Machakos Protocol in 2002 and the subsequent negotiation of the other protocols was seen by many in the east and west of Sudan as being an exclusive stitch up of the country by that northern minority ruling through the National Congress Party (NCP) and the SPLM. Since it had been based on the armed forces of the two sides the answer, in Darfur in the west as well as in the east, was to take up arms and fight for their share of the national cake as well. Another aspect of national politics was also involved. In 1999 there had been the split between President Beshir and Hasan al-Turabi and it was alleged that some followers of Turabi were behind a smaller rebel movement in Darfur, the Justice and Equality Movement (JEM). There was also a third international dimension especially involving Sudan’s western neighbour, Chad, where there were ethnic links between the regime of President Idris Deby and some groups in Darfur, especially the Zaghawa, who were involved in the revolt. The response of the Sudan government was to arm local militias, known as janjaweed, a tactic it had used in the past in the south. This time the strength of the resistance in Darfur, and the arrival of large numbers of refugees attracted international attention and the escalation of accusations that genocide was being perpetrated. It was at this point that oil came into the picture as the UN became the forum in which Sudan’s problems were addressed. Critics led by the US came up with a series of resolutions concerning the violence in Darfur which included consideration of sanctions, possibly including sanctions against Sudan’s oil sector. China regularly abstained in the votes in the Security Council and thus nothing was agreed. It could have vetoed them, as the Sudan government wished, but chose not to do so thus suggesting that its concern was more to protect its oil interests in the country than to show solidarity with the government. Furthermore, China may have been thinking not only of its current interests but also of the future. One area in which it has a concessionary interest is in southern Darfur, where some believe that there is considerable potential (Coalition for International Justice, 2006, pp. 38–41). The possibility of oil in Darfur was also a part of the Darfur Peace Agreement (DPA) of 2006 hammered out in Abuja, Nigeria, but at the time of writing accepted by only one of Darfur’s factions. Violence in Darfur was paralleled by violence in eastern Sudan if not on the same scale or with comparable international attention, though social conditions in parts of the east had been worse than those in Darfur (International Crisis Group, 2006). Again there was ethnic mobilization around the Beja Congress, the major ethnic community, and the Free Lions supported largely by Rashaida. They came together to form the Eastern Front and like the peoples of the south and Darfur raised the cry of ‘marginalization’; but in an attempt to head off growing unrest found the government willing to talk, and the Eastern Sudan Peace Agreement (ESPA) was signed in 2006. Here too there is a connection to oil, since there is

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concern that the current pipelines, as well as road and rail networks, cross the east to Sudan’s only outlets to the Red Sea. There have been attacks in the past and there are fears that they could be yet more damaging in the future threatening the development of the whole of Sudan’s economy. In addition, there is international interest in oil concessions in the east.

Conclusion The grievances of Sudan’s people, especially those in the ‘marginalized’ areas of south, west and east, pre-date the development of the oil sector, but oil has exacerbated political mobilization on all sides. Since Sudan’s oil came on stream in 1999 it has increasingly resembled the prebendal and predatory state model; but it has too shown its limitations in that conflict has grown and with it limitations on the growth of the exploitation of new fields, especially in the south, and the security of present output both in the south and through the pipelines in the east. This pressure appears to have contributed to the decision of both the ruling NCP and the SPLA to negotiate the series of protocols that concluded in the CPA in 2005. There are fears that the CPA would turn out to be a carve up of the country between the two partners, now officially dominant in the new Government of National Unity (GNU). It would allow both to benefit from the probable expansion of oilfields in the south. Yet there are two other possible scenarios. One is that the CPA is implemented including the opening up of the political system to make it broader and more participatory, especially through the elections agreed to be held by 2009 at the latest. This will require sustained commitment from the members of the international community that pressured the parties to the CPA, especially the US; as well as active participation by the political parties presently in the GNU and particularly those excluded from the political system since 1989. A final scenario is the attempted retention of power by the two main parties that signed the CPA which could lead to even worse violence in western and eastern Sudan, as well as in the south. In that event, Sudan would be faced not just with the possibility of the legal separation of the south, as agreed in the CPA, but the continuing collapse of an already weak state. In the latter event there would still be a probable attempt to export oil but it would be from limited areas where enforced security could be more or less assured, and might also face threats to the export infrastructure. At the same time as Sudan’s ‘marginalized’ areas have mounted political and military challenges it is clear that the distribution of oil resources is an important part of any peace. But the question still remains of what the oil will be used for if a broader distribution of power and wealth is achieved? Will it just be more broadly spread around to the benefit of other regional elites, as it has to the riverine northern elite thus far? Or will it be used more widely, not just through a broader rentier-type spread but into the growth of Sudan’s other great resource, its agricultural potential? Clearly, Sudan is at a cross roads with past trends in a rentier direction that could further break up the state or its various political

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constituents could come together towards the realization of its economic potential for the benefit of a much wider spread of its population.

References Alier, A. (1990), Southern Sudan: Too Many Agreements Dishonoured, Ithaca, NY: Exeter.Beshir, M.O. (1968), The Southern Sudan: Background to Conflict, London: Hirst. Coalition for International Justice (2006), Soil and Oil: Dirty Business in Sudan, Washington DC: CIJ. Collins, R.O. (1990), The Waters of the Nile: Hydropolitics and the Jonglei Canal, 1900–1988, Oxford: Clarendon Press. El-Affendi, A. (1991), Turabi’s Revolution: Islam and Power in Sudan, London: Grey Seal. El Obeid, A. (2006), ‘Sufism and Sudanese Middle Class: The Case of Shaikh Al-Burai’, paper given at International Sudan Studies Conference, Bergen. Flint, J. and A. de Waal (2005), Darfur: A Short History of a Long War, London: Zed Books. Gray, R. (1961), A History of the Southern Sudan 1839–1889, London: Oxford University Press. International Crisis Group (ICG) (2006), Sudan: Saving Peace in the East, Brussels, ICG. Johnson, D. (2003), The Root Causes of Sudan’s Civil Wars, Oxford: James Currey. Khalid, M. (ed.) (1987), John Garang Speaks, London: KPI. Large, D. (2005), ‘Sudan-China Relations: A Historical Perspective on “China’s Outpost in Africa”’, paper presented at ECOS conference, Hanover. Patey, L. (2006), A Complex Reality: The Strategic Behaviour of Multinational Oil Corporations and the New Wars in the Sudan, Copenhagen: Danish Institute for International Studies. Prunier, G. (2005), Darfur, the Ambiguous Genocide, London: Hurst. Taylor, I. (2006), ‘China’s Oil Diplomacy in Africa’, International Affairs, 82/5. Woodward, P. (1979), Condominium and Sudanese Nationalism, London: Rex Collings. Woodward, P. (1997), ‘Sudan: Islamic Radicals in Power’, in J. Esposito (ed.), Political Islam: Revolution, Radicalism or Reform?, Boulder, CO: Lynne Rienner. Woodward, P. (2006), US Foreign Policy and the Horn of Africa, Aldershot: Ashgate.

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Chapter 7

São Tomé and Príncipe: The Troubles of Oil in an AidDependent Micro-State Gerhard Seibert

Introduction1 The largely unknown twin-island republic of São Tomé and Príncipe is the second smallest country in Africa, with a total area of 1,001 km2 and a population of 155,000 (Instituto Nacional de Estatística, 2007). With GNI of $60.4 million and per capita income of $390 (2005) its economy is the smallest in Africa (World Bank, 2006). The former Portuguese colony derives some income from cocoa production and tourism, however, it has been largely dependent on international aid. Since 1991 the impoverished country has been a multiparty democracy. Elections have been held regularly and peacefully, and have been considered as free, fair, and democratic by international observers. Multiparty democracy in the archipelago has been marked by continuous political instability, weak institutions, widespread rent-seeking and the misappropriation of development funds (Seibert, 2006). Economic growth has been modest, while mass poverty has increased in recent years. A survey on poverty conducted in 2001 claimed that 54 per cent of the population lived in poverty, whereas in 1991 this figure had been 36 per cent (EIU, 2002, p. 29). Contrary to the other case studies discussed in this volume, São Tomé and Príncipe has not yet produced a single drop of oil and most probably will not do so until 2012 or even later. The country’s offshore oil reserves have been estimated at between six to ten billion barrels. It has been speculated that the expected oil windfall could turn all the 155,000 inhabitants into millionaires (Ethical Corporation, 13 February 2006). In a report published in August 2006 an IMF economist expected annual oil revenues to start with $26 million in 2012, reaching a peak of $396 million in 2015 and gradually declining thereafter (Segura, 2006, p. 20). In fact, all these expectations have been based on estimates and speculation, since so far only one test well has been drilled in the archipelago’s territorial waters. Consequently, this chapter does not deal with oil production, but highlights the recent oil-related developments in a small and poor country that might be transformed into a petrol state.

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The Troubles with the First Oil Agreements On 4 May 2006 a search warrant issued by the US District Court of the Southern District of Texas was executed on the Houston-based and Nigerian owned small oil company ERHC Energy (formerly known as Environmental Remediation Holding Corporation) for various records, including correspondence with government officials in São Tomé and Nigeria. Fourteen FBI agents removed some 118 boxes of paper files and copies of all the company’s computer hard drivers (Platts Oilgram News, 2006). The action followed the publication of São Tomé’s Attorney General’s report in December 2005 on his investigation of the contested awarding of oil blocks in the country’s Joint Development Zone (JDZ) with Nigeria that called the US authorities for an investigation on ERHC. The Nigerian company denied any wrongdoing. For the time being, this has been the last incident involving ERHC, the first oil company that signed an oil agreement with the island state. In 1996 ERHC, then American-owned, got interested in São Tomé and Príncipe. At the time ERHC was engaged in waste disposal and cleanup for the oil industry. Formally ERHC started operations in October 1996 and generated its first revenues by June 1997. The company had expected significant incomes from its American wells, however, the then low oil price of $12 per barrel undercut their potential benefits. When ERHC started negotiations with São Tomé, the government of Raúl Bragança had no information about the small American company, and did not investigate in its solvency. In fact, at the time nobody in the archipelago had any know-how or experience in the oil sector. However, a rentier culture based on foreign aid and other external resources had already been firmly established. In May 1997 the government signed an agreement with ERHC for the exploration and exploitation of petroleum, gas and mineral reserves in São Tomé and Príncipe. The 25-year treaty provided for an initial payment of $5 million to the government and was renewable for ten-year periods. Another $5 million would finance a feasibility study and a local office and staff. Under the agreement ERHC was committed to raise an additional $100 million for the development of the oil sector within 210 days. The company had to finance the evaluation of the country’s oil and gas reserves, and a joint-venture oil company was to be established with the government, from which both parties would each receive 40 per cent of the revenue, and 20 per cent would be set aside to repay debts and pay overhead costs. In addition, ERHC would negotiate exclusively on behalf of the local government for oil exploration rights with other oil companies and would earn a 5 per cent royalty interest in government concessions. During all operations in the country ERHC would be exempted from any duties, taxes or revenue. In November 1997 ERHC paid the country $2 million, instead of the promised payment of $5 million. This failure raised doubts that ERHC would be able to make available the $20 million needed to start exploration activities in São Tomé. In fact, at that time ERHC’s liquidity position was already considered precarious. ERHC had acquired seismic data stemming from onshore drillings executed in São Tomé in the late 1980s for $2 million in the form of company shares. The

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analysis of the data indicated that São Tomé’s oil potential existed only offshore in territorial waters of great depth. For this reason, ERHC helped São Tomé’s government to file a maritime boundary claim with the UN Law of the Sea Commission in New York. The goal was the recognition of the country’s 200-mile Exclusive Economic Zone (EEZ). The submission of the map of the country’s territorial waters was aimed at avoiding possible conflicts on offshore oil resources with Nigeria, Gabon and Equatorial Guinea. In March 1998 the National Assembly approved the law on the EEZ (64,550 sq. miles) that delineated the country’s maritime boundaries for the first time since independence in 1975. In April 1998, ERHC claimed that significant quantities of offshore oil had been discovered in the EEZ. It was announced that lease sales of oil concession rights would start before the end of 1998, after the number, surface and location of the concession blocks had been defined. ERHC declared that the seismic data necessary for the lease sales would be made available for analysis until the end of May. ERHC announced the drilling of a test well in late 1998, admitting, however, that it was subject to unknown risks and the availability of human and financial resources. By mid-1998 ERHC still owed the government $3 million of the initial payment of $5 million. Notwithstanding, in July of that year ERHC and the government set up the joint-venture oil company Sociedade Nacional de Petróleo de São Tomé e Príncipe (STPetro), with the government owning 51 per cent of the stock capital of $100,000. This agreement gave ERHC the right to obtain four oil blocks of its choice in the country’s EEZ. Carlos Gomes, a former government minister and nephew and advisor of Prime Minister Bragança, became president of the new company. Mateus Meira ‘Nando’ Rita, a former secretary of state for cooperation, was appointed STPetro’s general manager. Meanwhile, ERHC paid another $2 million of its commitments to the government. The next month ERHC engaged Gomes and Rita as the company’s consultants, allegedly for a monthly salary of $5,000. In December 1998 ERHC announced that it would divest from all noncore operations in the USA to focus its efforts on the São Tomé project. In fact, this decision had been taken due to financial constraints affecting ERHC. Apparently the company was on the brink of bankruptcy. During the first quarter of 1999 ERHC incurred a net loss of almost $1.7 million, and the total accumulated losses had reached more than $11 million. The company was facing penalties and interest due to its failure to have its Registration Statement declared effective in the United States. As a result, it could not obtain additional debt and equity financing. In addition, ERHC lacked the finance to meet its commitments to STPetro. In April 1999, an ERHC Investor Group Inc. presented an offer to ERHC in the form of a letter of intent to acquire 51 per cent of the issued and outstanding shares of the company. Under the terms of the letter, ERHC achieved Standstill Agreements from its noteholders, which enabled the company to meet all its debt obligations, including interest and penalties. Still, the financial problems continued. Subsequently, ERHC’s newly appointed CEO, Geoffrey Tirman initiated talks on a revised agreement with a government commission headed by Carlos Gomes. When the two parties failed to reach a consensus, Tirman accused the

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government of a lack of seriousness, broke off the negotiations and left São Tomé. In response, in October 1999 the government of Prime Minister Posser da Costa unilaterally rescinded the agreement with ERHC, arguing that the company had largely failed to meet its contractual obligations. In response, Tirman, in an open letter to the prime minister, accused STPetro’s president, Carlos Gomes, of corruption. Tirman maintained that following his refusal to provide Gomes with the requested incentives, the latter had obstructed negotiations with the government. Tirman claimed that during the talks in September Gomes had told him that the prime minister would appoint him as chairman of Petrogás, a fully state-owned enterprise that would be established to deal with all of São Tomé’s future oil agreements. Further, Tirman asserted that Gomes had suggested that after his departure from STPetro to Petrogás he could still be useful to ERHC, provided that the Americans continued paying his monthly salary of $2,500 and an additional monthly consultancy fee of $5,000 into his Portuguese bank account. Tirman wrote that he had refused to keep paying the $5,000 on the grounds that this violated the US Foreign Corrupt Practices Act. Gomes denied all allegations and demanded that ERHC prove them. In turn, he explained that the real problem was that ERHC was fiercely opposed to the establishment of Petrogás and wanted to eliminate all provisions referring to seismic surveys that had not been carried out. In January 2000 Tirman formally apologized to Prime Minister Posser da Costa and expressed his interest in settling the dispute with the government. But ERHC had already embarrassed the government by lodging a request for arbitration at the International Chamber of Commerce in Paris, without any prior warning. During that period, ERHC was subject to an investigation by the US Securities and Exchange Commission (SEC), regarding missing accounting records. In addition, the company failed to meet its obligations with its creditors. Ultimately, ERHC did pay some of its creditors, who had agreed to such a deal, in the form of common stock shares. Subsequently ERHC declared its insolvency to the SEC and considered beginning bankruptcy procedures. The company’s only asset, noted in its filing to the SEC, was its holdings in São Tomé and Príncipe. Notwithstanding ERHC’s uncertain future, the government resumed negotiations with the company in March. When a settlement with ERHC was finally reached in early 2001, the company had changed hands.

Seismic Surveys and Maritime Borders Seismic data proving the existence of deep-sea oil deposits in the country’s territorial waters were a prerequisite for attracting oil companies. As ERHC itself was unable to conduct seismic studies, it looked for other companies to do the job. Consequently, in September 1998, STPetro and Mobil (currently ExxonMobil) signed a technical assistance agreement to survey 22 deep-water blocks within an 18-month period in the country’s EEZ. Initially the blocks, varying in area between 1,000 and 6,000 km2, had been scheduled for open bidding in July 1999. According to the agreement, Mobil received an exclusive

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option on the entire EEZ, including a production sharing agreement for further evaluation through exploratory drilling once Mobil had completed its technical survey (budgeted at $10 million), within the agreed 18-month period. Mobil also negotiated with STPetro to conduct two experimental drillings within 18 months of signing the production sharing agreement. On its effective date Mobil would pay a signature bonus of $5 million plus an additional bonus of $1 million for each selected block. The company would pay São Tomé $2 million within ten days after the effective date of the technical assistance agreement and another $2 million after nine months. In January 1999, Mobil’s seismic contractor, the Schlumberger subsidiary Geco/Prakla (now WesternGeco), started a two-month survey of 2,723 km of seismic 2-D data in Mobil’s concession area. In September a delegation from Mobil presented the Santomean government the results of the seismic survey, identifying the blocks with a high probability of oil deposits. These blocks were all situated in the area of the country’s EEZ that superseded the maritime borders claimed by neighbouring Nigeria. São Tomé had been aware of the importance of reaching maritime border agreements with its neighbours in the Gulf of Guinea. After having filed its maritime boundary claims with the UN Law of the Sea Commission, the respective maps were sent to the neighbouring countries. Negotiations with Equatorial Guinea commenced in October 1998. Nine months later the Presidents Trovoada (1991–2001) and Obiang Nguema signed an agreement on the delimitation on their countries’ maritime borders. A similar agreement with Gabon based on the principle of equidistance between the two countries, was reached in April 2001. In December 1999 formal maritime boundary talks with Nigeria commenced. In April 2000 the negotiations with Abuja ended without an agreement on the maritime boundaries between the two countries. Nigeria refused to accept São Tomé’s proposal that based the boundary on equidistance between the continent and the islands. Faced with the possibility of a prolonged legal conflict with Nigeria, the Santomeans sought a viable compromise settlement. Consequently, in August the same year Nigeria and São Tomé achieved an agreement on the joint exploration of hydrocarbons in the waters disputed by the two countries. Under this agreement the two countries share the zone’s profits and costs in the proportions of Nigeria 60 per cent and São Tomé and Príncipe 40 per cent.2 Following several other negotiation rounds, São Tomé’s Foreign Ministers Rafael Branco and Dubem Onyia of Nigeria finally signed a 45-year treaty on 21 February 2001 that created a 28,000 km2 large Joint Development Zone (JDZ) that was to be managed by a Joint Development Authority (JDA) based in Abuja.3 The Authority’s board consists of four executive directors, two from each country, to be appointed by the respective head of state for a renewable period of six years. The JDA reports to a Joint Ministerial Council (JMC) comprised of four ministers from each country, who are also appointed by the two heads of state. The JMC has the overall responsibility for all matters concerning the JDZ. The far-reaching competences of the Santomean president are remarkable, since the country’s Constitution restricts his executive powers to foreign policy and defence, while the government is in charge of everything else, including the economy. Shortly before signing the treaty with Nigeria, the

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Santomean government and the Norwegian oil service company Petroleum Geo-Services (PGS) signed an agreement on the execution of marine seismic studies outside blocks 1–22, conceded to Mobil. The agreement signed with São Tomé provided PGS with the exclusive right to conduct seismic services for a ten-year period and to 10 per cent of all signature bonuses paid for blocks surveyed by PGS during this period. The company was not obliged to share any substantial part of its income stemming from the sale of seismic data until it had recovered at least three times its total investments. Besides, PGS concluded an exploration and production agreement with the government that included the option to enter into a production-sharing contract for three blocks of its choice in exchange of a signature bonus of $2 million. After signing of the productionsharing contract PGS had to pay an additional bonus of $5 million per block and after commercial discovery another $3 million per block. PGS initiated the seismic survey in the EEZ in late November 2001. In April 2002 the company confirmed the country’s potential oil wealth claiming that the identified blocks were commercially viable.

A Nigerian Businessman Controls ERHC Then in May 2001, as part of an agreement mediated by the Nigerian government, São Tomé settled the conflict with ERHC that had been taken over by the Nigerian company Chrome Energy Corporation three months before. The new owner, who had taken a 56 per cent stake in ERHC, withdrew the request for arbitration at the International Chamber of Commerce in Paris lodged by the company in 1999. Chrome reportedly had to pay millions of dollars to creditors to avoid ERHC’s bankruptcy. In the event, ERHC/Chrome made a mysterious payment of $550,000 to one STP Energy Corporation, registered in the British Virgin Islands. Chrome Energy is part of the Chrome Group, a private holding company owned by the Nigerian politician and business tycoon Sir Emeka Offor with various companies in the United States and Nigeria. Although lawyers advised against a settlement, because they thought that São Tomé could win the arbitration, both the government of Posser da Costa and President Trovoada had been in favour of the settlement. The Santomean negotiation team included Foreign Minister Rafael Branco and Trovoada’s son Patrice, the president’s economic advisor who was rumoured to have many personal contacts in Nigeria. Chrome had reportedly threatened that an arbiter’s ruling in favour of ERHC/Chrome would result in the implementation of the original May 1997 agreement. In addition, Chrome would ask President Obasanjo not to ratify the treaty on the JDZ, and would resort to international law to confiscate São Tomé’s assets abroad and impede oil exploration in the archipelago for many years. As part of the settlement São Tomé’s government allowed ERHC/Chrome far-reaching financial advantages within the JDZ, including a 15 per cent working interest in two blocks of ERHC/Chrome’s choice, a 5 per cent share in signature bonuses and a 10 per cent share of profit oil, and a 1.5 per cent over-riding royalty interest in production. In addition, ERHC/Chrome

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received two blocks of its choice in the EEZ without paying a signature bonus, and the option to acquire a 15 per cent working interest in another two blocks of its choice. ERHC/Chrome assigned its 49 per cent stake in STPetro to São Tomé and, consequently, relinquished its rights to acquire, as STPetro, four blocks within the EEZ. This new 25-year agreement with ERHC/Chrome replaced the one signed in 1997 and was contingent on the ratification of the treaty on the JDZ by São Tomé’s National Assembly. Foreign experts considered the agreement with ERHC/Chrome as one of the worst in the recent history of Africa’s oil industry (Frynas et al, 2003). The IMF blamed the government for a lack of transparency in its oil dealings and considered the ERHC/Chrome agreement as prejudicial to the country’s national interests, since it diverted the country’ potential oil revenue away from the treasury (IMF, 2002b). The controversial agreement nourished persistent rumours about the possible payment of bribes to Santomean government officials. At the request of the IMF, the government hired lawyers from an American law firm to conduct an analysis of São Tomé’s oil dealings. The legal experts presented their highly critical assessment in April 2002. They considered the two agreements with ERHC as extremely one-sided, since the government received little in return for what it gave to the company. In their judgement both agreements with PGS were also extremely one-sided and favoured the Norwegian company. In the lawyers’ opinion only the technical assistance agreement with Mobil approached similar agreements elsewhere in the international oil industry.4

Renegotiations of Controversial Oil Agreements Meanwhile Fradique de Menezes had become president. Emeka Offor, owner of Chrome had financed Menezes’s electoral campaign in July 2001 at the request of his predecessor Trovoada.5 In February 2002 Chrome Oil Services, one of Offor’s companies, sent an additional payment of $100,000 to Menezes’s company’s bank account in Brussels. Months later, Menezes publicly confessed to having received the money, but maintained it had been a campaign donation for his party during the legislative elections in March of that year. Despite having accepted campaign funds from Chrome, President Menezes, remained at the forefront of demands to renegotiate his country’s controversial oil agreements. In May 2002, Menezes publicly demanded the renegotiation of all oil agreements signed by various governments with ERHC/Chrome, ExxonMobil, Nigeria, and PGS. Menezes attributed the anomalies detected by the American lawyers to a lack of experience of the country’s negotiators. In fact, he had also reacted in response to demands by the IMF, who in February 2002 had urged the local authorities to take action following the results of the analysis of the agreement signed with EHRC/Chrome (IMF, 2002a). In November, the Nigerian government decided to suspend the long-scheduled licensing round for the first nine blocks in the JDZ until São Tomé clarified the contentious issues with third parties. Finally, the three agreements with third parties were all renegotiated in early 2003. In January the government signed a

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new contract with ExxonMobil that gave the company pre-emptive rights to one stake of 40 per cent in one block and 25 per cent each in another two blocks of its choice in the JDZ. ExxonMobil was obliged to match the signature bonuses and terms offered by other bidders. This was much more favourable to São Tomé than the previous agreement that gave ExxonMobil rights to several blocks of its choice for signature bonuses of only $1 million each, in turn for carrying out seismic studies. PGS also agreed to new talks with São Tomé, although the Norwegian company considered the two contracts as ethically sound and legally binding (Dagens Næringsliv, 2003). Under the new agreement with PGS concluded in early March 2003 the company received preferential options for two blocks of its choice in the EEZ in exchange for $2 million. On the effective date of the productsharing contract PGS would pay a signature bonus of $2 million and $2.5 million respectively for the two blocks. Upon commercial recovery the company would pay another $6 million and $5.5 million respectively. Additional cumulative payments based on cumulative production in the two blocks graduated from $3 million to $15 million, reaching a potential maximum of $69 million. Besides, in exchange for seismic services PGS had the option to participate with the government to a maximum of 15 per cent in any government participating interest options in the EEZ. While in the 2001 seismic services agreement PGS was supposed to get 10 per cent of all signature bonuses that São Tomé would receive in the future, in the 2003 agreement this was reduced to 10 per cent of the country’s signature bonus share from the first licensing round. In the same month ERHC/Chrome relinquished its earlier rights to an overriding royalty interest, a share of signature bonuses and a share of profit in the JDZ. Under the new agreement, ERHC/Chrome increased its rights to participate in the JDZ from a total of a 30 per cent working interest in two blocks to a total of 125 per cent working interest spread over six blocks, ranging from 15 per cent to 30 per cent each. In addition, the Nigerian company was freed from paying signature bonuses on four of the blocks. Although the previous agreement remained essentially intact, the government saw no alternative, since supposedly Nigeria had threatened to paralyse the licensing round if the agreement with ERHC/Chrome was not respected (EIU, 2003). The company justified the excessively favourable terms on the grounds of the $12 million it had invested in the development of São Tomés oil sector (Silverstein, 2003). Santomean chief negotiator was Rafael Branco, then minister of natural resources, who had been involved in the previous deal with the Nigerians. São Tomé’s National Oil Commission (CNP) had an advisory role in the negotiations. One of the CNP’s members was Foreign Minister Rita, a former ERHC consultant who owned 500,000 company shares. Two other commission members had also been on ERHC’s payroll at STPetro (ibid.). Analysts considered also the new deal excessively generous to ERHC/Chrome and out of line with international oil industry practices. Potential investors criticised the deal since it compelled them to cooperate with a partner with a limited track record in the oil industry.

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Controversial Oil Licensing Rounds The renegotiated agreements paved the way for the long awaited auction of the oil blocks. In April 2003 the licensing round for the first nine of 25 blocks in the JDZ was officially launched in Abuja. Estimates of oil reserves in the nine blocks ranged from 6 to 11 billion barrels of crude oil. The minimum bid per block was set at $30 million, half the value of São Tomé’s GDP. On 16 July 2003, soldiers launched a bloodless military coup in São Tomé that was not directly related to oil and ended after one week by negotiations (Seibert, 2003). In September 2003 President Menezes appointed Patrice Trovoada as special presidential oil advisor, without payment. On 27 October 2003, during a solemn ceremony in São Tomé, 20 oil companies submitted 33 bids for eight of the nine oil blocks in the JDZ that had been offered for public tender. Altogether there were five signature bonus bids of $100 million or more. ChevronTexaco offered the highest bid of $123 million for Block 1, considered the most promising of all blocks. Block 7 did not receive a valid bid and Block 8 failed to attract any bid at all. Based on the highest bids, a total of about $500 million was offered for the seven blocks. This result provoked a wave of enthusiasm in São Tomé since this would signify a windfall of some $200 million for the poor country. However, the only bidding companies with proven track records of deep-sea oil exploration and production were ChevronTexaco, the American Anadarko and the Norwegian company Statoil. Many of the nine Nigerian companies that presented 23 of the bids were suspected of being speculative and rent-seeking companies that would resell the blocks they had bid on for a higher price to a genuine oil company. In late 2003 the JMC asked ExxonMobil and ERHC/Chrome to exercise their preferential options. The two companies could not have more than a 40 per cent interest in one single block, equivalent to São Tomé’s share in the JDZ, and would be required to match the highest bid for such blocks, with the exception of the four bonus-free options of ERHC/Chrome. By mid-February 2004, ExxonMobil decided to take the 40 per cent option in Block 1 at a cost of some $49 million. However, the company declined to exercise its 25 per cent preferential rights in two other blocks. Reportedly, the company had been interested in participating in Blocks 2 and 4, but considered the signature bonuses too expensive. Subsequently, in April, ERHC/Chrome exercised four signature bonus-free options of 15, 20, 25 and 30 per cent respectively in Blocks 6, 3, 4, and 2 and took another two stakes of 15 per cent and 20 per cent in Blocks 5 and 9, for which signature bonuses were payable. The four signature bonus-free options would cost São Tomé and Príncipe almost $75 million in lost income or 125 per cent of the country’s GDP. On 24 April 2004, a meeting of the JMC in Abuja was expected to announce the winners of the licensing round. Unexpectedly, however, the meeting only awarded the exploration rights for Block 1 jointly to ChevronTexaco (51 per cent), ExxonMobil (40 per cent) and Energy Equity Resources (9 per cent), then a company jointly owned by Norwegian interests (49 per cent) and the Nigerian business tycoon Aliko Dangote (51 per cent). Block 1 entitled São Tomé and Príncipe to a signature bonus share of $49 million. Most of the amount was

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earmarked to repay advance payments by Nigeria totalling $15 million, to cover São Tomé’s share of operational costs of the JDA amounting to $10 million, and to transfer $13 million to the 2004 budget. Due to delays, only in February 2005 the three companies signed the product-sharing contract for Block 1. Subsequently the payment of the $123 million was made into a Nigerian bank.6 Meanwhile, Nigeria had agreed to postpone the settlement of São Tomé’s bilateral debts to the second licensing round. The decision of the JMC in April 2004 to postpone the allocation of the remaining blocks to a future date was a blow for ERHC/Chrome, because the company’s pre-emptive rights could not become effective. Reportedly, both the Nigerian and the Santomean government wanted to avoid assigning the blocks to companies with uncertain financial and technical capacities. In October the JMC declared the licensing round closed. This decision affected PGS, since its 10 per cent share of signature bonuses was reduced to one block only. Subsequently the JDA organized a new bidding round for the five blocks 2–6 that was closed on 15 December.7 This time 23 companies offered a total of 26 bids for the five blocks. The outcome of the tender was disappointing, since again no major oil company participated and only the highest bid of $175 million for Block 4 was considerably higher than the previous offer of $100 million.8

Efforts to Avoid the Oil Curse News on São Tomé’s future oil wealth had also attracted academics of Columbia University’s Earth Institute, headed by the economist Jeffrey Sachs and financed by billionaire George Soros’ Open Society Institute. The Earth Institute’s selfproclaimed country advisory team first visited São Tomé in November 2003 when they offered the local authorities their services free of charge to help elaborate São Tomé’s oil revenue management law, a legislation demanded by the IMF. São Tomé welcomed the initiative since the engagement of Columbia University could improve the image of the local government abroad. Besides the country lacked the legal expertise to design oil legislation. In addition to the Columbia University advisory team, the government had also asked the World Bank for assistance in drafting the oil legislation. In response, the World Bank paid a fivemember expert team headed by former Alaska governor Steve Cowper to draft a legal proposal. In April 2004 the Cowper team presented a complete proposal for a regulatory law of oil revenue management. The advisory team from Columbia University submitted three consecutive drafts of the oil revenue management law to the lawmakers in São Tomé. Finally, the oil revenue management law, approved by the National Assembly unanimously on 19 November 2004, was largely based on the draft of the Columbia University expert team. The bill provides for the creation of a National Oil Account, the sound management of the account, including the allocation of 10 per cent of the annual oil revenue used to Príncipe island (which makes up only about 4 per cent of total population), the establishment of a Permanent Reserve Fund for future generations, annual audits of the oil accounts by both the local Audit Office and international audit

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firms, transparency principles, and the creation of an eleven-member Oil Control Commission. In June 2004 in Abuja, Presidents Obasanjo and Menezes had signed an agreement on transparency in payments, expenditure and other dealings in the transactions in the JDZ. The guidelines for reporting of this Abuja Joint Declaration would be those adopted by Britain’s Extractive Industries Transparency Initiative (EITI). All information to be made public according to the declaration would appear on the website of the JDA.9 In fact, the Abuja Joint Declaration, drafted by the Earth Institute’s advisory team, is a mere declaration of intention, without any legally binding force. Not unexpectedly, it has been largely ignored. Interestingly, President Menezes has not made a similar declaration of transparency concerning his own country’s EEZ. However, on various previous occasions President Menezes promised transparency and accountability in the oil sector. In his address at the opening of the bids of the licensing round Menezes promised that he would struggle until the last day of his term for the right of all Santomeans, without exception, to benefit from the country’s national resources.10 At an international oil conference in São Tomé in December 2003 he declared his intention to guarantee transparency, good governance and efficiency in the management of future oil revenues.11 During a conference on ‘Promoting Accountability and Transparency in Africa’s Oil Sector’ at the Centre for Strategic and International Studies (CSIS) in Washington in March 2004, Menezes declared he wanted to assure that oil is a blessing for his country and not the curse it has been to other African petrol states and even promised to make public any oil deals made with his country and payments made by foreign oil companies.12 In October 2004 the government established the National Oil Agency (ANP). The ANP still suffered from a lack of adequately trained and experienced oil experts. The World Bank has provided a capacity building training programme for the agency. Besides, the World Bank financed about half of the ANP’s budget of $1.3 million for the fiscal year 2005. The ANP is the regulating body of the oil industry that has to execute the instructions of the simultaneously created 15-member National Petroleum Council (CNP) that replaced the National Oil Commission. CNP members include the head of state, the prime minister, four government ministers, the head of the Regional government of Príncipe, one representative each of Príncipe’s private sector, the Chamber of Commerce, and the trade unions, two persons each appointed by the head of state and the prime minister respectively, and the executive president of the ANP.13

Contested Oil Block Awards In December 2004 the company Equator Exploration, established in 2000, revealed that it had acquired PGS’s preferential options to two blocks of its choice in São Tomé’s EEZ through its subsidiary Aqua Exploration Ltd. Aqua Exploration has a further option to participate to up to 15 per cent in any of the government’s participating options in the EEZ. Further, Equator has the right

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to a share of licensing fees earned by PGS from the sale of seismic data in the EEZ and the JDZ.14 Equator Exploration’s executive director was the Canadian national Wade Cherwayko, who maintained business ties with Patrice Trovoada, President Menezes’s oil advisor. Originally, Cherwayco had negotiated the contract on behalf of PGS, subsequently his company bought the production agreement signed with São Tomé. The country was not able to intervene in the transfer of rights from PGS to Equator Exploration (Hagen, 2006). Despite the transfer, São Tomé owed PGS the amount of $4.92 million, 10 per cent of the country’s signature bonus of the first licensing round that the company receives according to the 2003 agreement (ibid.). The block awards of the second bidding round, expected for January 2005, were delayed by disagreements with Nigeria over signature bonuses. In April 2005 ExxonMobil again declined to exercise its two 25 per cent options. At a meeting in the same month in Abuja the JMC approved the awarding of the five blocks, however, the announcement was delayed by accusations of irregularities in São Tomé. In a report, the country’s ANP blamed the JDA of having done insufficient due diligence into bidders’ backgrounds and expressed fears that awards given to inexperienced Nigerian companies might frustrate seasoned operators. Among the Nigerian companies were Momo Oil and Gas and Equinox Petroleum. Supposedly, both companies were controlled by the Nigerian power broker Mohamed Asebelua, at the time President Menezes’s special advisor for foreign investments (Energy Compass, 13 May 2005). Patrice Trovoada, the presidential oil adviser, demanded a higher percentage for Equator Exploration, the company of his business friend Cherwayko. In response, President Menezes dismissed Trovoada from his post on the grounds that he had abused his function to do private business. Besides, Menezes was forced to dismiss Meira Rita, then the head of the presidential office, from the National Oil Council and the JMC. Menezes’s appointment of Rita in the two bodies was a clear violation of the Oil Revenue Management Law, because as ERHC shareholder he had conflicting interests. On 16 April, Arlindo Carvalho resigned as oil minister due to pressures by obscure interests in the oil negotiations. However, Menezes refused to accept his resignation. Due to the turmoil, on 2 May the National Assembly’s Committee for Oil Affairs interrogated the oil minister and other local oil officials about the affair. Minister Carvalho confirmed that he had been exposed to enormous pressures and that irregularities had occurred, while Patrice Trovoada claimed a lack of transparency in the decision on the awards. The Committee concluded that the decision had violated the established rules and asked the Public Ministry to investigate the case (Assemblia Nacional, 2005). Pressured by his Nigerian counterpart, on 31 May, Menezes approved the JMC’s award recommendations that had remained unchanged. Nigerian officials had allegedly threatened to withhold São Tomé’s share of the signature bonus from Block 1 unless Menezes ratified the awards (Energy Compass, 10 June 2005). A consortium of ERHC and Devon/Pioneer Natural Resources won a 65 per cent stake of Block 2, while Block 4 was awarded to a consortium of ERHC and Noble Energy. Anadarko that had submitted the highest bid for Block 4 got 51 per cent of Block 3. An Iranian-Nigerian consortium got the operatorship of Block 5,

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while a Nigerian company became operator of Block 6. The five signature bonuses totalled US$283 million. But due to ERHC’s bonus free options, São Tomé and Príncipe would only receive US$57.2 million from that amount. Following the request of the parliamentarian Committee the attorney general Adelino Pereira began an investigation into the five block awards. Pereira requested assistance from the American oil lawyer Dobie Langenkamp of Tulsa University. In December 2005 the attorney general handed his report to the government. An Englishlanguage version was submitted to the US authorities. The report denounced serious irregularities in the second licensing round, including vague selection criteria and the awarding of blocks to oil companies with doubtful technical and financial capacities. Representatives of the JMC and the JDA, including officials from São Tomé would hold stock in companies receiving awards. Furthermore, the report suggested ERHC gave irregular benefits to officials in São Tomé before the company’s agreement with the local government was signed (Vanguard, 2 January 2006). The Nigerian oil minister, Edmund Daukoru, rejected the report’s findings as unfounded and as the result of internal political quarrels in São Tomé. Then in January 2006 ChevronTexaco started drilling the first exploration well located in some 1,700 metres of water in Block 1. The well was finished at a cost of $37 million in March. In May Chevron announced the discovery of oil, but stressed that it was premature to say if the deposits were commercially viable, since normally several wells were drilled in one block before declaring it fully commercial (Reuters, May 26, 2006). In early 2007 Chevron declared to only drill other exploratory wells after drilling results from adjacent blocks were known. This induced ExxonMobil to put its 40 per cent stake in Block 1 on the market (Energy Compass, 26 January 2007). Meanwhile, ERHC’s three US partners in the licensing round had ceased the cooperation with the Nigerian company. In July 2005 Devon Energy withdrew from the consortium with ERHC due to the low interest the company received as one of the three partners. In November 2005 the Geneva-based Addax Petroleum replaced Noble Energy in the ERHC/Noble joint operatorship for Block 4. Without giving reasons, in February 2006 Pioneer withdrew from the operatorship of Block 2 and subsequently was replaced by the Chinese state company Sinopec and Addax. Simultaneously ERHC entered into a participation agreement with Addax Nigeria in Block 3. The stakes in three blocks helped Addax raise $349 million in its first public offering in Toronto in February 2006 (ibid.). For the sale of interests to Addax and Sinopec ERHC received $46 million of cash. In September 2007 Addax Petroleum announced to have acquired ExxonMobil’s 40 per cent working interest in Block 1 for S$77.6 million and 2 per cent of Addax’s share of profit oil produced from Block 1. Due to the controversial report the signing of the production-sharing contracts (PSC) for the awarded blocks was delayed until mid-March 2006. Then the JDA signed PSCs with operator consortium Sinopec/Addax/ERHC (65 per cent), Equator Exploration/ONGC Videsh (15 per cent), A & Hatman (10 per cent), Momo Oil (5 per cent), Foby Engeneering (5 per cent) in Block 2; with operator Anadarko (51 per cent), ERHC/Addax (25 per cent), DNO/EER (10 per cent), Equinox (10 per cent), and Ophir/Broadlink (4 per cent) of Block 3, and with

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Addax/ERHC (60 per cent), and other consortium winners Conoil (20 per cent), Hercules/Centurion (10 per cent), Gosonic Oil (5 per cent), and Overt (5 per cent) of Block 4. The signature bonuses for these blocks were $71 million, $40 million, and $90 million respectively. Thanks to ERHC’s bonus-free options, the company was exempted from paying signature bonuses of $51.8 million. As a result, São Tomé was entitled to only $28.6 million of the total amount. The signing of the PSCs for the Blocks 5 and 6 was further postponed. Signature bonuses for Blocks 5 and 6 will only arrive in 2007, if at all. In April Addax increased its interest in Block 4 from 33.3 per cent to 38.3 per cent by acquiring the 5 per cent stake held by the Nigerian Overt Ventures for $10 million. Simultaneously, Equator Exploration raised its share in Block 2 from 6 per cent to 9 per cent by acquiring together with ONGC Videsh a 7.5 per cent interest held by the Nigerian company A. & Hatman. In August 2006 the Canadian company Centurion increased its working interest in Block 4 by 2 per cent to 9.5 per cent by purchasing a 25 per cent equity holding in its partner Hercules for $4.4 million. In March 2007 Addax announced explorative drillings in the Blocks 2, and 4 for the second half of 2008. In May 2006 the JDA in Abuja had received signature bonuses of $145.65 million for the Blocks 2, 3, and 4. However, Nigeria impeded the transfer of São Tomé’s share of $28.6 million and demanded the repayment of the bilateral debts totalling $15 million. During months the Santomean government refused, arguing that the oil management revenue law would not allow settling the debts with the signature bonuses. Finally, in March 2007 the government gave way and accepted to repay Nigeria the $15 million. As a result of these difficulties the balance in the National Oil Account in early 2007 was much less than expected. A new bidding round for oil blocks in the JDZ was not expected until 2008. Although increased activities in the JDZ were not expected for 2007, in March 2007 the JMC increased the JDA’s budget for this year by 44 per cent to $13 million. This remarkable amount to run the completely overstaffed office in Abuja is equivalent to 14 per cent of São Tomé’s entire National Budget in the same year. Only after a new licensing round the poor country might receive additional signature bonus payments, provided that there is really commercially exploitable oil in its territorial waters. Meanwhile, without a single drop of oil being produced, some of the Nigerian oil companies involved in the JDZ have already made profits by selling their equity shares. In some of these cases the original owners and undisclosed third parties maintain rights to some potential profits (ibid.).

