Debating the curse of resources - The Case of Nigeria.

Transcription

1 Debating the curse of resources - The Case of Nigeria. Natasha Horsfield Abstract This paper critically addresses one of the primary assumptions underlying the hypothesis of a resource curse ; that resource abundance will lead to increased incidence, intensity and duration of armed conflict. Through an in depth examination of the crisis in the Niger Delta, it argues that rather than an being inevitable outcome of natural resource abundance, the curse of conflict is instead a political and economic construct born out of opposition to class structures and global power relations which spawn inequality and perceptions of illegitimacy at the heart of the accumulation process. Finally, it challenges the prevailing perceptions of rebel activity underwritten by resource curse theory in favour of an alternative view of conflict as a means of opposing liberalisation viewed as inherently illegitimate. POLIS Journal Vol.5, Summer

2 Introduction Persistent underdevelopment and a plethora of so called resource wars across Africa in recent decades, has led to the establishment of a body of literature pertaining to the existence of a resource curse, which postulates that natural resource abundance significantly increases the prevalence, intensity and duration of violent conflict and restricts development. The main purpose of this dissertation is thus to critically examine resource curse theory as a means of explanation for the crises faced by those developing nations heavily endowed with natural resources by interrogating the link between resource abundance and conflict. Since its emergence, the resource curse argument has been used increasingly in academic explanations for armed conflict and has influenced policy widely in this area; yet a body of criticism has emerged over the last few years highlighting a number of important flaws in the assumptions therein, particularly the notion that the risk of violent conflict will inevitably be increased by resource abundance. This raises the need to question such assumptions, and this analysis thus explores the theoretical claims of the resource curse hypothesis in detail, addressing the assumptions of its argument by highlighting a number of methodological criticisms and challenging the reductionism and determinism inherent within its thesis. Through a more nuanced examination of the petro-state in Nigeria and the crisis in the Niger Delta, it is argued that the assumptions made by the resource curse thesis are insufficient, and even obstructive to our understanding of the nature of violent conflict in Africa, by reducing complex social, political, and historical processes to statistical explanations of causality. The case specific analysis of Nigeria highlights the weight of political decision in determining the outcome of natural resource abundance as well as the constraints posed by historical legacy and international power relations on those decisions. Particular focus is placed on the salience of the process of accumulation by dispossession in producing resistance in the Delta, as well as the important role of international actors which is absent from resource curse theory. Furthermore, the case study is used to highlight the problem of assumed legitimacy and the serious implications posed for policy by this and the obstructive explanatory nature of resource curse theory; emphasising the importance of understanding the complex roots and nature of conflict on a case by case basis and challenging our perceptions of motivations in the interests of achieving resolution. POLIS Journal Vol.5, Summer

3 The central lessons of the Nigerian case are finally used to establish an alternative path of conflict analysis based on class structures and the international political economy, arguing that the curse of conflict, rather than an a priori outcome of resource abundance, is instead a political and economic construct, resulting from the inequality and opposition generated by class formation and international power relations; thus rejecting the central assumptions of resource curse theory by refuting the inevitability that resource abundance will produce a curse. 1. The resource curse and conflict Proponents of the resource curse hypothesis, such as Collier and Hoeffler, De Soysa, Ross, Karl, Shafer, seek to explain the linkages connecting the paradox of resource abundance, low economic growth and high incidence of conflict. Despite the long standing assumption that resource abundance would facilitate and enhance development, the paradoxically poor economic success and high incidence of conflict in developing countries rich in mineral resources has increased the influence of the resource curse theory, which postulates that an abundance of natural resources, instead of proving beneficial to development, actually causes poor growth and raises the incidence, intensity and duration of conflict (Di John 2007: 961). This runs in contrast to neo-malthusian theories of conflict which posit that resource scarcity, rather than abundance fuels conflict in underdeveloped countries (De Soysa 2000). Based on the resource curse concept, those countries whose economy is heavily reliant on resource endowments, as typified by resources revenue accounting for a large percentage of their export revenues, are likely to exhibit worse growth rates and higher incidence of conflict (Bush 2007: 131). Resource curse theory is rooted in the causal mechanisms underlying the paradoxical development characteristics of resource abundance, and endeavours to explain conflict and underdevelopment statistically by drawing correlations between resource abundance and its prevailingly negative outcomes which provide both the justification and evidence for the thesis (Obi 2010: 484). Resource curse theory offers two significant areas of explanation for the resource curse-conflict connection, that of rent-seeking behaviour and the rentier state model which must be explained to provide a basis for their critical analysis. POLIS Journal Vol.5, Summer

