"The Chinese are exploring Ethiopia," writes John Ghazvinian in the penultimate paragraph of "Untapped: The Scramble for Africa's Oil," a new book looking at the dramatic emergence of sub-Saharan Africa as a significant global producer of petroleum. In the wake of the murder of nine Chinese oil company workers by the Ogaden National Liberation Front two weeks ago, the sentence takes on an ominous cast. China's Ethiopian disaster has already been the hook for scores of stories assessing China's recent African adventures. If you want the back story to that narrative, "Untapped" is an excellent place to start.
But "Untapped" is not primarily about China's search for energy resources in Africa. Despite the hype concerning China displacing the West and propping up wretched governments from Zimbabwe to Sudan, Ghazvinian observes that "those who fear China's rapidly strengthening position in Africa might do well to maintain a sense of perspective. After all, the reality is that China has a long way to go before it catches up to the Western presence on the African oil scene. When it comes to exploration licenses, Chinese companies still make do with what one analyst calls 'the absolute dregs' and, overall, China's overseas-drilling portfolio is very much in its infancy."
The tales that Ghazvinian spins from his tour of Sudan, Chad, Nigeria, Equatorial Guinea, Angola, Congo-Brazzaville and a few other stops that most casual tourists would do well to keep their distance from (if they could even figure out a way to gain entry) have mostly to do with the usual suspects -- the Chevrons and Shells and Exxons and Totals, and the Western governments whose colonial adventures bequeathed a litany of catastrophe upon the unfortunate continent. Ghazvinian, who has a doctorate in history from Oxford, a sure hand with economic theory, and a journalist's touch for capturing the telling detail, delivers an account that would be wildly entertaining if the story he was telling wasn't so full of heartbreaking poverty, venality, corruption and violence.
The discovery of oil in Africa has been, almost without exception, a disaster for the host countries. The reasons are partly economic, partly having to do with the lack of well-developed institutions in many African states, partly owing to colonial legacies, and partly the fault of Western oil companies all too willing to turn a blind eye to corruption while the getting is good. In virtually no case has oil money been successfully employed for economic development, and so far, the likely prospect is that nearly every African country with significant oil deposits will end up worse off after the oil is gone than they were before the pumping started.
That oil wealth could be a curse seems counterintuitive. When an oil bonanza is discovered in a struggling African country, the instinctive assumption is that it can only be a good thing; that it will result in a rapid improvement in the lives of the people; that suddenly there will be money for hospitals and vaccines and schools and roads; and, even more than that, everyone will be rich. To the contrary, however, studies suggest that real GDP and the population's standard of living nearly always decline where oil is discovered. Between 1970 and 1993, for example, countries without oil saw their economies grow four times faster than those of countries with oil.
Ghazvinian's explanation of why this is so, which touches on exchange rates, the "resource curse" and the disemboweling of a developing nation's local industrial and agricultural systems of production by an influx of oil dollars, should be must reading for anyone who still believes that unregulated markets are the best way to cure all the ills of the poor nations of the world.
Which is not to let the rulers and governments of places like Equatorial Guinea and Chad off the hook. Nobody, aside from a few brave dissidents and NGO employees fighting against hopeless odds, comes out of "Untapped" looking very good. Which makes it all the more remarkable how riveting Ghazvinian manages to be, in a breezy and personal style grounded in stone cold facts collected, essentially, with his bare hands.
The writing isn't too shabby either. Describing a speedboat ride through the Niger Delta, Ghazvinian writes:
The motor failed every few minutes, and then we would sit waiting for the driver to repair it, overcome by -- to me -- a completely alien absence of noise. Even the quietest places on earth have some sort of ambient sound -- a rustling wind, chirping birds, the distant hum of fluorescent lights. But here, in the deathly humid air of the Delta, when the engine failed, and the waves stopped lapping, there was total silence -- like a pitch-black blindness of the ears.
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