I read this article today about a drastic step from the Eriterian government in its ongoing tug of war with the Western Aid agencies In Asmara. It goes to show how much real frustration policymakers in Africa are grappling with as they try to find a way to run their countries, accept foreign assistance and develop their people and infrastructure. It is hard to tell whether the Eriterians are right to suspend the operations of USAID, but I am sure it was precipitated by their realization that the foreign aid apparatus as setup is not working.
It is hard not to come to the bitter conclusion that Aid organizations are somehow, conciously or unconciously, invested in the dire status quo. The exorbitant administrative costs, the luxurious vehicles, the ample accomodation in third world capitals, the ready supply of good food and entertainiment, all in all, suggest that the institutions are employment bureaus for jaded idealists and not results oriented do-gooders. Actions such as the one taken by the Asmara government might herald a new dawn where the local african governments are decisive partners and players in the efforts, and not mere supplicants waiting for pronouncements and directives from the smug foreign consultants.
Friday, August 26, 2005
Oil contracts, Western Aid and Southern Sudan
As the new government of Southern Sudan starts operation in the next few months, it is worth examining some of the challenges that it will face. I say some, because the list is long and depressing, but also as a means of sifting and prioritizing these challenges. As we have all read and heard, there is what could only be mildly called a case of heightened expectations by our people, and anxious anticipation by many commercial and development institutions looking forward to working in Southern Sudan.
As an emerging oil producer, we should seriously pay heed to the experience of similar countries and regions that entered into concession contracts with big multinationals. A recent Economist article by Sanou Mbaye, a former African Development Bank economist, gave me pause and starkly outlined the acute unfairness inherent in the dealings between the African governments in one side, and the West with its Oil companies and financing institutions. In the case of Sudan, they are projecting production rates of 227,000 barrels a day, much of which will be extracted from the Southern region. Besides the usual culprits such as graft and corruption, the author illuminated the fact that the very contractual instruments that these extraction schemes are based are predatory and dishonest.
A stark example is that of the West African nations of Cameroon and Chad, both of which just struck oil deals financed by the World Bank with multinationals such as Chevron, Patrons and Exxon. The annual net returns for Chad and Cameroon from the exploitation of their natural resources come out to $62 Million and $18.6 respectively. The return for the World Bank, The European Investment Bank and the other Oil Multinationals is estimated at $4.7 Billion annually. Now, just try to wrap your head around those numbers and get some coherence out of them. It is inconceivable that the cost for the financing and operation of these oil concessions justifies such a disparity in returns for the parties. This just goes to show that there is a big gulf between what the World Bank means when it trumpets poverty eradication, and what its actions and lending practices impose on the ground in the poor capitals of Africa. All the talk about corrupt African governments falls short of the mark because it leaves out an integral co-conspirator in the looting of our treasures, and that is the global institution and its clients that work to facilitate this looting. In Chad, you are talking about the government potentially looting from an annual pool of $62 million dollars, while the Oil companies walk out with billions of dollar in broad daylight and without any shame. In fact, they walk out repeating the same refrains about corrupt Africans and how much good they are doing in these poor backwaters. Moreover, if we are talking about mere hundreds of millions in returns from the oil sector, then we should snap out of our dreams and recognize that Oil is not the source of salvation that many people are counting on. The Nigerian experience, where the par capita income of the citizenry hasn’t budged from $1 a day, should be a sober reminder that we need to cultivate other means besides counting on this finite natural resource.
