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Oil and Governance
22 February 2010
Karin Alexander and Stefan Gilbert
Idasa

As demands for oil in Europe, North America and the East continue to rise, the discovery and exploitation of oil in Africa have become increasingly important. Natural resources in Africa have never been in short supply. Indeed, much of Africa’s recent history is defined by the scramble for and exploitation of its resource wealth. That the presence of resources, such as diamonds, has contributed to the perpetuation of conflict and human atrocity is well documented.

Although oil has been a source of income for many decades, new discoveries and global economic and political dynamics have prompted much debate as to how this resource can be used for developmental purposes. The financial revenues gained from this resource could go a long way towards redressing developmental needs that continue to plague the continent. Thus far, however, the indicators are not encouraging: countries that depend primarily on oil revenues (a) are more likely to experience violent conflict (Le Billon, 2005); (b) tend to prioritise military over civilian expenditure (ibid); and (c) experience declining standards of health and education along with increasing levels of poverty (according to primary human development indicators).

Academic work on this subject has contributed to a better understanding of the relationship between oil and democracy, primarily in the area of economic governance. A literature review provides ample evidence of the dynamics that contribute to a decline, as measured by various economic and development indicators. However, these works tend to be constrained by the need to quantify variables in a way that leaves little room for addressing the socio-political processes that lie at the heart of the problem. The often random, personal and cultural nature of the political will cannot easily be measured or defined using traditional economic paradigms.

This study seeks to gain a greater understanding of the negative relationship between the presence of oil and development. It also seeks to identify mechanisms with which to change this dynamic. Rather than focusing on the economic and financial environment, the study provides an analysis of the political context within which decisions about resource revenue are made. By identifying the ways in which stakeholders such as civil society, citizens and external actors engage with the state, the importance of the political arena will be highlighted; this is the avenue through which change might be effected. Rather then asking why certain political choices have been made, it seems more useful to ask how decisions are made, by whom and how they might be influenced. This analysis seeks to identify the kind of action that should be undertaken with regard to the processes, actors and institutions that are involved in political decisionmaking. Political processes are often cumbersome and lengthy. It is often difficult for those who work in civil society, and see the way in which oil impacts on communities, to find the patience to work together with governments. It must also be said, however, that many within government face similar challenges when dealing with issues relating to oil extraction and revenue. Due to the highly centralised nature of decision-making in this area, parliamentarians, civil servants and other functionaries often lack the information or capacity – or sometimes even the inclination – to engage. Similarly, Multinational Corporations (MNCs) in the oil industry who show a willingness to provide information about their financial dealings with governments, risk losing lucrative contracts.

The presence of traditional democratic institutions and processes (such as regular elections) does not in itself mean that a country is democratic. In the absence of formal participatory mechanisms and a well developed culture of democracy, alternative means of engagement must be found. Finding or creating spaces in which constructive dialogue can take place often depends on the personal experiences of those who come into frequent contact with the people, institutions and processes concerned. This report seeks to address the practical problems of engagement and activism. Case studies based on in-country research will provide a snapshot of the situation on the ground as experienced by the primary stakeholders. These impressions, perceptions and experiences will help to identify opportunities for meaningful engagement, and will provide practical suggestions for future stakeholder action.

The aim of the report is to describe the context in which political power is exercised in the four countries that are the subject of the study. It will show how policies are shaped and how one might engage with – and perhaps change – the political processes at work. It is hoped that by isolating these socio-political forces, avenues for public participation, effective advocacy and positive engagement may be found. The focus is on what can be done to change the political process. The audience for this report is not limited to civil society actors. Civil society on its own will not be able to confront and resolve the challenges faced in oil-rich countries. The main actors in this arena are governments, MNCs, international funding agencies, donors, local and international NGOs, and, of course, the people. All face constraints and challenges that are unique to their domain. It is hoped that this report will resonate with all these stakeholders.



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