4 Rent-seeking theory and the rentier state model Rent seeking theory explains the resource curse conflict connection by focusing on greed as both an explanation and a motivation for armed rebellion, as well as its superiority over the traditional rebel discourse of socio-political grievances (Collier 2007; Collier and Hoeffler 2004). Since the opportunity to extort natural resource abundance provides an opportunity to finance rebellion, the presence of primary commodities is seen to substantially increase the risk of conflict (Collier and Hoeffler 2004). Furthermore, the potential economic gains to be made from natural resource extraction in underdeveloped countries not only create the opportunity to finance rebellion but also produce motivation to instigate it (Collier 2007). The rent-seeking argument is based on the notion that the existence of a honey pot of valuable rents produced by natural resource abundance in developing countries generates violent rentseeking behaviour in the shape of insurgencies motivated by greed (De Soysa 2000). Additionally, the resulting low economic growth rates and underdevelopment characteristic of the resource curse often create high levels of unemployment and poor access to education, which further increase the likelihood of conflict by skewing the cost-benefit analysis of civilians, particularly young males who make up the primary recruitment base for rebel groups, in favour of joining or mounting a rebellion, as they have financially far less to lose and more to gain through violent conflict (Collier and Hoeffler 2004). As the main proponent of the greed thesis, Collier (2007) argues that where greed is a primary driver of conflict, as in the case of those developing countries cursed with natural resource abundance, the potential gains to be made from the opportunity to continually extract those natural resources will also contribute significantly to the duration of conflict. Under these circumstances natural resource abundance perpetuates conflict in two ways; first by maintaining the ability of rebels to propagate conflict by providing a continued source of finance and second, where rebels are able to profit from the continued looting of resources, by providing an incentive to perpetuate conflict to continually satisfy their greed. Furthermore, it is argued that the lower the income of a country at the onset of conflict, the longer a conflict will last since both sides are more likely to develop economic interests in prolonging conflict to maintain access to resource rents (Collier 2007). The continuation of civil conflict thus typifies the establishment of a new system where certain groups stand to benefit to the detriment of others (Reno 2000). On this basis, combined with the idea that POLIS Journal Vol.5, Summer

5 internal conflict is development in reverse (Collier 2007: 27), the resource curse represents the creation of a vicious cycle where resource abundance perpetuates conflict and thus underdevelopment, which in turn feed on one another to further compound the negative outcomes of resource endowment. The second theory of explanation for the resource curse relates to the idea of the impact resource extraction has on the creation of a rentier state. Theories of the rentier state are based on the argument that the extensive revenues generated by mineral resource abundance hinder development by impairing the functioning of state institutions, resulting in perverse policies and fiscal management, and promoting corruption (De Soysa 2000). The main principle of rentier state theory is that where states gain an ongoing and considerable proportion of their revenue from external sources, as in the case of mineral resource rents, the need to levy domestic taxes is diminished. This reliance on unearned state income creates a so called political Dutch Disease which negates the establishment of reciprocal responsibility with citizens and decreases government accountability and legitimacy (Karl 2007; Ross 1999). In addition, the absence of the need to create strong bureaucracies to raise revenues results in weak state structures. The weak and illegitimate state is thus susceptible to insurgency in the form of violent mobilisation on the basis of grievances which the state lacks the strength and ability to counter (Di John 2007). The presence of abundant resource rents is also seen by the rentier state model to erode regime legitimacy through promoting corruption and the politics of patronage. Under these circumstances, construction of a legitimate social contract founded on the provision of public goods financed by domestic duties is replaced by the misappropriation of resource rents by political elites to purchase security (Di John 2007). This creates a perpetual cycle of corruption where abundant resource rents enable elites to maintain their privileged position and thus their continued access to resource rents to the detriment of national development (Karl 1997). This also has a significant effect on undermining the functioning of democracy by altering the conduct of electoral competition (Collier 2007: 42). Indeed, the skewed political system created by political patronage and the lack of public scrutiny over revenue spending has been proposed as an explanation for the tendency towards autocracy in many resource rich societies (Collier 2007: 44). According to Karl (1997) the characterisation of mineral producers in the developing world as rentier states can be attributed to the fact that the unearned income from resource rents accrue directly to the state without the mediation of private domestic actors, an argument that POLIS Journal Vol.5, Summer

