Book review: Poisoned Wells

http://www.pambazuka.org/images/articles/303/41306.jpgRising oil consumption and high commodity prices are the key drivers in a new scramble for Africa.

Take China, self-sufficient in oil as recently as 1993, it became the world's second largest consumer behind the United States in 2003. Like Europe and the US, China is looking to Africa for energy security and diversification.

Sub-Saharan Africa offers attractive oil prospects: non-Middle East and non-Organization of the Petroleum Exporting Countries - although recently Angola surprised many by joining.

Publication of this book this month could not be better timed, the same applies to John Ghazvinian's Untapped: The Scramble for African Oil (Harcourt, 2007).

Nicholas Shaxson, a Chatham House associate fellow is a British journalist. He worked as Reuters' Angola correspondent and later on its London oil desk in the 1990s; subsequently embarking on a freelance career including covering the Gulf of Guinea for the Financial Times and the Economist Intelligence Unit.

This volume hammers home its points through chapters on personalities such as Abel Abraão of Angola; Fela Kuti, Nigeria; André Milongo, Congo; Arcadi Gaydamak, Russia; and three presidents: Fradique de Menezes of São Tomé e Principe; Omar Bongo, Gabon and Obiang Nguema, Equatorial Guinea.

Paradox of Plenty
The thesis is clear throughout, that oil is toxic in Africa, ensuring countries that have it are even less interested in good governance, accountable leadership or poverty alleviation. It also damages non-mineral industries, making nations ever more dependent on oil and gas.

According to Shaxson, oil brings greater instability and only the elite really benefit from the massive wealth.

There is nothing too surprising in this. The World Bank and non-governmental organisations such as Catholic Relief Services in their Bottom of the Barrel report, all highlight the paradox of plenty in oil producing countries.

But Shaxson differs by fleshing out the complexity through character driven narrative that cuts through political correctness and organisational mandate. This book is independent and seeks to drill deep and survey wide in an age where expertise on Africa has become undervalued.

Dracula zones
In his final chapter, Shaxson tries to move the debate forward. He considers what can be done other than just feeling slightly guilty each time we fill the car at a petrol station, knowing that it is not just climate change that is affected by our thirst for oil.

So what can be done? Foreign aid clearly has little impact. Transparency does not seem to have made a major difference either. Attempting to diversify economies away from oil production has not worked well. Saving funds for post-oil days also sounds good, but in practice - as we saw recently in Chad - it can stir up local politics.

Shaxson has three suggestions: pay oil money directly to citizens, a kind of Alaska model; significantly reduce Western dependence on oil by raising taxes on fuel, especially in the US; and regulate the world's 70 odd tax havens better to control dirty money. These 'Dracula zones', as he calls them - or 'fiscal paradises' in French - are not just the Cayman Islands or Jersey, but London and New York too.

Shaxson argues: 'If half of global trade finance flows through offshore structures, and soon a quarter of America's oil imports will be coming from Africa, I would hazard a guess that we have a systematic and fast-growing problem on our hands.' He argues that legislation could solve this but the political will is lacking.

Shaxson's warning is that we ignore the impact of oil and gas extraction in Africa at our peril: its impact will spread. How many policy makers in oil companies or governments will listen to these warnings? At least I hope they read this book.

Poisoned Wells by Nicholas Shaxson is published by Palgrave Macmillan, 2007.

* Alex Vines is head of the Africa Programme at Chatham House in London.

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