Concluding Remarks As newly emerging oil producing country São Tomé and Príncipe has the unique opportunity to avoid the ‘resource curse’, the negative consequences of oil wealth experienced by many other oil producing countries. The country’s leaders have promised transparency, accountability and asserted their intention to invest the future oil wealth for the benefit of the entire nation. The approval of the externally conceived oil revenue management law suggests that they really mean it. However, the National Assembly’s vote was not free from external pressures,

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since the IMF had conditioned the country’s debt cancellation with the approval of the oil law. Besides, it remains to be seen if São Tomé’s weak institutions can cope with the complex demands of the oil legislation. Further, considering the country’s recent past and institutional practices, there is no guarantee at all that this law will be fully applied and that violations will be investigated and the culprits prosecuted. The country lacks a functioning judiciary and an independent media, while the incipient civil society is weak and intertwined with the state. A lack of transparency resulted in the prejudicial oil agreements, although inexperience in dealing with oil companies might also have played a role in the process. ERHC received a highly favourable contract giving the company free options on oil blocks in the JDZ that possibly deterred international oil companies from participating in the licensing rounds. In view of dominant local political practice laws alone are unlikely to avoid the ‘resource curse’. In fact, the features of the rentier elites and the rentier state already exist in São Tomé and Príncipe, however, due to the weak economy and the absence of extractive resources the rents have been largely derived from foreign aid and other external sources. Consequently, oil can only add new dimensions to existing rent-seeking practices, but not create these phenomena, since they are already rooted in local political culture. However, this does not necessarily mean that oil will turn political instability into unmanageable conflicts, since the tiny country has a culturally homogeneous society and no record of political violence in recent history.

Notes 1

2 3 4 5 6 7 8

9

A previous version of this chapter has been published under the title ‘São Tomé e Príncipe: The Difficult Transition from International Aid Recipient to Oil Producer’, in Matthias Basedau and Andreas Mehler (eds) (2005), Resource Politics in Sub-Saharan Africa, Hamburg: Institute of African Affairs, pp. 223–50. A subsequent version of this text has been included in Chapter 6 of the author’s book Comrades, Clients and Cousins. Colonialism, Socialism and Democratization in São Tomé and Príncipe, Leiden and Boston: Brill, 2006. See the Treaty at http://www.nigeriasaotomejda.com. In January 2002 the JDA office in Abuja was inaugurated. Memorandum: Oil Business between DRSTP and Nigeria, ERHC, Exxon-Mobil and PGS, Washington, 12 April 2002. According to Group Captain Nnamdi Nnoruka, Offor’s cousin and associate, in an interview in Newswatch (Lagos), 25 February 2002. In July 2005 São Tomé’s share of $49.2 million was deposited into the country’s National Oil Account at the Federal Reserve Bank of New York. The remaining blocks 7, 8, and 9 were expected to undergo additional seismic surveys before they would be offered in a third tender in 2005. The highest bids for the five blocks announced on 15 December 2004 were as follows: Block 2: $135 million by Vintage Oil & Gas; Block 3: $41 million by Energy Equity Resources AS; Block 4: $175 million by ECL International; Block 5: $37 million by International Commerce & Communications and O.E.O.C. Consortium; Block 6: $45 million by Filtim Huzod Oil & Gas Ltd. See at http://www.nigeriasaotomejda.com

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10 Discurso do Presidente Fradique de Menezes, Cerimónia da Abertura das Ofertas sobre os primeiros Blocos de Petróleo, São Tomé, 27 October 2003. 11 Discurso de Abertura pelo Presidente Fradique de Menezes, Seminário do Banco Mundial/PNUD sobre ‘Noções Básicas sobre a Indústria Petrolífera e Experiências de Gestão de Recursos’, 2 December 2003. 12 Speech by H.E.Fradique de Menezes, CSIS Conference, Washington, 30 March 2004. 13 The head of the ANP is a non-voting member. 14 http://www.equatorexploration.com.

References Assemblia Nacional (2005), Comissão dos Assuntos Petroliferos, Relatório, 19 May. Dagens Næringsliv (Oslo) (2003) 13–15 January Economist Intelligence Unit (EIU) (2002), Country Report São Tomé and Príncipe January, London: EIU. Economist Intelligence Unit (EIU) (2003), Country Report São Tomé and Príncipe January, London: EIU. Frynas, J.G., G. Wood, and R.M.S. Soares de Oliviera (2003), ‘Business and Politics in São Tomé e Príncipe: From Cocoa Monoculture to Petrol-State’, Lusotopie, Paris: Éditions Karthala. pp. 33–58, http://www.lusotopie.sciencespobordeaux.fr/frynas2003.pdf. Hagen E. (2006), ‘Norwegian Play for the Oil Rights in São Tomé’, Norwatch, 30 October. IMF (2002a), ‘IMF Concludes 2001 Article IV Consultation with São Tomé and Príncipe’ Washington, 28 February, Washington DC. IMF (2002b), Country Report No. 02/30, February, Washington DC. Instituto Nacional de Estatística (2007), http://www.ine.st. Kyle, S. (2003), ‘We’re Rich!! Or Are We?? Oil and Development in São Tomé e Príncipe’, Staff Paper, Ithaca, NY: Cornell University, http://www.kyle.aem.cornell.edu/lusopaps/ SP per cent202003-02.pdf. Platts Oilgram News (2006), No. 117, 20 June. Segura, A. (2006), ‘Management of Oil Wealth Under the Permanent Income Hypothesis: The Case of São Tomé and Príncipe’, IMF Working Paper, Washington DC: International Monetary Fund. Seibert, G. (2002) ‘São Tomé e Príncipe’, in P. Chabal with D. Birmingham, J. Forrest, M. Newitt, G. Seibert and E.S. Andrade, A History of Postcolonial Lusophone Africa, London: Hurst, pp. 291–315. Seibert, G. (2003), ‘The Bloodless Coup of July 16 in São Tomé e Príncipe,’ Lusotopie. Paris: Éditions Karthala, pp. 245–60, http://www.lusotopie.sciencespobordeaux.fr/ seibert2003.pdf. Seibert, G. (2006), Comrades, Clients and Cousins. Colonialism, Socialism and Democratization in São Tomé and Príncipe, 2nd revised and updated edition, Leiden and Boston: Brill Academic Publishers. Silverstein, K. (2003) ‘A Major Stake in Tiny African Nation’, Los Angeles Times, 24 May, pp. 1–6. World Bank (2006) São Tomé and Príncipe Data Profile, April, Washington DC.

Chapter 8

Rentier Politics and Low Intensity Conflicts in the DRC: The Case of Kasai and Katanga Provinces Germain Tshibambe Ngoie and Kenneth Omeje

Introduction This chapter explores the political economy of mineral resources in the Democratic Republic of the Congo (DRC) and the structure of conflicts it generates in the leading mining provinces of Kasai and Katanga. The DRC is well known for its diverse mineral resources (diamond, copper, cobalt, tantalum, uranium, etc.). It is also rich in biodiversity and has large agricultural potential. The equatorial forest, which transverses the northern part of the country, is endowed with assorted timber products. In spite of these vast natural resource endowments, the socioeconomic reality is that the bulk of the Congolese people live in extreme poverty and human insecurity. They do not enjoy the benefits of the enormous wealth and potential of the country. Available statistical data point to the precariousness of life in the DRC, although one must hasten to add that, as a consequence of the prolonged civil war, DRC’s statistics are, for the most part, unreliable. Even the data quoted in most official documents are suspect and can be misleading. Having said that, this study still makes use of some seemingly credible official statistics. In addition, the study relies on a plethora of empirical facts based on observation of contemporary political and socio-economic events in the DRC, as well as other secondary sources. According to the 2005 Report of the Provincial Division of Planning in Katanga, the living standard in this mineral resource-rich province is so poor that the bulk of the population subsists on less than US$1 per day. Further, a recent report released by the Netherlands Institute for Southern Africa (2006, p. 22) articulates the broader Congolese picture as follows: With one in five new-born Congolese children never reaching the age of five, the country holds the world record for mother-child mortality. More than 80 per cent of the estimated 55 million Congolese live on 0.30 US$ a day, and 75 per cent of the population is considered to be undernourished and has no regular supply of drinking water. Several health indicators draw an evenly grim picture of the population’s fate: due to the collapse of the public health system, a series of previously eradicated diseases has re-emerged while nearly two-thirds of the Congolese do not possess the financial means to afford conventional health care.

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We can epitomize the DRC’s paradox as follows: the country is potentially rich, but poverty becomes meanwhile the common ‘public good’. Moreover, the observed potential richness seems to produce a kind of curse linked to the fact that the use of state’s violence against the populace is preponderant in the country’s history. The kind of curse implied above tends to create within the DRC ‘a sort of culture of terror and a space of death’ (Taussig quoted in Watts, 1999, p. 9). The poetical picture of this violence is well dramatized in Joseph Conrad’s Heart of Darkness. In this melodrama, Kurtz’s policy of brutality is structured in such a way that violence is used as an instrument to tame the local subjects so that resource extraction ‘in the interest of civilization’ can proceed without resistance! Kurtz as a fictional character is represented historically by true personages like King Leopold II of Belgium who reigned over the ‘Congo Free State’ (CFS) between 1885 and 1908. Under the so-called CFS, Congo was proclaimed a private property of King Leopold II, who owned the entire land of the country and condemned the subjugated natives to brutal forced labour mainly for the production of rubber. It is estimated that about 10–15 million people (half of the CFS’s population) died of brutality, exploitation and disease during the reign of Leopold II. The imperial army Force Publique adopted a brutal policy of amputation of the natives’ limbs to enforce the rubber quota requirements imposed by the King’s officials. Private Reports on reliance on military violence as ‘normal’ instrument of exploitation during the imperial regime of King Leopold II are well known (Vangroenweghe, 1986; Hochschild, 1998). Between 1908 and 1960, Congo was governed as a colonial territory of the Belgian government. In comparative terms, the colonial regime significantly mitigated the brutality of the CFS, but expanded the structure of natural resource exploitation. The perpetuation of the tradition of rapacious exploitation and brutality in natural resource governance in postcolonial history is more or less exemplified by the regimes of Mobutu and the two Kabilas. The reliance on violence to prosecute natural resource politics in the DRC has a profound historical perspective. Soon after independence in 1960, the DRC was caught up with the tragedy of conflict goods. The provinces of Katanga and Southern Kasai (1960–1963) waged secessionist struggle against the new central government of President Joseph Kasavubu and Prime Minister Patrice Lumumba over control of copper and diamond mining rights in the region. The secessionist war in the mining region was compounded by a major personality conflict and power struggle between President Kasavubu and Prime Minister Lumumba at the centre. The interest of the US government in eliminating pro-communist sympathisers and leftist radicalism in Congo prompted the American Central Intelligence Agency (CIA) and the Belgian government to, first, support the reactionary side of President Kasavubu in the constitutional crisis of 1960 that ousted Lumumba as prime minister, and, second, bankroll the chief of army staff Joseph Mobutu to power in a military coup in 1965. The pro-Communist Prime Minister Patrice Lumumba was assassinated with CIA complicity in January 1961. On assuming and consolidating power, Mobutu embarked on one of the most avaricious and vicious personal rule projects in African post-independence history. Political dissent was systematically liquidated and natural resource governance was

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for the most part conducted with an iron fist, albeit the protection of imperialist investments and rentier exploitation in the strategic mining sector were always paramount. Prebendal corruption became pervasively entrenched. By the mid1980s Mobutu had amassed a personal fortune of over US $4 billion which he stashed in Swiss bank accounts. He was notorious for his flamboyant lifestyle and also used part of his loots to acquire a large number of overseas properties. If during Mobutu’s era, the management of mineral resources did not erupt into so much destructive violence compared to the post-Mobutu period, it is apparently because of false pacific climate instituted by Mobutu through totalitarian control. In fact, due in part to brutal censorship by Mobutu’s regime, there were several unreported episodes of violent clashes between the state’s forces and the common people, and specifically the creuseurs (i.e. local Congolese entrepreneurial and artisanal mining operators). In July and September 1979, for example, a special unit of the Forces armées Zaïroises was sent to Mbuji Mayi, the administrative capital of the province of Eastern Kasai with the mandate to attack local diamond miners, resulting in the killing of about 200 people (Lawyers Committee for Human Rights, 1990, p. 19). According to some sources, this special unit mainly comprised women soldiers. During Mobutu’s era, the deployment of the state security forces to persecute and decimate illicit diamond miners allegedly stealing the diamond resources of the state-owned Minière des Bakwanga (MIBA) was pursued by the state both as a punishment to culprits and deterrence to other potential illicit miners. Among the most notorious massacre of the so-called illicit miners by Mobutu’s security forces were the episodes in Katekelayi and Luamuela in the later 1970s (Bayart, 1980). The courage and the determination of the legislators from the affected Province to have some kind of official report on these massacres led them to forward a petition to the President of the Legislative Council reporting the awful incidents in their constituencies and calling for a public inquiry. Among the signatories of this petition was the current opposition leader Tshisekedi Wa Mulumba; others signatories are dead.1 The aftermaths of these massacres, coupled with resonance of the two wars in Shaba (1977 and 1978) led to intensification of pressures against Mobutu to democratize his regime. Consequently, Mobutu was compelled to liberalise the state’s control on the exploitation of mineral resources in the country. The policy on liberalization of mineral resource exploitation was promulgated in 1983. Since then, the mining sector as a channel of accumulation for the state and other powerful social actors has been riddled with more debilitating challenges, not least the descent to the law of the jungle as a means to settle inter-group and state-society conflicts in the DRC. DRC has been torn by civil war since 1996 when Laurent Kabila started a rebel campaign that ousted President Mobutu one year later. The rebel campaign which had active military and logistical support from neighbouring Rwanda and Uganda culminated into a fully blown civil war (the first Congo war) in late 1996. Mobutu was toppled in May 1997 and Kabila assumed power as president. Kabila’s inability to form an inclusive government coupled the spill-over effects of the Rwandan war, and complex regional and international interests in the DRC led to the explosion of a major conflagration in 1998 (the second Congo war).

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In this major war which, officially ended in 2003 (albeit a ceasefire agreement was signed in July 1999) after a peace agreement that brought in a transitional government, ‘absolute violence’ was ‘carried at its extremes’ by about 25 internal armed groups, eight African countries backing various local factions intervening peacekeeping forces (see Clausewitz, quoted in Knutsen, 1997, pp. 162–7). More than four million people died in the first and second Congo wars. President Laurent Kabila was assassinated in January 2001 and he was replaced by his son Joseph Kabila as president. Given the intensity of the conflicts and interest in the conflict goods, as well as the diversity of warring and intervening parties, many analysts have described the conflicts as ‘Africa’s first world war’ (Vlassenroot, 2003, p. 339; Dietrich, 2000; United Nations, 2001; Hoyweghen, 2005). Beyond the infratricidal wars of 1996 to 1999, the DRC conflicts have largely unfolded and persisted as low intensity conflicts characterised by perpetual ‘high tension and sporadic violent clashes’ (Machel, 2004). The low intensity nature of these conflicts does not, however, imply a low impact as it concerns casualties on the populations. On the contrary, most of the conflicts are characterised by extreme violence against civilian populations (Addison et al., 2001, p. 4). Consequently, the conflicts despite being low intensity have been multidimensional. Contrary to the misconception in certain quarters, they have not been a unidirectional warfare of the rentier state forces against the subalterns. Such a view is to say the least simplistic. Sections of the subalterns mostly consisting of mine diggers are also consequential actors, intermittently embarking on violent action against the state and mining companies.

The Geopolitical Context This research tries to examine issues of low intensity conflicts based on a study of three provinces known for abundant mineral resource endowments in the DRC, the Western and Eastern Kasai2 and Katanga. The Great Kasai situated in the centre of Congo is rich in diamond; its administrative capitals are Kananga and Mbuji Mayi. Mbuji Mayi is the administrative headquarters of the private diamond Company la Minière de Bakwanga (MIBA). The long-standing monopoly of the MIBA has been broken with the birth of the Zimbabwean-owned company Sengamines, which President Laurent Kabila registered as a compensation for Zimbabwean military support during his rebel campaign in the DRC. The Western Kasai city of Tshikapa is endowed with large deposits of diamonds and many foreign investors have mining concessions in this city. It is reported that the Belgian top politician Louis Michel is a stakeholder in diamond concessions in Tshikapa. The Great Kasai has a population of over 6 millions people. It is landlocked. Katanga is located in the southern part of the Congo and is Kabila’s home province. The province covers one fifth of the national territory and has about 5.5 million inhabitants. In the south of the province, vast reserves of copper (Cu) and cobalt (Co) are found in sedimentary deposits along the Central African copperbelt, which stretches along the DRC borders with Zambia and Angola. The copperbelt contains 34 per cent of the world’s cobalt reserves and

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10 per cent of the world’s copper reserves. Aside from copper and cobalt, the copperbelt also contains minerals such as zinc, germanium, uranium and silver. Mine exploitation started under Belgian rule by the Union Minière du Katanga (UMHK) and was taken over by the giant parastatal Gécamines (and a smaller parastatal called Sodimico) when Mobutu partially nationalized the Congolese economy in 1967’ (NiZA, 2006, p. 35; see also NiZA, 2007). During the past decade or so, these mining companies have been adversely affected by both the civil conflicts and government privatization policies. Productivity and workers’ conditions of service have for the most part been deplorable. There are diverse instances where workers have been faced with many months of unpaid wages. Consequently, Sengamines has suspended diamond exploitation while Gécamines has been in a state of dislocation due to the privatization of some assets of the company leading to far-reaching managerial and operational changes (Rubbers, 2004, pp. 21–41). More significantly, the three provinces as elsewhere in the DRC are in a terrible state of devastation and underdevelopment. Social services and infrastructural development are in disrepair and in many quarters, non-existent. According to the United Nations’ Report (2001, p. 15): The public sector within the Great Kasai did disappear. Out of five water delivery infrastructures in Eastern Kasai, four do no more function and the fifth in the capital Mbuji Mayi functions at less than 20 per cent of its capacity. In the Western Kasai, five out of six water delivery infrastructures stopped working while the sixth located in Kananga turns in its best at 10 per cent of its capacity.

The deplorable developmental condition in the Great Kasai is replicated in Katanga. The Global Witness’ Report (2006, p. 10) underscored the ‘poverty and economic neglect in Katanga’ and further indicated that: The economic situation in Katanga, as in the rest of the DRC, has been desperate for several decades, as a direct result of government mismanagement and corruption. Despite its vast natural resources, and the fact that the copper and cobalt mining areas have not been directly affected by the war, the province – with the exception of its capital Lubumbashi – is not significantly more developed or prosperous than other parts of the country. In the 1960s and 1970s, the state mining company Gécamines provided many of the services which are more commonly provided by the state, including health, education and housing. However, since Gécamines’s financial collapse in the 1990s, these services have become dilapidated or ceased to function altogether, and in most cases, the government has not replaced them.

In order to grasp the patterns of violence, this chapter shall attempt to (i) analyse the politics of control and access to underground mineral resources in the DRC, and (ii) the structure and nature of conflicts associated with extractive economy.

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Underground Mineral Resources and the Changing Ownership Regimes The low-intensity conflicts which have persisted in provinces rich in mineral resources in the DRC have their roots in the struggle between local people and the state over ancestral lands and mining spaces. The local people insist on their traditional rights to ancestral lands for existential purposes (peasant agriculture, extraction of natural resources, etc.) while the state is intent on land expropriation for mining and industrial development purposes. It is a struggle between ‘traditionalism’ and ‘modernity’. This is compounded by the internal struggle among the prebendal elites over control of the use of natural resources, a struggle that culminated in state fragmentation and the capturing of the Congolese state by what a major United Nations Report (2001, p. 7) calls ‘the elite networks’. Alternative land tenure regimes based on ‘legal pluralism’ have been proposed to redress the situation (see Hardin, 1968, pp. 1243–8; Helander, 2006). According to Bernard Helander (2006), this proposal has the advantage of creating enabling environment for the interaction between the state’s legal system and local, ‘informal’ systems of rules. The ownership regime of the ‘underground’3 can be defined as all the legal devices taken by the state in order to regulate the ownership, exploration and exploitation of the diverse mineral resource endowments of the country. This legal or rule-making approach makes the mining regime a kind of police regime because it is about the set of rules taken with the advantage of the coercive power of the state in order to preserve the ‘underground’ and pave way for the exploitation of the mining deposits to especially privilege the state and its governing elites (Karsenty, 2006). A precursor to this rentier-type intervention regime was the colonial Congo Free State’s era in which King Leopold II orchestrated the legal framework known as ‘the Crown domain’ through which ‘the uninhabited territory within the Lukenia Basin and Leopold II Lake (in the province of Bandundu) were forcibly acquired by the Crown following a decree promulgated on 9 March 1896 (Vangroenweghe, 1986, p. 221). The expropriation of land and mining spaces during the colonial era was consolidated by a barrage of colonial decrees (Piron and Devos, 1959). Today, the main operational mining legislation in the DRC is the Mining Code known as Decree No 007/2002 of 11 July 2002. The mining decree was drafted by World Bank experts presumably to enhance national economic recovery by attracting foreign investors in the mining sector. According to article 3 of the decree, the state enjoys the exclusive, inalienable ownership of land and underground mineral resources comprised in the DRC. The Congolese state has the right to alienate and transfer (sell, lease, etc.) land endowed with mineral resources as a means to enhance the revenue base of the state and encourage foreign direct investments and national development. The 2002 mining legislation identifies a hierarchy of stakeholders and actors in the mining business. The first is the Congolese state in which is vested ownership of all underground mineral resources. The second category of actors is individual and corporate holders of mining concessions granted by the state for exploration and exploitation purposes. It is important to note that the concession holders are

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generally foreign or national investors operating through registered companies. The companies are allocated large areas rich in mineral deposits at the expenses of the local people and grassroots communities whose lands are thereby expropriated. The third category of actors comprises those involved in the mining sector but without any direct state allocation or concession. In this vast third category, we find the local smallscale entrepreneurs, artisanal workers (mine diggers), as well as sundry speculators and middlemen. The local communities are generally forgotten. Moreover, the statute clearly envisions the primacy of the state ownership rights in all matters of underground mineral resources over any customary claims to land ownership by individuals and communities. In the event of any conflicting claims of ownership, the right of the state to expropriate land and mining spaces supersedes all other countervailing claims. Another key aspect of the new mining legislation concerns the distinction made between the industrial mining exploitation and the artisanal mining exploitation. Industrial exploitation covers all the areas within which investors – Congolese or expatriates – can undertake largescale industrial (mining) activities using modern machines while artisanal exploitation comprises activities within areas where the Mining Ministry permits mining deposits to be exploited only by local Congolese operators called creuseurs. The creation of artisanal mining exploitation zone is conceived to encourage the development of a robust middle class in the DRC. Effectively implemented, the two mining frameworks were designed to trigger a ‘soft boom’ in the economy, albeit industrial mining is the component that thus far seems to be significantly dynamic and functional. According to Global Witness’ report (2006, p. 11): It is the formal mining sector that has seen the most significant developments since 2004, in particular an increase in the number of large contracts signed with foreign or multinational mining companies. The primary goal of the Mining Code, introduced in 2002, was to attract foreign investment to the DRC. This strategy finally appears to have paid off, with a number of medium-sized international companies commencing operations in the copper and cobalt sector of Katanga.

Since the introduction of the new mining dispensation in post-war DRC, a considerable number of joint venture business contracts have been signed by the state mining corporation Gécamines and different foreign investors. Majority of these joint venture operations are in the province of Katanga. Emerging evidence suggests that the structure of joint venture contracts and operations is such that it maximizes the interest of the expatriate investors at the expense of the state and local populations in terms of land concession, equity participation, profits, capital flight and reinvestment conditions, obligations to local labour, and corporate social responsibility. Findings of Fasken Martineau DuMoulin (Pty) Ltd, a Canadian legal firm, based on their investigation of two joint ventures in Katanga’s formal mining sector indicate monumental losses and unfair opportunities for Gécamines.4 Concerning the artisanal mining subsector, available empirical facts suggest that the subsector is overcrowded, desperate and survivalistic. It is estimated

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that more than 80,000 people work in this sector in Katanga. It is a subsector that mostly attracts unemployed and underemployed people desperate to eke out livelihood from the industry against the backdrop of continued economic hardship nationwide. Artisanal mining has been recently characterised as ‘being very labour-intensive in providing work and income, although very low, to large masses of the population; exploitation in dangerous and unhealthy conditions with presence of the military; unclear ownership and accountability; little returns to local populations and being very damaging for the environment and livelihood of the Congolese communities’ (Hoyweghen, 2004). These characteristics point to the harsh living condition that large sections of grassroots populations face in the DRC. The situation is compounded by the repeated crackdown of local communities and artisanal miners by state security forces arising from issues of resistance to land expropriation and the local’s lack of clarity over zoning of mining spaces.

The Logic of Accumulation, Governance and Low Intensity Conflicts in the Mining Sector It is worthwhile to note some characteristics of the DRC’s economy in order to contextualize the low intensity conflicts that appertain to the extractive economy resources. Three characteristics could be identified: (i) the salience of the informal activities; (ii) the logic of predation stemming from systematic abuse of human and natural resources backed by the indiscriminatory application of military violence by the governing elites (Vlassenroot, p. 342); and (iii) the deepening poverty that blight the populace. There is an historic overlap between the three features. Against the background of a historically looted and wasted national economy, an informal or shadow economy based upon barter, smuggling and illegal trade have increasingly come to the fore, becoming thus the only means of survival for the majority of people’ (United Nations, 2001, p. 5). It is important to point out that the informal or shadow economy networks are not strictly a consequence of recent civil war. They are rather linked to the structure of the Congolese state and the correlated, centralized patronage system created by the Mobutu regime (see Vlassenroot, 2003, p. 342). The logic of centralized predation amidst ruthless authoritarian control in rentier accumulation precipitated the influx of many social agents and marginalized people into the shadow economy (see Talha, 2003, p. 27). Mobutu’s ‘Zairianization’ policy of 1973–1974, in which the government nationalised most small and medium-size foreign-owned agricultural enterprises largely owned by Belgian, French, Portuguese and Greek nationals, was part of the strategies of the governing elites to expand the rent-seeking interests of the state governing elites and indigenous entrepreneurs. This policy however had a disastrous effect on the economy as the governing elites and their business cronies lacked the discipline and technical competence to operate the nationalized investments. Consequently, the agricultural sector suffered from progressive neglect and the continuous shift of labour to the more lucrative mining sector

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(Ngoie, 2005). Poor agricultural production accentuated food deficits and the general hardship suffered by the hoi polloi. In response to pressures from the increasingly defiant and impoverished local populations and the international creditors, Mobutu’s regime decided to liberalize the mining sector in 1983 as part of the policies promulgated to contain the national economic crisis. However, as opposed to mitigating it, the liberalization measure exacerbated political and economic disorder. The state’s lack of capacity to control and regulate transactions in the mining sector precipitated profound fiscal crisis. The ease with which economic transactions, especially within the strategic mining sector evaded official control, regulation and scrutiny only reinforced neo-patrimonial corruption within the broad context of the informalization of the economy (Chabal and Daloz 1999, p. 80). Moreover, the perverse ‘elite networks’ implicated in the UN 2001 Report for appropriating the state apparatuses for predatory accumulation tend to weaken the institutions and pervert the policies of the state to suit their rent-seeking interests. More dismally, the policies of the state are generally disconnected from developmental preoccupations and the quest of the well-being of population. As Misser and Vallée (quoted in Botte, 2004, p. 20) captured the discourse: While general interest is fading out, the state machine does not crumble utterly: it comes to recompose within particular interests service […]. The criminalization is not within contamination of a sovereign and regulating state by the ‘bad other’ […]. It appears as the building upon the social and economical foundation of an accumulation regime disconnected from the general interest.

The recent Global Witness Report (2006, pp. 5 and 14) recorded the following observations concerning prebendal corruption and malpractices in the artisanal mining sector: There is ruthless exploitation of artisanal miners by government and security force officials and trading companies. At local and provincial levels, officials from various government departments, including the ministry of mines, the police, customs, intelligence services and local government offices, are all extorting large sums of money from miners in a system of institutionalised corruption. The association claiming to represent artisanal miners, Exploitants miniers artisanaux du Katanga (EMAK), is also extorting money from miners instead of protecting their interests. Négociants are financially exploited by the trading companies to whom they sell the minerals and are forced to accept prices which do not correspond to the real value of the products’ while as it concerns the formal mining sector, the Global Witness’ Report ‘highlights the involvement of high level political actors in the negotiation of these contracts and in siphoning off the profits from the mineral trade in Katanga – the heartland of President Joseph Kabila. … In the artisanal sector, corruption takes place at every stage of the mining process. At the entrance point to each mine, at the mineshafts where artisanal miners dig for minerals, at the exit point from the mines, along the roads, at checkpoints and at border posts, a bewildering range of officials are preying on miners, négociants, transporters and traders, and demanding sums which, once totalled, represent a significant amount of money. Those who work in the sector have little choice in the matter: their ability to work, to buy and to sell is dependent on paying

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Without doubt, public sector corruption is widespread and well embedded in the DRC state and the phenomenon permeates the relations between state officials/institutions and other social agencies like corporate organizations, individual investors, societal networks, etc. Consequently, the attitude of state officials towards sections of the populace or society ranges from disdain and contempt to insensitivity, indifference and antagonism. Because state offices are essentially appropriated by the governing elites to personal enrichment and the benefit of their patrimonial networks (NiZA, 2006, p. 9; see also NiZA, 2007), the state in a large part abdicates its social responsibility to the governed. Public infrastructures, social services and community development are practically glossed over by the state. Even the obligation of providing public order and security for the people and corporate sector is largely neglected by the state, which for the most part, lacks the logistical, operational and personnel capacity to perform these functions. As such, many wealthy people and corporate organizations resort to the services of private security firms to ensure their protection and that of their families and estates. In Lubumbashi, for instance, there are more than ten private security companies offering their services to the wealthy. In Mbuji Mayi, Kolwezi and other major cities the story is the same. With regard to low intensity conflicts (LICs), there are varied forms of manifestation. Firstly, large incidents of LICs in the DRC extractive economy are associated with the extortionist harassment of artisanal miners by state security officials and the indiscriminate protest and resistance of victims and local people. Policemen and soldiers often invade mineshafts intimidating miners and artisanal workers in a bid to extort bribes from them. The Global Witness Report (2006, p. 15) observed that: At the level of the mines, officials sometimes demand payment in kind rather than in cash. For example, a miner explained to Global Witness researchers that when he used to work at Kisankara mine, the Police des Mines used to take three bags of minerals per mineshaft: ‘The police come and demand it. You can’t refuse. If you don’t pay, they arrest you and make you pay double.’ Even in those artisanal mines where the military were usually not present, miners reported that soldiers would occasionally come for the sole purpose of demanding money. A miner who had worked in Luisha mine in 2004 said that the military used to come there every Saturday and ask for 200 francs (around US $0.5) per person. If the miners were unable or unwilling to pay, the soldiers would beat them or take their tools or the minerals they had dug, by force.

Secondly, there are a preponderant number of criminal networks, thugs and gangs operating in most mining towns and they contribute to the spate of LICs and structural violence in these areas. These armed criminal agents mostly constituted by soldiers, local bandits and labourers employed in the mining sector

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invade the large industrial mines to steal diamonds, copper, cobalt and other precious minerals which they sell in the black market. There are often violent clashes and gun battle between the criminal predators and the private security guards employed to protect the industrial mines, leading fatal casualties on either side depending on who has the upper hand in each particular incident. There are times when overpowered thieves have been caught and beaten to death by mine workers and private security agents. Sometimes, this sort of jungle justice provokes violent protests and vandalization of mining estates from hostile and disgruntled locals who perceive the predatory criminal operatives as just locals trying to ‘recover’ or ‘take’ resources that duly belong to their communities. The third form of the LICs is the confrontation between the contradictory claims of land ownership between the state (invoking its power to make binding legislation) and local communities. This type of violence is associated with ‘the expulsion of local communities to secure exclusive control over resources, thereby enabling international corporations to exploit resources. In such circumstances, civilians themselves may engage in violence in order to protect themselves or as a means of livelihood as the cost of peaceful behaviour becomes life-threatening and unbearable’ (Addison et al., 2001, p. 4). In the event of the state’s coercive enforcement of the mining code, most affected local communities, especially survivalist mine diggers resort violent protests (riots, uprising, destructive rebellion, etc.) against the state and holders (usually corporate organizations) of mining concessions in the defiant communities. In Lubumbashi, the Rwashi parish – an area hosting diverse mining concessions – has often been a theatre of such violent confrontation between the state security operatives and local mine diggers, whose lands are expropriated and sold or leased to big mining companies by the state. In fighting the mining companies, the local people employ all the ammunition at their disposal, including the use of magical power and juju as was recently demonstrated in Tshikapa (a diamond-rich city in Kasai) where local people used magical charms to render impotent the Alsatian dogs deployed by foreign investors to protect their diamond concessions. In Mbuji Mayi, the local community chiefs invoked ancestral forces to cause all underground diamond deposits in their community to disappear in order to punish the mining companies bent of expropriating their lands (Kasaï Wetu, 2005). The fourth form of LICs is related to land disputes between two or more neighbouring communities, ethnic groups, clans, villages or families fighting over ownership of a piece of land believed to be richly endowed with solid minerals, in most cases diamonds. This kind of conflict is highly pronounced in the Mbuji Mayi area of Eastern Kasai and in Tshikapa in Western Kasai. A large number of casualties are usually recorded at the outbreak of such communal feud.

Conclusion LICs in the mining sector in DRC are a product of the state’s predatory control of all strategic natural resources in the country and its mismanagement of the correlated conflicts. As a matter of fact, the DRC state displays a specific attitude

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of ‘governmentality’ characterized by ‘deeply-rooted patterns of patrimonialism and corruption’ (NiZA, 2006). The state’s ruling and governing elites are imbued with a dysfunctional ‘rentier mentality’ that disposes state functionaries to use their public offices and positions to accumulate both official and unofficial ‘revenues’ that are basically appropriated for personal and prebendal purposes. The recourse to, and exploitation of primordial identity and cleavages such as ethnicity and provincialism as basis for conflict mobilization by rent-seeking elites serves as an aggravating factor. Also, the disposition to exclusionist and perfunctory patterns of elite co-option and power-sharing in war peace deal has contributed to lack of effective settlement of political conflicts and unending instability (see Lemarchand, 2007, pp. 12–14). All the observed forms of LICs which occur in the mining sector are related to the rent-seeking excesses of the state, the prebendal culture of accumulation practices by state functionaries at all levels and the insensitivity of the state to the extreme deprivation of the grassroots populations and communities. The artisanal mine diggers that champion sporadic protests against the state and large mining corporations are victims of the coercive expropriation of the country’s natural resources and systematic impoverishment of the populace. The state adopts a reactive conflict control strategy to LICs as opposed to a proactive strategy capable of redressing the underlying structural issues of expropriation, predation, extortion, and corruption in the extractive economy, as well as the larger macroeconomic crisis of developmental retrogression and human insecurity facing the country. In the context of the complexity of the DRC, one proactive model that could help tackle the problem of the mining sector is the strategy of ‘polycentric governance’. Polycentric governance is designed to provide alternative strategies to address problems of daily existence at the grassroots level in the face of dismal performance of the modern state institutions. As one of the leading exponents of the model, Dele Olowu (1999, p. 213) coalesced the discourse, polycentric governance is about local self-governance which emphasizes three important attributes that are germane to democratic setting and which will invariably increase the level of public accountability. The attributes are: locality; primary accountability to the local people; and the provision of important regulatory, economic, or social services or a combination of all. In practice and in the context of the DRC, polycentric governance would entail functional devolution of power, resources, development policy formulation and implementation and systems of accountability to provincial and local levels of administration. This strategy will help to reposition the state and state resources for the greater good and benefits of the long-neglected grassroots populations.

Notes 1

All the deputies of the Kasai Oriental Province signed this motion calling for a public inquiry. In the politics of ‘divide ut imperes’, Mobutu became furious with three of the twenty three deputies. The three are: Ngalula Pandajila, Makanda Mpinga Shambuy

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4

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and Tshisekedi wa Mulumba. The three are also among the founding fathers of the political party called Union pour la démocratie et le progrès social (UDPS). For obvious historical reasons, the two Kasai provinces have been described as the Great Kasai. The Great Kasai has only one major mining resource – diamonds. In the 1966 Constitution of the former Zaire, the state has full statutory ownership of all land and underground natural resources. There are two legal regimes in this case. The first deals with land ownership while the second with underground resources. This section is more interested with the latter. The Fasken Martineau DuMoulin (Pty) Ltd investigated and analysed two Joint Venture (JV) agreements. The first JV Agreement concluded in February 2004 was between La Gécamines and Kinross Forest Limited, which created the Kamoto Copper Company and the second JV Agreement of 9 September 2004 concerned la Gécamines and Global Enterprises Limited. Among other findings, the investigators reported concerning the second JV agreement as follows: ‘It is reasonable to assume that KF Limited will have been totally reimbursed in capital and interests of all loan and advances and will have derived substantial benefits from the control exercised on the operations prior to Gécamines receiving any remuneration on its contributions. It is reasonable to assume that the remuneration for the Rented Equipment and Installation will be minimal, if any. It is reasonable to assume that available cash for dividends will be minimized as it will be more advantageous for KF Limited to be fully remunerated through contracts with the Manager and related companies rather than share the remaining available cash with Gécamines’.

References Addison, T., P. Le Billon, and S. Mansoob Murshed (2001), ‘Conflict in Africa. The Cost of Peaceful Behaviour’, Discussion Paper no. 5, http://www.unu.edu/hq/library/collection/ PDF_files/WIDER/Wider/dp/2001.51.pdf. Accessed on 8 August 2006. Bayart, J.-F. (1980), ‘La fronde parlementaire au Zaïre (1979–1980)’, Politique africaine, http://www.politique-africaine.com/numeros/pdf/003090.pdf. Accessed on 3 July 2006. Botte, R. (2004), ‘Introduction au thème. Vers un Etat illégal-légal?’, Politique africaine, 93, March, pp. 7–20. Certeau, M. (ed.) (1998), L’art de faire, Paris: UGE. Chabal, P. and J.-P. Daloz (1999), Africa Works. Disorder as Political Instrument, Oxford: The International African Institute. Dietrich, C. (2000), ‘The Commercialisation of Military Deployment in Africa’, African Security Review, 9(1). Global Witness (2006), Digging in Corruption. Fraud, Abuse and Exploitation in Katanga’s Copper and cobaltmines, Report, July, http://www.globalwitness.org. Accessed on 3 July 2006. Hardin, G. (1968), ‘The Tragedy of Commons’, Science, 62, pp. 1243–8. Helander, B. (2006), ‘Some Problems in African Conflict Resolution: Reflections on Alternative Reconciliation Work and Research’, http://www.somaliawatch.org/ archiveoct00/001005603.htm. Accessed on 13 October 2006. Hochschild, A. (1998), Les fantômes du Roi Léopold. Un holocauste oublié, Paris: Belfond.