In the context of Southern Sudan, it is important that the new GOSS enshrines transparency as a hallmark of their dealings in the Oil and Reconstruction sectors, and that the commissions mandated by the CPA be constituted to function without backroom dealing. It is also important that they stay vigilant when dealing with our more experienced partners from the government who have mastered the art of fudging the numbers and hiding the real costs and returns from the Sudanese people. The expectations of the people need to be tempered sufficiently back to the reality of reconstruction, especially at the scale needed in Southern Sudan. The leadership should use the bully pulpit of government to stress a new mobilization from everyone for development, much the same as the one we mustered for the recently concluded war. Investment in the educational and Agricultural sectors will thus produce greater reproducible results, and hasten the day when our greatest economic returns will come from sectors that produce finished products and services. No developed country in the face of the Earth got there by feverishly selling its natural resources to greedy speculators and swindler, while ignoring schemes that depend on a resourceful and active workforce. The tigers of Southeast Asia have shown us that fostering a climate of internal trade and cooperation, self dependency, realistic expectations, and open political participation can lead to poverty alleviation and prosperity faster than foreign aid and World Bank schemes. While it is true that we live in an interconnected world order dominated by some big players, it is wise to also start thinking clearly about ways to wean ourselves away from dependence.
As an emerging oil producer, we should seriously pay heed to the experience of similar countries and regions that entered into concession contracts with big multinationals. A recent Economist article by Sanou Mbaye, a former African Development Bank economist, gave me pause and starkly outlined the acute unfairness inherent in the dealings between the African governments in one side, and the West with its Oil companies and financing institutions. In the case of Sudan, they are projecting production rates of 227,000 barrels a day, much of which will be extracted from the Southern region. Besides the usual culprits such as graft and corruption, the author illuminated the fact that the very contractual instruments that these extraction schemes are based are predatory and dishonest.
A stark example is that of the West African nations of Cameroon and Chad, both of which just struck oil deals financed by the World Bank with multinationals such as Chevron, Patrons and Exxon. The annual net returns for Chad and Cameroon from the exploitation of their natural resources come out to $62 Million and $18.6 respectively. The return for the World Bank, The European Investment Bank and the other Oil Multinationals is estimated at $4.7 Billion annually. Now, just try to wrap your head around those numbers and get some coherence out of them. It is inconceivable that the cost for the financing and operation of these oil concessions justifies such a disparity in returns for the parties. This just goes to show that there is a big gulf between what the World Bank means when it trumpets poverty eradication, and what its actions and lending practices impose on the ground in the poor capitals of Africa. All the talk about corrupt African governments falls short of the mark because it leaves out an integral co-conspirator in the looting of our treasures, and that is the global institution and its clients that work to facilitate this looting. In Chad, you are talking about the government potentially looting from an annual pool of $62 million dollars, while the Oil companies walk out with billions of dollar in broad daylight and without any shame. In fact, they walk out repeating the same refrains about corrupt Africans and how much good they are doing in these poor backwaters. Moreover, if we are talking about mere hundreds of millions in returns from the oil sector, then we should snap out of our dreams and recognize that Oil is not the source of salvation that many people are counting on. The Nigerian experience, where the par capita income of the citizenry hasn’t budged from $1 a day, should be a sober reminder that we need to cultivate other means besides counting on this finite natural resource.
In the context of Southern Sudan, it is important that the new GOSS enshrines transparency as a hallmark of their dealings in the Oil and Reconstruction sectors, and that the commissions mandated by the CPA be constituted to function without backroom dealing. It is also important that they stay vigilant when dealing with our more experienced partners from the government who have mastered the art of fudging the numbers and hiding the real costs and returns from the Sudanese people. The expectations of the people need to be tempered sufficiently back to the reality of reconstruction, especially at the scale needed in Southern Sudan. The leadership should use the bully pulpit of government to stress a new mobilization from everyone for development, much the same as the one we mustered for the recently concluded war. Investment in the educational and Agricultural sectors will thus produce greater reproducible results, and hasten the day when our greatest economic returns will come from sectors that produce finished products and services. No developed country in the face of the Earth got there by feverishly selling its natural resources to greedy speculators and swindler, while ignoring schemes that depend on a resourceful and active workforce. The tigers of Southeast Asia have shown us that fostering a climate of internal trade and cooperation, self dependency, realistic expectations, and open political participation can lead to poverty alleviation and prosperity faster than foreign aid and World Bank schemes. While it is true that we live in an interconnected world order dominated by some big players, it is wise to also start thinking clearly about ways to wean ourselves away from dependence.
