South Sudan: Fragile and Resilient

In July 2011, South Sudan gained political independence. With the exception of Eritrea, no other African state has been created in the post-colonial period (i.e., since the 1950s). South Sudan now faces a long and difficult road to stability and prosperity.

Like many of the former European colonies in Africa – especially the Belgian and Portuguese territories – South Sudan’s independence inheritance was limited. In the case of South Sudan, governments in Khartoum systematically marginalized this geographically peripheral region. Some basic data tell a grim tale of under-development:

  • Only about 25 percent of the young state’s population is literate. Most developing countries have figures in the range of 50 to 80 percent.
  • South Sudan possesses a physical area larger than France. The new country, though, has virtually no paved roads. The longest stretch – connecting the capital of Juba to Uganda – is only about 100 kilometers.
  • Less than 1 percent of the population has access to electricity. That’s right, only a tiny fraction of South Sudanese can count on reliable access to a power grid. The 1 percent figure presumably does not include those who have access to a generator.
  • Maternal and infant mortality rates are falling, but they are shockingly high. The improved figures (since independence) are: 76 infants deaths per one thousand and 2,054 maternal deaths for every one hundred thousand births. This maternal mortality rate is the worst in the world.
  • A disputed border with Sudan and internal conflicts have led to the displacement of hundreds of thousands.

Yet, the new country has weathered its early independence phase better than many predicted. This assessment is especially remarkable given the long standoff with Sudan over oil transit fees. And South Sudan does have key natural resources other than oil. A high percentage of arable land, fairly dependable fresh water supplies, and ecotourism potential are a few of the country’s key natural assets.

The world’s newest state, though, is landlocked and situated in a highly volatile region of Africa. The Central African Republic and the Democratic Republic of Congo are both neighboring failed states. Adjacent portions of Uganda, Kenya, and Sudan have also experienced armed conflict or communal unrest in recent years. The South Sudanese people will require much more resilience in the years ahead.

Black Gold: The Geopolitics of Oil

I recently read Oil: Money, Politics, and Power in the 21st Century, a book by Tom Bower. Readers of this blog will find the book compelling for many reasons. Even so, Bower’s blind spot on climate change is a serious problem, and still symptomatic of the views of many of the world’s political and business leaders.

Oil – published in 2009 – provides a detailed account of the Western oil majors and their interactions with governments during the 1990s and 2000s. The book profiles a number of key industry executives – notably John Browne (former head of BP), and Lee Raymond (former head of ExxonMobil) – as it paints a nuanced picture of the risks and rewards of extracting “black gold.” Too often, ordinary consumers of oil do not comprehend the challenges associated with oil extraction, transportation, and refining. Companies often drill “dry wells” in the exploration process, which bring significant risk and cost to their operations. In many cases, host governments abandon negotiated contracts, leaving companies like Shell, Chevron, BP, and ExxonMobil in precarious financial situations. At the extreme, governments nationalize resources, as has happened in Russia, Venezuela, and the Middle Eastern states before them. Indeed, after the recent wave of energy nationalism, the Western oil majors (i.e. the world’s main privately held oil companies) now control a surprisingly small fraction of the world’s petroleum reserves.

Vladimir Putin Doll

Russia, more than any other state, has been closely associated with geopolitics and energy nationalism. The main architect of Russia’s energy geopolitics is Vladimir Putin. Photo credit: monkeyatlarge (via Flickr, Creative Commons license).

The most interesting geopolitical coverage in Bower’s excellent book is his discussion of Russia and the post-Soviet region. The book’s account of Russia’s wild 1990s period is stunning for its treatment of (oil) oligarchs such as Mikhail Khodorkovsky and Vladimir Potanin. As this and other cases from the book show, black gold has a way of undermining the rule of law and stimulating pervasive corruption. Bower also does an excellent job detailing the rise of Vladimir Putin and Russia’s resource nationalism. One compelling sub-theme related to Russia is the Clinton administration’s (1993-2001) aggressive efforts to channel Central Asian energy resources to the West, but not by way of Russia.

Now more than ever, the oil business is not for the faint of heart. Added to longstanding cycles of boom and bust are major geopolitical risks associated with unstable and uncooperative oil-producing states. And, critically, there is the core unresolved issue of climate change. Unfortunately, Bower mostly treats climate change as a difficult public relations issue for the oil companies. He seems to pat the companies on the back when they eventually concluded that they could not be both fossil fuel extractors and alternative energy leaders. That might be the right short-term business decision for these companies, but heavy global reliance on fossil fuels is not a wise path for our future. We must settle the climate change debate in the public arena, not in corporate boardrooms.