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Hoyweghen, S. (2005), DRC’s Natural Treasures: Source of Conflict or Key to Development?, Report of the Expert meeting, 23–24 November 2005, Brussels, http://www. globalwitness.org/reports/show.php/en.00095.html. Accessed on 23 August 2006. Karsenty, A. (2006) ‘Vers la fin de l’Etat forestier? Appropriation des espaces et partage de la rente forestière au Cameroun’, http://www.politique africaine.com/numeros/ pdf/075147.pdf. Accessed on 6 July 2006. Knutsen, T. (1997), A History of International Relations Theory, 2nd edn, Manchester: Manchester University Press. Lawyers Committee for Human Rights (1990), Zaire: Repression as Policy. A Human Rights Report, New York, August. Lemarchand, R. (2007) ‘Consociationalism and Power Sharing in Africa: Rwanda, Burundi and the Democratic Republic of Congo’. African Affairs, 106(422), January, pp. 1–20. Machel, G. (2004), ‘Mitigating, Preventing, and Ending Conflicts in Africa: The Link between Conflict, Refugees, and Food Security’, http://www.ifpri.org/2002africaconference/ program/day1summaries/machel.pdf. Accessed on 15 July 2006. NiZA (Netherlands Institute for Southern Africa) (2006), L’Etat contre le peuple. La gouvernance, l’exploitation minière et le régime transitoire en République Démocratique du Congo, Amsterdam: Felix Offset Amsterdam. The English version is also available. See also http://www.niza.nl. Accessed on 6 April 2006 NiZA (2007), ‘Key Mining Contracts in Katanga: The Economic Argument for Renegotiation’, monograph of the Netherlands Institute for Southern Africa, April. Amsterdam, http://www.niza.nl. Accessed on 10 April 2006. Ngoie, T. (2005), La République Démocratique du Congo dans les relations interafricaines: la trajectoire d’une impossible quête de puissance, Lubumbashi: Laboratoire des sciences sociales appliquées. Oluwu, D. (1999), ‘Local Organizations and Development: The African Experience’, in Polycentric Governance and Development: Readings from the Workshop in Political Theory and Policy Analysis, Ann Arbor, MI: University of Michigan Press, pp. 209–40. Piron, P. and J. Devos (1959), Codes et lois du Congo Belge, vol. 3, 2nd edn, Leopoldville: Editions des codes et lois du Congo Belge. Rubbers, B. (2004), ‘La dislocation du secteur minier au Katanga (RDC). Pillage ou recomposition?’, Politique africaine, 93, March, pp. 21–41. Talha, L. (2003), ‘Le régime rentier et son mode de régulation. Essai de problématique’, http://www.lepii/regulation/Forum/Forum-2003/Forumpdf/RR-TALHA.pdf. Accessed on 3 July 2006. United Nations (2001), Report of the Panel of Experts on Illegal Exploitation of Natural Resources and Other Forms of Wealth of the Democratic Republic of Congo, New York, United Nations Security Council, 12 April. Vangroenweghe, D. (1986), Du sang sur les lianes. Léopold II et son Congo, Brussels: Didier Hatier. Vlassenroot, K. (2003), ‘Economies de guerre et entrepreneurs militaires’, in P. Hassner and R. Marchal (eds), Guerres et sociétés. Etat et violence après la Guerre froide, Paris: Karthala, pp. 339–68; Watts, M.J. (1999), ‘Petro-Violence: Some Thoughts on Community, Extraction, and Political Ecology’, posted at the eScholarship Repository, University of California, http://repositories.cdlib.org/iis/bwep/WP99-1-Watts. Accessed on 3 July 2006.

Chapter 9

Thugs’ Paradise, Agencies’ Guinea Pig and the Natural Resource Intrigue: The Civil War in Liberia T. Debey Sayndee

Introduction The so-called ‘Liberators’ played a deadly role in the Liberian civil war. They turned Liberia into a land where they dictated the affairs of the state with immense brutality and coercion. In order to enhance their grip on state power, these men and women created a human-made crisis in which they brought under their domain, the major natural resources of Liberia, notably timber and diamonds. The ‘Liberators’ could not have achieved this feat alone. Western European and East Asian ‘friends’ needed Liberian timber, while others wanted its diamonds. And so the major actor, Charles Taylor, became comfortable enough to create a paradise for loyal actors and accomplices who perpetrated heinous crimes against the Liberian populations with impunity. How did Liberia become a paradise for ruthless actors and lawless people (thugs)? What role did the major natural resources (rubber, timber and diamonds) play in the conflict? Liberia’s natural resources, especially timber and diamonds, entered center stage immediately the National Patriotic Front of Liberia (NPFL) gained control of much of Liberia in 1990. Charles Taylor made informal arrangements with foreign Timber firms (Johnston, 2004). These arrangements were to later be more formalized when Taylor became President in 1997, thus showing the connection between unregulated private investment in weak states and the incidence of state failure and political instability (Johnston, 2004). The arrival of shady firms to extract Liberia’s resources only worsened the already fragile situation. Foreign firms such as the Oriental Timber Company (OTC), not satisfied with the unstable situation, brought in a private army to protect their concession areas. This army became brutal, intolerant and notorious (along with Taylor’s Anti-Terrorist Unit) for flogging of employees working with the firm. Weapons were reportedly delivered covertly via a heavily guarded OTC airstrip by chattered planes to support and strengthen Taylor’s army (Global Witness, 2002). The fragile situation provided the basis for the arrival of United Nations agencies and foreign NGOs. Local NGOs also sprung up to help alleviate the

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worsening situation. The UN agencies faced a humanitarian crisis unprecedented in the subregion: hunger, disease and insecurity. As the West African subregion braced itself (with support from the UN) to stabilize the situation, Liberia’s case for intervention was a trial and error method, basically making the country a guinea pig for international agencies in the areas of food aid, security plans, revitalization, and most spheres of livelihood. Taylor’s brutal exploitation of the people, war lord style of repressive governance and his continued decimation of opposition meant that political power was soon up for grabs among the several Liberian armed factions fighting one another for the purpose of control of strategic natural resources and state power. The fragile peace settlement that brought Taylor to power through a democratic election was thus eclipsed by the resumption of rebel war.

Historical Insights Liberia has a population of slightly more than three million and a land mass of approximately 38,250 square miles. It is rich in natural resources like iron ore, timber, diamonds, and gold. It hosts one of the world’s major tropical rain forests. Unemployment is approximately 80 per cent, and about 80 per cent of the population lives below the poverty line. Liberia is one of the two countries in Africa that was not subjected to colonial rule, albeit the second country Ethiopia was briefly occupied by the Italian fascist regime during World War II. Liberia is the oldest republic on the African continent. In December 1989, Charles Taylor led a rebel group, the National Patriotic Front of Liberia (NPFL) in an uprising against the government. Shortly thereafter, the Economic Community of West African States (ECOWAS) Ceasefire Monitoring Group (ECOMOG) was sent to Liberia as a peacekeeping force but they failed to terminate the fighting. Civil war spread throughout the country as the NPFL battled ECOMOG, the Liberian army, a splinter rebel group called the Independent National Patriotic Front of Liberia (INPFL), and the United Liberation Movement of Liberia for Democracy (ULIMO). A number of transition governments ruled Liberia during the 1990s as different cease-fires were agreed upon and broken. Finally, an ECOMOG disarmament programme initiated under the August 1996 peace agreement proved successful. Under considerable international scrutiny, presidential and legislative elections were held in July 1997. Charles Taylor, the man who instigated the Liberian civil war eight years earlier, was elected president. His political party, the National Patriotic Party, won a majority of seats in the National Assembly. The Liberian civil war killed more than 150,000 Liberians and displaced more than a million people between 1989 and 1996. However, his ascent to power failed to improve the lives of ordinary Liberians. Liberian political and economic history has been marked by cruel repressions by powerful elite whose origin dates back to the arrival of the ‘settlers’ (emancipated black slaves from the Americas) in 1822 and the subsequent years (Zartman ,2000, p. 99). The arrival of the settlers or pioneers as they are

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regarded in history literature saw the beginning of a series of conflicts with the indigenous people over land ownership. Even among the settlers themselves, there were instances of land conflicts as land was a major source of economic and political power even at that time. The conflict among the settlers came to a climax in 1870 when the first dark-skinned settler was elected president. He was accused of corruption, an accusation that caused him both the presidency and his life. The settlers maintained a stable democracy, so to speak, conducting regular elections that excluded the indigenous populations. They thus became powerful land owners by courtesy of the twin advantages of political power and western education they exclusive had. The settlers (and their descendants) progressively became the powerful elites, dominating the economy and political life of the country up to 1980. Being a neo-patrimonial shadow democracy, the political system produced and perpetuated ‘strong man’s rule’ marked by executive absolutism and cult of the presidency (Sawyer, 1992, p. 278). Although concession companies began arriving into the country in the 1920s and 1930s, the full strength of their activities was felt during the administration of William V.S. Tubman who came to power in 1944. Tubman initiated some questionable reforms in which retrenchment was to later replace the fading leader’s earlier modernizing innovations and things began to fall apart (Zartman, 1989). Although many mining companies were operating in Liberia at the time, resources were exploited to benefit the Western industries and powerful elites, who built fabulous houses in Western countries and deposited their loots and profits into foreign accounts. This growth in Liberia’s economy brought little or no benefit to the majority indigenous populations, leaving the country with poor road networks and public infrastructure. The indigenous people were not only excluded from participating in the country’s economic life, they played a lowkey role in the political affairs of the country. The indigenous people agitation for equal political status later led to a confrontation between them and the True Whig Party government headed by William R. Tolbert. He was overthrown in a military coup carried out on 12 April 1980 by indigenous lower rank army officers led by Master Sergeant Samuel K. Doe, thus ushering in a new chapter in the political history of Liberia.

Vandalism Vandalism describes the crime of deliberate damaging of public property. This is exactly what happened in the long armed conflict in Liberia. Since 1990, many towns and villages have disappeared. Forests that once fed and protected rural communities have withered in the predatory exploitation of ‘conflict timber’ by different foreign stakeholders in the Liberian war economy. France and China have become the main competitors in reducing Liberia to a desert through predatory exploitation of timber and other biodiversity (Kamara, 2001). The Oriental Timber Company, which brought in its own workers despite the over 90 per cent unemployment rate in Liberia after the first phase of rebel war, adopted a gold rush policy against the tropical rainforest (Kamara, 2001).

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The war and foreign investment companies extremely vandalized the country’s infrastructure, including roads, bridges, electrical and water supply, as well as human resources. Deforestation has taken place on a large scale without any attempt at reforestation, as was stipulated in most of the agreements signed with the Liberian government. Also, most of the business concession agreements provided for manpower development training for the unskilled Liberians as well as free primary education for employees’ children, but all these were not realized (Concession Review Report of Liberia, 2005). Liberia’s timber and diamond industries helped prolonged the civil war and destroyed the country’s formal economy. The combination of these factors and others helped to worsen the decay of Liberia’s state institutions. Investment from foreign timber firms in Liberia reinforced an informal, clandestine economy which thrived and took primacy after the collapse of Liberia’s infrastructure and formal economy. Heads of the various warring factions and their associates were the main people that benefited from these war economy transactions, leaving ordinary Liberians alienated. Timber firms and other industries served as proxies for collapsed state agencies. Taylor’s shadow economy had serious negative effects on ordinary Liberians. Since Taylor depended on foreign investment for capital and security, and not the productivity of domestic citizens and industries, he had little incentive to provide Liberians with public goods and services. Charles Taylor was actively involved in fueling the violence in the neighboring country of Sierra Leone. The relationship between the Liberian government and the Revolutionary United Front (RUF) was fed by the extraction of natural resources in both Liberia and areas under rebel control in Sierra Leone. He and a small coterie of officials and private businessmen around him were in control of a covert apparatus that included international criminal activity and the arming of the rebel RUF. Taylor used his position as rebel warlord and later president of Liberia to obtain preponderant diamonds from the RUF in exchange for arms. Known for its extreme brutality, the RUF killed many civilians in Sierra Leone and amputated limbs to instill terror in the populations. Children in Sierra Leone were victimized, but not just by the severing of limbs. The RUF kidnapped children as young as seven years old and forced them to join their rebel movement. Those who tried to escape were either sent into battle frontline or killed if they were caught. Facing gun battles, thirst, and hunger, those who managed to escape often walked for more than fifty miles seeking safety. The personal connection between ex-President Charles Taylor and late Foday Sankoh, the former RUF leader, goes back a decade to their paramilitary training in Libya as ‘revolutionaries’, their participation in the coup led by Blaise Campaore in his seizure of power in Burkina Faso, and to Sankoh’s involvement in Charles Taylor’s abortive attempt to seize power in Liberia during the early years of the rebel war in early 1990s (Hofstatter, 2001). While ex-President Taylor admits that he was a close friend of Foday Sankoh, he denies that he or his government had provided any weapons or assistance to the RUF. Following the election of Mr Charles Taylor as president, Liberia became a major conduit for diamonds export and arms supply for the conflict in Sierra

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Leone (Global Witness, 2006). Global Witness reports that the registration of planes and ships and the issuance of diplomatic passports was hideously abused in order to carry out the arms-for-diamonds transfers from Sierra Leone and also to ship Liberian timber overseas. Scores of ships flying Liberian flag were involved in this lucrative international trade from which the Liberian government, and by prebendal extension, President Taylor, realized millions of dollars in revenues. Many businessmen close to the inner-circle of President Taylor operated on an international scale, getting their weaponry from Eastern Europe transported on these ships. On 5 March 2000, the United Nations Security Council adopted Resolution 1306. This resolution prohibited the export of diamonds from Sierra Leone and expressed concern at the role played by the illicit trade in diamonds in fueling the conflict in Sierra Leone (Hofstatter, 2001). Resolution 1306 also noted that such diamonds pass through Liberia. Hofstatter explains that a Report by a Panel of Experts set up under Resolution 1306 found overwhelming evidence that Liberia had been actively supporting the RUF at all levels – by providing training, weapons and related materiel, logistical support, a staging ground for attacks and a safe haven for retreat and recuperation. On 1 December 2000, the United Nations General Assembly adopted Resolution 55/56. This resolution expressed concern about the problem of rough ‘conflict’ diamonds being used by rebel movements to finance their military activities and fuel conflict to overthrow legitimate governments. A United Nations Panel, according to Hofstatter, concluded that Charles Taylor had overseen the smuggling of diamonds mined by the RUF and had dedicated part of this money to paying off rogue arms dealers who, in turn, use Liberian registered planes to deliver large quantities of weapons back to the RUF. The Panel also found that Burkina Faso had facilitated weapon shipments to Liberia, Gambia had allowed diamond smuggling within its borders, and Ukraine had been a primary source of illegal weapon shipments. On 7 March 2001, the United Nations Security Council adopted Resolution 1343. The Resolution called for the Government of Liberia to cease its military and financial support for the RUF, to end all assistance to armed rebel groups in the region, and to end all direct or indirect importation of rough diamonds from Sierra Leone. Resolution 1343 threatened a ban on all Liberia’s diamond exports by 7 May 2001, unless Liberia cuts all ties with the RUF. Liberia did not cut its ties with the RUF, and the ban was placed on Liberia by the Security Council. Following visits to Guinea and Sierra Leone in March 2001, Britain’s Development Minister Clare Short repeated what is now a known factor for regional peace – that Taylor was at the heart of the collapsing region’s ‘instability’. The French, who at this point were accused of being pro-Taylor, seemed to have had enough of it. French Cooperation Minister Charles Josselin told journalists in Freetown (March 2001) that ‘the relations between Charles Taylor and the RUF is no secret. We must recognize that Taylor has shown no sign of complying as yet. On 7 May the sanctions will go into effect and he will be responsible’. However, in the Security Council’s wisdom, Liberia’s timber, which it says has fuelled regional chaos since it is battered for arms, will not be touched

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by the sanctions even if imposed. This decision to sweep under the carpet the systematic disappearance of one of the vital rainforests in West Africa plundered indiscriminately to facilitate the region’s destruction and finance internal repression, was a regrettable one. It is evident that logic and peacebuilding were not the factors considered in sanctioning the plundering of the rainforest, but appeasement of the French and the Chinese in their campaign to further exacerbate Liberia’s already worsened economic and environmental degradation. But the long-term effects of this terrible example of vested-interest will come to hunt the global community after Taylor and his foreign partners are gone, leaving behind unimaginable misery. It is this vested-interest that laid the pillars of West Africa’s destruction because world leaders and global actors discounted decency and human rights considerations in enthroning some of the worst abusers as leaders in Liberia. If Liberia had enjoyed the world’s attention as Sierra Leone did – courtesy of the British government – criminals bent on wiping out the Liberian rainforest would have not been positively portrayed as ‘enlightened,’ and ‘colourful politicians’ as some key Democrats in American political establishment once described Taylor (Kamara, 2001). The children of Sierra Leone, Guinea and Liberia itself would have been spared the inhuman treatment meted out to them by a bunch of gangland figures spreading despair for personal wealth.

Vigour of Vandalism The social dislocation from the state which was perpetuated during the country’s armed conflict that ended in 2003 can be seen in models developed in Max Weber’s theory of the state and William Reno’s theory of weak states. These explanations show logically the effects of the Liberian war – one which has been described as one of the wackiest, and most ruthless of all Africa’s civil wars (Johnston, 2004, p. 442). Predatory foreign firms and rent-seeking elites have undermined state institutions for private gain, leaving the feeble citizens vulnerable to insurgency while rulers and firms remain able to benefit financially. In barely a year the euphoria that greeted Liberia’s post-war democratic dispensation gave way to deepening crisis and complex challenges. Liberia’s 14-year fratricidal war has left in its wake a large militarized youth population. Of the 103,914 ex-combatants and people associated with fighting forces disarmed, only 28,000 weapons (UNMIL, 2004) were collected in a war that lasted for 14 years and fought by more than 10 warring factions. A significant number of excombatants still influenced by their commanders are engaged in organized crimes in most large cities of Liberia, particularly in Monrovia, Buchanan, Zwedru, and Tubmanburg. A second challenge is entrenched inter-ethnic hostility. Liberia’s civil war was in the main a product of the country’s fragmented and hostile ethnic relations, tempered by neo-patrimonialism. Hitherto instrumental inter-ethnic conflicts have assumed symbolic and primordial significance given the alleged mutual desecration of shrines and other symbols of significance by rival ethnic groups.

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This is particularly true for the Poro practicing ethnic groups who accused the Muslim practicing Mandingo ethnic groups of desecrating their shrines. As a consequence, 11 of Liberia’s 16 ethnic groups who have the Poro and Sande traditions have mobilized a ‘pan-Poro’ revolt against the Mandingoes. In addition to primordial interests, inter-ethnic hostility has become an alibi for individuals bent on perpetuating the culture of loot and vandalism to occupy lands and houses belonging to rival ethnic groups. Repatriating, resettling, and reintegrating over 50 per cent of its citizens displaced both internally and externally is Liberia’s third post-war challenge. At one point during the civil war over, 1.75 million of Liberia’s 2.5 million prewar populations were displaced as refugees across the globe (see ICG, 2003). Land disputes, contention over housing and property rights, women’s [especially widow’s] rights to land, rekindling of war-related traumas and consequential reprisal attacks are no longer risk factors but growing problems that need urgent response. This phenomenon is rife in communities where basic social services like the provision of health services, education, safe drinking water, and electricity among others, are non-existent. The fourth but most explosive post-war challenge is the illegal exploitation of natural resources. The Liberian civil war, in which multiple warlord and insurgent groups battled for the control of mineral-rich zones of the country, reinforced the long-held mentality that violence is the ultimate instrument in the management of natural resources in Liberia. An estimated 36,000 persons, 1,000 of whom are ex-combatants, still occupy the Guthrie Rubber Plantation in Western Liberia while at least 5,000 persons including 600 ex-combatants have laid claims to the Sinoe Rubber Plantation. Another estimated 30,000 persons including foreign nationals were, at the time of writing this contribution, still plundering Liberia’s internationally reserved Sapo National Park for gold, diamonds, and endanger species (UN Secretary General, 2006). With the militarization of the state, long years of vandalization of natural resources and heightened expectation amongst ex-combatants and ‘host communities’ that they are entitled to stakeholder tangible benefits, natural resource conflicts are likely to remain a major security threat to the Liberian state. Many critics argue that Liberia’s new democratic dispensation tend to be based on traditional ‘winner-takes-all’ and ‘winner witch hunts loser’ politics. Opposition parties feel left out of the rebuilding of post-war Liberia. A large number of competent Liberians who belong to rival political parties feel and complain of being marginalized because of their differing political views. National reconciliation is severely undermined by this feeling of exclusion (whether perceived or real) within Liberia’s so-called political class. While different structural causes laid the foundation for the Liberia civil war, the drivers and mobilizers of people for the war were disgruntled political elites. What seems to complicate Liberia’s internal challenges is prevalence of a turbulent and highly volatile Mano River region. For 14 years Liberia served as the ‘eye in the regional storm’ (ICG, 2003), exporting violence while at the same time igniting already combustible conflict factors in neighboring countries.

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The economic, social, political, and environmental disruptions caused by that experience remains a crucial challenge.

The Role of International Agencies The struggle for control of minerals and other natural resources is an important source of revenue in conflict. Rulers and warlords have used exclusive contracts with foreign firms to regularize sources of revenue, in lieu of a government agency to collect taxes (Nafziger, 2002, p. 157). Liberia as a nation attracted shady firms whose interests involved the extraction of primary commodities linked to the weapons trade. The international dimension exacerbated and prolonged the Liberian civil war by adding significant sources of capital and wagons for non-state insurgencies (Johnston, 1994, p. 443). Such countries as France, the Netherlands, Indonesia, Malaysia and Ukraine were among the nations that created a market for these resources, controlled by few elite in Liberia for their own benefit. (Kamara, 2001) Should the United Nations be held responsible for not imposing immediate sanctions on Liberia’s timber and logging industries, and excluding countries that have created market for the sale of these illegal resources? This question will not be explored in this chapter as it forms a different level of discussion. Liberia, like any other collapsed states, was at the crossroads of an international conspiracy. Despite serious international opprobrium and indictment during the 14 years war, Liberia found receptive audience in countries like France, Malaysia, etc., which had been dominant in Liberian industries at different levels. It is therefore no coincidence that most of these countries greatly increased the presence of their organizations and agencies during this period under the guise of humanitarian assistance and support. Further to the exploitation of Liberia, some Western countries hunted by the guilt of their duplicity, saw foreign aid as a vehicle of restitution, righting past wrongs and buying pardon. Without doubt, this humanitarian device seemed immensely gratifying to all parties. The net result, however, was that the international aid process in Liberia was turned into a bizarre showcase of humanitarian commercialism. This was, in many instances, motivated by selfinterest, ill-intention and strategic calculations. Liberia was used as a guinea pig or test ground for diverse models of reconstruction and peacebuilding activities, many of which were new initiatives that had not been tried elsewhere. The consequences have not been altogether pleasant, not least because of the contradictions and externalities that generally attend to donor-driven development intervention. The conduct of many aid agencies and their bureaucracies are, to say the least, deplorable. Most of these aid agencies have at least one thing in common: an uncanny ability to sense the prevailing mood in the donor countries and to adapt themselves to it. For instance, if humanitarianism is in the air, then they will make humanitarian statements, if environmental movements seem to be gaining political support, then the agencies will inject some ecology into their rhetoric (Hancock, 1997); if it is the concept of a welfare support which is on the

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ascendancy in the donor countries, the agencies will highlight their own role in the international redistribution of wealth and will accordingly plan along that line in the development process. Where conservative market values enjoy resurgence, then notions like structural adjustment and ‘poverty eradication strategies’ as we have seen with the development intervention programmes of the Bretton Woods institutions, are promulgated, ventures of private enterprise are extolled, and market forces are assigned a god-like omnipotence. In this way, leading agencies use western aid to create profit for Western companies.

Who Benefits from Liberian Resources? Public money is like holy water, every one helps himself to it (Hancock, 1997)! Who are the beneficiaries from Liberia’s resources? Is it the Liberian people or aid agencies and their staff and donor countries, or, further, Western companies who came as investors and agents of trade in weapons? Many concession companies operated in Liberia’s various industries, but neither the communities nor the population as a whole benefited from the export of the natural resources; less than 14 per cent of all taxes assessed were actually paid into government accounts and used to fund constructive governmental functions and social development (Concession Review Report, 2005, p. 34). Some local communities were terrorized by these concession companies, who funneled part of their profits from resource exploitation into the support of different war factions and private militias. The powerful local actors and warlords were in strong collusion with the so-called foreign investors: ‘[today] they are in high places doing business with international investors; tomorrow, they are with rebels in the jungle and some time flying away to their carefully prepared retirement homes in Western countries’ (Hancock, 1997, p. 181). Their embezzled fortunes would have long ago gone out ahead of them, usually to Switzerland, or to the United State, or some Western banks for safekeeping. As former US Treasury Secretary, Don Regan, accurately put it when speaking of America and the mighty green back: ‘we have become a haven currency and a haven country not only for people, but also for their money’. This is how the game works; public money levied from poor people’s labour in the form of trade and resource exploitation is transferred to the rich countries in the form of foreign trade. The rich in the poor countries or the elite collect the proceeds and then send it back for safekeeping in banks to the rich countries. The real trick, throughout this cycle of expropriation, is to maintain the pretence that it is the poor in the poor countries who are being helped all along by creating jobs for them in there communities, which is far from the reality (Hancock, 1997). The winners and beneficiaries of Liberia’s resources are the main players – the Western countries and their firms and the Liberian elites who manage to keep a straight face while building up a billion-dollar bank account in foreign countries. Another beneficiary could be the donor’s countries. The really clever players are those who have understood that every dollar of development assistance that comes into the country, whether through the national government or aid agencies,

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creates an opportunity for undetectable personal enrichment. Even when donor countries insist on closely supervising the expenditure of the particular funds they have provided, this is not an obstacle to the enterprising fiddler who knows the meaning of the word ‘fungibility’.

Conclusion This chapter shows how Western countries and their investing companies have exploited and benefited from Liberia’s natural resources and war economy. Instead of helping to rebuild the collapsed economy and institutions, foreign firms and the Liberian governing elites have tended to be more interested in exploiting and trading on timber and other primary commodities. The lucrative business in natural resources is beneficial to both the local and international elites, a malpractice that thrives at the expense of the majority of the Liberian people. Despite enormous personal profits, Mr Charles Taylor (the ex-Liberian warlord and president) and his associates had an incentive to allow Liberia’s formal economic and political structures to decay, thereby limiting political and economic opportunities for ordinary Liberians. Throughout most of Liberia’s pre-war and war-time history, the civil society and the local population were not only denied empowerment, but in some cases were actually expelled from their areas, or had their livelihood damaged by the behaviour of concession holders. Crops were damaged, people were threatened by militias and salaries were unpaid, leaving the entire country vandalized. This is because natural resources, coupled with an increasingly global trade and an emphasis on deregulation of commerce provide the currency to acquire weapons and to enrich leaders of various war factions. Some scholars articulated empirical evidence from events in Liberia and elsewhere to argue that the presence of natural resources tend to prolong the duration of civil wars, but not to cause them (Ross, 2004, p. 5). Clearly, natural resources and the correlated rents tend to have had an aggravating effect on the Liberian civil war and political transition. A positive transformation of the dysfunctional status quo would require the following: •

• • • • •

The Liberian people should be empowered with ownership of the natural resources; these resources belong to the people and not the few members of the governing elites who hitherto use them as sources of state patronage. When natural resource-related public assets are privatized, revenues should be deposited in a national investment fund. Structural devolution of political and economic power and resources should be promoted through state legislation and policy implementation. Line ministries dealing with natural resources should be separated from concession/holdings and future parliamentary oversight should be ensured. The Ministry of Finance should manage revenues and the natural resource line Ministries should do the long-term planning for the resource sector. Maximum transparency of revenues and transactions should be ensured.

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A strong legal framework that supports privatization and economic development outside of the natural resource sector should be developed.

The new democratic dispensation in Liberia that came into place in February 2006 presents a great opportunity for constructive political, constitutional and economic reforms. The post-war reconstruction of Liberia and the country’s future will likely be better served if natural resource ownership and revenue management are treated as an integral part of the process of developing new structures.

References CIA (2007), ‘World Factbook: Liberia’, http://www.odci.gov/CIA/publications/factbook/ geos/li.html. Concession Review Report (2005), Liberia, http://www.globalwitness.org/media_library_ detail.php/389/en/global_witness_welcomes_the_report_of_the_forest_c. ICG (2003), ‘Liberia: Security Challenges’, ICG Africa Report No. 71, Freetown/ Brussels, http://www.humanitarianinfo.org/Liberia/services/security/reports/docs/ ICG-report%20on%20Liberia.pdf. Global Witness (2002), ‘Logging Off: How the Liberian Timber Industry Fuels Liberia’s Humanitarian Disaster and Threatens Sierra Leone’, http://www.globalwitness.org/ reports. Global Witness (2006), ‘Breaking the Links Between Natural Resources and Conflict in Liberia: 2000 to 2006’, http://www.Global Witness Campaigns Diamonds.mht. Hofstatter, B. (2001), ‘Liberia: Trade, Environment, and Conflict’, ICE Case Number 82, LIBERIADIAMONDS. Hancock, G. (1997), Lords of Poverty, London: Cox and Whyman Ltd. Johnston, P. (2004), ‘Timber Booms, State Busts: The Political Economy of Liberian Timber’, Review of African Political Economy, 101, pp. 441–56. Kamara, T. (2001), ‘Saddam’s Oil and Taylor’s Timber’, The Perspective, 21 April, http:// www.theperspective.org/saddam_taylor.html. Nafziger, W. (2002), Economic Development, Inequality: War and State Violence, Manhattan, KA: Kansas State University Press. Pelton, R.Y. (2000), ‘Liberia: The Country’, http://www.comebackalive.com/df/dplaces/ liberia/index.htm. The Perspective (2000), ‘Investigative Report on Oriental Timber Corporation’, The Perspective, http://www.theperspective.org/otc.html. Sawyer, A. (1992), The Emergence of Autocracy in Liberia: Tragedy and Challenge, San Francisco: Institute for Contemporary Studies Press. Standley, J. (2000), ‘Sierra Leone’s Rescued Child Soldiers’, 30 May, BBC News, http:// news.bbc.co.uk. UN (2001), Report of the Panel of Experts Appointed Pursuant to UN Security Council Resolution 1306 (2000), Paragraph 19 In Relation to Sierra Leone, New York: United Nations. UN (2006), ‘Thirteenth Progress Report of the Secretary-General on the United Nations Mission in Liberia’, December, New York.

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Chapter 10

Resource Exploitation, Repression and Resistance in the Sahara-Sahel: The Rise of the Rentier State in Algeria, Chad and Niger Jeremy Keenan

Introduction It might seem a statement of the obvious to say that oil states would be very different places without their oil revenues. Imagine what Saudi Arabia and its neighbouring Gulf States might be today if it had not been for their vast endowments of oil. And would not an Algeria without hydrocarbons be a very different country from what it is today? Algeria’s War of Independence (1954–1962), in which an estimated one million (and possibly more) Algerians were killed, would almost certainly not have been contested so bitterly or for so long. Its post-independence economy would have been radically different, as would its demographic, social and political structures. Geopolitically, it would not find itself being wooed by Russia, the USA, China and the EU, nor would it have become the repressive and potentially-explosive sub-imperial power that has played a significant role in the current ‘global war on terror’ (Keenan, 2006a, 2007) and, in so doing, done much to destabilize both the Maghreb and the Sahel. It is also possible that the vicious struggle between Islamic militants and the country’s military, Algeria’s so-called ‘civil war’ (the Arabic word fitna is more appropriate) of the 1990s, might also not have happened, and if it had, it would almost certainly have been resolved much more quickly and with much less loss of life. Chad, without its oil, would also be dramatically different from what it is today. Without oil, Chad, or at least its citizens, would certainly be no poorer than they are today. Nor would it have reached the top of Transparency International’s ranking of the world’s most corrupt countries, albeit with a little encouragement from the world’s largest oil major (ExxonMobil) and the World Bank, along with a wink and a nod from its former colonizing power, France. Like Algeria, it would now almost certainly be experiencing less internal conflict, rebellion and death. In other parts of the Sahel, notably Darfur, Niger and Mali, natural resource endowments play a significant role in the explanation of most of the recent and current rebellions and, as in the case of Darfur, the slaughter of innocent civilians.

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In Niger, the colonial and post-colonial exploitation of its natural resources, notably uranium and oil, is the root cause of the country’s latest rebellion.

Algeria: More than Just a Scratching in the Sand Although oil production in both Chad and Niger is miniscule in global terms, oil, and in Niger’s case also uranium, dominate their respective political economies. Algeria, by contrast, is a major player on the world’s hydrocarbons market. It is the fifteenth largest oil producer in the world (eighteenth in terms of reserves) and the fourth largest gas exporter in the world (eighth in terms reserves).1 Thanks entirely to its hydrocarbons output and recent high oil and gas prices on the world’s markets, Algeria is close to being ranked in the world’s top ten richest countries in the world, if measured solely in terms of foreign exchange reserves. With its international debt almost entirely repaid,2 its FOREX reserves3 at December 2006 stood at $78 billion (fifteenth in world). Some estimates now (mid-2007) put them at around $100 billion, ranking Algeria at around tenth–twelfth in the world.4 This economic clout, backed by a significant military-security establishment, makes it Libya’s major competitor for ‘sub-imperial’ influence over the poverty-ridden but strategically important states of the Sahel. Following the Anglo-French Convention of 5 August 1890, at which the British effectively agreed a French takeover of the Sahara, the British Minister Lord Salisbury had joked that the French Sahara ‘is what a farmer would call “very light land” … We have given the Gallic cockerel an enormous amount of sand. Let him scratch it as he pleases’ (Porch, 1984, p. 127). Just over 64 years later, in the early hours of 1 November 1954, the first shots were fired in what was to become Algeria’s War of Independence. We can perhaps imagine the course that the war and Algeria’s subsequent development might have taken had not the outbreak of war more or less coincided with the discovery of hydrocarbons. In 1953, a year before the outbreak of the war, the first oil exploration permits had been given to four big French companies: la Société Nationale de Recherche et d’Exploitation des Pétroles – Algérie (S.N. Repal), la Compagnie Française des Pétroles – Algérie (CFPA), la Compagnie de Recherche et d’Exploitation Pétrolières au Sahara (CREPS) et la Compagnie des Pétroles d’Algérie (CPA). The first hydrocarbons, in the form of massive gas reserves estimated at 100 million cubic metres, were found in 1954 at the Djebel Berga, just to the south of In Salah. At the time, they lacked a commercial outlet. Far more significant, however, was the first oil discovery in January 1956 at Edjeleh in the In Amenas region close to Fort Polignac (today called Illizi) and immediately to the north of the Tassili-n-Ajjer. Algeria’s biggest oilfield, Hassi Messaoud, was discovered five months later (June 1956). Lord Salisbury’s sand was now no longer ‘light land’, but unless France took drastic actions it would only have a handful of years in which to scratch in it as it pleased. The oil discoveries provided a strong motive for both intensifying the war and for finding a way of separating the Saharan regions from the rest of Algeria and turning them into a separate entity that could be retained by France.

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This project exercised minds in the highest levels of the French state throughout 1956. Then, on 29 December Houphouët Boigny, the future President of the Ivory Coast but at that time a Minister of State in Guy Mollet’s government, presented the government’s plan to the National Assembly for approval. Less than two weeks later, on 10 January, the law creating the Organisation Commune des Régions Sahariennes (OCRS) was promulgated. The OCRS covered more than just the Saharan regions of Algeria. It stretched from the palmeries along the southern foothills of the Atlas Mountains in Algeria, regarded as the northern margin of the Sahara, to the Sahel, and included much of Mauritania and the northern parts of Mali, Niger and Chad. It was France’s last throw of the colonial dice, a desperate but unsuccessful attempt to hold on to its oil discoveries and a semblance of ‘empire’.5 Without the discovery of oil, would the OCRS have been planned? Would Algeria’s struggle for independence and its eight-year war have dragged on for so long and been fought with such intensity and with so many deaths? The answer to all these questions is probably not.

The Emergence of Algeria as a Rentier State Right up until the final agreements on Algeria’s Independence, signed at Evian in March 1962,6 France believed that it could still negotiate some sort of sovereignty over the newly-discovered oil and gas fields in the Algerian Sahara. But Algeria’s negotiators conceded nothing: the Algerian state-owned corporation, Sonatrach, was founded in December 1963, with Houari Boumedienne, who had replaced Ahmed Ben Bella as President in a peaceful coup d’état in 1965, nationalizing all French oil and gas holdings and petro-chemical resources. The nationalization programme was completed by 1971. Thereafter, and especially from the mid-1980s onwards, foreign oil companies wishing to do business in Algeria were obliged to negotiate partnerships with Sonatrach, the giant state-owned conglomerate. Although many Algerians today look back on the Boumedienne years (1965–1978)7 as something of a ‘golden age’, his economic policy, based on the country’s hydrocarbons wealth, paved the way for Algeria’s future economic and associated political crises. His socialist economic policy focused almost entirely on channeling the country’s substantial rents from the hydrocarbon sector, which were generating over 90 per cent of the country’s export earnings, into oversized, massively inefficient, ‘Soviet-style’, state-controlled industrial complexes. The problem with such an industrialization policy was that it was carried out at great speed and not actually financed by the received revenues from Algeria’s hydrocarbons, but by borrowing forward against their rents. This might have worked if the industrial complexes had not been so massively inefficient, developed at the expense of the agricultural sector and small-scale industrial enterprises and, most important of all, if the world oil price had remained sufficiently high to cover the mounting international debt that was financing this policy. Unfortunately for Algeria and other such oil-based rentier states, the high oil prices of the early 1980s8 were not to last. By late 1982, oil prices were beginning to fall, drifting

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down to about $25 per barrel in 1985 from an average of $32 in the early 1980s. Then, in early 1986, a sharp rise in crude oil supplies precipitated a crash in spot oil prices to below $10 per barrel.9 Boumedienne’s successor, Chadli Bendjedid, was aware of the potential weakness of such a rentier-based economy and devoted much of his first years in office to its gradual ‘de-boumedienization’. He prioritized agriculture, which had been ignored by Boumedienne, light industry and the social infrastructure. He also sought to increase the productivity and efficiency of the big state industrial sectors by restructuring them into smaller subsidiaries and more manageable regional entities.10 He also introduced a modicum of market orientation and encouragement to the private sector. Chadli’s economic reforms might have succeeded if the economy had not been so dependent on the price of oil. As it was, the success or failure of his reforms was always more likely to be determined by the vicissitudes of world oil prices than any internal factors. The downward drift in oil prices after 1982 made the reforms difficult; the oil price crash in 1986 effectively scuppered them. The oil price crash took Algeria into an economic crisis, known as the aprèspétrole era, which has had profound political implications on the future political development of the country. Between 1985–1987 Algeria’s oil revenues fell by 40 per cent, from $13 billion to $8 billion, thus making it increasing difficult to service the heavy foreign debt that had been taken on in the 1970s and which now stood at over $24 billion. As the national deficit burgeoned, the debt service ratio leapt from 39.9 per cent in 1984 to 76.9 per cent in 1988. Chadli, however, refused to default on the country’s debt obligations and instead introduced a drastic austerity package which made it increasingly difficult for the state to sustain social services, other welfare capacities and its extensive subsidies. Subsidies on staple foodstuffs were drastically reduced, price controls lifted, wages frozen, imports curtailed and inefficient cooperatives forced to sell off land. Living standards, which were already dire, fell further as the price of most basic necessities that had either been controlled or subsidized skyrocketed. This hardship was compounded by the soaring unemployment that resulted from the dismantlement and privatization of many state enterprises. Between 1985 and 1991 the rate of unemployment increased by an annual factor of 2.9, with the worst affected section of the population being the under-25s: every year 180,000 well-educated youths entered a job market that grew by only 100,000 (Stone, 1997, p. 97). If this was not enough, industrial output fell dramatically, taking most public enterprises into deficit. Algeria’s economic crisis of the mid-1980s did not affect all sections of the population in the same way. Algeria was already becoming a dangerously polarized society between an increasingly powerful politico-military elite and the masses. The burden of Chadli’s reforms and the austerity measures were borne by the masses who were made even more angry by the fact that the state’s increasing corruption enabled the elites to profit rapaciously from the economic liberalization process. For example, the break up of the big state industrial complexes and the first steps towards privatization enabled senior military figures and party officials to gain control of a number of state-owned assets, especially large amounts of formerly

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state-owned land. The result of the latter was that some of best agricultural land was acquired and used for uncontrolled urban development. This, in turn, led to a decline in the nation’s already neglected food supply, with the result that by the late 1980s some two-thirds of the country’s food, in a country which had all the means and potential to be self-sufficient, had to be imported.11 The result of the food shortages and other basic necessities was that prominent elements within the political-military elites, le pouvoir, took control of the black markets in ‘difficult-to-obtain-goods’ (Stone, 1997, p. 97; Martinez, 1998). As the economic situation worsened, corruption amongst the nomenklatura became rife, with the food distribution system becoming controlled by a handful of individuals, most of whom were in the upper echelons of the military or closely associated to them. The social outcome of Chadli’s reforms was a deepening of the existing social divisions, making Algeria an even more dangerously polarized society. Some measure of the extent of social inequality in 1988 was that 5 per cent of the population earned 45 per cent of the national income while 50 per cent earned less than 22 per cent. Poverty and pauperization were widespread: 46 per cent of the country, some 14 million people, lived below the international poverty datum line of $2 per day. By the 1980s, Algeria had fallen to the bottom positions in the Arab world in terms of indicators such as unemployment, information society and productivity.12 However, this polarization of Algerian society was more socially divisive and more politically explosive, as Algeria was soon to find out, than such raw statistics suggest. 70 per cent of the ‘masses’ were under the age of 30 and the majority of them were unemployed. They were also angry at the extent of the corruption and self-aggrandizement of the political-military and administrative elites. Although the corruption of these elites can be traced to earlier eras, the mismanaged attempts to liberalize the economy in the 1980s gave them the means and processes to accumulate and to entrench the structures that enabled the military to expand its economic interests and infiltrate itself into the economic fabric of the country. Indeed, the cause of Algeria’s economic woes, especially those which were to transcend into the political domain, stemmed as much from its dependency on collapsing oil revenues as from the country’s failure to transform its political structures and, more especially, the behaviour (i.e. ‘corruption’) of those in power and who controlled the oil rents. As the last comment suggests, Algeria’s ‘décennie noire’ (black decade), as the 1980s were known, was more than just an economic and social crisis; it was also profoundly political. The fundamental division of Algeria society between the ‘elites’ and the ‘masses’, characterized by the elites’ pervasive mistrust of the masses and the latter’s hostility of the elites, has been manifested throughout the history of independent Algeria but masked at various times and in varying degree by the politics of nationalism, populism, personalization and socialism. While Chadli’s economic liberalization measures increased the burden on the masses, they provided the elites with the opportunity and means to reinforce their ideological, political and military elitism with raw economic muscle. But, as the elites’ accelerated accumulation in the Chadli era was based largely on naked

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corruption, it not surprisingly strengthened their distrust of any form of political opposition, as demonstrated in the military’s response to the unrest of October 1988 and the political discourse that opened up in the subsequent three years. Unrest that had been growing since 1985 exploded in 1988. Strikes that had paralyzed many of the country’s major cities, especially the industrial suburbs of Algiers, came to a head in early October when, in spite of a state of emergency, protests and then rioting spread from Algiers to most of the country’s other main cities as Islamic fundamentalist leaders organized the crowds in post-prayer demonstrations. In cities and towns across the country, symbols of the state came under attack. City halls, police stations, ministerial buildings, post offices, luxury hotels, the offices of the national airline, state-owned vehicles and supermarkets, occasionally the Law Courts, and anything else that represented the regime or the FLN was attacked and destroyed. The security forces reacted violently, opening fire on public gatherings. Some 500 people were estimated killed, at least 3,500 arrested, including many children, and a large number tortured. However, far from silencing the opposition, the state’s ruthless repression empowered it. ‘Black October’, as it became known, was a turning point in Algeria’s history. The regime was shaken and its security forces lost whatever remained of their largely mythologized role as the ‘honourable guarantor of the revolution’.13 Chadli accepted blame and promised a wide-ranging programme of further economic reforms as well as substantial political reforms. His political reforms set off what Martin Stone (1997, p. 68) described as ‘the most promising and inspiring phase of political life since Algerian independence. Civil society burst into life for the first time since 1962 and the world watched fascinated as Chadli appeared set to establish the first genuinely pluralistic society in the Arab world’. Chadli’s political reforms were to culminate in December 1991 in an even greater crisis that was to take the country into civil war. The crisis centred around the Front Islamique de Salut (FIS), a radical Islamist party, which, in the space created by Chadli’s political reforms, had convened itself as a political party in February 1989. In the following year, it contested the municipal and provincials elections (12 June 1990), taking 55 per cent of the popular vote and winning 853 of the 1539 municipalities and 32 of the 48 wilayas (provinces). Eighteen months later, on 26 December 1991, it contested the general election, winning 188 of the 231 seats decided outright in the first round. The FIS needed only 28 of the 199 seats being taken to the second round on January 16 – a certainty – to become the world’s first ever democratically elected Islamist government. Algeria was facing her greatest political crisis. What to do? The solution, at least for the generals, was to annul the election results in what was effectively a military coup d’état in all but name. The extraordinary and complex events that followed this intervention go beyond the bounds of this chapter. Suffice it to say that they took Algeria into perhaps its greatest ever crisis: a civil war between the Islamists and the security forces which, although now much reduced from the horrific violence of the 1990s, has already claimed an estimated 200,000 lives and is still not entirely over.