A Cautionary tale
It has been a few weeks since the terrible loss of our leader Dr. John Garang, and people are slowly starting to heed the refrain that they should go back to doing their part in carrying the torch forward. There is no doubt that the enemies of this nascent peace agreement are plenty and certainly not limited to the radical elemants of Northern hegemony in Khartoum. Much ink has been and will continue to be shed by others about the notorious purveryors of religious zeolotry and regional hegemony against the marginalized peole of sudan, but I want to address the other threats that we rarely consider comprehensively.
In the context of Southern sudan, our biggest problem is the ignorance of some of our people and the forces that benefit and traffic in it, and the utter weakness of our political institutions. Well meaning Southerners have been duped by some of our opportunistic intellegencia to view everything in the lens of short term tribal and sectional advantage. Many of our communities are led by people who derive their legitimacy from trumpeting their tribal pedigrees, and not as national leaders who appeal across the board to all people. It is the tragedy of Africa, manifested clearly in Sudan, that political leaders do not have to pay heed to any measurable standards of performance and results. Instead, they relentlessly dedicate their life to jockeying for power till they die. Rarely have we heard a politician or what passes for political parties in our communities devise and present a blue-print for governance and development within a set timetable, and many of our politicians lack an overarching political philosophy that informs their positions besides the quest for power.
The political parties in the North present a terrible and dangerous precedent for governance, coherence and vitality, and their example should not be emulated in the South. Their track record in government can only be charitably called abysmal, and particularly that of the UMMA party. After 16 years of a military led government, the best that many of these parties could resort to is to jockey for short term influence in the centralized decision making apparatus in Khartoum. Their manifestos, if there are any, do not and have never contained any clear positions addressing the marginalized areas of the country, and the South in particular. They intentionally set about the corruption of whatever little political and civil society apparatus in the South through inducement and tribal incitement. It is therefore clear that the Bashir government only escallated what was clearly an innovation of the Northern Political parties, and the blame for the intractable problems of the country should be apportioned equally among these parties. Internally, these Northern parties have not revitalized their ranks since independance with the kind of diverse energy that ensures improvements in visions and practices.
We can go on and on tabulating all the ills and what they portend for our Southern Sudanese political climate in the next few years, but that can also be futile. There are some bright spots, and they should be augmented and reinforced by all concerned citizens. The SPLM, as the dominant player in the Southern region, at least during the interim period, is blessed with a coherent and clear vision that will certainly help immensely as it embarks on implementing real policies. I can already hear the refrain of others who think that coherence and clarity are not the hallmarks of these New Sudan vision. My consistent counter-argument has always been that by word and by deed, the movement has articulated and stood behind a simple clear reading of the Sudanese problem, and presented a resolution that is both idealistic in principle and pragmatic in practice.
The idealism is embodied by the vision of a secular, fair and just society where the rights of all citizen are protected without prejudice, and where the levers of power and the spoils of wealth and prosperity are distributed equally among all Sudanese. The geopolitical pragmatism is however clearly embedded in the detailed parameters of the CPA which allows for the unfortunate possibility that the Northern power elite is not mature enough, and certainly callous enough, as to reject a resolution that is both fair and transformative. It is therefore clear that the SPLM has fullfilled its pledge to defend the interests of the diversity of its constituents, both the hopeful segments who believe in a transformed Sudan, and the realists who have given up any notions that the political map in Sudan can be so drastically reformed. That is more than can be said for many of the critics of the movement who are ostensibly separatists by acclamation, but bona fide members of the Islamist National Congress Party of Omer Bashir. It is therefore hard to take seriously charges of incoherence from such quarters, given their own distorted positions. Back to the bright spots: the social upheaval caused by the war sent scores of our people to the North and the diaspora, and those multitudes will add to our shallow pools of educated people who can assist in their country's reconstruction. It is my hope that their experiences in societies that stress individual innovation and free critical thinking will enrich the fabric of their communities when they come back to participate. The women in the diaspora will hopefully return with an emboldened and proactive attitude towards the question of participating in the affairs of their communities, and that is a good omen too if the government's policies are structured to support that as promised.