6 is echoed elsewhere in the literature (Ross 1999; Shafer 1986). As a result, the state becomes the funnel through which all resource revenues pass, creating a mentality of rentier politics where control of the state, and thus the control of wealth becomes the prize in political contest (Shafer 1986: 919). This produces two effects; firstly, it fuels myopia among political leaders, where resource revenues become improperly directed away from development and towards the immediate maintenance of the corrupt status quo through channels of patronage (Ross 1999). Secondly, where wealth is dependent upon access to the state, competition to gain or maintain access to power and the revenues which come with it is likely to result in violent conflict (Bush 2007). It is also argued that the inflexibility of the mineral sector further ensures the weakness of state capacity to promote development by contributing to the myopic psychology of the rentier state (Karl 1997; Ross 1999; Shafer 1986). Karl (1997) explains how a continued dependence on mineral rents exacerbates the disparity between this weakened state capacity and extensive state jurisdiction to create an overextended and inefficient state. In the context of continued or at least the expectation of continued revenue flow, the concentration of state control through the centralisation of power and wealth happens almost automatically. However, the lack of sufficient and consistent development of political authority and institutional capacity to match this expansion of state control results in a weak and inefficient state, characterised by political rent seeking and completely unable to effectively devise and implement policies to counter the effects of the resource curse (Karl 1997). Under theories of the rentier state, the high incidence of conflict characteristic of the resource curse is the result of the violent expression of socio-political grievances generated by a perpetual and seemingly unbreakable cycle of corruption and patronage politics, underdevelopment and poor governance in the context of weak and inefficient state capacity to exercise authority. These factors are the creation of large resource revenues funnelled through the state, where the centralisation of wealth also produces violent attempts to capture the state as a means of accessing that wealth (De Soysa 2000; Shafer 1986). In addition to the ideas offered by the rentier state model, Ross (1999) sites a number of economic explanations for the poor economic growth produced by a high reliance on natural resources. First, that a decline in the terms of trade (a decrease in the value of exports in relation to the value of imports) for primary commodity exporters in the developing world, POLIS Journal Vol.5, Summer

7 results in a widening gap between underdeveloped resource exporters and wealthy industrialised states, which accounts to a large degree for the impoverishment of resource rich developing nations (Ross 1999). Secondly that heavy reliance on primary commodity exports would result in the transfer of sharp price fluctuations in the international market to the domestic economies of resource exporters. A third premise of such economic theory is that poor linkages between resource and non-resource sectors mean the stimulation of growth in non-resource sectors by the resource rich sector is improbable, especially where domination by foreign multinationals results in the repatriation of revenues to the detriment of local investment. (Ross 1999). The final and most commonly cited economic explanation for the resource curse is a phenomenon known as Dutch Disease. This describes the combined influence of two common resource boom effects, where a sharp increase in exports resulting in an appreciation of a state s real exchange rate combines with the tendency for capital to be drawn away from manufacturing and agricultural sectors by a country s successful resource sector, thus driving up production costs; leading to a decline in agricultural and manufacturing exports and inflating the cost of imported goods and services (Ross 1999). Although this and the afore mentioned economic hypotheses are influential in explaining the economic basis of the resource curse, they fail to encapsulate the political and institutional processes which result in the failure of government action to mitigate the negative impacts of resource abundance (Karl 1997; Ross 1999) and thus are mainly used in conjunction with the rentier state model. In recent times a partial move away from debates over greed and grievance, which in many ways typifies the divergence between the two strands of explanation for the resource curse, has resulted in an emphasis towards the onset, duration and intensity of conflict in resource curse theory (Obi 2010). In this respect, relating the characteristics of a country s resource curse and the nature of violent conflict to the type of natural resource available, and its prevailing socio-political characteristics, has become of significant importance to resource curse theorists. To this end, attempts to predict the type of conflict have been put forward on the basis of a resource s lootability and location as a point or diffuse resource (Ross 2002). It is postulated by resource curse theorists that lootable resources, such as alluvial diamonds, which are more easily extracted, will create greater incentive and opportunity for violent rent seeking behaviour on the basis of increased ease of opportunity (Collier and Hoeffler 2004). Furthermore, it is hypothesised that diffuse resources, which are also POLIS Journal Vol.5, Summer

8 typically lootable, are less likely to require direct challenge to the state since their ease of lootability requires only controlling a geographical area rather than the political domain of state power. In contrast, resource curse theory postulates that point resources such as oil which are assumed to be non-lootable are significantly associated with secessionist wars since their extraction requires means beyond the control of geographical area alone (Collier 2007; Ross 2002). Lujala (2009) has further hypothesised as to how the type of resource available affects the severity of armed conflict, positing that where lootable resources are available, protracted conflict typified by long periods of low intensity warfare is more likely; firstly as sustained conflict is preferred over peace to provide continued opportunity for rebels (and military forces) to gain economically from resource looting, and secondly since combative forces are likely to spend more time exploiting resources, and so less time in actual combat. Alternatively, in the case of point resources such as hydrocarbon products, which are characterised by extensive state control and expensive extraction processes, it is assumed that benefits are only likely to be gained by rebels through capturing the state or achieving regional autonomy, which is likely to entail more intensive fighting (Lujala 2009). Furthermore, the strong incentive to protect exploitation rights induced by the high value of extraction for the state is likely to result in more extensive involvement of state military forces, resulting in more intensive combat (Lujala 2009). In addition, it has been argued by Karl (1997) that the strategic value of oil in the international market coupled with the extraordinary rents accruing to oil exporting nations produces a more pronounced manifestation of the rentier state known as the petro-state. Critical analyses of this more specific oil curse have in part framed their discussion of the oil curse-conflict connection around the apparently unique nature of petro-violence (Di John 2007; Obi 2010; Watts 2007). Debating resource curse theory While resource curse theory offers two slightly diverging paths of explanation for the resource curse, the common characteristic of the resource curse thesis is the underlying assumption that conflict (and underdevelopment) will inevitably result from natural resource abundance. For this reason an important body of criticism has emerged which seeks to POLIS Journal Vol.5, Summer