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However, there is a key question about this war which is central to this chapter. Quite simply: would the war have run the course it did had it not been for Algeria’s hydrocarbons? We can, of course, argue that if it had not been for the rentier nature of Algeria’s economy, there would have been no such oil-inflicted crisis in the mid-1980s, no ‘Black October’, no rise of the FIS, no annulment of the 1991 elections and no civil war to start with. But the fact is that the hydrocarbons sector has been the mainstay of Algeria’s political economy since independence. It also played a pivotal role in rescuing the military regime from its most critical juncture in the war. Algeria’s civil war began with the country facing foreign debts of $26 billion. Debt servicing in 1992 was running at $8 billion per annum compared to revenue of $12 billion. In the following year, revenue fell to $9 billion, effectively bringing the regime to the state of bankruptcy. Algeria’s military rulers had no choice but to turn in 1993 to the IMF, which, given the country’s hydrocarbons assets, was only too willing to help. One of the strangest incidents in the war took place at the end of 1994. At more or less the same time as the military regime had agreed the conditions of its loan from the IMF, whom we might suppose would have welcomed a peaceful settlement to the war, the main opposition parties, notably the FIS and FFS,14 along with the FLN,15 along with a number of key Algerian and international personalities, met in Rome under the auspices of the Catholic Community of Sant’Egidio to agree on a ‘Platform for a political and peaceful solution to the Algerian crisis’.16 However, the initiative failed, primarily because the army, a key player on the Algerian stage, did not attend the talks. Why would the army, which was presumably fighting for an end and peaceful resolution to the conflict, effectively sabotage this initiative? The answer was that the army, and the regime which it controlled, was in the hands of a group of generals known as the ‘eradicateurs’ who were intent on destroying the Islamists. The assistance given the generals by the IMF through a debt rescheduling agreement released considerable financial resources, some $10 billion per annum, which they could use to finance their war strategy against the Islamists. Thanks to this financial windfall, the military, which by early 1994 had been on the retreat, now knew it could achieve its policy of ‘eradication’. It consequently had no intention of discussing peace in Rome or at any other forum. The conditions of the IMF’s debt rescheduling were a Structural Adjustment Programme (SAP) involving an extension and deepening of Chadli’s initial economic reforms, namely: the liberalization of trade; the ending of state subsidies on consumer goods; the devaluation of the Dinar and the privatization of state enterprises. While the SAP intensified the burden already being borne by the masses,17 it provided the generals with a path to victory. It enabled them to purchase arms and strengthen their repressive apparatus, to expand their patronage network and to respond to both internal and external demands from the private sector. The internal demands of the private sector involved a number of moves. One was to buy off the Chadli leadership, which had been forced to step down by the army strongmen who annulled the 1991 elections.18 The loyalty of many

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army officers was also ensured by providing them with new business interests. Many army officers who ‘resigned’ in this way were assisted in buying hotels and restaurants or made managers of state enterprises. French financial consultants estimated that $1billion of the $7billion external loans between 1994–1995 ‘vanished into thin air’. Another was to extend military control over the internal market economy, which effectively became a parallel or auxiliary means of warfare in that it enabled the regime to extend its patronage and hence gain support from moderate Islamists, such as Mahfoud Nahnah and the Hamas Party,19 as well as enabling it to co-opt the support of certain local ‘warlords’, or ‘emirs’ as they were known, by allowing them to establish export-import companies20 and expand their control over black market and smuggling (‘trabendo’)21 activities,22 which increased their funds and hence their fighting abilities.23 The external demands focused almost entirely on private foreign investors interested in expanding existing or taking new stakes in Algeria’s potentially lucrative hydrocarbons sector. The Algerian regime’s reform of its oil sector in 1991, followed by the 1993–1994 IMF negotiations, opened the way for a number of these private partners, mostly US oil corporations, to invest in Algeria’s oil and gas industry. In doing so, they were giving much-needed support to the regime, its repressive apparatus and its ‘eradicateur’ policy. Although several US and other foreign oil companies had established interests in Algeria before the 1991 crisis, it was from this period onwards that the US became a critically important and strategic client of the Algerian regime.24 Not all these investments, however, were above board. A particularly significant investment, which now lies at the heart of Algeria’s political scandals and difficulties, was made in 1994 by the US Halliburton company.25 Through its subsidiary Brown & Root, Halliburton set up a joint enterprise operation in 1994 with Condor Engineering Spa, a subsidiary of the Algerian national oil company Sonatrach. The joint enterprise, known as Brown and Root Condor (BRC) was established with a reported capital of 368 million dinars (US$8 million), of which Halliburton held 49 per cent and Sonatrach 51 per cent. BRC, however, was involved in much more than just the hydrocarbons sector. Its main contracts, which are not yet all disclosed, centred on the construction and provision of the repressive mechanisms of the militarysecurity establishment, such as military bases, police and intelligence service infrastructure, communications and electronic surveillance systems, etc. In 2006, Algeria’s President ordered a judicial investigation into BRC’s activities in the country, notably its alleged over-invoicing of service provisions on some two dozen or more major oil, military and security, mining, industrial, real estate and related projects which were granted to it without tendering, as is required by Algerian law (Laribi, 2006a). The international financial backing of Algeria’s military regime further embittered the Islamists in their struggle against the Algerian state and has done much to incite and legitimize their current struggle against the US itself.26 Indeed, as far as al Qaeda’s alleged current activities in Algeria are concerned,27 the public revelation that the General Staff’s sophisticated communication system, provided by BRC, was ‘permanently connected to the American and Israeli electronic

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intelligence systems’ (Laribi, 2006b) appears to have further infuriated and hardened Algerian Islamic militants in their jihad against the US and its allies. Most analyses of Algeria’s post-1988 crises and the theorization of its economy have been articulated around the concepts of a rentier state, an administered economy, a ‘plunder economy’ and even a ‘bunker state’. By this time, Algeria was a rentier state par excellence: By 2000, two thirds of its budget revenues, over 40 per cent of its GDP and over 97 per cent of its export earnings were being derived from its hydrocarbons sector. With the increasing world price of oil over the last few years, both Algeria’s wealth and dependency on hydrocarbons have become even greater. The IMF assistance and foreign investments in the oil sector during the 1990s were used to finance the regime’s war against the Islamists, not to reduce the national debt, which, by 2000 was little changed from the $26 billion which had brought the regime to bankruptcy at the beginning of the war. However, thanks to the oil price, this debt had been almost entirely paid off by 2006, and with FOREX reserves now (mid-2007) standing at an estimated $100 billion, this new found wealth, especially since the beginning of 2006, has given the Algerian regime the means both to strengthen its military-security and repressive apparatus and to conduct its foreign affairs and sub-imperialist strategies (see below) with an increasing independency from the constraints and considerations of its post-9/11 alliance with the US in its ‘global war on terror’ (GWOT).28 The notion of a ‘plunder economy’ was and still is an especially apt description of Algeria’s economy, not simply because of the way in which the hydrocarbons rents are ‘plundered’ and managed exclusively by the regime, but, especially since the IMF privatization policy began to bite in 1994, in the way in which both the emirs and military personnel had their hands on resources29 and were thus both able to maintain the violence. An even more apt concept to describe the Algerian state, especially as it has developed since the 1988 and 1991 crises, is that of a ‘bunker state’. ‘Bunker states’ were defined by Henry and Springborg (2002, p. 100), in what might well have been a description of Algeria, as ‘praetorian republics ruled physically or metaphorically from bunkers’. These states display the least institutional capacity of any of the MENA (Middle East and North African) states to manage their economies. [They] have the largest informal economies … Tax revenues outside the oil sector are low, and some of those revenues are being siphoned off to ruling factions … The technocrats of these regimes have little opportunity to make or even influence policy, as the ruling clans typically filter and distort economic information. No significant economic establishment, public or private, eludes the predatory rulers, although some firms … enjoy special protection. Private entrepreneurs may accumulate capital, but only so long as they enjoy the special favour of those who control the military or security services. (See also Dillman, 2000, pp. 11–15)

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Chad: Somewhere Beyond the Last Chance Saloon (Keenan, 2005) Chad has recently joined Algeria as another classic example of a rentier (or ‘bunker’) state. In fact, over the last few years, Chad has become the supreme example of all that has gone wrong in trying to use the oil exports of a less developed country to reduce its poverty and improve the living standards of its poorest citizens. One of the biggest issues facing global development is that oil exports have contributed so little to the welfare of developing countries. The ‘paradox of plenty’, or the ‘resource curse’ as it is generally known, is that countries rich in natural resources, especially oil, tend to suffer from lower living standards, slower growth rates and higher incidence of conflict than their resource-poor counterparts. Between 1970–1993, for example, resource-poor countries, without petroleum, grew four times more rapidly than resource-rich countries, with petroleum, despite the fact that they had half the savings (Auty, 1997). The World Bank and International Monetary Fund (IMF) have both confirmed that the greater a country’s dependence on oil and mineral resources, the worse its growth performance (Harvard, 1995; Leite and Weidman, 1999). The World Bank, as a significant source of financing for oil and gas development projects in developing countries, has for some time been at the centre of a global debate about the relationship between the extractive industries and poverty and the proper roles and responsibilities of international institutions, oil companies and civil society in addressing this problem. As the debate intensified during the 1990s, neither the oil companies nor the World Bank and its associates fared too well. Indeed, with the evidence stacking up so heavily against them, it was becoming increasing clear that they were nearly always part of the problem, rather than the solution.

The Chad Experiment30 Those, who, at the end of the last millennium still had some faith left in the World Bank-IMF and its associated donor systems, as well as the ability of hydrocarbons to lift developing countries out of poverty, were desperately looking for a model of how to make petroleum work for the poor. Their answer was Chad. The Chad Cameroon Petroleum Development and Pipeline Project (CCPP) was set up and designed to show that petrodollars really could be used to alleviate poverty. For both the World Bank and the oil companies, going into Chad was like going into the Last Chance Saloon (Keenan, 2005). It was the great experiment: the proof that the ‘resource curse’ really could be broken. The technical details of the project were relatively straightforward. Significant oil deposits had been found in southern Chad. Reserves of the Miandoum, Bolobo and Kome fields in the Doba basin are put at over 1 billion barrels. ExxonMobil31 planned to add five new ‘satellite’ fields in 2005–2006. As Chad is landlocked, the only way to export the oil is by a 1,070 km pipeline that runs from Kome in

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southern Chad across Cameroon to the Atlantic coast at Kribi: 890 kms of the pipeline are in Cameroon. The pipeline was completed in July 2003, 14 months ahead of schedule, with ExxonMobil making its first royalty payment to Chad’s escrow account at Citibank in London later in the year. Production from the three Doba fields reached peak capacity of 225,000 bpd in late 2004. At the end of 2004, it was estimated that Chad was likely to receive $140–150 million during 2004 and more than $200 million in 2005. At that time it was anticipated that these first three fields might earn Chad more than $5 billion over their proposed 25-year production span, with further substantial revenues flowing to Chad from fields falling outside the three Doba fields specified in the project. As it has turned out, revenues have been substantially higher. In September 2006, it was reported that as at mid-2006, Chad had earned a total of $648 million. For 2006, $350 million were anticipated from royalties and a further $140 million from corporate taxes. For 2007, Chad is anticipated to receive $1.3 billion from corporate taxes alone. The World Bank provided financing that catalyzed the ExxonMobil-led project. Originally costed at $3.5 billion, ExxonMobil confirmed in October 2004 that the total project cost had risen to $4.2 billion. Against widespread public concerns, the World Bank promised that the new oil revenues would not be lost to corruption (in spite of Chad’s ranking at that time as the third most corrupt country in the world) or mismanagement, but that petrodollars would be channelled to Chad’s poor. The Bank’s promise, which it described as ‘a major new opportunity to accelerate development in one of the world’s poorest countries,’ was based on the ingenious but seemingly simple and straightforward ‘Revenue Management Plan’ (RMP). The RMP was the key feature of the new legal framework, known as Law 001, established to manage the Project. The principles of the RMP were that: •

•

all direct revenues – royalties and dividends – were to be paid by the ExxonMobil consortium into Chadian government-controlled escrow accounts at Citibank in London; indirect revenues – income taxes on the oil companies, customs duties, etc., were to be paid directly into Chad’s treasury.

After debt repayments to the World Bank and the European Investment Bank had been withdrawn from the Citibank account, the remaining direct revenues were to be allocated as follows: • •

•

10 per cent to a Future Generations Fund to save for the post-oil era in Chad; 72 per cent to capital investments in five ‘priority sectors’ to fight poverty: education, health and social services, rural development, infrastructure, and environmental and water resources; 4.5 per cent to the oil-producing region in Southern Chad as additional, earmarked funding;

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13.5 per cent to Chad’s treasury for discretionary spending, until 2007; thereafter, these funds were to be divided among the priority sectors; a joint government-civil society Petroleum Revenue Oversight and Control Committee – known as the Collège – would be established with the authority to approve or reject specific projects financed by direct oil revenues.

Many, especially the participants, hailed the Chad project as a ‘new model’ for harnessing oil revenues to benefit development. At the groundbreaking ceremony in 2000, Tom Walters of Esso (ExxonMobil) Chad proclaimed: We know that profound poverty is an unfortunate reality in much of Africa. Its alleviation requires private investment, collaboration and responsible governmental policies. The Chad-Cameroon Project embodies all these elements. It offers great hope to the people of these two countries and we are proud to be involved now and in the future.

Two years further on, the Central African resident representative of the International Finance Corporation (World Bank Group) claimed that the Chad experiment was ‘going to be the model for every single project of this type worldwide’. And, at the inauguration of the pipeline in 2003, Chad’s President, Idriss Déby, claimed that: ‘The development of the crude oil will benefit the entire Chadian nation.’ The world, especially the development analysts, listened, watched and waited. In February 2005 the Catholic Relief Services and the Bank Information Centre (CRS-BIC) published the first comprehensive report on the CCPP, a year and a half after the project commenced operations (Gary and Reisch, 2005). The report, although perhaps sympathetic to the Chad government, was highly critical of the way in which the CCPP had been executed in Chad. It concluded that: •

•

•

Many of the details regarding the calculation of revenues and many of the key agreements between the oil companies and the Chad government had remained secret. There were many loopholes in the legal safeguards. For example, all ‘indirect revenues’ – including income taxes on oil companies – fell outside the provisions of the RMP and went direct to the government. These would amount to at least $3 billion over 25 years. Nor did the RMP cover any oil produced outside the three original Doba fields. These weaknesses meant that it would be very difficult to verify the accuracy of the revenue information disclosed, and that much oil revenue would fall outside the provisions of Law 001 and the oversight of the Collège. The project’s ‘watchdogs’ were ‘toothless’. The Collège had no legal power of enforcement nor sufficient capacity to track spending through to end use, while the World Bank’s own International Advisory Group (IAG) was largely ignored.32 The IAG had continuously critiqued the two-speed nature of the

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project, whereby construction of the pipeline (finished 14 months ahead of schedule) had far outpaced the urgently required building of the institutional and technical capacity of the Chadian government, which, at the time of the CRS-BIC report, was quite incapable of managing the project, especially its legal and financial components. The IAG’s repeated calls for urgent measures to accelerate capacity-building efforts had gone unheeded. Of the other two Monitoring mechanisms, the External Compliance Monitoring Group (ECMG) was staffed by a consulting firm under direct contract with the International Finance Corporation (the private-sector lending arm of the World Bank group) to monitor the Consortium’s compliance with the environmental management plan. In the case of Cameroon especially, the CCPP was in breach of numerous international environmental safety standards and regulations. The Comité Technique Nationale de Suivi et de Contrôle (CTNSC) was the government body in Chad charged with oversight of the environmental and social impacts of the petroleum sector. The CTNSC suffered serious capacity restraints, financial and organizational difficulties. This was in part because it was heavily reliant on funding from World Bank capacity building loans that had largely failed to achieve their objectives and were now depleted. The Chad government had failed to budget any resources for the CTNSC in 2004 and 2005, casting doubt on its commitment to the monitoring agency and thus making the CTNSC reliant on ExxonMobil’s facilities and data. Given ExxonMobil’s violation of environmental regulations (Keenan, 2005), this was merely another case of getting the fox to guard the chickens.

A general criticism of the project was its rentier nature. Apart from making the country’s economy increasingly dependent on oil prices and thus vulnerable to external shocks, oil sales tend to push up the exchange rate and thus make other exports non-competitive. In Chad’s case, this tendency would impact negatively on the labour-intensive agricultural sector. As the CRS-BIC report noted: As a form of rent, petrodollars decrease the government’s reliance on non-oil revenues, including taxes, and actually weaken one of the links between people and their government, which is essential if there is to be any popular control over major decisions affecting a country and its resources. In such a context, governments tend to rely increasingly on repression through the use of security forces (rather than consent of the governed) to remain in power. Indeed, countries that depend on oil exports are among the most economically troubled, the most authoritarian, and the most conflictridden states in the world today. (Gary and Reisch, 2005)

The CRS-BIC’s central conclusion suggests that ‘extractive industries can only be an engine of equitable growth and poverty alleviation if certain basic conditions are in place before oil or mineral wealth is tapped’ (Gary and Reisch, 2005). In Chad’s case, the fundamental ‘enabling conditions’ of ‘respect for human rights; consent of locally affected communities; adequate government capacity to enforce laws, monitor and regulate the extractive sectors, and demonstrated government

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and corporate commitment to transparency’ (Gary and Reisch, 2005) were and still are all noticeably absent. In early 2005, in reviewing the CRS-BIC report, I wrote: These failures, which must be laid at the door of the World Bank and ExxonMobil, have gone a long way to establishing the sort of framework within which corruption and mismanagement can flourish. Indeed, cynics might suggest that such an outcome is in the misguided interests of all three parties – the ExxonMobil-led oil consortium, the Chad government and the World Bank. Considering the way in which all three parties have ignored the advice that has been given them, it is difficult to counter such a suggestion, although the potential for increased political risk is now very much higher and is likely to become a cause of increasing anxiety to all oil and gas companies in the region. (Keenan, 2005)

In a careful choice of words, the CRS-BIC report concluded that ‘it is too early to declare the Chad experiment a failure or a success,’ but that the experiment ‘hangs by a thread.’ In reviewing the CRS-BIC report, I warned that: That may be optimistic. Quite apart from the findings of the CRS-BIC report, there are other pointers suggesting that oil production in Chad is likely to lead to corruption, conflict and the further concentration of power in the hands of a few. If that becomes the case, then the people of Chad risk bearing enormous costs. (Keenan, 2005)

My comments on the CRS-BIC Report in 2005 (which were not much different from hundreds of other critics of the entire ExxonMobil-World Bank project), now seem mild when we see what has occurred since then. Indeed, this desultory outcome was widely foreseen by those who new the ways and means of the Déby regime, ExxonMobil and the World Bank.33 By 2005, the entire CCPP project was a disaster waiting to happen: that disaster, in the form of widespread social unrest, environmental damage, oil leaks, Chad’s ‘civil war’ and the associated Darfur massacres has now happened. What was clear to most observers from the outset was that Déby had no intention of working within the agreement, but was determined to use the oil revenues to purchase arms and expand his own power base. ExxonMobil, for its part, was preoccupied solely with making profits, through numerous fraudulent practices, the abuse of environmental and safety regulations and the exploitation of the local populations.34 The World Bank acted as normal, failing in its duties of oversight and ultimately protecting US strategic interests. Towards the end of 2005, Déby decided to challenge the World Bank and the agreement. In January 2006 Déby ratified Chad’s National Assembly decision of December 2005 to modify Law 001, the essence of the entire ‘experiment’. Chad was now free to use the oil revenues to buy weapons, which it began doing in February 2006. The World Bank accordingly suspended further loans to Chad, which took Chad by surprise. However, the size of the World Bank loans was little more than an irritant and was more than offset by ExxonMobil’s payment of $66 million in taxes in March 2006.35

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A month later (April 2006) a coup attempt against Déby was overcome thanks largely to French military support. This secured the ‘rigged’ presidential elections of May 2006, which ensured Déby a third term of office, effectively making him ‘President for life’. In June Déby created a national oil company and threatened to replace possibly two members of the oil consortium, Petronas and ChevronTexaco, with Chinese oil companies. This was now a major challenge to the World Bank whose President, Paul Wolfowitz, visited Chad in July. It was a standoff between the World Bank and the President of one the world’s poorest and most corrupt countries. The World Bank blinked first. Wolfowitz signed a Memorandum of Understanding which effectively confirmed that President Déby, backed by the French military, the world’s largest oil company (ExxonMobil) and a global institution (the World Bank) that had failed to grasp both the political framework of Chad36 and its own duties and responsibilities, has succeeded in proving that the ‘resource curse’ is unlikely to be broken, at least until global institutions such as the World Bank are drastically reformed and the oil majors severely reigned in, neither of which are likely in the near future. What has happened in Chad (and Cameroon) over the last few years has illustrated how damaging the oil companies and the World Bank can be to the development and welfare of African (and other) peoples.

Sub-Imperialism in the Sahel: Rebellions in Mali and Niger In focusing on individual countries, as if they were confined to geographical borders, as I have done so far in this chapter, we are likely to misunderstand both the ‘global’ and ‘imperialist’, or in this case the ‘sub-imperialist’ interests surrounding such resource exploitation. The current exploitation of Africa’s resources can only be understood in terms of both America’s and China’s imperialist interests and strategies. These are currently being played out in virtually every country in Africa; in America’s case through the ideological package of its GWOT; in China’s case through its insistence that it is not, and does not want to be a ‘colonial’ power! But there is more to Africa’s exploitation than imperialism; there are the sub-imperialisms of Africa’s regional powers such as Algeria and, to a lesser extent, Libya, both of which caste long shadows across the countries of the Sahel. The wider exploitation of the Sahel’s resources (save for Chad) goes beyond the limits of this chapter. I therefore conclude by pointing out that much of the current political instability and insecurity in the Sahel is not a product of Islamic militancy and Al-Qaeda-backed terrorism, as the Bush administration proclaims, but the outcome of a complex interplay between ‘imperialist’ (US, China, France) and ‘sub-imperialist’ (Algeria, Libya) designs on the region. Global oil and mining companies are now busily exploring and exploiting almost every corner of this vast but little known zone of Africa: in Sudan, Chad, Niger, Mali and Mauritania. Global oil and mining companies are buying up exploration concessions by the dozen. The giant French conglomerate AREVA is avidly expanding the world’s third largest uranium mines in Northern Niger. In so doing it is wreaking

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environmental and human health damage on one of the world’s most delicate and valuable ecosystems (the Tamesna Plains). Local people are aware of this. It is therefore not surprising, except perhaps to AREVA, that after several years of peaceful protest, local people should take up arms against them.37 The same rebellion, which began in February of this year, has also threatened similar action against the China National Oil Company and other foreign companies currently exploiting the region. However, sometimes in partnership with and sometimes in competition to these ‘global’ interests are those of the two regional powers, Libya and Algeria. A Tuareg rebellion in Mali in May 2006 appears to have been engineered by Algeria’s intelligence services (with US support) as a means of ousting Libyan interests from the region (Keenan, 2006b). Similarly, there is emerging evidence to indicate that the above-mentioned rebellion in Niger has also been fermented by Algerian agents, possibly to embarrass Libya, which has been investing heavily in the region, or perhaps because its own national oil company, Sonatrach, now has several concessions across the country. The expansion of both Algerian and Libyan interest into the Sahel, sometimes in partnership with and sometimes in competition to ‘western’ companies, is an expression of the expansion of the rentier interests of these two regional powers beyond their own borders and the destabilizing effect it is having on the countries concerned.

Endnotes 1

2 3 4 5

6 7 8

9

Algeria’s oil production is 1,373 million barrels per day (2005 est.). Proven oil reserves are in excess of 11 billion barrels (2006 est.). Natural gas production is 80.15 billion cubic metres (2004 est.). Proven reserves of natural gas are 4.545 trillion cm (2005 est.) (CIA World Factbook, May 2007). In 2006 external debt stood at only $5 bn (CIA World Factbook, May 2007). Includes gold. By contrast, Algeria is only 83rd in the world when ranked by GDP at PPP (purchasing power parity) per capita (IMF, 2006). The OCRS’s boundaries were not determined wholly by economic considerations and isohyets. The OCRS was also an extremely ‘racist’ entity: a major consideration in determining its geographical extent was the distribution of ethnic groups, such as the Tuareg, who, because of their own strong racist antipathy to the ‘blacks’ to the south of them and the ‘Arabs’ to their north (or both!), might prefer to remain under the protection, patronage and privilege of French colonial rule. Algeria formally became independent on 1 July 1962. Boumedienne died on 27 December 1978, aged 46, from a rare blood disease, Waldenström’s macroglobulinaemia. The high oil price of the early 1980s was caused by the breakdown of the old vertically integrated system of multinational oil companies, the nationalizations by producer governments in the 1970s, the disruption of Iranian exports during and after the Iranian Revolution in 1979 and the destruction of the Iranian and Iraqi oil sectors during the Iran-Iraq war (1980–1988). The average prices for 1985 and 1986 were US$28 and US$14 per barrel respectively. By late 1986 and early 1987 it had partially recovered to US$15 or US$16 per barrel.

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10 Sonatrach, for example, was broken up into 13 components. 11 Today, this figure is still around 50 per cent. 12 As Martinez (1998) has noted, ‘many of the criticisms of corruption, growing inequality, etc. during the 1980s were already present in the 1960s’. Some of the urban classes, ‘especially the administrative bourgeoisie (civilian and military), which derived its privileges from sharing in state power, and the non-state bourgeoisie (trading, industrial and business), often linked to leading circles of the army and the administration,’ had already become noticeably stronger and richer by the beginning of the 1970s. In spite of Algeria’s trumpeting of its socialism, Algerian society was in fact profoundly inegalitarian by the end of the Boumedienne era. As R. Escalier noted in 1977, the population of Algeria’s cities consisted of ‘83 per cent of the deprived classes (including 20.3 per cent marginal people and 62 per cent poor and half-poor), 11 per cent of the “middle classes” and 6 per cent of the “upper classes”’ (cited by Martinez, 1998, p. 3 and quoted in Nouschi, 1996, p. 267). 13 Hugh Roberts (2003, p. 107) described the October crisis as ‘above all, a generalized disavowal of the regime of President Chadli [that] expressed a bitter exasperation with and contempt for Chadli himself. … In subsequently presenting Chadli as the disinterested apostle of “reforms” and, in particular, as the scourge of a corrupt elite, Western coverage determinedly overlooked the fact that, for the rioters of 1988 … Chadli had been the apex of a system of generalized nepotism and corruption for years, and in various ways, such as promoting and “covering” members of his own family – something which Boumedienne had never done – had set an example which his subordinates had merely followed with alacrity: “Chadli, barkana min el vis! Qoul li weldek ired el devis!” (“Chadli, that’s enough vice! Tell your son to return the money!”)’. 14 The Front des Forces Socialistes (FFS) was a Berber (Kabyle-based) opposition party. It had come second to the FIS in the annulled elections of 1991–1992. 15 The Front de Libération Nationale (FLN) was the original ruling party of the regime. Its unpopularity was such that it was trounced in both the 1990 municipal elections and the 1991–1992 general election by the FIS and other opposition parties such as the FFS. 16 The parties met in November 1994 and January 1995. 17 As a result of these measures, Algeria’s ratio of debt service to imports fell from 93 per cent in 1993 to 47 per cent in 1994 and 37 per cent in 1995. 18 These were primarily General Khaled Nezzar, the former Defence Minister and effective power behind the ruling Haut Comité d’Etat (HCE) that took over the government and fronted the regime, and Chief of Staff Major-General Mohamed Lamari. 19 Nahnah founded Hamas in 1990. 20 11,000 new trading companies opened between 1994 and 1996. 21 The term trabendo derives from the French word contrabande (contraband). Contraband operators (smugglers – contrabandiers) are known as trabendistes. 22 What has now become a massive drug trafficking business across the Sahara and North Africa seems to have developed around this period (i.e. 1994). 23 Emirs of the Groupes Islamiques Armées (GIA) became military entrepreneurs. Their aim was no longer to destroy the regime but to take over the running of local areas as local ‘war lords’. Thus, both the regime and the Islamists, especially the GIA, were strengthened through the expanding market economy, with the net result that the emirs gradually distanced themselves from the struggle against the regime to concentrate on their economic activities.

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24 The US is now Algeria’s first client, with purchases of more than $11 billion in 2005, almost exclusively hydrocarbons. 25 US Vice-President Dick Cheney was the CEO of Halliburton at the time. Cheney, who stood down from his position at Halliburton on assuming the US Vice-Presidency, had particularly close contacts with Algeria’s military regime. 26 On 10 December 2006, a bus carrying BRC workers in east Algiers was bombed, killing the driver and injuring a number of the workers. 27 Notably the two bomb attacks in Algiers killing 30 people and wounding some 200 others on 11 April 2007. 28 The ‘War on Terror’, although driven in large part by oil interests, and the US-Algerian relationship in launching a new Saharan front in the GWOT go beyond the scope of this chapter. Details of this relationship and its underlying oil interests can be found in Keenan (2006a, 2006b, 2007, 2007a). 29 Once such resource was land, especially agricultural land, which was sold off by local authorities to increase/maintain their budgets. 30 All data in this section of the chapter which refers to Chad is taken from Ian Gary (Catholic Relief Services) and Nikki Reisch (Bank Information Center) (2005). The opinions expressed in this chapter are those of its author and are not necessarily shared by Ian Gary, Nikki Reisch, Catholic Relief Services or the Bank Information Center. 31 The fields have been developed by a three-company consortium comprising ExxonMobil (40 per cent), Petronas Malaysia (35 per cent) and ChevronTexaco (25 per cent). The operating company is ExxonMobil. 32 The IAG is a five-member independent body of experts created by the World Bank in 2001 at the urging of civil society groups to monitor the implementation of the project and to advise the project sponsors, host governments and the World Bank on any problems as they might arise. The IAG reports directly to the World Bank President. At the time of the CRS-BIC report the IAG had submitted nine reports. 33 It is significant that most of the world’s major media failed to publish these warnings and criticisms, largely, it seems, because they were afraid that ExxonMobil would threaten them, as it is habitually does, with lawsuits. 34 ExxonMobil’s breach of environmental and other regulatory requirements is detailed in Keenan (2005). The most significant of these is the lack of safety valves in the pipeline. Since that ignored warning was published in 2005, the pipeline has already begun to leak at Kribi and the pipeline’s constructors, the Houston-based construction and engineering firm Willbros Group Inc. have been sued in a class action brought by investors in the US District Court of the Southern District of Texas alleging bribery and tax fraud at Willbros’ international operations. The company has settled out of court for an undisclosed sum which is believed to be substantial. Also, ExxonMobil, which may have made as much as $500 million by not installing required safety valves, has been found guilty by the International Finance Corp. (IFC) of destroying and continuing to destroy land exceeding its original estimates and permissions by 65 per cent and for which it has not paid compensation. The IFC has insisted that ExxonMobil reassess its compensation plans for the many thousands of peoples involved. 35 ExxonMobil had held off payments of its taxes until then to see what would happen. It can be construed that the timing of this payment sent a clear message to Déby that he could count on the support of world’s largest oil major. 36 For example, one World Bank report described Chad as having democratic institutions in place!

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37 An AREVA base was attacked by local rebels in April 2007, killing one soldier and wounding several others.

References Auty, R.M. (1997), ‘Natural Resources, the State and Development Strategy’, Journal of International Development 9, pp. 651–63. Dillman, B.L. (2000), State and Private Sector in Algeria: The Politics of Rent-seeking and Failed Development, Oxford: Westview Press. Gary, I. and N. Reisch (2005), Chad’s Oil: Miracle or Mirage?, Catholic Relief Services and Bank Information Centre. Harvard Institute for International Development (1995), Natural Resource Abundance and Economic Growth, Development Discussion Paper no. 517, Cambridge, MA: Harvard Institute of International Development. Henry, C.H. and R. Springbord (2002), Globalization and the Politics of Development in the Middle East, Cambridge: Cambridge University Press. Keenan, J. (2005), ‘Chad-Cameroon Oil Pipeline: World Bank and ExxonMobil in “Last Chance Saloon”’, Review of African Political Economy, June/September, 32(104/5), pp. 395–405. Keenan, J. (2006a), ‘Security and Insecurity in North Africa’, Revue of African Political Economy (ROAPE), 33(108), pp. 269–96. Keenan, J. (2006b), ‘The Making of Terrorists: Anthropology and the Alternative Truth of America’s “War on Terror” in the Sahara’, Focaal – European Journal of Anthropology, 48, pp. 144–51. Keenan, J. (2007), ‘The Banana Theory of Terrorism: Alternative Truths and the Collapse of the “Second” (Saharan) Front in the War on Terror’, Journal of Contemporary Africa Studies, 25(1), pp. 31–58. Keenan, J. (2008, forthcoming), The Dark Sahara: America’s War on Terror in the Sahara, London: Pluto. Laribi, M. (2006a), ‘Que cache le dossier Brown & Root Condor’, Le Maghrébien, 9, October. Laribi, M. (2006b), ‘Brown and Root Condor: une holding “militaro-énergétique”’, Le Maghrébien, 13 November. Leite, C. and Weidman, J. (1999), ‘Does Mother Nature Corrupt? Natural Resources, Corruption and Economic Growth’, IMF Working Paper, WP/99/85. Martin, I. (2003), ‘Algeria’s Political Economy (1999–2002): An Economic Solution to the Crisis?’, Journal of North African Studies, 8(2), pp. 34–74. Martinez, L. (2000), The Algerian Civil War: 1990–1998, London: Hurst & Co. (first published in 1998 as La guerre civile en Algérie, Paris: Karthala). Nouschi, A. (1996), L’Algérie amère, 1914–1994, Paris: Ed. de la MSH. Porch, D. (1984), The Conquest of the Sahara, New York, Knopf. Roberts, H. (2003), The Battlefield Algeria: 1988–2002, London: Verso. Stone, M. (1997), The Agony of Algeria, London: Hurst and Co.

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Chapter 11

Oil Sovereignties in the Mexican Gulf and Nigerian Niger Delta1 Anna Zalik

Introduction: Ecology and Nationality in the Mexican Gulf and Nigerian Niger Delta In 2006, Mexico and Nigeria saw ongoing political crises connected in no small way to the extractive regime. In Mexico, following disputed national elections in July 2006, the opposition Presidential candidate Lopez Obrador declared an alternative watchdog government. In the state of Oaxaca a teacher’s protest galvanized a broader movement demanding the resignation of the state governor and gaining international support. In the oil-producing region of Tabasco, Lopez Obrador’s home state, state elections were marked by irregularities. Suppression of the opposition in Tabasco and Oaxaca and, later, mobilizations in Southern Veracruz in support of the Oaxacan movement involved arbitrary detentions, violence against protesters, arrest of organizers and participants. In Nigeria, the Movement for the Emancipation of the Niger Delta (MEND) emerged, calling for greater local control over oil resources – including direct participation in industrial extraction through the trade in contraband/bunkered oil. MEND’s hostage takings, which have centred on political (rather than financial) demands, were accompanied by an increase in commercially-motivated kidnappings (Okonta, 2006a, 2000b). The Nigerian military reacted harshly to this context and deepening militarization and violence in the Delta mutually reinforced one another – with US security analysts now openly discussing and implementing intervention in the form of the new Africa Command (Castelli, 2006). This chapter demonstrates how two divergent regulatory contexts for petroleum extraction have emerged historically and, consequently, contribute to the shaping of contemporary social movements for greater economic equity in revenue distribution and ecological protection. These movements, in different forms, employ a discourse of resource sovereignty – demanding greater control over the management and use of revenues by populations inhabiting the region of extraction. I argue that the varying nature of social claims on the oil resource in the Mexican Gulf and the Nigerian Niger Delta emerge from differing historical pacts between labour and national/global capital and ideologies of land tenure, which have important implications for socio-economic redistribution under rentierism (Chaudhry, 1989, 1994). That is, the nature of rentierism, as well as its impact on

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nation-state (de)formation, varies qualitatively with the role of popular/national social mobilization in shaping industrial regulation. In examining how contemporary social mobilization is constituted by historical struggles for control over land and resources, this chapter pays particular attention to the variation that emerges when oil is explicitly harnessed for national industrial development rather than for export. Here the Mexican nationalization of 1938 is a classic example with symbolic implications for global oil politics. Daniel Yergin describes the struggles of the Mexican oil workers in the 1920s and 1930s as follows: The emerging conflict in Mexico would establish an essential and lasting line of battle between governments and oil companies that would soon become familiar around the world. In Mexico, the issue came down to two things: the stability of agreements and the question of sovereignty and ownership. To whom did the benefits of oil belong? (Yergin, 1992, p. 232)

The Mexican Expropriation as National Resource Sovereignty The historical specificity of the Mexican oil industry, in particular the expropriation of foreign-owned firms in 19382 and the mobilization of oil workers that contributed to it, warrants more attention than it receives in the literature on the ‘resource curse’.3 Following Mexico’s nationalization, oil exports were prohibited for over three decades so as to employ the resource for developmentalist ends. Only with the oil shocks of the 1970s, which provided the country with the capital to develop its offshore reserves, did Mexico once again become a key supplier to the global market and, in particular, to the US. Integration into global markets compromised Mexico’s ‘energy sovereignty’, built on an ideology associating collective/national self-determination with public ownership and labour control over natural resources, an association that often favoured national capitalist and ‘elite workers’. Today environmental groups in Latin America, from Greenpeace Mexico to Oilwatch South America, employ the concept of energy sovereignty to protect local populations from ecological destruction and ‘national’ hydrocarbons from over-exploitation by foreign firms.4 Practically and symbolically, the Mexican expropriation demonstrated the ability of a southern oil exporter to control extraction without external interference, for the purposes of national development. It marked a key moment in the twentieth-century link between industrial capacity and state sovereignty in the Global South. Importantly, it made manifest that the Mexican state – as representative of the will of its residents under the notion of state sovereignty – would protect national energy resources from overexploitation, while defending those resources for the use of future generations of Mexicans. In today’s Mexico, contemporary disputes over privatization arise from the erosion of the ‘corporatist pacts’ among representatives of the state, labour and economic/industrial elites (Moreno Andrade, 2003; Uribe Iniesta, 2003; Beltran, 1988; Zermeno, 1996) one result of the economic disembedding that has arisen in

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the wake of neoliberal globalization. As a central pillar in the formation of the national-territorial state, contestation over the use of natural resources reflects the longer-history of Nigerian and Mexican state formation and the historically contingent but interconnected (pre/post)-colonial legacies in which they are embedded. To examine these variations I begin by discussing the concept of sovereignty and its relationship to the cases in question. From this backdrop I proceed to an overview of the nature of social mobilization in each region in the previous decade. This leads into an analysis linking the juridical structures affecting land tenure at the site of extraction, namely the Mexican constitution and the Nigerian Land-Use Act, with the nature of social claims on resources in each site. The chapter then proceeds to focus on the rootedness of Mexican land reform and labour politics in the struggles of the oil workers following the Mexican Revolution,5 and the ways in which the historical expropriation of the oil industry shapes contemporary resistance to denationalization of the industry. Nationalization in Mexico has informed a very different political and development trajectory from that of Nigeria wherein oil industry penetration in the late colonial period (Idahosa and Shenton, 2003) deepened fragmentation in the new Nigerian polity that expressed itself in local demands for autonomy and revenues. The notion of popular sovereignty rests on the assumption that the collective will is carried out through a ruler or a government endowed with such power – who, in turn, is subject to the will of the people. From the liberal vantage point the protection of territory and citizens is central to the expression of state sovereignty, requiring that police or military are endowed with sufficient force to secure national borders, and that the country’s domestic jurisdiction is respected by other states (Ruggie, 1993). Achieving these two functional characteristics has been central to modern statehood and the goal of movements for national self-determination. Yet- as recent work has stressed – the exercise of sovereignty is located within the constitution of the state’s subjects, legitimacy being achieved and recognized through the regulatory activities that the state or other coordinating institutions carry out. This ‘social sovereignty,’ as described by Latham (2000), resonates with the demystification of the state central to critical strands of political sociology that see it as essentially a mask for elite interests (Gramsci, 1957; Abrams, 1988). Contesting the official jurisdiction of the state through the quest for autonomy at the subregional level is central to many contemporary minority and indigenous movements for self-determination (Dietz, 2007). Territorial fragmentation and inter-ethnic divisions across Nigeria had been the basis for subnational state creation for some time (see Chapter 3 by Ukiwo in this volume). This fragmentation is produced by demands for subnational autonomy, reflecting the post-modern territoriality that Ruggie (1998) has theorized. Primarily these are demands for local control over state revenues (all basically from oil), largely to the benefit of regional elites. Such claims indicate profound fissures in the construct of Nigeria as a unified state. The push for access to economic rents reproduces the social relations of state predation (Ibeanu, 2000) that hamper the emergence of an apparently ‘rational’ bureaucratic state. Indeed, the Nigerian case epitomizes how local claims to natural resources, the partial unbundling of territoriality

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from the state, create the conditions for competing sovereignties. Thus, in the Niger Delta, calls for local resource control by ‘minority’ ethnicities are partially exercised through armed militias, which constitute a serious security threat to the multinational operators in the oil region, further challenging the monopoly over the means of force associated with the Weberian state (Tilly, 1985). In the Mexican case the connection between self-determination, antiimperialism and resource sovereignty is central to much Mexican nationalist historiography of the expropriation. Myrna Santiago has recently demonstrated that popular and state struggles for control over subsoil resources had an important ecological component as well, seeking to guarantee the conservation of the resource for future generations (Santiago, 2006). Despite variations in the locus of demands for sovereignty – at the subnational level in the Nigerian case and in anti-imperialist nationalism in the Mexican case – certain characteristics remain common to both regions as extractive zones. These include the general exclusion of the peasant and fishing populations from the benefits of industrial development; social and ecological alienation from subsistence livelihoods; violent repression of protest by the public and increasingly by militias and private security groups; ‘rentier corruption’ in which both oil corporations, state officials and community leaders are implicated; and a culture of ‘claims-making’ on the oil industry.