In the context of Southern sudan, our biggest problem is the ignorance of some of our people and the forces that benefit and traffic in it, and the utter weakness of our political institutions. Well meaning Southerners have been duped by some of our opportunistic intellegencia to view everything in the lens of short term tribal and sectional advantage. Many of our communities are led by people who derive their legitimacy from trumpeting their tribal pedigrees, and not as national leaders who appeal across the board to all people. It is the tragedy of Africa, manifested clearly in Sudan, that political leaders do not have to pay heed to any measurable standards of performance and results. Instead, they relentlessly dedicate their life to jockeying for power till they die. Rarely have we heard a politician or what passes for political parties in our communities devise and present a blue-print for governance and development within a set timetable, and many of our politicians lack an overarching political philosophy that informs their positions besides the quest for power.
The political parties in the North present a terrible and dangerous precedent for governance, coherence and vitality, and their example should not be emulated in the South. Their track record in government can only be charitably called abysmal, and particularly that of the UMMA party. After 16 years of a military led government, the best that many of these parties could resort to is to jockey for short term influence in the centralized decision making apparatus in Khartoum. Their manifestos, if there are any, do not and have never contained any clear positions addressing the marginalized areas of the country, and the South in particular. They intentionally set about the corruption of whatever little political and civil society apparatus in the South through inducement and tribal incitement. It is therefore clear that the Bashir government only escallated what was clearly an innovation of the Northern Political parties, and the blame for the intractable problems of the country should be apportioned equally among these parties. Internally, these Northern parties have not revitalized their ranks since independance with the kind of diverse energy that ensures improvements in visions and practices.
We can go on and on tabulating all the ills and what they portend for our Southern Sudanese political climate in the next few years, but that can also be futile. There are some bright spots, and they should be augmented and reinforced by all concerned citizens. The SPLM, as the dominant player in the Southern region, at least during the interim period, is blessed with a coherent and clear vision that will certainly help immensely as it embarks on implementing real policies. I can already hear the refrain of others who think that coherence and clarity are not the hallmarks of these New Sudan vision. My consistent counter-argument has always been that by word and by deed, the movement has articulated and stood behind a simple clear reading of the Sudanese problem, and presented a resolution that is both idealistic in principle and pragmatic in practice.
The idealism is embodied by the vision of a secular, fair and just society where the rights of all citizen are protected without prejudice, and where the levers of power and the spoils of wealth and prosperity are distributed equally among all Sudanese. The geopolitical pragmatism is however clearly embedded in the detailed parameters of the CPA which allows for the unfortunate possibility that the Northern power elite is not mature enough, and certainly callous enough, as to reject a resolution that is both fair and transformative. It is therefore clear that the SPLM has fullfilled its pledge to defend the interests of the diversity of its constituents, both the hopeful segments who believe in a transformed Sudan, and the realists who have given up any notions that the political map in Sudan can be so drastically reformed. That is more than can be said for many of the critics of the movement who are ostensibly separatists by acclamation, but bona fide members of the Islamist National Congress Party of Omer Bashir. It is therefore hard to take seriously charges of incoherence from such quarters, given their own distorted positions. Back to the bright spots: the social upheaval caused by the war sent scores of our people to the North and the diaspora, and those multitudes will add to our shallow pools of educated people who can assist in their country's reconstruction. It is my hope that their experiences in societies that stress individual innovation and free critical thinking will enrich the fabric of their communities when they come back to participate. The women in the diaspora will hopefully return with an emboldened and proactive attitude towards the question of participating in the affairs of their communities, and that is a good omen too if the government's policies are structured to support that as promised.
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