9 challenge the assumptions and methods of the resource curse and move beyond resource curse determinism to provide a more nuanced understanding of the resource-conflict connection. Cramer (2002) describes the generalisation that the very presence of primary commodities increases the probability of civil war as absurdly simplistic, and argues that while it is clear that primary commodities and material interests play an intrinsic role in many conflicts, it is extremely difficult to distinguish between their role in the origins of conflict and their influence on the features and durability of that conflict (Cramer 2002). In particular, the econometric models applied to theories of rent-seeking behaviour reduce complex structures and motivations rooted in history to causal binaries of rational choice (Lawrence 2010). The presumption that conflict is the outcome of conscious rational decisions made by rebels in the pursuit of economic gain incited by the presence of natural resource abundance has been criticised as ignoring relational rationality, social and historical restrictions on choice, and conceivably overestimating the distinction between choice and compulsion in human nature (Cramer 2002 p1850). Indeed, a similar criticism can also been applied to the assumptions made by the rentier state model that the predatory behaviour of the state is based on rational aims of rapacity as opposed to development. Furthermore, the assumption that such decisions will be the predominant outcome of resource abundance needs to be explained rather than just being described (Di John 2007: 969). A further set of criticisms which has been levied against resource curse theory are the presence of opaque causality and use of spurious correlations. The presence of a strong statistical relationship between resource abundance, poor economic development and high incidence of conflict does not necessarily demonstrate causality and can not in itself explain in which direction an arrow of causality runs (Di John 2007; Lawrence 2010). Furthermore, it is entirely possible that the correlations on which the resource curse is founded could be spurious, and that the connections linking the negative outcomes of resource abundance could be the result of an unmeasured third variable not included in the resource curse paradigm (Ross 2004). This is supported by Di John s (2007) proposal that the statistical models which provide the basis for resource curse theory lose their significance with the removal of a small set of countries; and are thus likely to be the victim of selection bias to support the resource curse model; indeed, as will be shown, assumptions underpinning the labelling of a resource as lootable or unlootable stand in clear disparity with important case study evidence (Watts POLIS Journal Vol.5, Summer

10 2007). The fragility of such models therefore also forces us to question the robustness of generalising the resource curse as a theory. Furthermore, resource curse models of conflict focus on conflict as a singular phenomenon which ignores the presence of multiple overlapping conflicts (Lawrence 2010). Indeed, based on an examination of the interaction of political and private activities during conflict, Kalyvas (2003: 475) asserts that civil wars are not binary conflicts but complex ambiguous processes that foster an apparently massive, though variable mix of identities and actions. The reductionism critique can also be applied to the assumptions of resource curse theory more generally, which largely ignore the complexity of social, cultural, historical processes which forge the socio-political and class structures within which an apparent resource curse is situated (Bush 2007; Di John 2007; Obi 2010). Resource curse theory also overlooks the uniqueness of individual cases by homogenising the causes and motivations of conflict and underdevelopment across a diverse set of countries solely on the basis of the shared characteristic of resource endowment (Bush 2007; Obi 2010). Indeed more attention needs to be given to the theoretical assumptions which underline the hypothetical leap between statistical correlations and apparent explanations in resource curse theory, and the reductionist value judgements involved (Lawrence 2010: 9). Furthermore, resource curse theory ignores the extent to which imperialist interventions and the nature of the global political economy of resources has shaped the subordinate role of primary commodity exporting developing countries within the global capitalist system and the global security nexus (Bush 2007; Lawrence 2010; Obi 2010). Moreover, the role played by international actors such as foreign mining companies in the political dynamics of internal conflict, particularly in relation to grievances over the extraction process and the use of militias for private protection, is overlooked in much of the resource curse literature (Obi 2010; Watts 2007). Finally, perhaps the most important problem belying the validity of resource curse theory as an explanation for conflict is the extreme determinism implicit within the resource curse ideology (Di John 2007; Obi 2010). It is imperative to question the inherent inevitability that resource abundance will produce the negative effects underpinning the resource curse as a theory. The criticisms raised call into question the validity of resource curse as an explanation for conflict, and it is thus necessary to examine the assumptions and implications of resource curse theory by analysing both the role of natural resources in exacerbating and shaping existing socioeconomic problems and POLIS Journal Vol.5, Summer