Social Resistance and Industrial Risk in the Nigerian Delta and the Mexican Gulf Between 1990 and 1995 the Niger Delta and the Mexican Gulf saw major mobilizations of local communities against the oil industry; each carried on in a somewhat less sustained fashion into the late 1990s. The stories of the social movement leaders central to these struggles – Ken Saro-Wiwa and Andres Manuel Lopez Obrador – shed light on the contrasting nature of the extractive regime in each setting. In 1995 Ken Saro-Wiwa, the Ogoni leading environmentalist and internationally renowned novelist, was executed by the Nigeria junta with the tacit support of Shell. Lopez Obrador, then the opposition leader from the key oil state of Tabasco – whose entire population is approximately 3 million – became a popular hero after an on-camera beating by the state military while leading a peasant protest for reparations from Pemex. From Tabasco he was propelled to the national state where he became the popular Mayor of Mexico City and Presidential candidate in 2006. In the Presidential race, which he lost to Felipe Calderon in the midst of electoral irregularities, one of his competitors was the PRI’s Roberto Madrazo who had defeated him for the Governorship of Tabasco in 1996 – an election largely marked by fraud (Curzio 2000). At the international level Ken Saro-Wiwa came to represent ‘indigenous’6 communities threatened by transnational corporate interests and linked struggles of minority groups in Nigeria to environmental rights movements throughout the world. While social contention in the Niger Delta and its international echo contributed to spurring Nigerian regime change in 1999; ongoing attempts to ‘secure’ oil installations by armed groups and competition for territorial control

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by neighbouring communities has contributed to continued violence in the extractive zone under the present democratic dispensation (Okonta and Douglas, 2001; Kemedi, 2003; Manby, 1999). This instability has met with a conjoint developmental response promoted by industry and international donors, in particular, a new ‘partnership’ approach to industry–‘community’ relations, led by Shell (Zalik, 2004b). This private re-regulation seeks to achieve what is referred to as the corporate ‘social license to operate’ requiring that local residents and ‘civil society’, or ‘stakeholders’ as they are identified in the business literature, espouse interests of private industry. Yet expelling Shell from Ogoni, in fact, contributed to the Ogoni’s political eclipse in Nigeria by movements of other Niger Delta ‘minority groups,’ in particular the Ijaw, who remain ‘hosts’ to oil installations (Obi, 2001; Omeje, 2006). Today, Ijaw nationalist organizations, including the Ijaw National Congress, Ijaw Youth Council and more militant groups like Asari Dokubo’s Niger Delta People’s Volunteer Front and MEND lead demands for access to oil revenues. Globally, interventions claiming to favour Niger Delta residents are made by human rights and environmental groups, corporate self-regulating bodies (Zalik, 2004b) and, most recently, a group of Nobel Laureates. In the Niger Delta civic organizations have called for a Sovereign National Conference to renegotiate the quota of revenue allocation to oil-producing states. Niger Delta delegates in fact walked out of a national Confab on this issue in 2005 when their demand for 25 per cent derivation was vetoed. Frustration with unsuccessful demands has fuelled a rise in the activities of youth militias. In contrast, successive movements of campesinos (agrarian or peasant movements) against Pemex in the Mexican Gulf have had greater success in capturing resources for their constituents from the Mexican central state. Social contention has met with considerable federal resource allocations to extractive zones since the 1980s, both at the state and municipal levels (Gonzalez, 1988; Beltran, 1988). Significant in all these allocations is the overlap between the petroleum workers and the agrarian populations; many of the latter found work in the former so that the two sectors indirectly subsidize the other. Even following the massive layoffs of oil workers under Salinas de Gortari’s liberalization program in the late 1980s, Pemex continues to employ more workers per barrel than any other oil company in the world (Shields, 2003).7 Yet the 1990s struggles in Tabasco had little global resonance when compared to the Niger Delta movements or, more locally, to the Zapatistas in neighbouring Chiapas.8 In the lead-up to the 2006 elections, Lopez Obrador and the Tabascan PRD sought to lessen their reputation for confrontation with Pemex in their quest for regional and national power, and their defence of the nationalized energy sector.

The Contemporary Moment and its Historical Context In the contemporary moment, the political unrest in Mexico and Nigeria may be typified as examples of broader regional trends. In the Niger Delta the push for resource control demonstrates a demand for inclusion by the Niger Delta

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minorities on the federal centre – a problem associated in some academic literature with African ‘state failure’ (see Chapters 3 and 5 in this volume for comparison). The controversy in Mexico surrounding the PAN’s retention of the Presidency (National Action Party – right wing) in the 2006 Mexican elections reflects continent-wide social cleavages. The PAN favours privatization of the oil industry, in contrast to Lopez Obrador and the PRD. Broadly speaking, the contested victory of the right represents the power of advantaged classes whose interests meld with those of Northern capital, including that of the Texas based petroleum industry.9 Mexico’s proximity to the United States and huge population labouring without documents there, as well as its provision of oil to that market, makes the social policies of its leadership of considerable import to US economic policy. Given that Mexico is one of the top three suppliers of oil to the US, its 2006/7 political crisis, like that in the Niger Delta, has significant implications for global ‘energy security’. The controversy in Mexico is made weightier due to Latin America’s so-called ‘left turn’, as expressed in electoral outcomes from Venezuela to Argentina, Nicaragua to Ecuador. The shift is marked by increasingly antiimperialist discourse and redistributionist social policy, and in cases like Mexico and Venezuela – the deepening of class cleavages. The issue of control over subsoil resources plays no small part in these trends. In Venezuela the programmes of Hugo Chávez entering a third presidential term and the election of Evo Morales to Bolivia’s Presidency, to name only the most prominent, emerge from and have been shaped by claims against the privatizing forces characterizing neoliberal economic policy and for ‘national’, ‘public’ control over natural resources – in particular, oil, natural gas and water (Iniesta, 2004; Kohl and Farthing, 2006; Sawyer, 2004; Shever, forthcoming). Historically, as we have seen, the expropriation of the Mexican petroleum industry in 1938 was the first significant case of a Southern nation taking significant control over subsoil resources, long before the creation of OPEC. Seen as the most autonomous leader of the immediate post-revolutionary period, President Lázaro Cárdenas was heroized for the nationalization of the industry. Indeed, popular histories describe how people of all classes deposited their most prized possessions in Mexico City’s central square to finance the costs of expropriation. Cardenas’ later support for the Cuban revolution foreshadowed his son’s (Cuahtémoc Cárdenas) political career as leader of the left wing of the PRI (Institutional Revolutionary Party) that became the key opposition party, the PRD, in the 1980s (Party of the Democratic Revolution). The major firm expropriated, El Aguila de Mexico, was a subsidiary of the Royal Dutch Shell (Meyere and Morales, 1990; Meyer, 1972). The latter began to explore in earnest in the Nigerian Niger Delta in 1937, the year preceding the Mexican expropriation. The consolidation of the PRI affiliated oil workers union thereafter served as a fundamental pillar of the PRI’s corporatist state apparatus for 50 years. Yet the expropriation manifested and widened an opening for popular claims on state institutions. By constituting the subsoil, in a both legal and figurative sense, as the property of ‘los Mexicanos’ the extractive resources of the nation were made a ‘public’ good whose redistribution, or lack thereof, remains the site of

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significant popular and legal claims by various fractions of the Mexican public to this day. In contrast, the Nigerian federal state, which Obafemi Awolowo described as a mere ‘geographical expression’, was compromised at the national level from the outset through the organization of the polity under the competing largest ethno-regional groups – the Hausa, Yoruba and Ibo. In the extractive sites of the Delta, the socio-territorial divisions were magnified as the oil industry was embedded in a site geographically marginalized from the federal centre, inhabited by diverse minority ethnic groups – today’s so-called ‘oil minorities’. Contestation over territory did not begin with oil extraction, however. It was readily apparent under the trans-Atlantic slave trade and further shaped by British indirect rule (Ibhawoh, 2002). The latter fostered the localized governance relations which went on to shape struggles between competing regional-ethnic elites (Idahosa and Shenton, 2004; Mamdani, 1996). It is to the legislation shaping social relations with natural resources in Nigeria and Mexico, as expressions of the socio-historical constitution of each extractive context, to which we now turn.

The Historical Constitution of Resource Sovereignties To reflect on the variations in social relations described above, it is useful to reference certain constitutional provisions that have mutually informed the territorial relations of state and subjects in the two extractive zones. From the Constitution of Mexico, Article 27, 1917: Ownership of the land and waters within the boundaries of the national territory is vested originally in the nation which has the right to transfer control over them to private individuals, thus establishing private property. Expropriations may only take place by reason of public utility and with compensation. The nation shall forever have the right to impose upon private property the limits which the public interest may dictate. In the nation is vested direct ownership of all minerals… such as petroleum and all hydrocarbons, whether solid, liquid or gaseous… Only Mexicans by birth or naturalization and Mexican companies have the right to develop mines, waters or mineral fuels in the Republic of Mexico. The state may grant the same right to foreigners provided that they agree… to be considered as Mexicans with respect to such property and accordingly not to invoke the protection of their governments regarding the same …

The Nigerian Land Use decree of 1978 states: All land in the territory of each state of the Federal Republic of Nigeria is hereby vested in the Governor of that State and that such land shall be held in trust and administered for use and common benefit of all Nigerians in accordance with the provisions of the decree.

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As described by Udo, the Land Use Act shifted control of land from traditional rulers to state governments, endowing families or individual community members with usufructuary rather than absolute rights to land (Udo, 1999). The above pieces of legislation suggest the ways in which formal state regulation has expressed collectivized or fragmented claims on national territory. The Nigerian legislation has served as a tool to further marginalize inhabitants of the oil-producing region and is seen as vesting power in governing elites – magnifying the competition for political office. While the policy prescriptions of the Land Use Act were justified as potentially redistributive, in practice their interpretation and outcome is contradictory (Iwarere, 1994). In the oil-producing areas in particular the Act alienates residents of ‘oil-producing communities’ (where installations are sited) from direct claims on revenue. Nevertheless, an explicit acknowledgement of usufruct rights has meant that the revenues that do return – often in the form of direct oil industry access payments to ‘host communities’ – stoke conflicts between neighbouring groups over ‘historical’ claims to earlier settlement or ‘first use’ of particular tracts of the Delta. Couched in the discourse of ‘indigene’ and ‘settler’ community, claims to land in some parts of the Niger Delta have led to violent exclusion and conflict between neighbours so as to secure ‘first-right’ to payments from industry and the federal government.10 The Land Use Act is often referred to as an ‘obnoxious law’ employed as a tool to strip land owners/users – as individuals or collectives – of their right to revenues from natural resources (ERA, 2002). With increasing regional disputes over oil revenues in Nigeria, there has been increased clamour for further state divisions so as to benefit minority sub-groups within states. In Mexico, through the revolution, centralized control and public ownership of the subsoil made land the symbolic property of the ‘national public’. The collective elements of the 1917 constitution remained protected by ‘progressive’ social movements under the neoliberal policies of the past two decades. In conjunction with Article 27, Article 12311 served as a partial decommodification of labour through guaranteed protections to workers that mirrored the implications of Article 27 with regard to land and nature. Both are still put to use by progressive and radical social movements in Mexico, including the Zapatistas and their supporters, as defence against private capital and for socio-ecological protection.

‘Poor Mexico: So Far from God yet so close to the United States’ – Porifirio Diaz It was under the rule of Porfirio Diaz, Mexico’s dictatorial modernizer, that the foreign oil industry put down roots in Mexico. Diaz reversed previous legislation that placed ownership of the subsoil with the Spanish crown. As such, Mexico became the only country outside of the United States in which the subsoil was under private control at the turn of the century. By placing mineral rights in the control of landowners, Diaz encouraged American and British land speculation. Foreign interests thus owned most of the territory from which petroleum was extracted prior to the beginning of the Revolution in 1911. The Porfiriato (as

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Diaz’s reign is known) also created a regulatory context free of levies, in which the oil companies could import equipment duty-free, and were exempted from taxes for a period of ten years. Yet, somewhat paradoxically, most accounts of US- Mexican relations make reference to Porfiriato’s proverbial expression: ‘Poor Mexico! So far from God yet so close to the United States’. The history as recounted by the private oil industry indicates that Henry Clay Pierce, of Standard Oil’s St Louis affiliate, initially imported Pennsylvania crude into Mexico from which he produced kerosene in his refineries in Mexico City and Veracruz. With time, he began to require more fuel for the large Mexican railroads in which he had an interest, and so encouraged the infamous American entrepreneur E.L. Doheny to seek crude. Doheny eventually created the Huasteca Oil Company with associates, for which the labour was Mexican and poorly treated (Antonio Menedez, 1958). Indeed Doheny, responsible for drilling the first major well in California, is described in the Mexican popular histories as the quintessential cutthroat explorer of the period – a role that went hand in hand with the destruction of the ecology of the rainforest (Santiago, 2006). In the same period, the British magnate, Weetman Pearson, eventually Lord Cowdray, constituted the company El Aguila (Mexican Eagle Oil Company). Royal Dutch Shell subsequently purchased Pearson’s interests in El Aguila so that Shell held a controlling interest in the second largest oil company in Mexico from 1919. However, industrial interests in this period were confronted by the revolutionary upsurge from 1910 through 1921, continuing through the 1930s. The 1917 constitution was a turning point in the revolutionary period, placing the subsoil in the hands of the nation. As cited above, Article 27 of the constitution has served important practical and symbolic purposes for popular struggles, serving to frame campesino and worker demands for greater access to industrial revenues and for ecological protections and compensation.

The Oil Workers and Mexican Resource Sovereignty In Mexican nationalist accounts of the revolution, the exploitative nature of private foreign control in the 1800s contrasts with the narrative of heroic, popular organization on the part of the oil workers. As representatives of the Mexican masses, the workers managed to independently run operations and finance compensation to expelled private companies. A state developmental project with long roots (Knight, 1994) shaped a historiography in which Mexicans as subjects of the private companies became agents of national industrial development. Fuelling the domestic market was essential to construction of President Cárdenas’ revolutionary modernizing project. His Presidency from 1934–1940, sought to cut across regional and cultural divisions and defeat reactionary forces in the countryside (Meyer and Morales, 1990). Merging ‘progressive’ radicalism with strategic alliances, he has been described as achieving some ‘autonomy’ for the Mexican revolutionary state vis-à-vis elite and international interests (Hamilton, 1982). This ideology of national, anti-imperial production continues to resonate in contemporary claims upon Pemex and against denationalization.

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When Cárdenas came to power, 98 per cent of the Mexican petroleum industry was controlled by foreign companies (16 in total), primarily El Aguila and the Huasteca. By 1934 the unions, particularly the independent-democratic ones of the Tampico area, had won wage increases through strikes. After the founding of the STPRM (Federal Petroleum Workers Union) in 1936, workers sought a collective agreement for labour control over operations, a 40-hour work week, and further increases in wages and benefits (Brown and Knight, 1992; Brown, 1993). Since the 1930s, the oil worker’s union – as a strategic ally of the ruling PRI government – played an important role as a constraint on privatization, given its authority over the workforce. Generally the STPRM’s power emerged from negotiated control among state managers and the union following the nationalization of 1938, and over time fomented high-level corruption involving leadership in both administrations – Pemex and the STPRM. The STPRM formed part of the broader PRI labour structure under the CTM (Confederación de Trabajadores Mexicanos; Mexican Labour Federation) that took shape in the 1940s. From the late 1940s onward, sponsored PRI unions violently eliminated independent unions and became the effective base for labour control ‘in the national interest’ for 50 years. In turn Pemex’s significant contribution to the federal budget, providing over one-third of total fiscal revenue, has made the government dependent on the union’s ability to quell discontent and prevent work stoppages. Alongside the unions, the history of Pemex management has been marked by a long-standing division between those who seek further contracting and foreign investment and those who promote the ‘national’ interest. Both nationalist and externally-oriented Pemex directors have attempted to incorporate private contractors in joint ventures on high-risk projects but these were largely unsuccessful ( Velasco-Ibarra, 2001) or cancelled under more nationalist management in the late 1960s and 1970s. However, both the power of labour and of the ‘nationalist’ side of Pemex management structure were eroded under the Salinas de Gortari presidency. Under his Presidency Article 27 of the constitution was reformed to allow for the privatization of collectively owned land, effectively ending the partial decommodification of land that was one the achievements of the revolution. The Union’s authority was also deeply compromised. In January 1989 the long-time national leader of the STPRM Joaquín Hernández Galicia, known as ‘La Quina,’ was arrested by federal authorities on weapons charges. The demise of La Quina spelled the end of the STPRM’s hegemonic control over the petroleum labour pool. The justification for his arrest was the need to punish corruption within union ranks but also conveniently served the interests of neoliberal restructuring. Some workers celebrated the decline of this structure while thousands were laid off. Although the STPRM remains very powerful in the refinery zone of southern Veracruz, the entry of increased numbers of private contractors both onshore and through ‘multiple service contracts’ on the offshore platforms has weakened their political clout. Forming part of the contested future of Pemex, the company was decentralized also in the 1990s. This ran contrary to the global trend, in which

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the Oil Majors sought mergers as a strategy for increasing market share and minimizing competition (Shields, 2003; Moreno Andrade, 2003). Thus, since the late 1980s, workers’ control over both industrial operations and local politics has weakened. Through the Multiple Service Contracts, working conditions on the offshore platforms near Carmen Island, Campeche reflect the classic ‘race to the bottom’ scenario. Although oil industry wages are high enough to draw young people away from agriculture, contract workers on the platforms receive a fraction of the wages of their unionized Pemex counterparts and work under far inferior conditions. In a context of weakening labour power, violence has continued to mark struggles for control over union locals throughout the region. In this sense, competition for resources is partially internalized within struggles for leadership of the STPRM itself (Galicia, 2004; Mendoza 2004) or between rival democratic unions and the STPRM. Competition for resources, then, does not involve claims to territorial sovereignty per se but for institutional power over the workplace. In this context, a democratic branch of the oil worker’s union, the Alianza Nacional Democratica de Trabajadores Petroleros, has opposed privatization and has allied with national agrarian organizations, echoing the revolutionary process of the 1930s. In a similar vein to the Alianza, but emerging from Pemex Management and Professionals, the Grupo Constitucion 1917 is made up of retired Pemex engineers and is based in Mexico City. Alongside it, the Union of Professional Workers in the Petroleum Industry (UNTCIP) allied with the Grupo, forming itself officially as a union in 2004 and embracing the broad objective of Latin American energy sovereignty manifest in Hugo Chávez recent call for the establishment of Petroleo Caribe (see http://www.untcip.net). UNTCIP describes privatization policies as demonstrations of Pemex’s ‘Penelope complex’ in which the company weaves throughout the day only to unravel its work at night. Like the Alianza, it has sought to ally with rural residents of the Petroleum zone in a plan that endorses a ‘safer, cleaner, Pemex’ for communities neighbouring installations. As such it embraces the interests of the agrarian sector that has organized for some decades to demand Pemex compensate and reinvest in communities affected by extraction.

State Corporatism and Sovereignty Discourse Historically, the process of co-opting local agrarian dissent into industrial practice was promoted through formal programmes of state institutions. Tabascan campesinos took their complaints concerning environmental damages to Pemex and even the President of the Republic as far back as the 1960s. However, Pemex’ policy that compensated individuals and the nature of the tabulator used to assess the amount owed for damaged crops, trees, and lands, was not applicable to collective damages, for instance the deviation of water-ways in construction processes or air pollution. The most prominent of the early campesino mobilizations against Pemex was the Pacto Ribereno. Formed in 1975–1976, the Pact brought together approximately 7,000 claimants from Tabasco’s coastal region in a common front for reparations and against authoritarian practices.

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Some of the immediate causes of discontent included the poor construction of a canal from a major lagoon system in Tabasco to the Gulf of Mexico, as well as petroleum pollution from both spills and flares. A general context of ‘relative deprivation’ undergirded the movement since mobilization was particularly strong in areas where relatively few residents were employed by the industry (Allub, 1983). Analyses of the immediate causes of the mobilization indicate, unsurprisingly, that the industry’s evasion of campesino demands acted as a strong impetus to protest. Legal options for resolving problems worked against local residents due to the bureaucratic procedures involved, the requirement of evidence of proof, and the reality that any irregularity in the tenure status of campesinos or ejidatarios, including informal use, could serve as grounds for dismissal. In response, state agencies were established with the express purpose of addressing development conflicts in extractive zones. Their existence coincided with Pemex’s creation of its social development arm in 1983. Together PRODECOT (Programme for the Development of the Tabascan Coast, established 1983) and CODEZPET (Council for the Development of Petroleum Extractive Zones, established 1984) were partially successful in connecting rural areas around petroleum zones to transportation and electrical grids, even during what was considered a ‘lost decade’ at the national level. This is a major contrast to the Niger Delta, which has remained infrastructurally marginalized. Successful infrastructural development in this period was clearly related to the historical trajectory of Mexican state-formation, which had already seen a century of industrial modernization projects prior to the first oil shock and reaped benefits from its boom later than most OPEC members (Karl, 1997). Yet PRODECOT and CODEZPET also promoted the individualization of compensation payments, reinforcing state paternalism (Beltrán, 1988; Solano Palacios, 2001). In particular, cash payments contributed to what is derisively viewed as a culture of dependency, in which campesinos are accused of ‘drinking’ the money they receive for damages – not unlike the charges against ‘stand-by payments’ in Nigeria. Indeed, this approach also served to fragment collective mobilization and purchase PRI support.

Oil Sovereignty under Neoliberalism At the end of the 1980s Mexican democratization movements saw resurgence. This was partially a manifestation of the national break in PRI hegemony represented by the formation of the PRD following the contested elections of 1988. Cuahtémoc Cárdenas, the son of Lázaro Cárdenas who had expropriated the oil industry, led the PRD. Concurrently, the emergence of an indigenous rights discourse nationally and internationally made social movements in Mexico’s south, where the indigenous population is concentrated, central to popular struggles for democratization. This was crystallized in the 1994 Zapatista uprising. In the South-eastern Gulf region, the neoliberal policies of Salinas were particularly noted due to Pemex layoffs, and the restructuring of union–management relations discussed above.

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In this context the 1990s mobilizations in the Gulf brought together both peasants affected by environmental degradation and laid-off Pemex workers. As an important political proponent for democratization, Andrés Manuel López Obrador effectively led these movements. While initially a member of the PRI, he worked in the organization of the PRD within Tabasco and nationally, and eventually ran for governor. It was during his first gubernatorial campaign that he began to consolidate state-wide support, particularly in the indigenous communities of the state (López Obrador, 1995). The founding of the Ecological Association Santo Tomas in 1989 (officially incorporated in 1995), in which López Obrador also participated, served to strengthen ‘civil society’ support for the opposition. A member of the ecological movement in Tabasco put it to me – ‘we were the technical arm of the PRD during the 1990s, acting as advocates for rural communities affected by Pemex’. The coincidence of rural sector mobilization and ecological movements became a Gulf-wide affair. Tabascan organizations like Santo Tomás collaborated with the ecological movements on Carmen Island (Campeche State) to protest the construction of the largest nitrogen plant in the world on the Atasta Peninsula. The Isla del Carmen mobilization pushed successfully for the formation of the Protected Area on the island. These mobilizations served to consolidate the Mexican branch of the global Oilwatch Network, which participated in its first international meeting in Ecuador in 1996. During this period López Obrador led ‘exoduses’ (or marches) for democracy to Mexico City in 1991, 1994 and 1995. These marches brought together a broad set of pro-democracy demands: protests against fraudulent elections, claims for adequate settlements to laid-off Pemex workers, compensation for campesinos affected by pollution. Due to these pressures, the government did increase the provision of damage payments to communities – including cash and replacements on roofing and fencing damaged by acid rain. Even so, these victories in some ways served to weaken the movement. Accusations of corruption went in various directions; against Pemex workers for pocketing kickbacks and against campesinos for ‘bribe-seeking’ protests, for purposefully ‘oiling’ their fishing nets in order to receive money to purchase new ones, and for spending their compensation monies in the bars. Given the threats posed to regional PRI control, protests in Tabasco state were met with increasing repression from state and federal security forces – particularly in the form of the BOM, or Base of Mixed Operations, combining police and military control. The use of harsh policing was based on the costs blockades created for the petroleum industry and the fear in the Zedillo government that the Zapatista movement would spill over from Chiapas to Tabasco. Additionally, Zedillo’s pledge to increase petroleum production for export as collateral for the 1994 financial bailout required the repression of the Gulf-based movements to guarantee ‘security’. A new state law banning blockades facilitated the arrest of protesters; the imprisoning of Tabascan campesino movement leaders only increased. On various occasions protesters spent six months or more in jail for blockading installations. A standoff in Nacajuca, Tabasco, from which López Obrador emerged bloodied, was viewed on national television in 1996; this only

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bolstered his popular support. Following the approval of Madrazo’s rigged election win by federal authorities, López Obrador became more centrally implicated in PRD mobilizations in the federal capital. In Tabasco, concurrently, the stick of repression was accompanied by the carrot of more payouts from the newly created CIMADES (Inter-Institutional Commission for Environment and Sustainable Development). Thus following López Obrador’s departure to Mexico City in 1995, the imprisoning of Tabasco campesino leaders only increased while widespread mobilizations subsided (Curzio, 2002; Hanson, 2002). As Lopez Obrador moved to the Federal Centre, Ken Saro-Wiwa faced ‘trial’ and execution.

Conclusion: The Niger Delta through the Lens of the Mexican Gulf Taken together, the Niger Delta and Mexican cases manifest social alienation and displacement among communities in the extractive zone from the material basis of, and respect accorded to, subsistence livelihoods. Yet territorially and with regard to contemporary social mobilization they have had very different implications. Whereas in the Niger Delta community claims to territory shape and are shaped by ethnic conflict and social fragmentation that express the history of colonial and post-colonial rule, in Mexico agrarian claims tend toward agrarian and labour unity. This was very much the legacy of the Mexican Revolutionary period of the first half of the twentieth century and specifically the 1938 expropriation, throughout which foreign capital was associated with violent repression against worker organizations and progressive rural movements. This chapter has demonstrated how claims to sovereign control over oil in the two sites shape very different oppositional movements for, and outcomes from, the quest for greater local access to revenues and reparations for ecological damages. Whereas in Nigeria the struggle over oil has accompanied the fracturing of identities and the consolidation of various ethnic groups struggling over resources, in Mexico the struggle over oil resulted, historically, in the partial consolidation of agrarian and worker identity and solidarity In Nigeria, regionally embedded minorities, in particular disenfranchised youth, make direct claims for entitlement to oil resources against the federal state. In this sense they make a claim for a kind of private indirect sovereignty (Eberlein, 2006; Mbembe, 2000). Indeed, some sections of Deltan youth state explicitly that they would collaborate with any foreign company which recognizes their own claim to territory on which installations are sited. Practically this has been partially achieved. This because the oil corporations do contract ‘territorial security’ guards in the riverine area, or offer some form of standby contract, to groups whose identity in fact overlap with local militias demanding greater autonomy for the Niger Delta states and their indigenes. This practice resonates with the protection system, or comey, that European merchants employed during the colonial period in the trade in both slave and palm oil (Alagoa, 1964). In Mexico, claims for ecological and resource sovereignty are channelled through the identity of agrarian producers and oil workers who struggle for the protection of the developmental state, figuratively and practically, from neoliberal assault.

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Notes 1

The author thanks the Social Sciences and Humanities Research Council of Canada, the Einandi Centre for International Studies and Department of Development Sociology at Cornell University, and the Ciriacy Wantrup Fellowship at the University of California at Berkeley for funding research contributing to this chapter. 2 Bolivia and Argentina nationalized their industries earlier, but were a relatively small source of oil. 3 A 2004 Foreign Affairs article refers to the relative success of Mexico and Indonesia at ‘managing their oil responsibly’, thus avoiding the ‘resource curse’ (Birdsall and Subramanian, 2004). Their identification of the Mexican case does not refer to the 1938 nationalization of Pemex. 4 See the website of Greenpeace Mexico commemorating the 18 March 1938 expropriation of the petroleum industry: http://www.greenpeace.org/mexico/news/ en-riesgo-la-soberan-a-energet. 5 Revolution refers to the historical period of 1911–1929 and sometimes through the Cardenas era until 1940. 6 While not to necessarily to be confused with the broad based struggles of the Niger Delta ‘oil minorities’, indigeneity is rejected by some Nigerians as serving to justify local violence and exclusion. 7 Pemex is sometimes compared to Venezuela’s national company Petroleos de Venezuela which, as an OPEC member, has far greater foreign presence in operations than Pemex. According to the US Department of Energy, Pemex produced 28 barrels per employee per day (at about 140,000 employees), whereas PdVSA produces about 43. US Energy Information Administration, 2004, ‘Mexico Country Analysis Brief’. Available at http://www.eia.doe.gov/emeu/cabs/Mexico/Background.html. 8 Much has been made of the transnational linkages of MOSOP or the Zapatistas (Bob, 2001), but their success and failures have a complex and contradictory relationship with their ability to make global alliances. Ijaw militant groups have yet to receive the embrace of the alter-globalization movements that buttressed the Zapatista uprising. 9 See the website of the National Union of Mexican Professional Petroleum Staff (UNTCIP) which places denationalization in the context of alliances between elite Mexican bureaucrats and US corporations: http://www.untcip.net/lecturas.html. 10 In the last few years a series of academic and consultancy reports have documented these disputes. Among the most contentious and long-standing is the ongoing dispute over territorial ownership in the oil-rich Warri area involving primarily Ijaw, Itsekiri and Urhobo groups. 11 While Article 123 guaranteed an eight-hour work day, the right to unionize and various other protections, it was also critiqued as essentially reformist since it sought ‘equilibrium between the various factors of production, harmonizing the rights of capital and labour’. See Santiago (2006) pp. 240–41.

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Chapter 12

Extractive Resources and the Rentier Space: A South American Perspective Julia Buxton

Introduction South America is rich in natural resources. Following from colonial conquest by the Spanish in the sixteenth century, extractive industries have shaped the political economy of the region. Despite the importance of the natural resource sector, South America has not experienced the violent resource-based domestic conflicts that have scarred a number of African countries. Moreover – with a couple of key exceptions, the conflicts that have broken out have been low level and focused on issues of management and extraction strategies, not control or looting of strategic resource sectors. As such, natural resources have neither catalyzed violent conflicts – either greed- or grievance-based – nor have they sustained them. This is not to suggest that the possession of vast resource wealth has not been conflict inducing for South America. The distinction is that South American resource disputes have been of comparatively low intensity in terms of violence, and, more importantly, these disputes have been largely channelled through the political system. The ‘rentier space’ has consequently been a highly contested domain (see Chapters 1 and 2 in this volume for the definition of ‘rentier space’). While political instability, grievance and discontent in South America have been driven by factors largely extraneous to the resource sector and not directly mobilized around resource issues, access to and opportunity for rent accumulation has traditionally generated intense competition for control of the state. These antagonisms have historically been channelled on class not ethnic lines and articulated through the ideological and conceptual lens of socialism, populism, anti-imperialism, military authoritarianism or neoliberalism. Contending forces have typically argued that their motivation for power and resource control is ‘inclusivist’, predicated on their capacity to enhance the national interest through better, more rational distribution of rents rather than ‘narrow’, exclusivist agendas oriented toward achieving concentration of rent among an ethnic, religious, secessionist or other ‘minority’. The South American discourse has always been framed (or disguised) as a positive sum game and legitimized through reference to the national interest. This chapter seeks to bring a South American perspective to the analysis of the ‘rentier space’. By way of a comparison to the other country and regional case

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studies, it presents an explanation for the low level of resource-based violent and low-intensity domestic conflicts in the region before progressing to an analysis of structurally entrenched patterns of rent distribution and ‘new’ tensions that have emerged around them. The chapter argues that state control of the resource sector enabled populist patterns of rent distribution that mitigated against domestic conflict and the mobilization of identity-based grievances throughout much of the twentieth century. However, this relative political stability was undermined by the privatization processes of the 1980s and 1990s, which saw natural resource sectors deregulated, contracted out or sold to private interests in line with the neoliberal policy approaches followed during this period. Privatization eroded opportunities for rent accumulation, which, along with the negative impacts of neoliberalism on the poorest sectors, served to deepen previously muted class-based cleavages. Demands for meaningful citizenship that emerged forcefully in response to neoliberalism have parlayed into a wider, more complex and polarizing debate on the distribution of resource wealth – one that is very much conceived as a zero-sum game, in which the wealthiest in society (and transnational private interests) should forego resource control and the opportunities for profit in order to enhance the prospects for equitable development. In this political schema, renationalization is seen as a fundamental for social and national development. Privatization also framed new modes of conflict between private operators, national unions and local communities. In those countries such as Peru, Venezuela and Colombia that lack viable and legitimate institutions capable of mediating grievances around issues such as ownership, the environment and workers rights, resource wealth is emerging as a catalyst or deepener of increasingly violent conflict. The ‘new’ politics of rent distribution places South America at the helm of a global swing toward resource nationalism and on a collision course with transnational corporations and the US, which has perceived South America as its ‘backyard’ since the issuing of the Monroe Doctrine in 1823. The chapter ends with the pessimistic conclusion that conflicts over the control of resources and access to rents will become more frequent and intense in South America owing to ongoing demands for inclusion and redistribution among the poor, population pressures, and antagonism between the state, transnational corporations and the US – the latter linked to unsustainable patterns of resource consumption and efforts to ensure resource security amid competition from countries such as China. In order to illustrate the complex dynamics and multiple tensions around these new South American rent-based conflicts, the chapter focuses on the case study of Venezuela. An oil rich country with the world’s largest oil reserves, Venezuela has experienced radical change under the government of President Hugo Chávez. Following his election to the presidency in 1998, Chávez has restructured and redefined the role of the oil sector, revised existing private sector contracts and radically altered patterns and mechanisms of rent distribution. This revolutionary break with the established ‘rules of the game’ has restructured the rentier space and provoked a powerful domestic and international backlash that has sometimes been violent and at all times destabilizing. As such, Venezuela is a case study of how the contest for rent and opportunities for accumulation can and will generate

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‘new’ disruptive domestic, regional and international conflicts. Venezuela – and the regional influence of Chávez, demonstrates that this is more likely to be the case in profoundly unequal countries that have a mono-export profile. In these country contexts, which would extend to Bolivia and Ecuador, state control over natural resources and its enhanced discretion in the distribution of rent, is conceived as a foundation for the development of the nation. This puts these countries and popular sectors at stark ideological odds with transnational corporations, the US and private sector interests. Before assessing the rentier space in South America (which does not extend here to consideration of Central American nations), it must be emphasized that this chapter is an exercise in ‘over-generalization’. Rather than addressing the distinct rentier politics of the individual countries, the chapter presents an overview that highlights general themes and trends, illustrated through reference to country examples. It should also be stressed that the nature of ‘rent’, and the contribution of rent to national income in each of the country contexts is different – ranging from high impact oil-based rents in Venezuela and Ecuador to relatively low impact agriculture and mineral rents in Argentina and Brazil. Consequently rents have had differential impacts and forged distinct rentier spaces, the dynamics of which cannot be fully captured here. Finally, this chapter only addresses natural resources in the formal economic sector. As such, it does not discuss the cases of Peru and Colombia, where the illicit cultivation, production and trafficking of narcotic drugs financed the insurgencies of non-state and paramilitary actors that include Sendero Luminoso, the Fuerzas Armadas Revolucionarias de Colombia and the Autodefensas Unidas de Colombia

The Political Economy of Natural Resources in South America There is an abundance of renewable and non-renewable natural resources across the countries of South America. These include minerals such as copper, coal, iron ore, gold, silver, manganese, sulphur, petroleum, nitrates, gold, oil and natural gas, in addition to agricultural and forestry products. Although the politics of the region has been characterized by bouts of instability, insurgency and violent conflict, these resources have not historically been the target for violent predation, or seizure and looting. Competition for ownership and rent accumulation opportunities have largely been conducted in the formal political sphere, pitching the public ‘interest’ – through the agency of the state – against private sector interests (domestic and international). Put more crudely, rent distribution conflicts have been structured as a struggle between a majority poor against a minority elite, the latter supported by the US as a result of that country’s extensive economic and political interests in the hemisphere. Underscoring this, US investments in South American in 2005 totalled US$300 billion. A number of factors account for what has historically been a low proclivity toward resource-based and violent domestic conflict in the region. Firstly, and in contrast to the situation in the African case studies, South American countries are characterized by established and uncontested territorial boundaries, the coherence

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of the nation state and – although fragile in some country contexts – a state presence across the national territory. After independence from the Spanish in the early nineteenth century, oligarchic governments, typically of a military hue, embarked on a process of nation building. This led to the early centralization of state authority and territorial integration, defended by a national army across what had been fragmented and inchoate geographic boundaries. As a result of this nation building process, the region has a muted history of border conflicts and while regionalist identities have remained strong, this did not translate into secessionist tendencies (Dominguez, 2003). Colonialism, racial intermingling and repression of indigenous cultures also generated a high level of religious, linguistic and cultural homogeneity. This overrode the primacy of ethnic difference, which was not parlayed into identity-based politics in the later democratic period. It is largely as a result of this historical background that political differences have pivoted around issues of class and the distribution of economic and political power, not identity or territory. In this context, it has been control of the state that has been the focus of competition (largely through formal politics) and the driver of political violence, which has been systemic across the region. Linked with this, the historical low prevalence of resource-based conflicts can also be explained through reference to the type of resources present and the manner of their extraction. Resource exploitation in the region is complex and difficult. Gold, coal, silver, copper and oil sectors have been reliant on large amounts of investment and technological input. This high input dependency has limited the utility and vulnerability of natural resources to capture by antigovernment and anti-state groups. Moreover, commodities in the region have traditionally been subject to depressed prices in the international economy and vulnerable to boom/bust conditions. This low level of profitability, combined with the complexity of distribution chains in the formal domestic and global economy, has historically reduced the value of natural resources and consequently their significance as a driver or financier of domestic conflict. However, debates about resource ownership have been instrumental in shaping the rentier space in South America.

Rents and Resource Extraction in Historical Perspective Foreign investment was central to the early exploitation and expansion of resource sectors in South America, and the region’s integration into the global economy in the late nineteenth and early twentieth centuries. As the value of natural resources such as oil, coal, copper and tin to the industrialized consumer economies to the North was recognized, South America became an attractive investment environment for foreign investors. The allure of the region was enhanced by the liberal foreign investment regimes that were put in place by the oligarchic governments of the period, which had assumed control of the state after independence from the Spanish and which persisted in power – in alliance with foreign capital interests – until forced aside by pressure for democratic reform in the 1930s and 1940s (Williamson, 1993).

