Can Angola Break the Oil Curse?

More on the oil curse, this time with Angola.

The United States is expected to import 25 percent of its oil from Africa by 2015. Whether it will export democracy and stability in return is another question — one that will most likely be answered by the way in which American oil companies and the United States conduct business with countries like Angola.

Although Angola is finally at peace after decades of catastrophic civil war, its oil riches don't appear to be doing the country much good. Despite the production of almost a million barrels of oil a day, the vast majority of Angola's 10.7 million people live in grinding poverty. Government officials and oil executives live in villas behind security walls and barbed wire. But most Angolans — even here in Luanda, the capital — stay in crumbling cement-block huts without electricity or running water. Along the streets, children pick through mountains of roadside garbage while their parents hawk sundries from car to car or sell produce in the dirt alongside open sewers. The average life expectancy is around 40; the country has one of the highest infant mortality rates in the world.

The United States, eager to strengthen its ties with Angola, last year spent more than $100 million on the country's humanitarian emergency. It is expected to add $40 million more for 2003. But that's nothing compared to the oil revenues that disappear from government coffers each year. The International Monetary Fund has found that about $1 billion went unaccounted for each year in Angola from 1997 to 2001.

That doesn't look so good. Any suggestions on how to improve it?

In Angola, the United States has the opportunity to prove the agency wrong — if it takes several concrete steps. First, the United States should insist that its aid contributions be matched by funds from Angola's treasury. Angola has to invest in its own future.

Second, the United States should promote accountability in Angola by restoring aid to local pro-democracy and independent media organizations. (This aid, administered through the United States Agency for International Development, was reduced significantly three years ago.)

And third, the United States should compel American oil companies to make public what they pay to Angola for its oil. Right now, those payments are secret — as they are elsewhere in the world. As a result, no one really knows what the government earns from oil. That makes it impossible for Angolans to respond to their leaders' claims that oil revenues are being spent wisely. The Securities and Exchange Commission should therefore insist that publicly traded oil companies publish their payments to governments. If that happened, it could encourage real democracy.

I think those sound pretty good. Increase transparency, make sure the money goes to the people and help the pro-democracy forces. We will see how well that works out.

via International Reporting Project