11 how country specific socio-political and historical factors may drive the characteristics pertaining to a resource curse. To more accurately inform our understanding, this must be done not only within the context of a case study, but also through a class-based analysis within the context of the global political economy (Di John 2007). 2. The political economy of oil in Nigeria Nigeria provides an ideal case through which to interrogate the affliction of resource abundance in the context of oil, which because of its high value has seemingly become the most cursed of resources. Oil presents a particularly interesting commodity through which to examine Africa s resource curse because of the rising strategic importance of African oil in both the global capitalist system and the contemporary struggle for energy security. Indeed no other country presents a more striking example of the oil curse than Nigeria (Bush 2007), whose oil industry has, according to Peel (2009: xviii) almost become [its] raison d être. The case of Nigeria and particularly the crisis in the Niger Delta are a crucial example of why it is necessary to understand how socio-economic, historical and political factors, under the influence of global forces, forge the conditions of inequality and structural violence contextual of conflict and underdevelopment (Obi and Rustad 2011). It is this context which moulds the nature of resource reliance within a state and within which one must examine the negative outcomes of such reliance to interrogate the inevitability of a resource curse. This chapter therefore examines the Nigerian political economy of oil in terms of internal socio-economic and political factors, the implications of its role in the wider international political economy, and against the historic context of colonialism and class formation in Nigeria; in doing so providing a more nuanced background through which the crisis of insurgency and underdevelopment in the Niger Delta can then be explored. To simply say that the Nigerian state, where oil now accounts for over 80 percent of government revenues and 90 percent of export earnings (Obi and Rustad 2011), has become reliant upon oil would be a gross understatement. For this reason, Nigeria has been seen as a classic example of the resource curse; exhibiting the many shortfalls of the rentier state. Although oil exportation began in 1958, two years after its discovery, it initially only accounted for less than 2 percent of national exports, which were dominated by cash crops and other minerals (Obi and Rustad 2011; Watts 2004). From 1960 to 1973 however, oil exports rose dramatically, and as a result of the global price increases in petroleum in 1973 and 1979, the Nigerian economy enjoyed a huge oil boom (Bush 2007; Obi and Rustad POLIS Journal Vol.5, Summer

12 2011). During this time, Nigeria s agricultural exports became less profitable in comparison to the extensive revenues accruing from oil, and production subsequently collapsed (Collier 2007) leading to increasing state reliance upon oil marked by the centralisation of oil wealth, which shifted power from the state based agricultural elites to the previously weak central government of the Federation (Shafer 1986). The increase in oil rents during boom time also freed the Nigerian government from the need for domestic taxation, producing an archetype example of the rentier state, with the expected implications for state institution representation and accountability (Mustapha 2009). The Nigerian oil boom however, was characterised by authoritarianism, heavy borrowing and wasteful spending on projects swamped by corruption (Bush 2007; Collier 2007) which, following the 1986 world oil price crash, led to a drastically diminished source of state revenue with which to repay an extensive burden of debt; resulting in the halving of Nigerian living standards and the introduction of an IMF sponsored structural adjustment programme (SAP) to manage the switch from borrowing to repayment (Collier 2007). The fall in per capita income from $250 to $212 between 1965 and 2004 was marked by a stark deterioration in income distribution (Watts 2007: 641) where 55.5 percent of income accrued to the top twenty percent of the population, while only 4.4 percent accrued to the bottom 20 percent (Bush 2007: ). Indeed by 2003 most Nigerians were poorer than in 1970 (Bush 2007) with the number of people living below the poverty line increasing from 36 to 70 percent during this time; a massive jump from 19 million to 90 million Nigerians (Watts 2007: 641). Furthermore, the extent of Nigerian state corruption is evident in the fact that during this time perhaps a quarter of the $400 billion accruing to the state in oil revenues has basically gone missing (Watts 2007: 641). The centralisation of the extensive oil wealth under the state, a paramount characteristic of the resource curse, also elevated competition for access to the state, resulting in a revolving door syndrome of successive military coups (Mustapha 2009; Shafer 1986) and a disproportionate level of expenditure on civil servant amenities at the expense of development funding (Shafer 1986). The rentier nature of the Nigerian state and the poor record of economic development characteristic of the resource curse have thus been portrayed as the unavoidable consequence of oil dependence (Shafer 1986: 951). Bush (2007: 135) however, has asserted that if Nigeria is illustrative of the negative consequences of an apparent resource curse, there was no inevitability about the trajectory of its outcome. While rentier politics may POLIS Journal Vol.5, Summer