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In Chile for example, the copper industry was transformed by the influx of foreign investment, starting in 1904 with the exploitation of El Teniente by the Braden Copper Co., which subsequently transferred its operations to another US company, the Kenecott Corporation. The New York Guggenheim group entered Chile in 1910, working in Chuquicamata through the Chile Exploration Company, which was sold in 1923 to another US company, the Anaconda Copper Company. Similarly in Mexico, it was foreign investment that drove expansion of the hydrocarbons sector, with British and American oil firms, Pearson and Doheny beginning commercial drilling and refining of oil in 1917. In Ecuador, the development of the petroleum sector began in 1878 when M.G. Mier and Company was granted rights to extract petroleum, tar and kerosene in the Santa Elena Peninsula. Shell Oil gained a presence in the country in 1937 after receiving a concession to explore and work in the Oriente region, with Texaco-Gulf moving into exploration and production in the coastal region in the 1960s. In Venezuela, Standard and Creole Oil were the key beneficiaries of the first exploitation agreements enacted by the government of Juan Vicente Gómez, president of Venezuela on three occasions between 1908 and 1935 (Tugwell, 1975). There was a dramatic change to the profile of natural resource extraction as it became clear that this was injurious to the broader national interest. Highly favourable terms were offered to foreign investors under the first concessions. They typically allowed foreigners subsoil rights (which were traditionally in the hands of the nation) and failed to take into account extraordinary profits. Many were offered on these terms for perpetuity and, more problematically, the small revenues generated through land and resources sales, taxes and royalties were accumulated by a clientelist elite around the oligarch. In Chile, copper concessions were so favourable that the Chilean state received negligible financial benefits until a revision of the mining law in 1951 reserved 20 per cent of copper production to the state. This was followed in 1955 by a new copper production law that guaranteed the state a share of private sector profits. The notion that the state had the right to share in profits, rather than just taxing them, on the basis that the nation was the owner of natural resources, was an important part of this shift towards resource nationalism that was further exemplified by the 1943 hydrocarbons legislation that was introduced in Venezuela and which introduced a 50-50 sharing of profits between the landlord state and foreign companies. Starting in Bolivia in 1937, national governments began to rescind or revise the contracts held by foreign enterprises and embark on the nationalization of natural resource sectors, extending more widely to the agricultural, infrastructural and industrial holdings of foreign corporations. This followed from a transition from the oligarchic regimes, to new party political systems that represented an alliance of working- and middle-class interests. These liberal, bourgeois revolutions were led by multi-class ‘populist’ parties (such as the Movimiento Nacionalista Revolucionario in Bolivia, Acción Democratica in Venezuela, Partido Revolucionario Institucional in Mexico and Partido Justicialista in Argentina) and, in some cases (such as Brazil) reformist military governments. They built their popular appeal and ‘revolutionary’ legitimacy around demands for democratic reform and, of acute significance, economic nationalism.

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Nationalization of natural resources was seen to offer the potential for rent to be ‘sown’ more widely, focused on development and distributed for the benefit of the national interest. This orientation toward economic nationalism was reinforced by the Great Depression in the US, which had a catastrophic effect on South American economies and, in the post-World War II period, by proponents of import substitute industrialization strategies, such as the profoundly influential Raul Prebisch, director of the Economic Commission for Latin America (ECLA). In his 1950 publication The Economic Development of Latin America and its Principal Problems, Prebisch argued that in order to reverse unfavourable terms of trade with developed economies, developing nations needed to engage in manufacturing and production activities for the domestic market. In this schema, nationalization of natural resources enabled the state to retain export revenues that were in turn sown back into the national economy through import substitute industrialization strategies (ISI) that focused on subsidization of nascent heavy industry and manufacturing sectors, and Keynesian economic policies intended to boost consumption. This virtuous cycle of growth was perceived as a means of breaking with patterns of exploitation and the region’s ‘periphery’ status in the global economy. It was adopted across the region. The mid-twentieth century was subsequently characterized by a parallel process of democratization and resource nationalization in the majority of South American countries. The timing depended on the individual country’s level of political development and the perceived financial importance of the natural resource sector. In Bolivia, petroleum was nationalized and brought under the direction of the state petroleum company Yacimientos Petroliferos Fiscales Bolivianos (YPFB) in 1937. Mexico followed in 1938, with the creation of Petróleos Mexicanos (PEMEX). State control of the Ecuadorian oil sector took place through the Hydrocarbon Law of 1971. The Corporación Estatal Petrolera Ecuatoriana (CEPE), which was created in 1972, assumed responsibility for all hydrocarbon activities, which were deemed part of the ‘inalienable patrimony’ of Ecuador. Venezuela was relatively late in nationalizing its oil sector. It was not until 1976, when concessions dating to the 1943 hydrocarbons law moved to expiration that nationalization was decreed and the state holding company Petróleos de Venezuela (PDVSA) was created. In Chile, the process of ‘Chileanizing’ the copper sector began with legislation in 1966 that established mixed companies with foreign investors in which the state had a majority (51 per cent) share, administered through the newly created Copper Corporation. Under the left-wing government of President Salvador Allende (1970–1973), nationalization of large-scale copper mining followed from the modification of the Chilean Constitution. In a strong echo of other regional legislative and constitutional modifications, this stressed the ‘sovereign and inalienable right of the State to freely use its wealth and natural resources’. The popular legitimacy of these actions was underscored in the revised Article 10, which pointed to copper nationalization as having been ‘demanded by national interest’. The state mining company Corporación Nacional del Cobre de Chile, (Codelco) was subsequently created in 1976. The nationalization waves of the mid-twentieth century extended across all resource and strategic sectors, with vast national holding companies created

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to administer exploitation of mineral deposits. It was not a smooth process, provoking serious dispute with domestic and foreign private sector investors, and the US. The intensity of these disputes varied depending on the country, the sector, the timing and management of the nationalization process. In Mexico, oil sector nationalization met with a muted response owing to US government concern that a strong defensive response in support of private interests would alienate the popular and strongly nationalist government of President Lázaro Cárdenas as international tensions deepened in the run up to World War II. By contrast in Chile, the US government of President Richard Nixon worked with right-wing opponents of Allende to block his government from coming to power and carrying through the planned nationalization of strategic economic sectors. Although Allende assumed the presidency at the height of the Cold War, US opposition to his administration was predicated on the threat to US economic interests in the country, which totalled over $1 billion, rather than the threat of communism in the US ‘backyard’. In response to the ‘Chileanization’ of the copper sector, the CIA channelled $2 million in assistance to the opposition movement in Chile to finance activities intended to destabilize the Allende government. Economic assistance through the US-sponsored Alliance for Progress was ended, Chilean access to international loans was blocked and the US government sought to actively destabilize the international copper markets (Kornbluh, 2003). The nationalization processes in countries such as Ecuador, Venezuela, Brazil, Bolivia and Argentina did face strong opposition from private sector groups, and as in Chile, support from the US for opponents of the reformist governments. In some cases this was attenuated by the renegotiation of contracts into joint ventures or through the provision of compensation packages.

The Rentier Space and Populist Strategies The adoption of state capitalist models of development across South America assisted in the legitimization and consolidation of early democratic systems. The nationalization projects were introduced alongside major programmes of land reform, the unionization of the labour force and the creation of rudimentary welfare state models. This marked a radical transformation of the politics within the rentier space. The governing political parties, such as the Peronists in Argentina, the PRI in Mexico and AD in Venezuela, became the arbiter between the population – newly incorporated into politics – and the resource rents and revenues flowing to the state (Wiarda, 2004). In something of a generalization of political trends during this period, it can be argued that the rentier space was configured around corporatist patterns of political organization and clientelist mechanisms of distribution. It was relatively pluralized and equitable. In effect, all social sectors benefited from the newly enhanced distributive capacity of the state, mediated by the dominant political parties. In order to benefit from the state’s largesse, labour, rural workers, students and domestic private sector interests had to be incorporated into the relevant sectoral wings of the ‘mass’ governing party.

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The state capitalist models were initially successful at mediating pressures between contending economic forces and political interests. Rent distribution helped to forge a positive sum game, in which all social classes had access to and opportunities to benefit from rent. The domestic private sector was protected through subsidies and tariffs on imports while the organized labour benefited from expansive union and welfare rights and protected employment status. However, ISI and clientelist incorporation strategies experienced serious difficulties in the 1960s and 1970s. A large number of the mono-export dependent countries experienced problems of ‘Dutch-disease’, commodity prices were vulnerable to boom/bust patterns in the international economy and there was chronic irrationality in economic policymaking, which was characterized by high levels of corruption, inefficiency and a lack of monitoring, oversight and accountability. The ISI model additionally became financially overextended as the more complex second stage of ISI was approached, but the need to maintain the positive sum matrix within the rentier space inhibited fiscal retrenchment. As a result, and underscoring policy ‘irrationalism’, national governments increasingly resorted to international lending in order to cover financial shortfalls. This strategy proved disastrous in the early 1980s, as international interest rates rose sharply and commodity prices declined. Amid an emerging debt crisis, South American countries had few alternatives but to turn to the International Monetary Fund. The economic crisis of ISI triggered a process of political decomposition and democratic regression. Starting in 1964 in Brazil, the military intervened in order to rein back democratic and populist participatory initiatives, which were perceived as destabilizing, and in country contexts such as Argentina and Chile – a communist threat to the integrity of the nation. In other country contexts, such as Peru, Venezuela, Ecuador, Mexico and Bolivia (and later in Brazil and Argentina), economic crisis led to the de-legitimization of the once dominant political parties and the rise of outsiders from non-traditional political backgrounds.

Neoliberalism and the Reconfiguring of the Rentier Space The 1980s and 1990s marked a redefinition of rentier politics in South America. In line with the recommendations of the IMF, there were experiments (of varying intensity and rigour) with stabilization and structural adjustment policies across all South American countries – those that had experienced military administration and those that retained civilian democratic forms (Colombia, Mexico and Venezuela). The neoliberal period marked a dramatic shift from closed to open economies, from nationally focused development to regional integration strategies underpinned by trade and financial liberalization and steep reductions in government spending. There was a stress on diversification away from natural resources rather than their intensive exploitation, and privatization of strategic assets and resources. Approaches to resource sector privatization were framed by the national legislative context. In Venezuela for example, the opening of PDVSA and the oil sector to private investment was made possible through loopholes in the nationalization decree of 1976. In Brazil, the state oil

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company Petrobrás became part privatized when it began trading shares in the company of the Brazilian Bovespa in 1997, while in Bolivia, the government of President Jaime Paz Zamorra (1989–1993) enabled private sector participation in mining and hydrocarbons through revision of existing legislation. There were some exceptions to the privatization trend. In Chile, the dictatorship of General Augusto Pinochet (1973–1989) did not include the copper sector in its privatization wave, ensuring the military a place in the rentier space through the ring-fencing of copper funds for defence spending. In Mexico, the privatization of PEMEX, the national oil company was also resisted – even by the incoming right of centre PAN government of Vicente Fox (2000–2006). The shift from heterodox to orthodox policy did lead to some positive outcomes. Inflation and hyperinflation that had been prevalent across the region was reduced, with the majority of South American countries recording single digit inflation by the end of the 1990s. External debt profiles also fell while foreign investment surged, leading to a strong improvement in the fiscal accounts. Technological transfers increased, as did productivity, and there was vibrant economic growth across the region. However, the downsides were severe and destabilizing, shaping the ‘new’ political conflicts around rent distribution and natural resource ownership that are being played out in the current period. In economic terms, the neoliberal adjustments deepened existing and profound levels of inequality (Green, 2003). The ‘rationalization’ of the labour sector following from deregulation and privatization of industry, manufacturing and agriculture led to regional double digit unemployment and rising informal sector employment. This ran parallel with a reduction in public and welfare spending, generating a sharp increase in poverty and critical poverty that was not countered by rising levels of GDP or job creation in sectors penetrated by foreign direct investment (O’Toole, 2007). The cost to the poorest and most vulnerable sectors of South American society was immense and it was exacerbated by the elimination of subsidies on basic products, housing rents, transport and utilities. Problematically, informal workers, the poor and lower middle class groups were unable to defend their economic and social rights in the rentier space owing to its reconfiguring by the neoliberal governments of the 1980s and 1990s. The state became detached and insulated from organized and grassroots pressure ‘from below’ and as a result large sectors of the population were excluded from traditional political channels and were unable to pacifically articulate their grievances. Opportunities for rent accumulation contracted as did access points, which became narrower and mediated by personalist elite ties rather than the large corporatist party political organizations that had collapsed or gone into decline. Private sector and transnational interests gained a privileged position within the rentier space to the detriment of popular sectors which were politically and economically marginalized.

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New Conflicts and the Evolving Dynamics of the Rentier Space The contemporary period is one of heightened conflict over access to rent accumulation and ownership of natural resources. There are a number of factors that account for this and taken together, they indicate a strengthening regional predisposition toward resource nationalism, resource-based conflicts and the intensification of rent-based demands and expectations. Firstly, there has been the commodity boom of the 2000s. This has generated intense popular pressures for more equitable wealth distribution. As in the 1930s, the surge in commodity prices has refocused attention on the national impacts of private sector ownership and reignited nationalist demands for sovereign control of natural resources. In Bolivia, Ecuador and most significantly Venezuela, popular frustration with the lack of economic progress and hostility to privatization has translated into support for nationalist, left of centre actors from non-traditional backgrounds. In office, Presidents Hugo Chávez of Venezuela, Evo Morales of Bolivia and Ecuadorian president Rafael Correa have variously moved to renationalize hydrocarbon resources and/or renegotiate contracts with private sector operators in order to increase the state’s share of resources from the commodity boom. This process has gone the furthest in Venezuela, where the Constitution of 1999 and Hydrocarbons Law of 2001 reserves oil resources for the national interest and mandates a majority share for PDVSA in all projects. Contracts signed during the apertura (opening) in the 1990s have been revised, taxes and royalties increased on private producers and ‘sovereignty’ reasserted in PDVSA, which had been criticized by President Chávez for acting like a ‘state within a state’. Oil has returned to the centre of Venezuela’s national development strategy and it has also become an important tool in Venezuelan international relations and strategy for regional integration (Ellner and Hellinger, 2004). The Chávez administration has fundamentally restructured the rentier space in Venezuela, a country where a third of residents lived in critical poverty when Chávez took power in 1999 and nearly 70 per cent lived in poverty. Previously excluded groups located in the informal sector and slum (barrio) communities have displaced traditionally privileged elite sectors and foreign interests as the main beneficiaries of rent access and accumulation, with the volume of rent available expanded through the re-nationalization process. PDVSA contributed $6 billion of its profits to social programmes in 2005 and $8 billion in 2006. This was distributed to marginalized groups through social policy initiatives called the Missions, of which there are 17, operating in the areas of education, health, housing and job creation. According to government statistics, the education Missions (Mission Ribas, Mission Robinson and Mission Sucre) have led to the construction of 3,000 primary schools, assisted 1.4 million complete high school and expanded university access to 27,000 students from disadvantaged backgrounds. In health care, Mission Barrio Adentro has led to the construction of 4,400 community health clinics (initially staffed by 17,000 Cuban medics) that deliver in situ, free primary and preventative healthcare to 68 per cent of the population. Over 40 million consultations have been conducted and prescription drugs are now free of charge. Supporting Barrio Adentro is Mission Mercal, a subsidized food

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distribution project operated through a chain of 6,000 supermarkets that supplies 8 million people with cheap food. These social welfare initiatives, which are delivered through community-based organizations, have led to strong improvement in the country’s human development index and reductions in levels of poverty and critical poverty.

Figure 12.1 Venezuela’s Human Development Index Source: Social Report (INE)– Venezuela

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Figure 12.2 Poverty levels in Venezuela Political pressures generated by the current commodity boom have been fuelled by the emergence of ethnic- and identity-based politics, particularly in Bolivia,

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Ecuador and to a lesser degree Peru (Crabtree, 2005; Vann-Cott, 2007). Demands for inclusion and economic opportunity amongst marginalized indigenous groups has reinforced economic nationalism and political tensions, particularly in those country contexts where natural resources are located in areas densely occupied by indigenous groups. Overlapping with this has been resource-based disputes between private sector operators and local communities. They have pivoted around issues that include environmental damage and destruction caused by private sector agencies in the process of resource extraction; human rights abuses against local employees and local communities; labour rights in newly privatized resource sectors and community demands for local investment by private sector agencies in the environs of their extractive operations. The countries that have been affected by these disputes are numerous, with Peru, Colombia, Bolivia and Ecuador as the most cogent examples. The emergence and evolution of these disputes owes much to the liberal operating rights provided to private sector groups in the contracts awarded at the height of the neoliberal model in 1980s and 1990s and the state’s defence of this operational freedom, which has been exemplified by the deployment of the security sector to protect private operators and their assets. This situation is particularly acute in Colombia, where the state has allowed multinational corporations, particularly in the oil sector to police and repress local grievances with violence and impunity (Pearce, 2005). The weakness or absence of institutions capable of mediating disputes and representing grassroots interests has increased the sense of frustration and grievance, and ultimately the utility of violent protest. Political demands for a share of the commodity ‘boom’ and frustration with the limited progress made by poorer sectors under neoliberal policies has fed into a broader drift to the centre left and ‘non traditional’ political options. There has been a profound political shift across the region since the late 1990s, a development that has been variously dubbed ‘the pink tide’ or ‘leftward swing’. In Venezuela, Ecuador, Bolivia, Chile, Brazil, Uruguay and Argentina left of centre governments and ‘non-traditional’ actors with roots in the regions social movements have been elected to power. This and the trend of resource nationalism, pits these administrations against the interests of the US and private investors. In some cases, such as Brazil, Chile and Uruguay, these tensions have been attenuated by policy continuity between outgoing centrist administrations and the new left of centre administrations. However, the cases of Venezuela, Bolivia and Ecuador are more problematic owing to the rupture between these new governments and their predecessors, the emphasis of these administrations on re-crafting state sovereignty, their strong support base among marginalized and excluded groups and their commitment to equitable distribution. Renationalization policies and strategies in these three countries have provoked a powerful backlash – particularly in the case of Venezuela where the process has gone the furthest. The reconfiguring of the rentier space under these administrations has been to the benefit of previously excluded groups, but this has been understood by traditional elite rent beneficiaries as a negative sum game, in which their interests have now become peripheral. This has in turn catalyzed new forms of conflict and protest, which, like the ‘new’ politics of ethnic mobilization and economic

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nationalism, has taken a contemporary form. In Bolivia and Venezuela, regionalist pressures that have the potential to develop into secessionist demands have developed in areas of resource wealth dominated by anti-government groups (Santa Cruz in the case of Bolivia and Zulia in Venezuela). The US administration of President George Bush has additionally become actively engaged in the defence of the status quo and has assumed a highly critical and provocative stance against the economic policies being pursued in these countries. This intervention has taken many forms and included the channelling of financial assistance to opposition groups through agencies such as the National Endowment for Democracy. In the case of Venezuela, these revenues were used to support anti-government street protests, a military coup attempt against President Chávez and a crippling management led lock out of PDVSA that led to oil export revenue losses to Venezuela in the region of $18 billion and severe economic recession in 2003. This US strategy, which has parallels with the defence of private interests in the Chilean copper sector during the Allende administration have been legitimized through perceived threats to US energy sovereignty (Sullivan, 2005). They underscore an intensification of the clash between the developed consumer countries, which is accelerating owing to new competition for resources from countries such as China, and commodity producer countries to the South that are seeking to address grotesque levels of inequality and underdevelopment.

Conclusion The nature of the rentier space and the debate around resource wealth is undergoing dramatic change in South America. The politics of rent distribution have always been highly contested and as a consequence, the rentier space has been in persistent evolution. High levels of inequality and political exclusion have forged new directions in the resource politics of the region and this is in turn likely translated into intensified competition for resource sovereignty and control of the state, bringing new dimensions to pre-existing tensions and conflicts. It is expected that these will cohere around traditionally antagonistic actors – the majority poor and a US-backed minority elite and transnational foreign capital. While the US has always shown a proclivity to intervene covertly and overtly in the domestic politics of those countries that find themselves in the North American backyard, it is expected that these interventions will become more routinized and incautious as pressure for resource supplies and energy security intensifies. Attempts by countries such as Venezuela to forge new energy-based relations with other resource rich states – such as Russia and Iran, has been perceived by the US as deeply antagonistic. As such, efforts to advance national sovereignty on the back of resource nationalism will accentuate the conflict potential of the contemporary resource debate. Moreover, Venezuela presents a particular challenge for the US as the country has pressed for regional energy integration through projects such as PetroCaribe, PetroAmericana, the Gasducto del Sur and technical and financial agreements with neighbouring resource rich states such as Bolivia and Ecuador.

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Finally, the potential for intensified conflict also stems from the possible inability of resource nationalist states to meet the immense popular expectations that government and the commodity boom have generated. With the singular exception of Chile, institutional weakness remains an ongoing problem. In the absence of institutions capable of mediating conflict and monitoring economic policymaking there will be problems relating to the sustainability of the contemporary welfare oriented strategies. The consequences of a development like this would be grave and such a complexity of future international, domestic and grassroots tensions are unlikely to be contained by and played out in the formal arena of the rentier space. In such a pessimistic scenario, natural resources may emerge as a vulnerable and highly ‘political’ target for predation, sabotage and capture.

References Crabtree, J. (2005), Patterns of Protest: Politics and Social Movements in Bolivia, London: Latin American Bureau. Dominguez, J. (ed.) (2003), Boundary Disputes in Latin America, Washington, DC: United States Institute for Peace. Ellner, S. and Hellinger, D. (eds) (2004), Venezuelan Politics in the Chávez Era: Class, Polarization and Conflict, Boulder, CO: Lynne Rienner. Green, D. (2003), Silent Revolution: The Rise and Crisis of Market Economics in Latin America, London: Latin American Bureau. Kornbluh, P. (ed.) (2003), The Pinochet File: A Declassified Dossier on Atrocity and Accountability, Washington, DC: National Security Archive Book. O’Toole, G. (2007), Politics Latin America, London: Pearson. Pearce, J. (2005), ‘Policy Failure and Petroleum Predation’, Government and Opposition, 40(2), pp. 152–80. Sullivan, M. (2005), Venezuela: Political Conditions and US Policy, Washington, DC: Congressional Research Services, http://www.fas.org/sgp/crs/row/RL32488.pdf Tugwell, F. (1975), The Politics of Oil in Venezuela, Stanford, CA: Stanford University Press. Vann-Cott, D. (2007), From Movements to Parties in Latin America: The Evolution of Ethnic Politics, Cambridge: Cambridge University Press. Wiarda, H. (2004), Authoritarianism and Corporatism in Latin America, Gainsville, FL: University Press of Florida. Williamson, E. (1993), The Penguin History of Latin America, London: Penguin History.

Chapter 13

Rentier States and War-Making: The United Arab Emirates and Iraq in Comparative Perspective Rolf Schwarz

Introduction The now famous dictum that ‘war makes states’ has received renewed interest in recent years with the experience of state-collapse and state-failure in many parts of the Third World (Tilly, 1985, p. 170). Historical studies have shown that the activity of war-making was an essential ingredient of the process of stateformation in early modern Europe (Tilly, 1975; Ertman, 1997). These studies claim that the ability of getting ready for war and then actually waging war requires power holders to get involved in actions that are very frequently also conducive to state-formation. This includes the effective extraction of resources for the purpose of war-making. Extraction activity presupposes state control, which in turn requires an efficient bureaucracy (Hintze, 1975). In cases where there was nothing or little to extract from society, war-making also required the promotion of capital accumulation which in turn made war-making possible. This activity also required the growing strength of a centralized bureaucracy (Tilly, 1990). This chapter analyses the history and dynamics of state-formation and statebuilding in the Middle East and argues that ‘oil rentier states’1 defy the ‘war makes states’ theory. The Middle East as a region has seen many inter-state wars and violent conflicts, and war is perhaps even a defining feature of the region (Waterbury, 1998, p. 168). Regional scholars have therefore pointed towards the many possibilities to combine insights from research in state-making processes and Middle Eastern politics, as ‘the recent work on state formation in Europe suggests that violence is a natural, perhaps necessary, concomitant to state formation and nation building merits serious attention from scholars of regional politics in the Middle East’ (Anderson, 1990, p. 74). This chapter compares two oil rentier states from the Arab Middle East, one having been exposed to the experience of war-making (Iraq), the other having been spared the experience of wars since its formation in 1971 (the United Arab Emirates). The chapter shows that rentierism serves as an obstacle to the formation of strong and legitimate states, since stability rests on an implicit social contract through which consent is bought via material welfare. Where military capacity is paid for by rulers’ rents and

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war-making employed as a strategy of state-making, as in Iraq, state-formation has nearly opposite effects from the ruler-subjects struggles that characterized early modern Europe.

Rentier States The notion of the rentier state grew out of the study of the modern Middle East (Mahdavy, 1970; Beblawi, 1990; Luciani, 1990). Rentier states derive most of their revenues from the outside world and the functioning of their political system depend to a large degree on accruing external revenues that can be classified as rents. Rentier states rely on allocation and redistribution (allocation states) and hence show a remarkably different political dynamic than other contrasting states (production states). Rents have been defined as ‘the income derived from the gift of nature’ and are usually understood to be income generated from the export of natural resources, especially oil and gas (Beblawi, 1990, p. 85). The rentier effect is not confined to the oil-exporting states alone. To a limited but still significant extent the rents of the oil states have been recycled to the nonoil Arab states through migrant workers’ remittances, through transit fees and through aid. The oil phenomenon has thereby ‘cut across the whole of the Arab world’ and propagated a new pattern of behaviour: rentier behaviour (Beblawi, 1990, p. 98). Furthermore, external rents can also be conceived of as bilateral or multilateral foreign-aid payments, such as foreign development assistance or military assistance, and are hence sometimes termed strategic rents. These strategic rents form the majority of state revenues in many small states in the global South and produce rentier state behaviour (Moore, 2004, p. 305). Generally, the rentier model of statehood is stable as the availability of resource abundance helps to preserves traditional loyalties through generous welfare allocations and thereby renders state-formation into a legitimate process. Political support is bought off – following the notion of ‘no taxation, hence no representation’ – and material legitimacy created. Resting on the economic function of the modern state in providing welfare and wealth to its citizens, this model of statehood remains stable as long as state and society adhere to an implicit social contract between state and society, through which political rights are substituted for state-provided welfare. Where citizens trust the state institutions to progressively provide these public goods, they correspondingly tend to be more allegiant and less antagonistic towards the state. Where citizens sense an appropriation of the state by a self-serving elite, trust in the beneficial use of the natural resources of the country is lost, opposition emerges and violent conflict ensues (see the contribution by Dauda Abubakar in this volume). War-making and the capacity of the state to extract tangible and intangible resources are seen as key indicators of the state’s capacity. The existence or non-existence of strong states can hence be measured through the level of tax collection.2 Autocratic governments are generally poor at raising direct taxes, since their collection requires widespread voluntary compliance by citizens, as well as an efficient and legitimate bureaucracy (Fauvelle-Aymar, 1999, p. 406).

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Consequently, the more a state relies on direct measures of taxation, the more the collection of taxes depends on an efficient bureaucracy and voluntary compliance. In the absence of voluntary compliance, often linked to a lack of legitimacy, states have to rely on other indirect measures to generate the necessary revenues. Oil-exporting rentier states have the opportunity not to tax their populations or to impose very minimal taxes if need be. In fact, most oil-rich rentier states have relied on a combination of rents and minimal taxation for their state revenues. In the Arab Middle East, few states rely on direct taxation and most employ indirect means of levying resources, such as tariffs, sales tax, and licensing (Schwarz, 2008).3 Where taxation is applied, it is mainly levied on state-owned companies (mainly the oil industry) and foreign companies. In other words, rentier states in the Arab Middle East have levied taxes on themselves (the states’ agencies) and foreign corporations and not from the bulk of the citizenry. Based on its modern history, Iraq, as the case study below suggests, is a classical rentier state that fits into the broad Middle Eastern category in terms of non-taxation of its citizens.

Iraq: From a Rentier State to a Failed State The Iraqi state was created in 1920 in the aftermath of World War I. Stateformation in Iraq has followed the path of many developing states in its struggle against a major foreign power (the British) and the attempt to create a modern state administration and representative institutions. The modern state that emerged was defined by personalized rule, informal relations, and abundance of oil revenues. These three elements were inherently linked as the abundance of oil revenues and the distributive capacities of the state allowed for political rule to be personalized and based on patronage networks. Much of Iraq’s modern history of state-formation (1958–1980) has followed the rentier state paradigm. The onset of the Iran-Iraq war in 1980, however, started a new era of the state’s history that was characterized by war, violence and ultimately the unmaking of the state. The disposition of the belligerent Iraqi oil rentier state to war-making, marked by an overestimation of its military strength, proved to be particularly catastrophic. While the early years of independent Iraq were characterized by a reliance on domestic resource extraction,4 the discovery of oil in 1927, its subsequent development and the nationalization of Iraq’s oil industry in 1961,5 brought Iraq on the path of a rentier state. The fiscal nature of the state changed in the 1950s as oil royalties were no longer treated as extra-budgetary receipts but were incorporated into the budgetary process. This gave the state considerable financial resources which it ploughed into social welfare through a newly created state agency (the Iraqi Development Board) that was given the task of coordinating spending. The change in the fiscal nature of the state brought about the first signs of a rentier state (spending spree and a decline of the non-oil sector). Oil revenues prior to 1962 were modest and increased to about 60 per cent of total revenues during the 1960s and 1970s, while domestic revenue extraction continued

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modestly (Askari et al., 1982, p. 108). From 1973 onwards, however, Iraqi’s fiscal system showed clear signs of rentierism, with oil revenues ranging from 56 per cent in 1972/73 to almost 86 per cent in 1977 and taxes falling considerably in percentage relative to total revenues. Taxes were still levied on personal incomes and profits of companies and, in theory, rates were steeply progressive. In reality, taxes were only collected from salaried employees of the state.6 The reach of the state was short and extended only on its own salaried personnel. Agricultural incomes (except for land rentals) were excluded from taxation and in the private sector taxes were only levied inconsistently and inefficiently. In essence, personal income became the burden of a portion of the middle class working in the state administration.7 Apart from the increase in oil revenues from the mid-1970s onwards, Iraq also profited from earnings generated by assets held overseas. While these earnings remained initially minor in relation to total revenues (4 per cent in 1976), they sharply increased following the second oil crisis in 1979 (the current account surplus stood in 1979 at 3,360m dinars and in 1980 at 4,370m dinars). At the beginning of the 1980s, Iraqi foreign holdings had increased to a level where they represented 45 per cent of oil revenues and 39 per cent of total government revenue (Askari et al., 1982, p. 111).

Table 13.1 Oil revenues 1955–1977 as percentage of total revenues Year

1950

1962

1970

1973

1977

Average

17.3

64.1

53.7

80.9

85.5

60.3

Source: Waterbury, 1997, p. 155.

This drastic increase of additional resources allowed the Iraqi state to embark on a state-building project based on large-scale spending implemented in a topdown fashion and largely divorced from societal demands. The massive influx of oil revenues during the 1970s enabled Iraq to pursue a policy of ‘guns and butter’ – extravagant spending on expanding its military-security machinery and on welfare benefits (social development).8 Internally, expanded military-security expenditure was designed to strengthen the power of the ruling Ba‘thist regime. On the external front, it was used to engage in aggressive foreign policies, which led to the outbreak of war with Iran in 1980. Given the massive flow of oil revenues, the costs of a war with Iran seemed easy to bear. Surplus funds also came in the form of strategic rents (foreign military aid) from neighbouring states. During the first two years of the war, Iraq’s economic position was comfortable. It used its oil exports of 3.5 million barrels a day and an annual oil income of US$ 30 billion to finance the war effort (Al-Khafaji, 2000, p. 273). As the war dragged on, Iraq’s economic position began to deteriorate as a result of: (i) the partial destruction of its oil-export facilities in the Persian Gulf (Mina al-Bakr and Khawr al-‘Umayya); (ii) a decline in world oil prices;9

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and (iii) Syria closing a pipeline running through Iraq to the Mediterranean Sea. The total costs of the war which lasted from 1980–1988 are estimated to stand at $452.6bn for Iraq and $644.3bn for Iran (Mofid, 1990). These numbers exceed the total amount of oil revenues both countries have accrued since they started selling their oil by a total of $678.5bn (Sluglett and Farouk-Sluglett, 1990, p. 20). During the war, the failing Iraqi economy was maintained by political rents coming from Saudi Arabia, Kuwait, and the UAE. In public rhetoric this foreign aid was downplayed or denied, and official reports of the Ba‘th party stressed the boldness of the Iraqi leadership in standing alone against Iran (Al-Khafaji, 2000, p. 273). This official government propaganda explains why Iraq prolonged its war effort despite growing human and economic losses. The regime of Saddam Hussein was convinced that it would achieve victory single-handedly, while the costs of the war were shared by the neighbouring Arab states, particularly the oil monarchies in the Gulf. Iraq insisted that no official debt arrangements should be made to accommodate the war effort. In short, war seemed an economically rewarding activity, a vision, which with hindsight could not have been more off the mark. By the end of the war, Iraq was faced with many economic difficulties, not least the problem of demobilizing three quarters of a million soldiers. The state was not able to accommodate such a large number of soldiers that depended on government guaranteed jobs and welfare benefits. The state could no longer deliver on its implicit social contract established during the boom of the rentier years. War had fundamentally altered the situation and redefined the terms of normality. Unemployment, already felt during the war due to the privatization measures enacted in 1986–1987, but aggravated thereafter, became widespread in Iraq and young people were deprived of previously guaranteed careers in the civil service. The only solution seemed to keep them in the service of the state, albeit not in a civilian function but in the military service. The Iran-Iraq war undoubtedly eroded the fiscal basis of the state. Probably, a few years of peace and normal oil-production would have brought Iraq back to pre-war levels, but instead of using an inward-looking strategy of coping with the fiscal crisis brought about by the Iran-Iraq war, the Ba‘thist regime of Saddam Hussein chose a strategy of rent acquisition (Sluglett and FaroukSluglett, 1990). Through much of Iraq’s modern history, the Ba‘th Party had dominated almost all facets of life. The party’s stated aim has been to unify the Arab region between the southern edge of the Taurus and Zargos mountains and the Gulf of Basra, the Arab Sea, the Abyssinian highlands and the Sahara in the south; between the Gulf and the Atlantic Ocean – it was a shrewdly calculated project of pan-Arabism under the hegemony of the Ba‘thists. While in theory this was understood to encompass peoples of different religious and ethnic origins, such as Shiites or Kurds, it translated in reality to the emergence of two Ba‘th parties, one in Syria and one in Iraq, both claiming to be the legitimate successor of the original party. When in 1968 the Ba‘th Party seized power, it tried to consolidate its grip on the state by presenting a Pan-Arab ideology that minimized the religious and ethical divisions in Iraqi society.

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Inventing a state ideology and a distinct Iraqi identity detached from tribal, ethnic and religious considerations, proved to be very difficult. Under the rule of Saddam Hussein a clear and conscious design of ‘intellectual and political reorientation towards Iraq’ was pursued (Dawisha, 2002, p. 129). This included the attempt to portray Iraq as an Arab state and particularly that Iraq’s territory formed part of the Arab homeland. By emphasizing Iraqi territory and not the Iraqi nation, an attempt was made to pay tribute to the ethnic and religious heterogeneity of the country. In a speech to Iraqi Officers in 1978, Saddam Hussein made the following declaration: We should support our theory by referring to ancient history and should stress that the history of the Arab nation [al-umma al-‘arabiyya] extends to ages long past. All basic civilizations that developed in the Arab homeland [al-watan al-‘arabi] express the personality of the sons of the nation stemming from the same offspring … and if these civilisations have a regional specificity [al-khususiyya al-wataniyya], this is part of the more general and encompassing national characteristic [al-sima al-qawmiyya al-a‘amm wa-al-ashmal]. (Freitag, 1994, p. 31)

By using the term watani for both the Arab homeland and a smaller distinct entity (the Iraqi territory and not the Iraqi people), Saddam Hussein laid the basis for an ideology attached to an Iraqi state. In another speech he underscored the crucial distinction that Iraq was part of the Arab homeland, and not the Iraqi people part of the Arab nation (Freitag, 1994, p. 31). This political strategy of creating a national ideology attached to the Iraqi territory was used in spite of the Second Gulf War (1990–1991) and the ensuing Kurdish uprising. During the Gulf War period Saddam Hussein appealed to Kurdish leaders to cooperate with his regime by stressing 6,000 years of common history of the ‘Iraqi territory and people’ (Freitag, 1994, p. 32). The continuous link between modern Iraq and the ancient civilizations that had resided in the same land was also diffused through cultural programmes that eulogized the achievements of Sumeria, Akkadia, Babylon, and Assyria, as well as through archaeological works that reconstructed such ancient cities as Hatra, Assur, Nineveh, and Babylon (Dawisha, 2002, p. 129). This equation between modern Iraq and ancient Mesopotamia continued into the 1990s with, among other things, the publication of the best-seller novels (suspected to have been written or sponsored by Saddam Hussein himself) depicting the Iraqi ruler as a king in the tradition of the great kings of Mesopotamia (Bengio, 1998, 2002). With the domestic fiscal crisis of the 1980s compounded by the external war with neighbouring Iran, the invasion of Kuwait, this political strategy came to be questioned from within, namely through the Kurdish revolt in 1991. An extended, parallel political strategy employed by the regime of Saddam Hussein included a novel emphasis on the religious roots of Iraq as an authentic Islamic state, the reconstruction of the ancestral root of Saddam Hussein as a descendant of the family of the Prophet Mohammad, and finally a return to traditional elements such as tribal loyalties and the Iraqi heritage of the ancient civilizations of Mesopotamia. Throughout the Iran-Iraq war, Hussein emphasized Iraq’s

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adherence to the fundamental principles and cannons of Islam. For instance, one of the country’s newspapers, al-Thawra, attacked the Iranian leadership for accusing Iraq of being un-Islamic: We tell you that Iraq is a true Islamic state, and the people of Iraq, as well as its leaders, believe in God and in the teachings of Islam as a religion and as a heritage. Indeed, President Hussein’s regular visits to the holy shrines and his continuous efforts to provide for these shrines is a clear proof of his deep and his unequivocal belief in the glorious message of Islam. (Al-Thawra, 16 January 1982)10

Other references to Islam and the unity of Iraq were constantly made during the Kuwait crisis and the subsequent Gulf War in 1991. In November 1990, Saddam told a CNN reporter that ‘it is impossible for us to capitulate to those who bring together 400,000 soldiers against us, because we put our trust in Allah … Saddam Hussein is an Arab citizen, a servant from among God’s believing servants; he struggles [yujahid] for justice [haqq] and rejects oppression [zulm] and fears only God’ (Bengio, 1998, p. 183). On another occasion in November 1990, Hussein spoke in a reassuring vein: ‘Do you know why the Iraqis are confident? Because they are a people who believe in God, and they are sure that justice is on their side. He who walks along the path of justice, God is with him; and he who has God on his side, what would he fear’ (Bengio, 1998, p. 183). Furthermore, there were continuous references to the 1990/91 Gulf War as a Jihad (struggle in the path of God) fought in the name of God. Strikingly enough, this reference emerges immediately after the invasion of Kuwait and even before actual hostilities erupted (Bengio, 1998, p. 187). The Islamization process peaked on the eve of the Gulf War, when Saddam Hussein ordered the famous Islamic chant Allahu akbar (God is the greatest) to be inscribed on the Iraqi flag. New forms of political legitimation under Saddam Hussein included also the cultivation of a personality cult, including the emphasis on the noble origin of President Hussein’s family and his ancestral root in the ancient land of Iraq. As an illustration of the former, it was reported that in August 1990, a few days after the invasion of Kuwait, Saddam Hussein sent a message to President Mubarak of Egypt, indicting him for aligning with the United States and Saudi Arabia against Iraq. In this indictment, Saddam Hussein alluded to Mubarak’s underclass origins from a peasant family not connected with the families of Egypt’s historic rulers. He contrasted this with his own origin from a most illustrious family ancestrally traceable to the Qurayshis, the tribe of the Prophet Muhammad; Saddam Hussein even claimed direct descent from the Prophet’s grandson Husayn (Bengio, 1998, p. 79-80). There are also several examples of Saddam Hussein’s use of rhetoric equating himself with Iraq, with Iraqis and with Arabs everywhere. Some of these expressions of megalomania include: Saddam al-Arab (the Saddam of the Arab); Saddam al-Fath (the Saddam of conquest); Baba Saddam (Father Saddam) and Abu al-Iraq al-jadid (Father of the new Iraq) (Bengio, 1998, p. 78). While such rhetorics were meant to evoke feelings of closeness, others were conceived reverence and idolize Saddam Hussein (e.g. his alleged descent from

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the Prophet Muhammad), elevating him to the realm of the superhuman and the supernatural.11 Finally, the Iraqi regime under Saddam Hussein invoked other more traditional identities and images of the state in order to legitimate its rule. These include a renewed emphasis on tribal elements and the portrayal of modern Iraq in the tradition of those ancient civilizations as Assyria or Babylon. On 29 March 1991, after the violent suppression of the local revolts in the aftermath of the 1991 Gulf War, Saddam Hussein received a delegation of tribal leaders for the first time. The timing of this visit in the context of the evolving politicization of tribal identity was not arbitrary: it reflected the regime’s need for societal support (Baram, 1997, p. 7). The following years saw an emphasis of tribal values, such as the new-found justification for the invasion of Kuwait in terms of tribal honour (al-sharaf al-ashairi), and an increasing reliance on tribal justice over the state’s legal system.12 As these examples show, Iraq represents a remarkable case of how an image of the state was created in order to legitimize the political rule of an authoritarian leader who faced economic and fiscal crises due to extravagant policies on social welfare and war-making during the oil boom. Most striking in this regard is the constant presence of the past and the shift from a secular and socialist idiom to a language dominated by Islamic rhetoric and primordialism. Similar tendencies of religious legitimation of political rule are discernable elsewhere in the Middle East, notably in Saudi Arabia and Iran (see Dauda Abubakar’s contribution in this volume). In sum, the case of Iraq prior to the dismantling of state institutions in 2003 demonstrates how a chain of reactions caused the unmaking of the rentier state: Initial war-making (the Iran-Iraq war) led to an overstretch of the state capacity; the ensuing fiscal crisis led to a further weakening of the state and pushed the regime to bellicosity – the annexation of oil-rich Kuwait to shore up Iraq’s rentier resources. The concerted military action by the international community and the subsequent regime of UN sanctions left the Iraqi state crippled. Having lost the first Gulf War to the US-led United Nations multinational force, the government of Saddam Hussein was hamstrung with multiple international sanctions and as such could only exercise limited domestic sovereignty. The weakened Iraqi state had to re-create new forms of legitimacy by resorting to Iraqi nationalism based on tribal affinities and Islamic religion, to counter the persistent surveillance and encroachment of the powerful external adversaries led by the US. This bellicose public discourse proved counter-productive in the long term, as Iraq’s supposed military capacities were one of the reasons for the violent regime change in 2003 and the total collapse of the state in the aftermath of the invasion.