***  A new book by this blogger:  Failed States: Realities, Risks, and Responses

Angola: Recovering from State Failure

Campaign Sign for Angola's Jose Eduardo Dos Santos

President Jose Eduardo Dos Santos’ MPLA won another election in 2012, despite protests from the opposition about the conduct of the poll. Photo credit: Oscar Megia (via Flickr, Creative Commons license).

Forbes announced last week that the eldest daughter of Angolan President Jose Eduardo Dos Santos is Africa’s first female billionaire. Though much is unknown about  Isabel Dos Santos’ climb to this elite club, her status is indicative of the opportunities and challenges facing Angola.

For much of its history since independence in 1975, this African state has been wracked by armed conflict, grinding poverty, and bad governance. In short, Angola was a failed state for much of the not-too-distant past.

In the case of this lightly settled, oil-rich country, external factors were exceedingly important in Angola’s decay. The country suffered as the site of a proxy war between the Soviet Union and the United States, and involved other states like Cuba and South Africa. Prior to the Cold War meddling, the Portuguese – like the Belgians elsewhere in Africa – did a poor job preparing the colony for independence.

When the Portuguese left in relative haste, the Angolans initiated a 27-year civil war that also had significant connections with the global geopolitical struggle between Moscow and Washington. These dark decades can be summed up by a long list of depressing words and phrases: refugees, landmines, official thievery, food insecurity, bombed-out bridges, and empty schoolhouses.

After the death of rebel leader Jonas Savimbi in 2002, Angola’s fortunes have begun to improve. First and foremost, Angola has recorded a decade of peace. Economic growth has been impressive, even if concentrated in the export-oriented energy sector. Transportation has improved within the country, helping the country’s many small-scale farmers get their goods to markets. Many refugees have returned from neighboring countries.

Now, back to Africa’s first female billionaire. Here I provide an excerpt from the Forbes story, which includes a pertinent quote from the political scientist Peter Lewis:

How did a 40-year-old woman who started out with just one restaurant come into such a vast fortune? . . . “It’s clear through documented work that the ruling party and the President’s inner circle have a lot of business interests. The source of funds and corporate governance are very murky,” Lewis explained. “The central problem in Angola is the complete lack of transparency. We can’t trace the provenance of these funds.”

Lewis is careful to state that he cannot authoritatively comment on the particulars of Isabel Dos Santos’ wealth. The people who can comment on her wealth, likely do not intend to do so.

Even so, there are indicators that Angola’s ruling party has been somewhat less corrupt in recent years. New investments have flowed into the country. And, Angola has even remade itself as an immigration destination for financial crisis-weary Portuguese.

Yet, there are limits to the gains in governance. According to Freedom House, Angola remains an authoritarian state, despite holding elections. President Dos Santos has led the country since 1979, and looks set to do so for many more. The political opposition remains weak. And given the country’s continued reliance on oil exports (with the heavy involvement of the Chinese state), this is not a good mix for broad-based development. Angola is no longer a failed state, but its foundation for the future is uncertain at best.

Follow the Money

The Congressional Research Service – a public organization that supports the U.S. federal legislature – reported Friday that American weapons sales abroad tripled between 2010 and 2011. And, unsurprisingly, the U.S. continues to dominate the global market in military armaments. The American defense industrial complex accounted for 78 percent of worldwide weapons sales, for a 2011 total of $66 billion. This was a new U.S. record, and shattered the previous high ($31 billion in 2009).

From a geopolitical perspective, it is revealing to see where most of the growth in arms sales occurred. Here there is one basic answer: the Arabian Gulf (or Persian Gulf). Three U.S. allies stand out for acquisition of expensive weapons systems in 2011: Saudi Arabia, the United Arab Emirates, and Oman. Gulf states spent billions of dollars on advanced fighter jets, helicopters, missile defense systems, and other weapons. We already knew that tensions in the region are high. Tensions between Iran and most of its neighbors have escalated over the past year, but this data on weapons sales provides additional evidence of the arms race occurring in the region. And the data should give us additional cause for concern if Iran develops deployable nuclear weapons, and a more deadly arms race ensues in the region.

And, let’s not forget that about two-thirds of the world’s most accessible petroleum is located in the Arabian Gulf region. From the perspective of common sense, it is not a good trend that so many weapons are flowing into the region. Perhaps realism will win the day, leading to regional peace through a balance of power. Even so, the continued reliance of energy dependent countries on such a volatile set of states is foolish. Even with recent growth in petroleum production in places like North America, Africa, and Brazil, the Arabian Gulf remains the lynchpin in world oil markets, and that is unfortunate.

*** Did you like what you read here? You might be interested in the new book by this blog’s author, Failed States: Realities, Risks, and Responses.