13 explain to a certain extent the government s failure to rectify the negative consequences of resource dependency, Nigeria s crises should be understood in the context of decisions made within the constraints of both rentier politics and other historical and external factors which require explanation, rather than as an a priori fate set in motion by its national resource endowment (Bush 2007: 135). In the Nigerian case, decisions within such contexts have led to the failure to manage resource booms, failure to expand capital outside the oil sector and the widening inefficiency of the public sector. Perhaps of primary significance however has been the way in which rentier politics has influenced state decisions of how to manage the distribution of oil revenues, which sparked the political dynamics of consolidation and domination of wealth, and thus power, under the state apparatus, establishing the state as the funnel for resource rent distribution, and engendering the problems classically associated with the rentier state (Bush 2007: 135). Prior to 1969, revenue allocation was based on one of the foundations of Nigerian federalism, the derivation principle, which allowed the allocation of 50 percent of resource revenues to the states from which that resource was derived (Mustapha 2009; Ukiwo 2011). However, the rising importance of oil as key source of revenue in the late 1960s led to the devaluation of the derivation principle through the construction of oil as a national asset by the state and dominant social classes (Ukiwo 2011). This was enshrined through the Petroleum act (Decree No.51) of 1969 which concentrated control and ownership of all petroleum under the state (Obi and Rustad 2011) at the expense of the states of the Niger Delta, whose share of government revenues dropped to 1.5 percent by 1982 under the Federation Account (Mustapha 2009: 77). This shift from fiscal federalism to fiscal centralism had wide reaching consequences for the Niger Delta and is paramount to understanding the crisis there, not least because oil from the Niger Delta was the only resource to be presented as a national asset under the Federation Account (Ukiwo 2011). Since the reintroduction of civilian rule in Nigeria in 1999 there has been an important reversal from fiscal centralism back to fiscal federalism which has directed more oil revenues back to the Niger Delta (see chapter 3). Watts (2007: 642) describes how this changing politics of fiscal centralisation and decentralisation has produced a new Nigerian political economy characterised by the decentralisation of corruption, the rise of power and wealth at state level and a democratisation of the means of violence. While these shifts in policy have important ramifications for the crisis in the Niger Delta which need to be explored in detail (Chapter 3), what is of note here is how the link between these changing characteristics and state methods POLIS Journal Vol.5, Summer

14 of revenue allocation depict how the effects ascribed to a high value resource such as oil pivot on state judgements, albeit judgements constrained by the politics of rentierism, rather than the inevitable driving force of oil abundance itself. While domestic constraints are of paramount importance, the decisions of the Nigerian state elites cannot be fully understood independently from the influences of the international political economy of oil, and in particular the strategic importance of Nigeria s oil to the United States. Being the largest oil exporter in Africa and one of the tenth largest in the world, Nigeria s role in the global oil market is significantly sizeable (Peel 2009). The new gulf oil states of West Africa, which Nigeria dominates, have surfaced as crucial to US global energy security calculations in recent years, with around 40 percent of Nigerian oil accounting for 10 percent of US crude imports (Ukiwo 2011), the fifth largest source of US oil imports (Bush 2007). Nigeria s rising significance as a major oil supplier to the US is linked to both its geo-strategic advantage and geo-political importance for the western market. Geo-strategically, the proximity of the large accessible Nigerian reserves of easily refinable crude to the US market, along with the equally convenient expanding reserves of natural gas are of obvious favourability (Obi and Rustad 2011). Geo-politically, concerns in Washington over the United States precarious reliance on Middle Eastern oil, which have been dramatically amplified in the wake of 9/11 (and will be heightened further by the recent Arab awakening), have significantly increased the strategic value of access to Nigerian reserves; further pressurised by the mounting competition in the new scramble for oil arising from China and other Asian powers expanding presence in Africa (Watts 2007: 638). Indeed, the magnitude of Nigeria s role in this ever tightening global market could not be more abundantly clear, with the launch of Africom, a special US military command, in 2007 prompting the active militarisation of US energy security policy on the continent (Peel 2009; Watts 2007). The strategic importance of Nigeria s reserves in this international oil complex has not been without its influence on Nigerian politics. During the extremes of military dictatorship, the role of Nigerian oil was significant in US negligence to condemn repression and autocracy (Bush 2007). Peel (2009) describes how the British policy of military support for the Nigerian dictatorship throughout the Biafran war was driven by strategic decisions over how best to safeguard the interests and access of British oil companies to Nigerian deposits. Indeed, international influence over Nigeria s internal affairs has by no means been confined POLIS Journal Vol.5, Summer

15 to the energy interests of foreign governments, of which the recently leaked cable from Royal Dutch Shell to the US embassies is testament. The cable revealed the extent of exploitation of Nigerian political channels by the largest oil company operating in the Niger Delta, which claimed to have staff working within every major ministry of the Nigerian government in order to ensure the companies interests. The level of internal manipulation uncovered was so extensive that Shell was described as having more power than the government itself (Smith 2010). In addition to this, Shell and other oil MNCs are complicit with internal elites in extensive corruption in Nigeria, including bribery of powerful government officials to increase profit and direct implication in assisting with the distortion of the electoral process (Obi 2010; Okonta 2005). If Nigeria has indeed become as Peel (2009: xvi) describes, a laboratory for the arrogance of a fossil-fuel obsessed world, then the powerful oil multinationals and their home governments are most evidently the scientists running the experiment. The Nigerian political elite are however in no way removed from the workings of international oil interests in Nigeria. In fact the corporate interests of the Nigerian state and its ascendant class are inherently tied to those of the international capitalist system (Ukiwo 2011), and so to ensure the security of its own interests, through internal military activities and by welcoming those of the international military (Ukiwo 2011), this class and the state have been complicit in ensuring global capitalism s grip on Nigerian oil, and the political channels through which the resource is controlled. The final and perhaps most fundamental context within which the political economy of oil in Nigeria must be understood is that of colonialism, and how the colonial legacy has shaped the political, economic and class systems into which the Nigerian oil industry was born. Indeed, the inter-linkage of the interests of Nigeria s economic and political elite with those of the global capitalist powers is an intentional outcome of the colonial legacy. Nafziger (1973) describes how the dominant Nigerian class was formed by the British administration in the final decade of colonial rule through the provision of patronage and economic benefits, to ensure that post-independence Nigerian rule was favourably placed to continue British capitalist trade interests in the post-colonial era. The roots of patronage and class subordination can also be traced to the colonial project as the post-independence Nigerian ruling elite inherited channels of patronage directly from the colonial administration, which it was then able to utilise to retain its position and to ensure the subordination of the underprivileged Nigerian classes (Nafziger 1973); a condition which oil revenues rather than creating purely engorged. The intervention of imperialist interests through colonialism must POLIS Journal Vol.5, Summer