United Arab Emirates: From a Rentier State to a Production-Oriented State The United Arab Emirates stands in stark contrast to Iraq. Its history shows how oil revenues can produce effective states in the absence of war-making. The UAE embarked on economic diversification during the oil boom years and have over

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the years set in place a policy of resource and capital acquisition based on the attraction of foreign direct investment. The welfare provisions and allocations in the UAE have today become sustainable to the point that even during periods of low world oil price the state is able to fulfil its welfare commitments. In creating a sustainable rentier structure, the UAE have managed to break the linkage between declining resources and rising demands for political participation. Oil has played a crucial role in the emergence of the modern state in the UAE. After the end of World War II a renewed strategic interest by external actors emerged in the Persian Gulf. Great Britain, as the patron and protector of the trucial states, had previously cared little about control of the tribal hinterland. But with oil explorations and profits in the offing, territorial control became important. Local rulers were asked to facilitate access for foreign oil companies to these oilfields. This meant that local rulers had to pay money to tribal leaders in order to assuage them.13 In 1939, Abu Dhabi granted an oil concession to the British Iraq Petroleum Company, which created a subsidiary for the exploration of oil.14 By 1958 oil had been discovered in Abu Dhabi and the production and export of oil began in 1962. Initially, Abu Dhabi oil production reached 6 million barrels a year, of which 5 million barrels were exported.15 This gave an estimated £706,000 of additional revenues to the Abu Dhabi government in 1962 alone. By the end of the decade, Abu Dhabi’s oil revenues had reached £96,998,000 and oil production an annual 284 million barrels, of which 31 million were produced in Dubai where the production and export of oil had started in September 1969. By 1972 oil production had reached 440 million barrels and brought to Abu Dhabi oil revenues worth £220,400,000. As these numbers indicate, Abu Dhabi has been bearing the bulk of oil exports and with it the majority of revenues for the federal state. In 1974, 84 per cent of the UAE’s total revenues came from Abu Dhabi. In 1976 this number stood at 82 per cent and in 1978 it was still at a high of 77 per cent (Askari et al., 1982, p. 135). This enormous oil wealth was judiciously used for development of modern public infrastructure, transformation of municipalities, as well as an extensive state apparatus. Rather than investing in the military-defence complex as in Iraq, the UAE embarked on a policy of economic development by emphasizing economic diversification. In Dubai, for example, an ambitious development policy was conducted by the regime of Sheikh Rashid Bin Maktum. The development projects included town improvement (construction of a runway in June 1965 and a bridge in May 1963), land management, and infrastructure for improved trade (construction of port Rashid, which was opened on 5 October 1972). Other projects included the establishment of social welfare services, such as medical facilities, educational establishments, and a modern police force in 1956. The magnitude of these endeavours is highlighted by the fact that the population of Dubai doubled between 1968 (59,000 inhabitants) and 1974 (est. 120,000 inhabitants) (Heard-Bey, 1996, p. 269). The UAE state and society indeed experienced dramatic and rapid transformation over the last few decades: Till the pre-oil era, it was one of the poorest Arab countries, its people having suffered tremendous economic hardship after the collapse of the pearling industry – for long

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State-formation in the UAE was characterized by redistribution of existing oil revenues, by investment in national infrastructure, and by attracting new capital investments. In this way, the UAE combined the positive attributes of a rentier state (huge oil investment and revenues) with those of a production-oriented welfare state. The UAE have attempted to diversify their economy and to attract foreign investments as part of the plan for the post-rentier phase. Their policy trajectory shows that the country is leaving the rentier tendencies of the past behind, and that the foundations for lasting stability and prosperity have been laid. Several indicators suggest that the UAE are moving beyond a rentier state. Per capita GDP in purchasing power parity (PPP) has risen considerably since the late 1980s (in 1989 at US$ 17,000 and in 2001 at US$ 26,000). Real GDP growth has averaged 7 per cent a year since 1993. This was due to rapid diversification of the non-oil sectors (energy-intensive petrochemicals, fertilizers, cement, and aluminium) and more recently, of tourism, re-export, trade and manufacturing. While these non-oil sectors accounted for 70 per cent of GDP and 43 per cent of exports in 2000, the country’s economy grew at 9 per cent a year in real terms in the 1990s. Moreover, the UAE are among the top 20 economies in Internet usage and the country has the most access to Internet in the Middle East and North Africa (29 per cent of the population use the Internet compared with 16 per cent in Bahrain, 8 per cent in Kuwait, 3 per cent in Saudi Arabia and Oman, and 1 per cent in Morocco and Egypt) (World Bank, 2003, p. 25). Among the forward-looking policies and programmes pursued during the boom years were the establishment of various national large-scale projects intended to create a common Emirate identity (nation-building), a political leadership committed to trade and equitable growth between the seven emirates (trade openness)16, investments in social policies such as the Abu Dhabi Fund for Development or inter-Emirate economic aid (social justice)17, and the diversification of exports and foreign investment through free zones (favourable business climate).18 Indeed, exports from the UAE have relied heavily on exports from its free zones, particularly those located in Dubai. In 2002 exports stood at US$ 51bn and in 2003 rose to US$ 61bn (Middle East Monitor, 2004, p. 6). The UAE have managed to use their oil revenues to develop a regional hub for foreign investment in the areas of construction, tourism, waste water treatment, desalination, natural energy exploration, and in the transportation sector and through the use of free trade zones. These policies (nation-building, trade openness, social justice, and favourable business climate) clearly point towards an awareness of the necessity to think and act beyond the rentier state. They remain, nevertheless, partly bound by a rentier logic, as the UAE’s growth rate over the past years and the country’s economy remains dominated by oil (Emirates Bulletin, 2004). There are still limits to the transformation of the rentier state, as privatization has changed little in the structure and way economics and politics interact. Many of the features of a personalized economy still exist, such as the local sponsorship system (kafil),

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the informal nature of politics (wasta), and the persistence of neo-patrimonial structures. Recent proposals to abolish the agency law that restricts foreigners to minority stakes are pointing towards more fundamental changes. These proposals are of course linked to issues of economic privileges, equal wealth distribution and the integration of foreign workers and hence clearly linked to the question of political rule and political legitimacy. Economic reforms have nevertheless created a diversification of the economy based on creating new rents and a favourable investment climate. While the country has not moved completely beyond the rentier state, it finds itself in a transition period from a rentier state to a production-oriented state. As already argued in this chapter, rentierism broadly poses an obstacle to the formation of strong and legitimate states, since stability rests on an implicit social contract through which consent is bought via welfare benefits funded by revenues from extractive resources (in this case, oil). In the event of declining oil revenues and when the social contract of welfare provisioning is no longer sustainable, this developmentalist trajectory shows its weaknesses and fragility. The case of Iraq and a number of other Gulf States is illustrative of the pitfalls inherent in this rent-driven pattern of state-formation and nation-building. This study has identified two distinct patterns of state building and development pursued by the oil-rich Middle Eastern rentier states: the first is one based on an attempt to diversify the resource base of the state and to lay the foundations for lasting welfare provisions and, hence, political stability (pursued by the UAE); and the second is one based on the continuation of the traditional rentier paradigm of spending spree in the boom years, and descent to political instability in times of fiscal crisis (e.g. Iraq).19 It is apparent that the path to state-formation and statebuilding pursued by the UAE over the past three decades has laid the foundations for a production-oriented state and for lasting stability and sustained prosperity (Heard-Bey, 2005, p. 358).

Conclusion This chapter has compared two oil rentier states in the Middle East, Iraq and the United Arab Emirates. It has shown that it is oil rents and, not as often assumed, war-making that is the driving force of state-formation and state-building in the Middle East. Generally, oil rents serve as an obstacle to the formation of strong and legitimate states, since stability rests on an implicit social contract through which consent is bought via welfare provisioning. Where oil rents have been used, as in Iraq, for war-making and where military capacity was paid for by rents, state-formation had nearly opposite effects from the ruler-subjects struggles that characterized early modern Europe. The abundance of oil revenues in the case Iraq facilitated an unsustainable degree of militarization that was not matched by the economic and institutional strength of the state beyond the rentier windfall. The overestimation of its rent-dependent military capability and the consequent overstretching of its military capability in actual war-making rendered a destructive blow in the Iraqi context. The combination of rentierism and war-making was

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particularly deadly to the Iraqi state, as it contributed to the unmaking and collapse of the state. The case of the UAE, however, shows how through discreet planning, oil rents were utilized in a more constructive way to enhance stateformation and state-building, and how many adverse policies often associated with rentier states were carefully avoided. The case of the UAE underscores the fact that effective state-formation and state-building in rentier economies largely depends on the formulation and implementation of economic policies that allow for a continuation of welfare provisioning during periods of fiscal crises. Theoretically, this chapter has made the case that the role of institutions of organized violence in the process of state-formation (war-making as statemaking), the rentier nature of most Arab states (rentierism), and the interplay between domestic pressures for state-formation and external influences are intertwined. Focusing solely on the war-making capacity and orientation of states has the danger of trivializing other important dynamics linked to the rentier nature of the states in the Arab Middle East (Tilly, 1991). Based on the notion of ‘no taxation, hence no representation’, most rentier states of the oil-rich Middle East rely on oil rents and not on domestic sources of resource extraction (taxation). It is argued that the more a state relies on direct measures of taxation, the more the collection of taxes would depend on an efficient bureaucracy and voluntary compliance of citizens. Tax paying citizens invariably seek to hold the state to a high level of accountability, and in addition, make demands for greater political rights and civil liberties. The non-tax revenue base of Middle Eastern rentier states tends to hinder an active engagement with the citizens and society which is based on the principle that revenue extraction invariably provokes demands for political rights and responsive representation. The resulting state structures are therefore largely divorced from society; they are as such not strong enough to actively cope with societal demands in times of crises. Only where concrete policies to attract non-oil revenues are pursued can the logic of economic diversification be created to support the emergence of effective state structures.

Notes 1 2

3

4

Oil rentier states are those states in which revenues from oil exports contribute well over 40 per cent of the state’s overall revenues (Beblawi, 1990; Luciani, 1990). With respect to the view that taxation capacity is the key test for state capacity, see Barnett (1992), Hood (2003, p. 213), and Fauvelle-Aymar (1999, p. 391). State capacity is hence infrastructural state power, namely ‘the capacity of the state to actually penetrate civil society and to implement logistically political decisions throughout the realm’ (Mann, 1993, p. 55). As historians of taxation have shown, this distinction is indeed an important one: ‘The true magnitude and significance of the tax load have in the past been concealed from the people. The fiscal principle would have to yield to the economic principle; the direct method of raising state revenues should become the rule and the indirect method the exception.’ See Wicksell (1988, p. 128) and Waterbury (1997, p. 171). Income taxes were first introduced in 1909 under Ottoman rule. After World War I they were abolished and an income law was only reinstated in 1927. Modifications and

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refinements came through laws no. 36 of 1939 and no. 63 of 1943, and the passing of an intermediate law no. 85 in 1956 and eventually a regular tax law no. 44 of 1968. Up until the 1960s, income taxes contributed modestly to the ordinary budget, ranging from between 3.4 per cent to 5 per cent depending on the year (Sharif, 1968, pp. 543 and 549). In 1927 exploration rights were granted to the Iraqi Petroleum Company (IPC), which despite its name was a British oil company. Questions of nationalization came to the forefront after the revolution of July 1958 and in December 1961 the government seized 99 per cent of the IPC and in 1973 fully nationalized it. In the mid-1970s, personal income up to an annual level of 500 Dinars was theoretically subject to a 5 per cent tax, gradually increasing for income between 500–1,000 Dinars to a 10 per cent tax. The tax drastically increased for the richest of society, where income above 15,000 Dinars was taxed at 75 per cent (Askari et al., 1982, p. 108). In the 1960s an individual had to earn nearly 7 times the per capita income (based on the year 1963) before being subject to a personal income tax. For a married man with dependants under the age of 18, earnings would have to exceed 14 times the per capita income before tax assessment would occur. Furthermore, about 91 per cent of all personal income tax paid came from residents of the province of Baghdad. The concentration of income tax payers was so extreme that in 1966 less than 1 per cent of the entire population paid any income tax (Sharif, 1968, pp. 543–55). The welfare benefits allocated to society in the form of state-provided jobs are illustrated by the following numbers. At the end of the Gulf War in 1991, the civilian branch of the state employed 21 per cent of the working population and 40 per cent of Iraqi households depended directly on government payments (Dodge, 2003, p. 107). The price of a barrel of oil dropped from $27 in 1985 to $15 in early 1986. As quoted in Dawisha (2002, p. 133). In official speeches, Saddam Hussein switched between Modern Standard Arabic and Iraqi dialects in order to create a sense of closeness with the people and his listeners. One such example is given in Mazraani, 1995. In the realm of tribal justice, one can speak of the existence of a parallel legal structure. Tribal law included compensations for murder (diya or blood money) or disgraceful acts (hasham) and became a common feature in some part of Iraq, thereby supplanted state law (Kadhim, 1961; Baram, 1997). The rulers of Sharjah and Ras al-Khaimah resumed responsibility over the tribes of Bani Qitab, Khawatir, and Ghafala, which previously had seen themselves as independent of any Trucial State. In one case, this strategy of buying control and territorial authority did not work, and led to the recognition of Fujairah as an independent trucial state in 1951 and the reversion of the city of Kalba to Sharjah (Walker, 1994, pp. vii and viii). Bahrain had been the regional front-runner in this category. In 1932, oil had been discovered in Bahrain and after the signing of an agreement for oil exploration, production commenced already in the 1930s. Numbers are based on figures from the Central Bank: http://www.cbuae.gov.ae/ dynamicGrowth/htm. Each Emirate has tried to foster its own comparative advantages in trade, with Abu Dhabi focusing on energy-based industries, Dubai on commercial, telecommunications, tourism, and financial services, Sharjah on textiles and light manufacturing, and the Northern Emirates on agriculture, cement and shipping. Another indicator of trade openness is that effective trade tariffs stand at 4 per cent.

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17 The Abu Dhabi Fund for Development was created by law no. 10 in 1999. Several policies to accommodate the needs of the poorer northern Emirates have been put in place (Rizvi, 1993, p. 667). 18 Another attempt has been to diminish the UAE’s reliance on the US$ by diversifying its foreign reserves with Euros (98 per cent of UAE’s foreign reserves are still in US$). In 2005, the Governor of the Central Bank, Sultan Bin Nasser al-Suwaidi, announced that up to 5 per cent of the US$ 19.1bn were to be transformed into Euros (Neue Zürcher Zeitung, 12 July 2005). This reliance is linked in general terms to the rentier nature of the economy, since the UAE – as most countries in the Middle East – have pegged its currency to the US$ in order to facilitate comparability with the world oil price (also in US$). Due to the devaluation of the US$ in recent years (since January 2001 around 35 per cent towards the Euro), there have been voices within OPEC that have raised the possibility of selling oil on the world market in Euro, as was, parenthetically, announced by Iraq prior to the US invasion in 2003 (Neue Zürcher Zeitung, 12 July 2005). 19 Other examples of unstable rentier states are Saudi Arabia, Iran and Algeria (see the contribution of Dauda Abubakar in this volume). With regard to Saudi Arabia, population growth and misallocation of resources seem to be the two factors that have characterized its history over the past decade (Hertog, 2008).

References Al-Khafaji, I. (2000), ‘War as a Vehicle for the Rise and Demise of a State-controlled Society: The Case of Ba‘thist Iraq’, in S. Heydemann (ed.), War, Institutions, and Social Change in the Middle East, Berkeley, CA: University of California Press, pp. 258–91. Anderson, L. (1990), ‘Policy-Making and Theory Building: American Political Science and the Islamic Middle East’, in H. Sharabi (ed.), Theory, Politics and the Arab World: Critical Responses, London: Routledge, pp. 52–80. Askari, H., J. Cummings and M. Glover (1982), Taxation and Tax Policies in the Middle East, London: Butterworth Scientific. Baram, A. (1997), ‘Neo-Tribalism in Iraq. Saddam Hussein’s Tribal Politics 1991–1996’, International Journal of Middle Eastern Studies, 29, pp. 1–31. Barnett, M. (1992), Confronting the Costs of War: Military Power, State, and Society in Egypt and Israel, Princeton, NJ: Princeton University Press. Beblawi, H. (1990), ‘The Rentier State in the Arab World’, in G. Luciani (ed.), The Arab State, London: Routledge, pp. 85–98. Bengio, O. (1998), Saddam’s Word: The Political Discourse in Iraq, Oxford: Oxford University Press. Bengio, O. (2002), ‘Saddam Husayn’s Novel of Fear’, Middle East Quarterly, 9(1), pp. 9–18. Dawisha, A. (2002), ‘Footprints in the Sand: The Definition and Redefinition of Identity in Iraq’s Foreign Policy’, in S. Telhami and M. Barnett (eds), Identity and Foreign Policy in the Middle East, Ithaca, NY: Cornell University Press, pp. 117–36. Dodge, T. (2003), ‘US Intervention and Possible Iraqi Futures’, Survival, 45(3), pp. 103–22. Emirates Bulletin (2004), ‘Oil Still Determines UAE’s Growth’, Emirates Bulletin, 195, 19 October. Ertman, T. (1997), Birth of the Leviathan: Building States and Regimes in Medieval and Early Modern Europe, Cambridge: Cambridge University Press.

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Fauvelle-Aymar, C. (1999), ‘The Political and Tax Capacity of Government in Developing Countries’, Kyklos, 52(3), pp. 391–413. Freitag, U. (1994), ‘Writing Arab History: The Search for the Nation’, British Journal of Middle Eastern Studies, 21(1), pp. 19–37. Heard-Bey, F. (1996), From Trucial States to United Arab Emirates. A Society in Transition, London: Longman. Heard-Bey, F. (2005), ‘The United Arab Emirates: Statehood and Nation-Building in a Traditional Society’, Middle East Journal, 59(3), pp. 357–75. Hertog, Steffen (2008 forthcoming), ‘Saudi Arabia and the WTO: Internal Segmentation and External Conditionality’, Review of International Political Economy. Hintze, O. (1975), ‘Military Organization and the Organization of the State’, in F. Gilbert (ed.), The Historical Essays of Otto Hintze, New York: Oxford University Press, pp. 178–215. Hood, C. (2003), ‘The Tax State in the Information Age’, in T.V. Paul, G.J. Ikenberry, and J.A. Hall (eds), The Nation-State in Question, Princeton, NJ: Princeton University Press, pp. 213–27. Kadhim, M.N. (1961), ‘Reaction to Crime under Tribal Law and Modern Codification in Iraq’, DPhil thesis, St Catherine’s College, Oxford University. Luciani, G. (1990), ‘Allocation vs. Production States: A Theoretical Framework’, in G. Luciani (ed), The Arab State, London: Routledge, pp. 65–84. Luciani, G. (1994), ‘Oil Rent, Fiscal Crisis of the State and Democratization’, in G. Salamé (ed.), Democracy Without Democrats? The Renewal of Politics in the Muslim World, London: I.B. Tauris, pp. 130–55. Mahdavy, H. (1970), ‘The Patterns and Problems of Economic Development in Rentier States: The Case of Iran’, in M.A. Cook (ed.), Studies in the Economic History of the Middle East, London: Oxford University Press, pp. 428–67. Mann, M. (1993), The Sources of Social Power, vol. II, Cambridge: Cambridge University Press. Mazraani, N. (1995), ‘Functions of Arab Political Discourse: The Case of Saddam Hussein’s speeches’, Zeitschrift für Arabische Linguistik, 30, pp. 22–36. Middle East Monitor (2004), 14(10), p. 6. Mofid, K. (1990), The Economic Consequences of the Gulf War, London: Routledge. Moore, M. (2004), ‘Revenues, State Formation, and the Quality of Governance in Developing Countries’, International Political Science Review, 25(3), pp. 297–319. Ritvi, S.N.A. (1993), ‘From Tents to High Rise: Economic Development of the United Arab Emirates’, Middle Eastern Studies, 29(4), pp. 664–78. Sharif, S. (1968), ‘Income Tax in Iraq’, Bulletin of International Fiscal Documentation, 22(12), pp. 543–55. Schwarz, R. (2008 forthcoming), ‘The Political Economy of State-Formation in the Arab Middle East: Rentier States, Economic Reform, and Democratization’, Review of International Political Economy. Sluglett, P. and M. Farouk-Sluglett (1990), ‘Iraq Since 1986: The Strengthening of Saddam’, Middle East Report, 167, pp. 19–24. Tilly, C. (ed.) (1975), The Formation of National States in Western Europe, Princeton, NJ: Princeton University Press. Tilly, C. (1985), ‘War Making and State Making as Organized Crime’, in P.B. Evans, D. Rueschemeyer, and T. Skocpol (eds.), Bringing the State Back In, Cambridge: Cambridge University Press. pp. 169–91. Tilly, C. (1990), Coercion, Capital and European States, AD 990–1990, Oxford: Basil Blackwell.

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Tilly, C. (1991), ‘War and State Power’, Middle East Report, 21(171), pp. 38–40. Walker, J.F. (1994), The UAE: Internal Boundaries and the Boundary with Oman, London: Archive Editions. Waterbury, J. (1997), ‘From Social Contracts to Extraction Contracts: The Political Economy of Authoritarianism and Democracy’, in J. Entelis (ed.), Islam, Democracy, and the State in North Africa, Bloomington, IN: Indiana University Press, pp. 141–76. Waterbury, J. (1998), ‘The State and Economic Transition in the Middle East and North Africa’, in N. Shafik (ed.), Prospects for Middle Eastern and North African Economies: From Boom to Bust and Back?, Houndmills: Macmillan, pp. 159–77. Wicksell, K. (1988), ‘A New Principle of Just Taxation’, in J. Gwartney and R. Wagner (eds), Public Choice and Constitutional Economics, London: Jai Press, pp. 117–30. World Bank (2003), Trade, Investment and Development in the Middle East and North Africa: Engaging with the World, Washington, DC: World Bank.

Chapter 14

Rethinking the Rentier Syndrome: Oil and Resource Conflict in the Persian Gulf Dauda Abubakar

Introduction Although the issue of rentierism and its impact on the dynamics of politics, society and development processes in the global South has received great attention from many scholars,1 there remains no definitive resolution of the resource curse debate, which is premised on the assumption that the availability of lootable strategic economic resources such as oil, diamond, gold, copper, timber and coltan contribute to precipitation and prolongation of insurgency conflict, thereby forestalling or undermining democracy. For example, in a study on the nexus between oil and democracy, Michael Ross concluded that oil ‘does greater damage to democracy in poor states than in oil-rich ones … even if exports are relatively small’ due to the deleterious impact of three crucial variables, namely: ‘taxation effect’, ‘repression effect’, and ‘modernization effect’ (Ross, 2000). Furthermore, Ross argues that the collective impact of these three variables on fiscal policies of the state ultimately impinges on the regime type, ‘hence governments that fund themselves through oil revenues and have larger budgets are more likely to be authoritarian; [while] governments that fund themselves through taxes … are more likely to become democratic’. Therefore, political formations or states, which entrench rigorous extraction capacities through taxation are candidates for the enthronement of democracy since there is ‘no taxation without representation’ (Yates, 1996, p. 34). However, in rentier formations, the absence of embedded state taxation capacities leads to the shrinking of the democratic space where rentier elites claim there can be ‘no representation without taxation’. Because social services in sectors such as education, health and infrastructure are provided by the state using the rent derived from oil exports, rentier elites constrain the prospects of mass participation in the political process. Thus, many rentier state theorists argue that one of the fundamental limitations of rentierism is that it asphyxiates the flourishing of democratic values through political despondency and departicipation. Furthermore, at the economic level, instead of production and extraction, the function of a rentier state is restricted to distribution and allocation of what has been described as ‘rentier largesse’ (Omeje, 2006, p. 11).

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However, critics of the rentier state paradigm (Okruhlik, 1999, p. 295) insist that the framework is ‘limited because it relegates political choices to a back seat, behind structural economics’, and that its analytical utility can be enhanced if scholars ‘construct more explicit linkages between state strategies of expenditure and the political consequences for particular social groups’. In the specific instance of Saudi Arabia, Okruhlik argues that the rentier framework fails to adequately account for dissent ‘because it reifies the state and emphasizes state resources and autonomy from the social consequences of expenditure’. Indeed, historical evidence suggests that in the Persian Gulf, rentier states such as Iran, Iraq and Saudi Arabia have experienced internal revolutionary turmoil and political dissent that have swept dictatorial regimes such as Shah Reza Pahlavi from power in 1979. In Iraq, both Kurds and Shiite groups have opposed the late Saddam Hussein’s authoritarian Ba’athist rule and actively supported foreign intervention, first, in 1991; and then in 2003, which culminated in his tumultuous overthrow. Within monarchical Saudi Arabia, Okruhlik posits that oil rent ‘did not buy the support or loyalty of different social groups even during the boom. Rather, at most, it may have [only] purchased temporary complacency’ (Okruhlik, 1999, p. 297). From a comparative perspective, competition over oil resource control in Nigeria’s Niger Delta has persistently been a source of low intensity [insurgency] violence and opposition to military autocracy, the Nigerian rentier state, as well as multinational corporations (Watts, 2004, 1999; Osaghae, 1995; Obi, 2001; Omeje, 2006). Similarly in Algeria, the Islamic Salvation Front (FIS) has waged a violent campaign against the Boutiflika regime since the early 1990s following the annulment of an election that would have led to the victory of the Islamist party within a democratic framework. Thus, the claim that rentier states and elites do not have to depend on civil society and the electorate for their legitimation, having been insulated by oil wealth and the attendant patronage networks; and hence suffer no serious challenge to their power, may not be substantiated by the empirical evidence in certain oil-producing states. As political experiences of Saudi Arabia, Nigeria, Iran, Iraq and Algeria suggest, rentier states and elites experience opposition to authoritarianism from civil society; and, in the context of the Persian Gulf, external intervention further sharpens internal conflicts that threaten not only subregional security, but also the stability of the international system. This chapter argues, among other things, that although the theory of the rentier state helps to elucidate the diverse impediments to the development of oil-dependent countries in the global South, it scarcely incorporates the critical trajectories of geopolitical conflicts, often aggravated by external interventionism and militarization. The recycling of oil wealth through the procurement of armaments by the Persian Gulf states in the Cold War epoch not only deepened their economic dependence on foreign patrons; but, above all, it exacerbated the penetration of the Gulf States themselves, and the entire region by self-seeking powers, thereby entrenching arms build up, poverty, socio-economic inequality and the ultimate radicalization of society against monarchical authoritarianism, predatory rule and corruption of the erstwhile theocratic states. As the sovereignty and identity of the Persian Gulf states got compromised through close economic

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and military alliances with external patrons, their societies increasingly became fractionalized, thereby deepening violent responses from fundamentalist groups opposed to western ideologies of modernity and politics of interventionism. For Islamist fundamentalists in the Persian Gulf rentier states, close alliance with western secular states and modernist values undermine the theocratic foundations of their states, identity and autonomy. Thus, understanding the complexity and dilemmas of the rentier space and politics in predominantly theocratic and monarchical autocracies of the Persian Gulf necessarily calls for the interrogation of the interface between oil, state power and external militarization, and their implications for socio-political stability within states, as well as regional and international security. I shall argue that the incorporation of a rentier formation into the world capitalist economy through the nexus of oil and gas resources not only extroverts the economic sector, but also politicizes identities, thereby deepening internal conflicts. I shall draw my illustrations from the Persian Gulf which currently contains an estimated 65 per cent of the world’s untapped petroleum reserves. As Michael Klare asserts, with proven reserves of 673 billion barrels of oil, along with unknown quantity of uncharted supplies, the rentier states of the Persian Gulf will continue to extract oil for several decades into the twenty first century, thereby remaining a crucial geo-strategic link in the ever expanding global capitalist economy, which is highly dependent on imported hydro-carbon (Klare, 2001, p. 55). This raises fundamental questions, which this chapter will attempt to answer. First, why have Persian Gulf states remained at the lower level of human development index, in spite of the enormous oil wealth generated into their coffers since the oil price increases of the 1970s? To what extent does the theory of the rentier state and politics provide a coherent understanding of this contradiction? Second, to what extent could the embedded assumptions of ‘resource curse’ and ‘resource conflict’ theories compliment our understanding of the dilemmas of politics in rentier formations of the global South? Third, how does the post-Cold War structure and transformation of the international system affect geo-strategic alignments in the Persian Gulf, particularly the control of territory with vast energy resources where state boundaries are not well defined? In exploring the foregoing questions, the chapter will be divided into three related parts. The section which follows will attempt to sketch a conceptual framework on the notion of rentier space and resource conflict by drawing on the relevant theoretical literature. In section two, I shall examine the linkages between rentierism, geopolitics and conflict in the Persian Gulf. I shall argue that the availability of ‘rentier largesse’ (Omeje, 2006) to the predominantly monarchical and sultanistic regimes of the Persian Gulf not only entrenches oil wealth centralization, patrimonialism, sectarian identity and the militarization of the region, but also engenders violent conflict within and between states in the region. I shall argue that the paradox of rentierism in the Persian Gulf is embedded in the nexus of hydrocarbon resources, which on the one hand generates enormous petrodollars to the state and rentier elites, but on the other hand, simultaneously drives internal socio-political turmoil, radical Islamist fundamentalism, militarization and external interventionism, thereby making the region a vortex of complex postCold War instability. The final section draws some conclusions and specifies the

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regional and global security implications of geo-strategic resource and emerging fundamentalist identity conflict in the Persian Gulf.

Rentierism and the Geopolitics of Resource Conflict: A Conceptual Framework Recent literature in International Political Economy (IPE) on the nexus between geo-strategic resources and ‘war economies’ have demonstrated through empirical research how the availability of economic resources such as oil, natural gas, diamond, timber, coltan, gold and copper to mention a few, deepen insurgency and identity conflicts, which undermine state coherence and political stability, especially in deeply divided post-colonial societies of the global South.2 One of the central hypothesis in the literature on resource conflict put forward by Collier and Hoeffler (2000) is premised on the assumption that insurgency conflicts in resource-rich states are driven by greed and not necessarily grievance, whereby rebels are concerned with ‘opportunities for primary commodity predation’ and that they ‘loot natural resource rents on a continuing basis’. Ballentine and Nitzschke (2005, p. 3) have also demonstrated that natural resource predation and criminal economic activities can have strong regional linkages with crossborder trading networks, regional kin and ethnic groups, and supportive neighboring regimes, particularly where conflicts are embedded in regional propelling structures and catalysts. Another set of theoretical literature on the linkage between natural resources and the processes of socio-economic development is the ‘Paradox of Plenty’ thesis or what Michael Ross describes as the political economy of ‘Resource Curse’ syndrome. Proponents of this perspective assert that the abundance of resource wealth in post-colonial states of the global South has not translated into meaningful development or the positive transformation of the livelihood of the citizenry in such countries because of the way and manner in which resource rent distorts the domestic economic sectoral linkages by entrenching predatory rent-seeking, patrimonialism, corruption and authoritarianism (cf. Karl, 1997; Ross, 2001, 2003, 2004; Klare, 2001; Watts, 1999). For instance, in a study on the relationship between oil and democracy, Ross (2001, p. 356) concludes that embedded dependence on oil wealth, indeed, does hurt democracy. Oil wealth, Ross argues, has restricted democratization not only in the Middle East, but also in oil exporting states of the global South such as Indonesia, Malaysia, Mexico and Nigeria through the triple effects of rentierism, repression and modernization. According to Ross, regimes in the rentier states not only use low tax rates and high spending to dampen pressures for democracy, but also utilize the resource wealth to procure armaments for internal security forces which in turn is used to thwart democratic pressures from civil society through repression. Similarly, in their incisive study of oil and the geopolitics of the Persian Gulf, Le Billon and Khatib (2004, p. 112) assert that: Resource dependence can have a number of adverse effects on governance and societies. Through the rentier effect, governments can rely on fiscal transfers from resource rents,

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rather than statecraft, to sustain their regime. Large resource rents independent of public taxation can result in a coercive effect as rulers finance higher internal security expenditures, warding off democratic pressure domestically and inciting aggressive posturing and policies towards their neighbours and international norms. At a societal level, non-modernisation effects associated with the enclave nature of many extractive resource sectors, such as oil, fail to bring about socio-professional and cultural changes that tend to promote democracy and a thriving civil society.

As stated earlier, with over half of the world’s proven oil reserves and 28 per cent of the world’s current production, the Persian Gulf remains the epicenter of the global political economy of oil and gas resources. Some scholars, particularly Klare, (2001) have argued that since oil is the main engine for generating production in the world economy, its availability in the Persian Gulf has motivated external intervention by major powers, thereby affecting the balance of power within and between the regional states. As one oil expert, Edward L. Morse argues, ‘petroleum is the most versatile fuel source ever discovered [and is] situated at the core of the modern industrial economy … Despite competition from natural gas and nuclear energy, it has maintained its prominence largely because it is the only energy source that can be used across the board – in space heating, as an industrial fuel supply, and as a means to generate electricity – and because it continues to be unrivaled in the transportation sector’ (Morse, 1999). Extending the argument on the strategic significance of oil, Michael Klare contends that petroleum in its various forms such as gasoline, diesel fuel, jet fuel, etc. – accounts for approximately 95 per cent of all transportation energy consumed in the world; and it is estimated that by the year 2020, transportation activities will account for an estimated 52 per cent of worldwide petroleum consumption, up from 43 per cent in 1996 (Klare, 2001). This scenario highlights the increasing geo-strategic significance of the Persian Gulf rentier states. Hence, political stability within and between states in the region will increasingly impact the sustainability of the global economy. The political economy of the rentier space in the Persian Gulf where oil wealth is abundant and yet a majority of the population is asphyxiated under monarchical autocracy, poverty and underdevelopment explains why the region has become the fulcrum of violent Islamist fundamentalism and resilient opposition to Western democracies and modernity. Thus, although oil is central to the industrial global economy, it has also increasingly become a source of internal conflict in producing states and regions. According to Le Billon and Khatib, the availability of vast oil revenues to the Persian Gulf states and quasi-theocratic/ monarchical elites have tremendously deepened inequalities in wealth and power, thereby exacerbating internal dissent, instability and interstate conflict in the region. In the context of Saudi Arabia, for example, although oil resources have not been central to the consolidation of the House of Saud monarchy and the Wahhabi Islamic legitimacy in the Kingdom, oil wealth, nevertheless, played a significant role in ‘shifting the balance of economic and military power from larger agricultural countries in the region to the petro-states of the Persian Gulf through massive arms purchases, financial aid and remittances, as well as the clout of their powerful industrial allies’ (Le Billon and Khatib, p. 110). Simply put, within

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the context of the Persian Gulf, the political economy of the rentier space and practices not only incorporates the stultifying presence and impact of oil wealth on the processes of democratization through the entrenchment of quasi-theocratic authoritarianism; but even more importantly, is the militarization of the region through arms purchases by the ruling elites and the related intervention of foreign powers in their pursuit of secure access and flow of strategic oil resources. As Le Billon and Khatib persuasively argue, oil has also lent greater significance to the issues of territorialization of states and boundaries in the Persian Gulf within parameters that are alien to the political geography and cultural lifestyles of the Arabian Peninsula. Accordingly, as foreign multinational companies competed for securing concessions and sustaining their control over oil and gas fields, ‘local rulers have awarded concessions in border regions, hoping that the association of capitalist claims and backing of foreign troops would secure their share of the new found wealth. Territorial disputes such as the issue of the Iraqi access to the sea or the exploitation of the cross-border oilfields have been among the main reasons and justifications for armed conflicts in the region’ (Le Billon and Khatib, 2004). Thus, protracted conflict by competing rentier states and elites over the definition of territorial boundaries, oil and gas resources have historically shaped the violent geopolitics of the Persian Gulf and foreign intervention in the region. As Le Billon persuasively argues, armed conflicts and natural resources can be directly related in two main ways: first, armed conflicts motivated by the control of resources; and, second, resources integrated into the financing of armed conflicts through predatory networks and the criminalization of state institutions. In the words of Le Billon: Although few wars are motivated by conflict over the control of resources, many integrate resources into their political economy. While it would be an error to reduce armed conflicts to greed driven resource wars, as political and identity factors remain key, the control of local resources influence the agendas and strategies of belligerents. This influence is played out through local resource exploitation schemes, involving the production of territories based on resource location, control and access to labour and capital, institutional structures and practices of resource management, as well as incorporation into global trading networks. To some extent, many contemporary wars are inscribed in the legacy of earlier mercantile wars privately financed to serve economic objectives and similarly focusing on resource rich areas and trading posts. The significance of resources also influences the course of conflict as the localization of authority and motives for violence can be deeply influenced by economic considerations to the point of impeding a transition to peace. (Le Billon, 2001, p. 580)

In what he describes as the ‘political ecology of war’ thesis, Le Billon contends that natural resource endowment could be conceptualized as a historical process of social construction whereby nature is transformed through the human agency of needs, desires, practices and forces of production. From this perspective, the notions of resource scarcity or abundance are relative social constructs embedded within the historical experiences, processes and practices of social and political formations. Unlike the ‘Paradox of Plenty’, ‘Resource Curse’, or the ‘Greed and Grievance’ theses, the political ecology approach insists that resource conflicts

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can be ‘viewed as a historical product inseparable from the social construction and political economy of resources … [involving] … the restructuring of polities and commercial networks, as countries become selectively incorporated into the global economy, often in the form of resource enclaves, in a mutually dependent relationship which encourages and sustains armed conflicts, as the source of power becomes not political legitimacy but violent control over key nodes of the commodity chain’ (Le Billon, 2001, p. 576). Thus, from the political ecology of war paradigm, oil and gas resources in the Persian Gulf are socio-historical and political constructions inscribed in the dialectic of regional and global economy, as well as the geopolitics of militarism that collectively entrench the dominance of the monarchies and rentier elites in power. Thus, it is within the context of the interface of the local-rentier statism, autocratic monarchies, predatory elites – and the major global power economic penetration, militarization, and dominance – that we could understand the complexities of violent resource conflict in the Persian Gulf. Simply put, although the theory of rentierism gives us insight into the nature and character of oil dependent states in the global South, there is the conceptual need to incorporate the impact of external penetration of rentier spaces by major powers, as well as transnational corporations, and how these collectively interact to influence the dynamics of politics in strategic formations such as the Persian Gulf. The next section turns to this important subject matter.

