THE SCRAMBLE FOR AFRICA’S OIL: A BLESSING OR A CURSE FOR AFRICAN STATES? DEEKANA TIPCHANTA Thesis submitted to the University of Nottingham for the degree of Doctor of Philosophy JULY 2012 Acknowledgement I am heartily thankful to my supervisors, Catherine Gegout and Lauren McLaren, whose encouragement, supervision and support from the preliminary to the concluding level enabled me to develop the writing of the subject. I also would like to make a special reference to Elias Courson, the director of a committed non- governmental organization Our Niger Delta, and Reverend Dr Reuben Ezemadu, the Coordinator of the Movement for African National Initiative (MANI), who made available their support in a number of ways, making a nearly-impossible visit to Nigeria possible. I am also indebted to many activists on the ground whose tireless assistance helped me gain relevant data on this sensitive matter and whose sacrificial commitments and fearless belief continue to make changes and give hope for the better human rights conditions in Nigeria and beyond. I owe my deep gratitude to the people of the Niger Delta, whose sufferings I encountered, endlessly inspired me to produce this volume. I specifically thank CoReach for their grant support, without which my fieldwork in Nigeria would be impossible. I offer my regards and blessings to all my colleagues and friends, especially Aikande Kwayu, who supported me in any respect during the completion of the project. Most of all, I am forever grateful to God, the Heavenly Father, to whom I owe my very existence, and to my mother, whose continuous struggles and selfless love become the strength and compass of my life. Deekana Tipchanta Table of Contents Synopsis……………………………………………………………………………3 Chapter 1 Introduction………………………………………………………………..6 The Scramble for Africa’s Oil: a Blessing or a Curse for African States?...............6 Research Question………………………………………………………………7 Defining ‘Foreign Intervention’………………………………………………..8 Theories and Hypotheses………………………………………………………14 Operationalisation……………………………………………………………...16 Research Objective…………………………………………………………….33 Research Outline……………………………………………………....………36 -Chapter 2-……………………………………………………………..…...……….41 Literature Review: The Resource Curse………………………………….………41 Background of ‘Resource Curse’ Literature………………………….………..44 Do Natural Resources Hinder Development?.....................................................46 What is the Resource Curse?..............................................................................47 What Causes the Resource Curse?......................................................................48 How can the Resource Curse be Overcome?......................................................56 -Chapter 3-………………………………………………………………………..…62 Theoretical Framework and Mechanisms of Intervention………………………..62 Defining Neo-colonialism………………………………………………….…..63 Theoretical Framework………………………………………………………...64 Operationalising Foreign Interventions in Oil-Related Issues…………………73 Determining the Players in Oil-Related Foreign Interventions………………..77 -Chapter 4-…………………………………………………………………………..93 Foreign Political Interventions in African Oil-rich Countries……………………93 Balkanization of Africa………………………………………….……………..94 The Use of State Policies………......…………………………………………101 Political Meddling…………………………………………………………….110 Military Involvement…………………………………………………………121 -Chapter 5-…………………………………………………………………………128 Foreign Economic Interventions in African oil-rich countries………………….128 Financial Involvement………………………………………………………..129 Business Conduct…………………………………………………………….148 -Chapter 6-…………………………………………………………………………154 Neo-Colonial Interventions in Nigeria’s Oil Industries…………………………154 Nigeria: overview……………………………………………………………..155 Foreign Political Interventions………………………………………………..164 Foreign Economic Intervention………………………………………………178 -Chapter 7-…………………………………………………………………………193 Conclusion: Development of Resource Curse Discussion………………………193 Outcomes of Foreign Scramble for Africa: A Resource Curse………………193 Foreign Interventions and the Resource Curse: a Probabilistic Causal Mechanism……………………………………………………………………205 Bibliography…………………………………………………………………….210 Synopsis This thesis analyses foreign intervention in oil-rich African states which have contributed to the resource curse problem in the latter. It concentrates on the role of former colonial powers-France and Britain-as well as new players-the United States, China and multinational agencies who have deployed policies and carried out practices in securing Africa’s oil resources. This study argues that ‘Foreign intervention contributes to the likelihood of the resource curse through both political and economic means,’ based mainly on the resource curse theory and concept of neo-colonialism. Apart from factors addressed by the existing literature on the resource curse, namely, economic malfunctions, government policies, social foundations, resource types, country size and initial conditions, this research hypothesizes that foreign interventions display a strong linkage to the resource curse. African countries have experienced poverty and conflicts even if they have had the greatest dosages of foreign interventions from the slave trade through to the present date, as explained by neocolonialism. This is contrast to the neo-liberal economists which promote foreign interventions and resource exploitation which they argue are necessary for African economic and political development. This study includes two theoretical approaches which address the relationship between continuing foreign intervention and the resource curse in Africa: neo- Marxism and realism. Marxist dialectical materialism allows us to look back over the history of the relations between Africa and foreign powers both materially and in regard to how these relations, time and again, affect and shape Africa’s structure. By discussing the ‘world order’ in terms of production structure that leads to exploitation, oppression, enslavement and the struggles of the lower social classes in weaker states, Marxist perspectives shed light on the relationship between foreign interventions and Africa’s underperformance. With realist main assumptions of power and profits maximization, this study explains that foreign interventions in African oil-rich countries will be maintained and will intensify as global situations surrounding oil become more hostile. I offer to use these theories to explain specific policies and practices of foreign interventions with relation to the African oil industries. The foreign powers involved in the interventions for Africa’s oil, the mechanism through which they are carried out and the outcomes of these actions are neither addressed nor evaluated in these theories. Although the abovementioned Marxist strands indicate that neo-colonialism will contribute to poor performance in Africa, it does not relate to the resource curse discussion which mainly assumes that resource-rich countries are doomed to fail. This is the gap which this study has filled by linking these theories to real-world practices. By applying the concept of neo-colonialism, this study compiles the empirical evidence of continuing interventions by former colonial powers and new powers as they seek oil security in African states. The result of this study is that oil- related foreign intervention is linked to the resource curse discussion. In effect, the resource curse theory is refined by stating that a foreign intervention variable must be included into its discussion and policy considerations. This study records oil-related incidents of foreign interventions in Africa and systematically categorizes oil-related foreign interventions using political and economic approaches. Foreign political interventions include the balkanization of Africa, the use of state policies, political meddling and military involvement.1 Economic approaches used by foreign players to secure African oil are categorized into two central themes: financial involvement and business conduct. The former refers to the following practices: neo-liberal policies, petrodollar monetary order, economic sanctions, financial support and money corruption. With regards to business conduct, the following practices will be investigated: circumventing environmental standards, enclave oil operations and unsuitable philanthropic projects. This study examines these interventions from the first scramble in Africa during the colonial era, through to the second scramble during the Cold War and the current scramble of Africa’s resources. The study displays these occurrences in any oil-rich African countries including Angola, Sudan, Libya, Gabon and Equatorial Guinea. A specific case study is devoted for Nigeria which is the biggest oil-rich African countries but paradoxically experiences endemic poverty and conflicts. Primary data and interviews conducted in the Niger Delta, Lagos, Cape Town, and London are used extensively. 1 Balkanization is the shaping of states comprised of populations of different homogeneous entities. The term was initially coined at the end of World War I to describe the ethnic and political fragmentation that followed the breakup of the Ottoman Empire in the Balkans. Balkanization has occurred in places other than the Balkans, including Africa (Encyclopædia Britannica Online, 2011). Under the use of state policies, I analyse foreign policy, energy policy, oil diplomacy and the formation of special initiatives and institutions responsible for enhancing oil interests. Under political meddling,