16 also bear some responsibility for the dominance of natural resource exports in the Nigerian economy, in that Nigeria s primary role on integration into this system was as an economic protectorate focusing specifically on the production of raw materials (Nafziger 1973). British colonialism is also of particular importance in understanding the post-independence Nigerian political system into which oil revenues were introduced (Watts 2004). Nafziger (1973) describes how the establishment of a federation in 1954, which granted the three regions of the federation self-government six years before central independence, reduced the strength of the federal centre, to which oil revenues would later accrue. Furthermore, the institutionalisation of regional derivation, political representation and the division of power along these provincial lines reinforced the dominance of the three powerful ethnic majorities, further marginalising the ethnic minorities, particularly in the Delta, who had already occupied a subordinate position under colonialism, which later had important ramifications upon the introduction of oil revenues (see chapter 3) (Obi and Rustad 2011; Watts 2004). The fact that ethnic hegemony had been the basis for the consolidation of local class power under Native authority also led to ethnicised civic rights post-independence (Obi and Rustad 2011; Watts 2004). The legislative equation of political identity on the basis of cultural identity converted ethnicity into a political force which entrenched ethnic rivalry over access to local government and the state. It was into this mix that valuable oil revenues entered, with the centralisation of oil rents designating state creation as a precondition to gain access to oil wealth, resulting in the multiplication of the number of states from the original 3 to 36 (Watts 2004: 74). While on the surface the case of Nigeria appears to present the epitome of the resource curse, it is evident that the negative effects associated with the increased reliance on oil are in no way an a priori outcome of resource abundance. Instead, the rise of Nigeria as a petrostate can only be explained through deeper understanding of the formation of the state, political economy and class system, as well as contestation over resource distribution, in the context of rentier politics, international imperialist intervention and colonial legacy. Understanding these formations and how they have shaped and continue to shape the characteristics of resource abundance in Nigeria forms the basis for a nuanced analysis of the crisis in the Niger Delta which challenges the reductionism, determinism and validity of the resource curse-conflict paradigm as an explanation for conflict. POLIS Journal Vol.5, Summer

17 3. Crisis in the Niger Delta As the source of Nigeria s oil and as a site of violent insurgency and gross underdevelopment, the crisis in the Niger Delta has been explored from a resource curse perspective. However, an in-depth analysis of the socio-political, economic and historical roots of political mobilisation and catalysts to violent insurgency highlight the resource curse viewpoint as obstructive to our understanding of the complex struggles in the Delta and thus provide the basis upon which to challenge the assumptions of resource curse theory. The Niger Delta, is made up of 9 states and 185 local government areas, covering around 75,000 square kilometres with an estimated population of 31 million people. Composed of fine agricultural land, extensive forests and fisheries, the Delta supports a fragile ecosystem of biodiversity to which the lives of its inhabitants are intrinsically linked, where as one of the most populous places on the planet, land scarcity poses a constant challenge for its 60 or more ethnic groups (Obi and Rustad 2011: 3-4; UNDP 2006; Watts 2007: 641). As the host to the Nigerian oil industry, consisting of 606 oil fields, 5,284 wells, 7,000 kilometres of pipeline, ten export terminals, four refineries and a massive liquefied natural gas (LNG) sector (Watts 2007: 639) the Delta s delicate environment and its residents are subject to the overwhelming ecological impacts of some of the most extensive levels of oil pollution and the highest rate of gas flaring in the world, posing a constant threat to the devastation of local livelihoods (Obi and Rustad 2011). Compounding these environmental conditions is a bleak human development situation where unemployment is widespread, access to healthcare and educational facilities is inadequate and the most basic of amenities such as potable water and electricity are scarce; a situation which stands in appalling contrast to the level of wealth accruing from the regions oil fields to both federal and local governments (UNDP 2006). In late 2005, fifteen years of increasing political unrest and violence in the region ruptured into insurgency, rendering the Delta to most extents ungovernable. Violent hostility towards oil operations has been characterised by direct attacks on federal and state security forces, offshore and onshore oil instillations and the kidnap of foreign workers (Watts 2007). Sabotage of the oil industry in the Delta has been a direct objective of militias, who succeed in deferring around 900,000 barrels, as well as the theft of another 100,000 barrels daily; over a third of national output. Such activities have been at extensive cost to the Nigerian government, which loses around $4.4 billion annually as a result (Watts 2007: 639). POLIS Journal Vol.5, Summer