Autocracy, Militarization and the Political Ecology of Conflict in the Persian Gulf As stated earlier, the oil producing and exporting states of the Persian Gulf, namely, Saudi Arabia, Kuwait, Iran, Iraq, Oman, Qatar, Yemen, United Arab Emirates and Bahrain collectively possess an estimated 673 billion barrels of untapped oil reserves. World oil consumption from the region is expected to increase from 27 per cent of world trade in 2001 to 34 per cent by 2025. Advanced industrialized countries such as the European Union (EU), Japan, the United States, as well as rapidly growing economies such as China and India are highly dependent on the Persian Gulf states for the supply of oil resources, including price stability in the international commodity market. It is estimated that China, which has recently emerged as the second largest consumer of oil, after the US, will increase its dependence on imported oil by 45 per cent in 2010. In India, oil account for approximately 37 per cent of its total energy consumption and 57 per cent of it is imported mainly from the Persian Gulf states. Unless Russian supplies increase from the Caspian basin or Siberia, it is estimated that EU dependence on imported oil could increase from the current rate of 70 per cent to almost 90 per cent in 2030 with a significant portion imported from the Persian Gulf. By 2010, it is estimated that Asian demand for Persian Gulf oil will significantly increase and surpass that of European Union and North America (Le Billon and Khatib, 2004, p. 114). One unique dimension of oil resources in the Persian Gulf region is not only in terms of its huge reserves, but even more fundamentally is the geology whereby oil deposits are highly concentrated and located close to the surface, thereby making

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it relatively easy to explore and extract. Thus, Persian Gulf oilfields are not only more productive in yielding resources, but also constitute strategically profitable source of high profit for oil multinationals and other stakeholders in the global industry. As Klare (2001) aptly asserts, even if new oilfields are discovered in North Atlantic, Siberia, Alaska or other remote locations, the Persian Gulf states ‘can provide the vast amounts of hydrocarbons that will be needed to satisfy rising demand in the twenty-first century’. Within the Persian Gulf oil producing region itself, there are five major ‘swing’ suppliers such as Saudi Arabia with an estimated 263.5 billion barrels (bbl) in proven reserves which represents approximately 25 per cent of the world total. The Saudi Kngdom is closely followed by four other countries with large reserves: Iraq with 112.5 bbl; the United Arab Emirates (97.8 bbl); Kuwait (96.5 bbl); and Iran (89.7 bbl). Michael Klare rightly underlines the strategic significance of the Persian Gulf oil-producing states by arguing that since the region has proven reserves of 673 billion barrels along with unknown quantity of uncharted supplies, ‘the Gulf states can continue to extract oil from the ground for several decades to come at current or even higher rates of production…without depleting their available reservoirs’. As the Table below demonstrates, even within the Persian Gulf oil stakeholders, the Saudi Kingdom with its vast reserves and large daily production for the international market – extracting about 8.6 million barrels per day in 1999, representing approximately 12 per cent of total worldwide production – remains a paramount owner of untapped oil and gas resources at both regional and global levels. According to Klare, ‘Saudi Arabia alone harbours more oil than North America, South America, Europe and the former Soviet Union combined … [and geologist believe] … that continued exploration will result in additional reserves, thus enhancing Saudi Arabia’s status as the world’s leading supplier of petroleum’. Klare further argues that even if worldwide oil consumption increases by 55 per cent between 1997 and 2020, as projected by the US Energy Department, a significant share will have to come from the Persian Gulf since there is no other regional supplier with enough reserves to sustain such increase. It is also pertinent to state that in addition to Saudi dominance in terms of proven reserves and daily production, Table 14.1 reveals the strategic proven oil reserves of other key producing states such as Iraq, UAE, Iran and Kuwait. In terms of inter-state conflicts in the Persian Gulf, the struggles over control of oil and gas rich territories, pipelines, islands, water basins and sea ports are certainly constitutive dimensions of the political ecology of resource war in the region. For example, in 1990–1991 Iraq under the late Saddam Hussein invaded oil rich Kuwait, placing his relatively well equipped troops within reach of Saudi Arabia’s Hasa oilfields. It took the intervention of the United Nations through a Western multinational coalition forces led by the United States to secure Kuwait’s sovereignty. Saddam’s strategic calculation in terms of economy and stakes of oil resources is that the incorporation of Kuwait into Iraq would give the latter a dominant control of large oil reserves with which to assert Iraqi supremacy and hegemony, not only in the Persian Gulf but also in the Arab world at large. Furthermore, the control of large oil reserves within the Persian Gulf would empower Saddam Hussein and the Ba’ath regime to significantly influence not

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Table 14.1 Oil production and reserves in the Persian Gulf, 1999 Country

Production mbd

% of world total

Proven reserves bbl

% of world reserves

Iran

3.55

5.1

89.7

8.7*

Iraq

2.58

3.6

112.5

10.9*

Kuwait

2.03

2.9

96.5

9.3*

Oman

0.9 1

1.3

5.3

0.5

Qatar

0.72

1.0

3.7

0.4

Saudi Arabia

8.60

11.9

263.5

25.5*

UAE

2.51

3.2

97.8

9.4*

Yemen

0.40

0.6

4.0

0.4

Other

0.10

0.1

0.2

–

Total

21.40

29.7

673.2

65.1

Notes bbl = billion barrels. mbd = million barrels per day. * Persian Gulf states with large proven reserves that can affect world supply and prices. Source: BP Amoco, Statistical Review of World Energy, 2000.

only the flow, but also the price of the commodity in the international market. Such was the threat that leading industrialized market economy consumers, particularly the United States, European Union and Japan would not allow because of the effect that the interruption of oil flow from the Gulf would have on their economies, as well as global capitalist production and trade. It suffices to indicate at this point that the nature of conflict in the Persian Gulf region is inscribed in the social construction of oil as ‘black gold’, as well as the discursive narratives in the media and policy circles linking oil to the ‘national security’ of western capitalist countries and the global economy. It is through this ideology of militarization of the strategic Middle Eastern oil region for national security that interventionism and pre-emptive regime change in the Persian Gulf is legitimated as a foreign policy tool of key Western countries, particularly the US and Britain, as demonstrated in the 2003 invasion of Iraq. In the projection of future global supply and demand, Klare contends, the Persian Gulf alone ‘will account for an ever expanding share of the world’s requirements: 27 per cent in 1990 to 33 per cent in 2010 and 39 per cent in 2020’. The US Department of Energy estimates that global imports of Persian Gulf oil will more than double between 1997 and 2020, from 16.3 to 36.4 million barrels per day. As Table 14.2 below indicates, China’s imports is projected to increase by 960 per cent within the next two decades, while that of developing nations

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of Asia will rise by 114 per cent; and North American countries will rise by approximately 105 per cent, thereby deepening competition not only over access to oil and gas fields, but also the entrenchment of enduring security alliances that will exacerbate militarization of the region, elite predation and corruption in the Persian Gulf rentier formations. As Michael Klare suggests: ‘oil and gas deposits located in contested areas will become increasingly valuable, and so the claimants to these reserves will face greater temptation to seize and occupy them through the use of force’ (Klare, 2001).

Table 14.2 Global imports of Persian Gulf Oil, 1997 and 2020 (in million of barrels per day) Importing region and country

Actual imports 1997

Estimated imports 2020

% increase 1997–2020

North America*

2.0

4.1

105

Western Europe

3.5

3.7

6

Developed Asia**

4.8

5.5

15

China

0.5

5.3

960

Developing East and South East Asia

4.2

9.0

114

All others

1.3

8.8

577

16.3

36.4

123

Total, all countries Notes

* = United States, Canada and Mexico. ** = Japan, Australia and New Zealand. Source: US Department of Energy, International Energy Outlook 2000, Table 13.

One of the significant aspects of Table 14.2 above is that it reveals how the US, China, India and the growing economies of Asia will increasingly be dependent on Persian Gulf oil resources for their imports. It is also important to note that the European Union countries are increasingly reducing their dependence on Persian Gulf oil, partly because of the perception of political instability in the region and the associated fear of interruption of supplies. Generally, the EU is increasingly turning its attention to supply of energy resources from Russia and Central Asia. The rapid economic growth of China and Indian economies and their dependence on the Persian Gulf will still make the region critical in the global oil supply chain, thereby deepening competitive intervention and violent confrontation within the rentier states themselves and the region in general. Klare perceptively captures the emerging political ecology of resource conflict in the Persian Gulf as follows:

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239

Increased dependence on Persian Gulf energy [by major powers] will also generate new sources of conflict. As more and more nations come to rely on the Gulf for their essential imports of petroleum, the competition for access to the available supply will intensify. Market forces, will of course, help alleviate these pressures by allowing better off countries to procure what they need through the payment of higher fees, and by compelling less wealthy states to somehow dampen demand. But some importing countries may seek alternative means of satisfying their requirements, such as forming military alliance with local [regional] powers and trading weapons and other forms of assistance for oil. Such arrangements have already been tried in the Gulf – France maintained ties with Saddam Hussein before 1990, while China is said to have formed such a relationship with Iran – and could become more common in the years ahead. With many states competing for access to oil in this manner, relations between rivals within the region will become more strained and the risk of combat between them will grow. In a worst-case scenario this could lead to a clash between the external backers of rising Gulf powers. (Klare, 2001; emphasis mine)

China, for instance, with its resurgent economy and thirst for oil, has lately embarked on aggressive foreign policy posture aimed at securing regular supply from different parts of the world, including African countries like Nigeria, Sudan and Angola; and also from Latin American countries, especially Venezuela. Within Latin America itself, the populist Venezuelan President Hugo Chávez has increasingly expressed the need for oil exporting countries of the global South to exert control over supply and price of oil in the international market. Chávez’s radical stance is likely to increasingly draw his country closer to China in terms of global ideological orientation. It is also pertinent to state that China’s search for oil resources has fundamentally been guided by its economic interests at the expense of human rights conditions and violence against oil communities in the producing states. For example, within the United Nations Security Council, China has been protective of Sudan’s Omer El-Beshir’s regime over the genocidal violence in Dafur; and it has consistently blocked any effort by the world community at taking punitive measures against Khartoum. The Dafurian crisis has degenerated into a catastrophic humanitarian disaster, which has left over 200,000 people dead thus far; and displaced over one million civilian population into Chad, thereby deepening insurgency violence and humanitarian crisis in Chad. Furthermore, China which has significant investment through its national oil corporation – China National Oil Company – in Sudan’s oil sector; has armed the Sudanese state, thereby exacerbating violence by the ‘Janjaweed’ militia against innocent civilians in post-colonial Africa. Similarly, China’s close alliance with Iran in the Persian Gulf tends to deepen the militarization of the Islamic Republic as Iran asserts its Shi’ite identity in the predominantly Sunni Persian Gulf. Since from the 1930s, the United States has been a strong supporter of the Saudi Arabian monarchy founded by King Ab al-Aziz al-Saud. When the Arabian American Oil Company (ARAMCO) struck oil in commercial quantities in 1938 in the Hasa region along the shores of the Persian Gulf, Saudi-American cooperation increasingly became interdependent. While the Saudi monarchy needed security from its neighbours, especially Iraq and Iran; the United States, on the other hand, is interested in the Kingdom because of its vast oil and gas resources. Thus, historically, Saudi-US

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relations has fundamentally been shaped by the ‘oil-for-security’ nexus in which the monarchy assured regular flow of oil to the United States, while the latter provided security from internal and external threat to the House of Saud and their Kingdom. In 1951, the Saudis concluded a mutual defense pact with the US, which included a long term lease of the Dhahran airfield under the auspices of the US Military Training Mission (USMTM) to the Saudi Kingdom. After the 1973 oil embargo by Arab oil exporting countries against European countries and the United States for their support to Israel in the Arab-Israeli war, the US foreign policy strategy expanded in the Persian Gulf to incorporate not only access to oil resources and the security of the Saudi Kingdom; but, oil and gas resources in the region were conceptualized within the broader framework of US ‘energy security’. Following the 1979 Islamic revolution that swept the Shah of Iran from his throne and the 1980 Soviet invasion of Afghanistan, President Jimmy Carter told the joint session of US Congress that: ‘an attempt by any outside force to gain control of the Persian Gulf region will be regarded as an assault on the vital interests of the United States of America … [and] will be repelled by any means necessary, including military force’ (Klare, 2001). It is this original formulation of what came to be known as the ‘Carter Doctrine’ that has defined US interventionist policy leading to militarization of its key allies in the Persian Gulf. When Iraq annexed Kuwait in 1990, President George H.W. Bush told the Saudi monarch King Fahd that: ‘the security of Saudi Arabia is vital – basically fundamental – to US interests and really to the interests of the Western world’ (Pollock, 2002). Although US policy towards Iraqi invasion of Kuwait was premised within the narrative of international norms such as sovereignty and that aggression will not be tolerated as was the case with Nazi expansionism in the 1940s; the primary interest of the US is primarily that it would not tolerate any geopolitical change in the western dominated petroleum system. If Iraq’s occupation of Kuwait and its rich oilfields is not thwarted, Saddam would have controlled 20 per cent of the Persian Gulf oil, thereby turning Iraq into OPEC’s swing state that would control pricing. Thus, as Edward Morse rightly suggests: ‘The Gulf War of 1991 was the first war in modern history fought specifically over oil. It serves as a reminder that as long as hydrocarbon resources remain fundamental to economic growth – and as long as there are powerful governments that want to ensure [cheap] access to hydrocarbon supplies – there will be a commitment to use force to prevent any single government from controlling the market’ (Morse, 1999). Thus, it is within this context that we could grasp western, particularly US apprehensions and militarization of its allies in the Persian Gulf. Simply, therefore, the political ecology of resource conflict over the control of the Persian Gulf is not only about oil per se, but even more importantly, it is about which country or group of countries with large reserves that can determine supply and price of the commodity in the world market. In order to ensure the flow of energy resources and security of the monarchical regimes in the Persian Gulf, the United States has over the years supplied its allies in the region with sophisticated military armaments worth billions of dollars. Some of these sophisticated weapons systems include F-15 and F-16 fighter jets, M-1 tanks, AH-64 Apache attack helicopters with hellfire anti-tank missiles,

Oil and Resource Conflict in the Persian Gulf

241

AWAC early warning air crafts and Patriot air-defence missiles. Within Saudi Arabia itself, the security of the royal family rests with the Saudi Arabia National Guard (SANG) – a 57,000 strong active-duty combatants that are equipped with a broad array of modern weapons (Klare, 2001). Following the 1990 invasion of Kuwait by Iraq, the Saudi and the ousted Kuwaiti monarchies enthusiastically welcomed the US-led coalition forces. The Saudi royal family also ordered the supply of 1,117 Light Armored Vehicles, 2,000 TOW anti-tank missiles, 27 M-198 towed howitzers to the tune of $3.4 billion for the National Guard. In 1993 followon contracts were signed to the tune of $819 million and later another additional $690 million. Table 14.3 below shows arms transfer agreements between the US and selected Persian Gulf states from the 1990s. This process of arms procurement not only exacerbates the militarization of the Persian Gulf region but, even more fundamentally, it entrenches capital flight in hard currency from the economies of the Gulf states, thereby undermining the social and economic development of the countries. Furthermore, the recycling of oil wealth for the purchase of armaments through secretive contracts deepens patronage and corruption, which undermine accountability in the conduct of state affairs in the Persian Gulf.

Table 14.3 US arms transfer agreements with selected Persian Gulf states, 1990–1997 (in millions of US dollars) Recipient Bahrain Kuwait Oman Saudi Arabia

1990–1993

1994–1997

Total, 1990–1997

300

300

600

3,700

500

4,200

100

0

100

32,000

4,200

36,200

UAE

600

300

900

Total

36,700

5,300

42,000

Source: Congressional Research Service, Conventional Arms Transfers to Developing Nations, 1990–97, 31 July 1998. p. 51.

The centralization of oil wealth in the royal families and their surrogate rentier elites has created a deep sense of alienation and disenchantment among the youths and leading Islamic scholars in the Persian Gulf within the last two and half decades. In Iran, this disenchantment erupted in the 1979 Islamic revolution, which swept the Shah Reza Pahlavi monarchy from power and led to the establishment of a Shiite-dominated theocratic state. In the Saudi Arabian Kingdom, opposition to the monarchy has emanated from radical fundamentalists, such as Osama bin Laden and the Wahhabi clerics who perceive the royal family as a surrogate of the United States that has abandoned strict Islamic doctrines and embraced the presence of infidel troops in the sacred land of the two holy shrines of Mecca

242

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and Medina. For Osama bin Laden and radical Islamist fundamentalists, US interventionism in the Persian Gulf, as well as its support for Israel, constitute a sacrilege to Wahhabi Islamic doctrine and a departure from the broader Pan-Arab agenda of securing a Palestinian state. Thus, following the defeat of the Soviets in the Afghan war and the installation of the Taliban in power, several veterans (Mujahedin) returned to the Persian Gulf, especially Saudi Arabia to prosecute the Jihad against the royal family and their foreign allies, especially the United States. As Le Billon and Khatib put it, ‘returning from Afghanistan to their home countries after the Soviet withdrawal in 1989, many Arab fighters, emboldened by their victory but alienated by their home governments, initiated … a fight against domestic rulers and their foreign supporters with the goal of establishing Islamic states. In … the Gulf monarchies, petroleum interests provided a powerful discursive theme for criticism and mobilization around the themes of corruption and western exploitation’ (Le Billon and Khatib, 2004, p. 119). In November 1995, a massive truck bomb destroyed the headquarters of the Saudi Arabia National Guard in Riyadh killing five American soldiers and several civilians. On 25 June 1996, another truck bomb exploded at Khobar Towers in Dhahran killing 19 American soldiers. In August 1998, American embassies in Kenya and Tanzania were bombed killing over 200 civilians including some officials of the embassies. This trend of terror bombings continued until the climax on 11 September 2001 with the attacks on the World Trade Towers in New York and the Pentagon in Washington. Over 3,000 people lost their lives in the terrorist attacks. According to the 9/11 Commission Report, 15 of the 19 hijackers are of Saudi origin and closely linked to Osama bin Laden’s Al Qaeda group. At the root of the rage in the Persian Gulf against the royal monarchies and their foreign patron (the US), is the perception of economic alienation, internal repression by a rentier elite and a sense of disillusionment on the part of the unemployed youth populations. As Klare suggests: … driven primarily by religious belief, these groups have also tapped into other sources of discontent. Much of this discontent is of an economic nature: when oil revenues declined in the 1990s, the government cut back on the lucrative benefits provided to all Saudi citizens. Unemployment rose, expectations declined, and many young Saudis became embittered by the loss of privileges once taken for granted. With the open expression of political dissent forbidden, it is not surprising that a certain percentage of these disaffected youths have moved to the political margins [and a majority has taken to extremist teachings of clerics who are also disillusioned with the monarchies and their corrupt anti-Islamic posturing in governance of the state and its oil resources]. (Klare, 2001)

Within the last three and half decades, the rentier space in the Persian Gulf has become an unstable terrain of contestation between monarchies, the rentier states, elites and their patrons, on the one hand, and the dominated subject classes, as well as Islamist fundamentalists on the other. More significantly, the crisis of rentierism in the regional context has exploded to the global level arising from the sharp ideological and doctrinal divide within the Islamic faith between the radical Islamists protagonists of a ‘global Jihad’ such as bin Laden and liberal

Oil and Resource Conflict in the Persian Gulf

243

or moderate Muslim clerics/elites whose preference is for accommodation of western democratic values within the context of twenty-first century globalization. Intrusive foreign interventionism by external powers through supply of armaments, and also regime change by direct interventionism, particularly the Anglo-American-led 2003 invasion of Iraq by the so-called coalition of the willing clearly demonstrates how the Persian Gulf has become the epicentre of violent geo-strategic resource conflict. Like the Soviet invasion of Afghanistan in the 1980s, the Anglo-American intervention in Iraq has not only led to state collapse and the extermination of thousands of innocent Iraqis, but even more tragically, it has entrenched a complex civil war between ethnic and sectarian communities, thereby putting the future of the country in a balance. Which ever way the Iraq conflict ends, the Persian Gulf will continue to remain a critical region in the growth and development of the global capitalist economy. While the royal monarchies and rentier elites are likely to continue with the arms race to ensure the security of their thrones rather than open up the political space through democratization; western powers, along with China, are likely to be more concerned with deepening their alliances in the region through weapon supplies to ensure regular flow of oil and gas resources. Thus, the rentier states of the Persian Gulf will become increasingly dependent on their external patrons for security and legitimacy. At the domestic level, these rentier regimes are likely to become more authoritarian, thereby exacerbating internal opposition from Islamic fundamentalists, sectarian turmoil and instability.

Conclusion The intervention of external powers in the Persian Gulf has had far-reaching impact on the socio-economic, political and cultural life of the rentier states and peoples of the region. The availability of oil wealth enabled the monarchical regimes to engage in massive procurement of sophisticated weapon systems not only to secure the security of their regimes in power, but also the sovereignty and autonomy of their states in a highly unstable region of the world. The Saudi monarchy, which controls a large reserve of oil and gas resources, has historically been the client of the United States, which is more interested in ensuring stable supply of energy from the Persian Gulf. However, as indicated above, the increasing disenchantment of the unemployed youth and dominated subject classes, as well as ideological and doctrinal divisions within Islam (i.e. between radical Islamists and fundamentalists) has sharpened internal conflicts in the rentier formations of the region. The combination of internal cultural, economic and political forces and external interventionism in the Persian Gulf have thus unravelled monumental conflict and violence in the region, thereby exacerbating the disintegration of states such Iraq, constant terror attacks within Saudi Arabia and the increasing incidence of terrorism in Europe and North America. What the Persian Gulf suggests in terms of the discourse on rentier states and politics is that where rentier elites and regimes are dependent on external patrons for their security and legitimacy, the attendant escalation of military expenditures undermine development and

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exacerbate national and regional instability. Whether Iran will emerge from the turmoil as a formidable regional hegemon with nuclear arsenal and control over the predominantly Shiite regime in Iraq remains to be seen. What is clear for now, however, is that the Persian Gulf, though highly volatile and militarized, will remain a strong focus of energy seeking states such as the United States, members of the European Union, Japan and China. As Peters (2004, p. 208) argues, given the constantly growing energy dependence of most western states, China and India; and a future of oil supply crisis emerging on the horizon as well as lethal terror violence in the Persian Gulf, the future potential of inter-state conflict over the control of oil and gas resources, shipping lanes and strategic straits has to be taken seriously. From the perspective of the political ecology of resource conflict, therefore, the Persian Gulf will, for decades to come, remain enmeshed in the complex web of oil-induced rentierism and patrimonialism at the national level; while at the regional level, militarization will further induce inter-state rivalries that could spill over into globalist intervention and disastrous cataclysm with wider socio-economic, political and cultural ramifications for the international system.

Notes 1

2

The following are some of the well-regarded studies that have focused on rentierism and its impact on state politics and development issues in the global South: Beblawi and Luciani, 1987; Karl, 1997; Yates, 1996; Ross, 2001, 2003, 2004; Watts, 1999, 2004; Le Billon, 2004; Le Billon and El Khatib, 2004; Collier and Hoeffler, 1998, 2002a; Peters, 2004. See the following relevant IPE references: Collier and Hoeffler, 2000; Ross, 1999, 2004; Beblawi and Luciani, 1987; Peters, 2004; Le Billon, 2004; Klare, 2001; Yates, 1996; Collier and Sambanis, 2002; Ballentine and Sherman, 2003; Reno, 2002; Adebajo, 2004; Berdal and Malone, 2000; Balentine and Nitzschke, 2005; Rotberg, 2004; Watts, 2004; Dunn, 2001.

References Ballentine, K. and H. Nitzschke (eds), Profiting From Peace: Managing the Resource Dimensions of Civil War, Boulder, CO: Lynne Rienner. Ballentine, K. and J. Sharman (eds) (2003), The Political Economy of Armed Conflict: Beyond Greed and Grievance, Boulder, CO: Lynne Rienner. Beblawi, H. and G. Luciani (eds) (1987), The Rentier State, New York: Croom Helm. Berdal, M. and Malone, D.M. (eds) (2000), Greed and Grievance: Economic Agendas in Civil Wars, Boulder, CO: Lynne Rienner. Collier, P. (1998), ‘On Economic Causes of Civil War’, Oxford Economic Papers, 50, pp. 563–73. Collier, P. and Sambanis (2002), ‘Understanding Civil War: A New Agenda’, Journal of Conflict Resolution, 46(1), pp. 3–12. Dunn, K.C. (2001), ‘Identity, Space and the Political Economy of Conflict in Central Africa’, Geopolitics, 6(2), pp. 51–78.

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Fearon, J.D. and D.D. Laitin (2003), ‘Ethnicity, Insurgency, and Civil War’, American Political Science Review, 97(1), pp. 75–90. Karl, T.L. (1997), The Paradox of Plenty: Oil Boom and Petro-Politics, Berkeley, CA: University of California Press. Klare, M.T. (2001), Resource Wars: The New Landscape of Global Conflict, New York: Metropolitan Books. Le Billon, P. (2004), ‘The Geopolitical Economy of Resource Wars’, Geopolitics, 9(1), pp. 1–28. Le Billon, P. and F.E. Khatib (2004), ‘From Free Oil to Freedom Oil: Terrorism, War and U.S. Geopolitics in the Persian Gulf’, Geopolitics, 9(1), pp. 109–37. Morse, E.L. (1999), ‘A New Political Economy of Oil’, Journal of International Affairs, 53(1), p. 2. Omeje, K.(2006), High Stakes and Stakeholders: Oil Conflict and Security in Nigeria, Aldershot: Ashgate. Okruhlik, G. (1999), ‘Rentier Wealth, Unruly Law, and the Rise of Opposition: The Political Economy of Oil States’, Comparative Politics, 31(3), pp. 295–315. Osaghae, E. (1995), ‘The Ogoni Uprising: Oil Politics, Minority Agitation and the Future of the Nigerian State’, African Affairs, 94, pp. 325–44. Peters, S. (2004), ‘Coercive Western Energy Security Strategies: Resource Wars as New Threats to Global Security’, Geopolitics, 9(1), pp. 187–212. Reno, W. (2002), ‘The Politics of Insurgency in Collapsing States’, Development and Change, 33(5), pp. 837–58. Ross, M.L. (1999),‘The Political Economy of the Resource Curse’, World Politics, 51(9), pp. 297–322. Ross, M.L. (2001), ‘Does Oil Hinder Democracy’, World Politics, 53(3). Ross, M.L. (2003), ‘Oil, Drugs and Diamonds: The Varying Role of Natural Resources in Civil War’, in K. Balentine and J. Sharman (eds), The Political Economy of Armed Conflict: Beyond Greed and Grievance, Boulder, CO: Lynne Rienner. pp. 47–70. Ross, M.L. (2004), ‘How Do Natural Resources Influence Civil War: Evidence from Thirteen Cases’, International Organization, 58(1), pp. 35–67. Rotberg, R.I. (ed) (2004), When States Fail: Causes and Consequences,Princeton, NJ: Princeton University Press. Reno, W. (2002), ‘The Politics of Insurgency in Collapsing States’, Development and Change, 33(5), pp. 837–58. Watts, M.J. (1999), Petro-Violence: Some thoughts on Community, Extraction and Political Ecology, Berkeley Working Papers WP 99–1, Institute of International Studies, University of California. Watts, M.J. (2004), ‘Resource Curse? Governability, Oil and Power in the Niger Delta, Nigeria’, Geopolitics, 9(1), pp. 50–80. Yates, D.A. (1996), The Rentier State in Africa: Oil Rent Dependency and Neocolonialism in the Republic of Gabon, Trenton, NJ: Africa World Press.

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Index

Abubakar, D. 13, 23, 37, 44, 46, 214, 220, 226, 229 Abu Dhabi 221, 222, 226 accumulation 2, 4–5, 8–11, 16, 20–22, 34, 46, 58, 66, 72, 78–9, 137, 142–3, 146, 164, 165, 199–201, 207–8, 213 prebendal 4, 8, 10–11, 13–14, 17–19, 46, 116, 140, 143, 145–6, 153 rent 5, 21, 199–201, 207–8 Afghanistan 8, 13, 240, 242–3 Africa 1, 3, 8, 13, 18–20, 24, 33–5, 39–40, 42, 95–7, 101, 108, 110–12, 115, 117, 119, 125, 135, 150, 154, 181, 172, 175, 177, 222, 239 see also individual country entries Algeria 20, 30, 161–79, 226, 230 al Qaeda 101, 175, 242 Anderson, P. 51, 72, 95, 213 Angola 6, 9, 42, 58, 66, 95, 96, 138, 239 Apartheid 79 Arabian Gulf 10, 13, 23 Argentina 186, 195, 201, 203, 205–6, 210 Asia 1, 3, 18, 35, 112, 237–8 see also individual countries autonomy 2, 29, 108–9, 14, 183, 189, 194, 230–31, 243 Auty, R. 33, 39 Bahrain 23, 222, 225 Ballentine 94, 232, 244 Basedu, M. 39, 40, 42, 46, 133 Beblawi, H. 5, 15, 29, 30, 36, 214, 224, 244 Belgium 33, 101, 136 King Leopold II 136, 140 Bengio 218, 219 Beshir 108, 115, 117 Biafra 16, 56, 75, 80 biosystems 2 Bloc, A. 61 Bolivia 6, 8, 22, 186, 195, 201, 201–11 Brazil 201, 203, 205–6, 210 Burkina Faso 152–3 Buxton, J. 21

Cameroon 52, 170–72 campesino 185, 189, 191–4 capitalism 2, 3, 4, 52, 182, 205–6, 231–4, 237, 243 Chad 8, 20, 161–79, 239 Chechnya 58 Chile 203–7, 210, 212 China 18, 20, 110–12, 115, 161, 175, 176, 200, 211, 235, 237–9, 243–4 Christianity 66 clientilism 4, 13, 17, 24, 34, 44, 93, 97–100, 103, 203, 205–6 coercion 33 Cold War 7, 31, 39, 73, 93, 94, 205, 230–31 Collier, P. 1, 9, 17, 23, 32, 41, 43, 51, 57–9, 61, 66, 68, 70, 71, 73, 93–4, 96, 103, 232, 244 Columbia 6, 9, 58, 65, 200, 201, 206, 210 colonialism 1–5, 7, 21, 24, 34, 45, 63, 64, 76, 78, 103, 136, 140, 150, 162, 175, 183, 194, 199, 232, 239 community development committees (CDCs) 83 complex political emergencies (CPEs) 15 conflicts 1, 2, 6 10, 13–15, 17–22, 27–9, 31–3, 35, 37, 39–46, 57–8, 60, 61, 70, 73, 78, 82–103, 107–11, 113, 116, 123–4, 136, 138, 145–6, 149, 151–6, 161, 170, 182, 188, 194, 199–202, 208, 210–12, 214, 229, 231–5, 237–40, 243–4 civil 58, 60, 70, 73 dysfunctional 2 ecological 2 oil 10, 21, 28 resource-based 27,–8, 33, 35–8, 45, 46 structural 2 see also wars conflict management 28 Congo/Democratic Republic of Congo (DRC) 6–7, 19, 35, 42, 95–6, 102, 135–42, 144–6, 148 Congo Free State (CFS) 136, 140

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corruption 1, 2, 14, 19, 20, 43, 52, 59–60, 62–4, 67, 71, 88, 97–100, 122, 137, 139, 143–6, 151, 164, 184, 190, 193, 206, 230, 232, 241–2 Cote d’Ivoire (Ivory Coast) 101, 163 democracy 5, 19, 37, 40, 42, 73, 119, 150–51, 193, 229, 232–3 developmentalism 7, 13, 35 diamonds 14, 17, 18, 32, 38, 42, 93–103, 135, 137–9, 144–6, 149–50, 152–3, 155, 229, 232 conflict 17–18, 93, 95–6, 101–3 Dubai 221, 222, 226 Economic Community of West African States (ECOWAS) 150 Ceasefire Monitoring Group (ECOMOG) 18, 101, 102, 150 Ecuador 22, 186, 193, 201, 203–6, 208, 210–11 Egypt 30, 107, 108, 219, 222 Equatorial Guinea 8, 18 Europe 2, 3, 4, 72, 153, 213–14, 223, 236, 238, 243 see also individual country entries European Union (EU) 161, 235, 237–8, 244 exploitation 2, 3, 18–20, 35, 37, 44, 36, 56, 63, 77, 81, 84, 99, 100, 102–3, 107–9, 113, 116, 120, 136–7, 139–43, 145, 150–51, 155–7, 161–79, 182, 202–6, 234, 242 extraction 2–4, 8, 14, 15, 17, 21, 202, 213, 215, 224 France 33, 34, 151, 156, 162, 163, 175 Francis, D. 24, 34, 96–7, 100 Gabon 8, 18, 121, 123 Gambia, The 101, 101 Germany 33 Ghana 97 globalization 2, 12, 13 ‘greed and grievance’ 15, 16, 32, 41, 43, 51, 70, 93, 95–7, 103, 183, 195, 234 Guinea 97, 100–101 Gulf of Guinea 14 Gulf Wars 7, 9, 22, 218–220, 225

Hoefller, A. 1, 9, 23, 41, 43, 70, 73, 232, 244 Hudson, V. 30, 31 Human Development Index (HDI) 1, 209 human rights 1, 4, 18, 40, 65, 93, 95, 112, 154, 173, 185, 210, 239 Huntington, S.P. 7 import substitute industrialization (ISI) 204, 206 India 3, 18, 112, 235, 238, 244 indigeneity 6, 11, 16, 17, 19, 45, 64, 72, 75–6, 78, 80–83, 85–6, 151, 188, 194–5, 202 Indonesia 232 industrialization 2, 163, 206 integrated holistic approach (IHA) 15, 28 internationalization 12, 13 International Financial Institutions (IFIs) 94, 103 International Monetary Fund (IMF) 62, 65, 94, 119, 125, 128, 132, 167, 206 international oil companies (IOCs) 60, 133 Agip 76 Chevron 54, 60, 69, 76, 80, 108–10, 131 ChevronTexaco 127, 131, 175 Elf 76 ExxonMobil 76, 131, 122, 126, 127, 130, 131, 161, 171–4, 178 Mobil 76, 122–5, 133 Shell 3, 55, 60, 76, 77, 80, 88, 184–6, 189, 203 Texaco 76, 203 Total 108, 114 international political economy (IPE) 5, 6, 232, 244 Iran 22, 23, 29, 36, 46, 211, 215–20, 226, 230, 235–7, 239–41, 244 Iraq 7–9, 13, 22–3, 39, 46, 213–21, 223, 225–6, 229–44 Hussein, Saddam 9, 22, 46, 217–20, 225, 230, 236, 239 Islam/Islamism 8, 13, 23, 66, 107–19, 111, 112, 155, 166, 168, 169, 177, 218–20, 230–31, 233, 242–3 Italy 33 Japan 235, 237, 238, 244 Kahl, C. 39, 43, 44

Index Kaldor, M. 32, 93, 95 Karl, T.L. 5, 9, 39, 56, 192, 232, 244 Keenan, J. 20, 161, 170, 173, 174, 176, 178 Khatib, F.E. 232–5, 242, 244 Klare, M. 231–3, 236–42, 244 Kuwait 6, 22–3, 36, 217–20, 222, 235–7, 240–41 Le Billon, P. 32. 43–4, 57–9, 61, 232–5, 242, 244 Liberia 6, 18–20, 95, 100–2, 149–59 Taylor, Charles 18, 20, 95, 101, 150, 151, 152–4, 158 Libya 6, 20, 30, 152, 162, 176 limited context approaches (LCAs) 15, 29–30 limited factor approaches (LFAs) 15, 28, 30, 46 local government areas (LGAs) 71, 81, 84–6, 89 looting/lootability 10, 14, 41, 57–8, 60, 70, 71, 95, 199, 201, 229 low intensity conflicts (LICs) 1, 15, 19, 138, 142, 144, 146 Luciani, 15, 30, 36, 214, 244 Mahdavy, H. 15, 29, 30, 36, 46, 214 Malaysia 3, 18, 112, 156, 232 Mali 161, 163, 175 Mauritania 175 Mbembe 2, 4, 57, 194 Mexico 8, 21, 181––9, 191–5, 203–7, 232, 238 mining 2, 4, 8, 15, 18–20, 100, 101, 136 Morocco 222 Movement for the Emancipation of the Niger Delta (MEND) 53–7, 60, 66, 69–72, 181, 185

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neo-patrimonialism 8, 19, 24, 40, 44, 93, 143, 151, 154, 223 Ngoie, G.T. 19, 135, 142 Nicaragua 186 Niger 161–79 Niger Delta 10–11, 16–17, 21, 28, 49, 51–73, 181–95 Nigeria 3, 6, 10–11, 16, 18, 28, 30, 42, 44, 51–73, 75–89, 102, 115, 120–21, 123–6, 128, 130–33, 181, 183–5, 187–8, 192, 194, 230, 232, 239, 245 Obasanjo, President Olusegun 52, 54, 63, 75, 88, 95, 101, 124, 129, 149–50, 152–3, 158 Saro-Wiwa, Ken 184, 194 non-governmental organizations (NGOs) 65, 95–6, 100, 103, 149 non-lootability 10, 58 obstructability 57–60, 71 Oman 6, 23, 222 Omeje, K. 4, 5, 8, 10, 19, 28, 44, 56, 76–7, 89, 135, 185, 229–31 Organization of Oil-producing Countries (OPEC) 36, 54–5, 61, 77, 89, 186, 192, 195, 226, 240

‘Paradox of Plenty’ 39–40, 232, 234 patrimonialism 19, 24, 34, 93, 96–8, 100, 103, 145, 231, 232, 244 peacebuilding 17, 19, 20 Persian Gulf 6, 13, 23, 66, 229–44 Peru 200, 201, 206, 210 political ecology 15, 23, 43–5, 234, 235–6, 238, 240, 244 political economy 1–5, 11–13, 16, 18–19, 34–6, 38, 44, 56, 61, 93, 135, 199, 201, 232–5 Portugal 33 post-colonialism 1, 3–4, 7, 17, 21, 24, nationalization 5, 16, 21, 29, 30, 44, 46, 34–5, 45, 63, 103, 194, 232, 239 78–81, 89, 182, 186, 190, 195, 203–6, poverty 1, 14, 51, 54, 62, 66, 88, 98–9, 119, 208, 215 135–6, 139, 142, 150, 157, 165, 170, national oil companies (NOCs) 60, 63 173, 207–9, 230, 233 natural resources 2, 3, 5, 8, 14–15, 18, 20, prebendalism 9, 24, 33, 38, 43 28, 32, 35, 37, 39–41, 43, 76, 94, 110, 126, 139, 140, 142, 145–6, 149–50, 152, predation 10–11, 15–16, 33, 43, 57–8, 60, 66, 70–71, 142, 146, 183, 201, 212, 155–8, 162, 182–3, 186–8, 199, 201–4, 232, 238 206, 208, 210, 212, 214, 232, 234 privatization 182, 186, 190, 191, 200 neoliberalism 21, 22, 192, 199–200, 206, Príncipe see São Tomé and Príncipe 207, 210

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Qatar 6, 23, 36, 235, 237 rent oil 19, 36, 38, 230 -seeking 8–9, 18–20, 93–103, 142, 143, 146 rentierism 5–11, 15, 18, 20, 23, 28, 33, 181, 213, 216, 223–4, 229, 231–2, 235, 242, 244 rentier space 9–14, 16–17, 21–2, 29, 39, 44–5, 75–6, 78–87, 199–212, 231, 232–4, 242 rentier politics 1–23, 27–8, 31, 45, 135, 201, 206 rentier states 133, 138, 161–79, 213–15, 220–24, 226, 229–34, 238, 242–3 Roberts 77, 78, 87, 88 Ross, M. 5, 14, 40–41, 46, 57–61, 71, 73, 158, 229, 232, 244 Russia 18, 112, 161, 211 Rwanda 137 Sambanis 71 São Tomé and Príncipe 8, 11, 18–19, 119–33 Menezes, President Fradique de 125, 127, 129–20, 133–34 Saudi Arabia 23, 46, 63, 161, 217, 219–20, 222, 226, 230, 233, 235–7, 240–43 Schwartz, R. 10, 22, 23, 36 separatism 58, 60, 65 Sierra Leone 6, 17, 35, 42, 93–103, 152–4 Somalia 54, 95 sovereignty 2, 13, 16, 21, 23, 72, 181–4, 191, 194, 208, 210–11, 220, 230, 236, 240, 243 Spain 33 stakeholders 2, 6, 8, 9–11, 13–15, 19, 44, 46, 75–6, 78, 87–8, 140, 151, 185, 236 state power 2, 4, 23, 34, 149–50, 224, 231 structuralism 1, 38 Sudan 6, 18, 42, 58, 107–16, 175, 239 Darfur 18, 111–12, 114–15, 161, 174 Sweden 33 Syria 217 terrorism 13, 23 9/11 8,13, 39 ‘war on terror’ (global) (GWOT) 39, 69, 169, 178

Tilly, C. 22, 33, 184, 213, 224 Tillian model 23 transnational companies (TNCs) 2–5, 8, 76–7, 80, 82–4, 87–8 Turkmenistan 6 Uganda 137 Ukiwo, U. 11, 16–17, 75, 83, 86, 183 United Arab Emirates (UAE) 6, 22, 23, 213–26, 236–7, 241 United Kingdom 7, 33–4, 101, 102, 237, 221 United Nations 15, 22, 96, 100, 102, 139–40, 142, 149, 150, 153, 156, 236, 239 United States of America 7, 8, 13, 20, 22, 24, 33, 39, 59, 65, 66, 76, 110, 112–13, 115–16, 120, 122, 131, 136–7, 144, 157, 161, 168, 169, 174, 178181–2, 186, 188–9, 195, 200, 201, 203–5, 210–11, 226, 235–44 Bush, President George W. 14, 20, 66, 113, 175, 211 Bush, President Herbert W. 240 Uruguay 210 USSR 109 Venezuela 7, 8, 22, 186, 195, 200, 201, 203–11 Chávez, President Hugo 200–201, 208, 211, 239 violence 6, 10, 13, 16–18, 21, 28, 32–3, 36–40, 43–4, 46, 51, 53–7, 59–62, 66–7, 69–73, 82, 84, 97, 99, 109–12, 115–16, 133, 136–9, 142, 144–5, 152, 155, 166, 169, 181, 185, 191, 195, 199, 202, 210, 213, 215, 224, 230, 234, 239, 243–4 war 1, 7–9, 13–21, 32, 35, 38–9, 41, 43, 45, 51, 56–8, 60, 62, 66, 70, 77, 80, 82, 93–7, 99–103, 108–10, 113, 135–9, 141–2, 146, 149, 150–58, 169, 213–21, 223–4, 232–6, 240, 242–3 Biafran 60 civil 14–19, 21, 37, 41, 42, 51, 56–7, 60, 62, 70, 77, 80, 82, 93–103, 108–10, 135, 137, 142, 149–58, 161, 166–7, 174, 243 Iran-Iraq 176, 215, 217, 219, 220

Index on terror see terrorism resource 32, 35, 38–9, 45 World War I 215 World War II 76, 108, 150, 204, 205, 221 Watts, M. 6, 10, 16, 76, 136, 230, 232, 244 Weber, Max 98, 154, 184 Woodward, 18, 107, 108, 110, 111, 113

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World Bank 14, 41, 57, 62, 66, 94, 119, 128–9, 140, 161, 170, 171, 173, 174, 176, 178, 222 Yates, D. 5, 8, 29, 36, 229, 244 Yemen 23, 58, 235, 237 Zalik, A. 21, 32, 181, 185