18 The Delta conflict has been examined by resource curse theorists as both a greed based rebellion from the angle of rent-seeking behaviour and in the context of poor governance and poor security response of the weak Nigerian petro-state, leading to the assumption that corruption, malfunctioning democracy and voraciously motivated conflict are the result of Nigeria s high dependency on oil revenues (Obi 2010). Of particular salience in the case of the crisis in the Niger Delta are examinations of resource induced violent rapacity, based around the criminalisation of militant activities of oil bunkering in the Delta. Such examinations seek to illustrate how the networking of criminal syndicates in the Delta epitomises the raison d être of the ongoing violence in the region, and how motivations of grievance related to socio-economic and political marginalisation and environmental degradation, while initially plausible as the basis for protest, in their shift towards violence have evolved into greed (Collier 2007; Watts 2007). Collier s (2007) examination of violence in the Niger Delta, exploring the incidence of violence in relation to the number of oil wells in an area, deduces that the story of violence in the Delta is more resembling of a protection racket than the grievances posited by initial protests. The notion proposed by this is that rebellion in the Delta equates to organised crime rather than a politically motivated insurgency (Watts 2007). Focus on the criminal objectives of militias in both literature and policy has significantly influenced the securitisation of the Nigerian state response to the Niger Delta crisis, resulting in government failure to redress the root causes of conflict in the region (Ukiwo 2011). As has already been shown in chapter 2, resource curse theories of the weak Nigerian petro state overlook important historic context and the role of international actors in shaping resource dependency and its effects on growth, development, corruption and democracy. This too is the case in relation to theories of both resource fuelled violent criminal activity and the resource induced weak Nigerian petro state as explanations for conflict in the Niger Delta. Resource curse determinism cannot adequately account for the complex multilayered motivations of militias operating in the Delta, leaving open the need to explore the historical and structural bases of the crisis, as well as the interlinking role of the state and international community in alienating the people of the Delta. Rather than focusing on oil abundance as the singular cause of violence in the Delta, it is necessary therefore to recognise the complex webs of petro-violence which requires more nuanced analysis of the interface between a multitude of factors (Obi and Rustad 2011: 2). Indeed, instead of justifying the postulation that grievance has evolved into greed as a result of the opportunity to profit from oil POLIS Journal Vol.5, Summer

19 bunkering, it is more suitable to move beyond the resource curse hypothesis to engage in an in depth contextual analysis of how and why civilian resistance to the complex social paradoxes and environmental issues presented by the international oil industries presence in the Delta have transformed into violent conflict and taken on new characteristics over time. Background to the crisis Movements for autonomy in the Niger Delta preceded the oil-complex. Indeed, the shifting dynamic of the Nigerian state to one of petro-reliance in the 1970s only served as a volatile catalyst to pre-existing grievances surrounding the marginalisation of the Delta s ethnic minority groups by ethnic majorities during the formation of Nigeria as a federation (Obi 2010; Ukiwo 2011). The most significant of these early movements for self-determination in terms of the present crisis was the declaration of a Niger Delta Republic in 1966 by the nonelitist Niger Delta Volunteer Force (NDVF), aimed at ensuring Ijaw ownership and control over oil in the area and autonomy from the dominant Igbo elite. Isaac Boro who led this secession attempt has become a modern inspiration for Ijaw youth militias in the Delta who were disillusioned by the exploitation of the Delta s oil by the ethnic majority leadership (Obi and Rustad 2011; Ukiwo 2011). Aside from the iconic Boro movement, the resistive roots of the contemporary near permanent state of disorder in the Niger Delta date back to the Movement for the Survival of Ogoni People (MOSOP) in the early 1990s (Peel 2009). In 1990, as the representation for the smallest ethnic minority group in the Delta, MOSOP targeted the Nigerian federal government and Shell with demands for local autonomy, the right to control over their resources and compensation for exploitation and pollution of their land. The international MOSOP campaign, led by the writer and activist Ken Saro-Wiwa, engaged in a pacifist strategy framed in the discourse of endangerment of the Ogoni as an indigenous population, which was widely publicised and supported by international advocacy groups (Obi and Rustad 2011; Ukiwo 2011). However the Ogoni protests, which eventually forced the shutdown of Shell operations in the area, were met with a harsh military response and the systematic repression of the movement marked by allegations of human rights abuses committed by the Nigerian state. Military raids on Ogoni villages culminated in the arrest and contentious trial of Saro-Wiwa and eight other MOSOP members, who were subsequently POLIS Journal Vol.5, Summer