Angola: Oil and diamonds and the prospects for recovery
Mike Eiseman, EISA, December 18, 2002
Large endowments of natural resources in African states are often associated not with prosperity but with poverty and chaos[1]. Angola is no exception; massive oil and diamond deposits make it one of the most resource-rich countries in Africa, but the proceeds of those resources have not served to benefit its population. Instead armed rebel faction UNITA's control of diamond exports has funded the extension of a destructive civil war.
More than US$2 billion annual government revenue from oil exports has served as the ultimate prize for that war, encouraged corruption and patronage in the MPLA government, and allowed for almost total neglect of the non-oil economy. A third of Angolans are internal refugees displaced by war, and nearly two thirds live in poverty.
With the death of UNITA's leader, Jonas Savimbi in February 2002, the outlook for permanent peace is more optimistic today than it has been at any time since independence. While peace presents the chance for ordinary Angolans to improve their standards of living, Angola's natural resource endowment continues to present a serious threat to its political and economic recovery.
Historical negative impacts of oil and diamond resources
Collier & Hoeffler (2001) find that the existence of opportunities for rebellion can more accurately predict civil wars than the existence of grievances against the government. In their model, dependence on a primary commodity export, such as oil in the case of Angola, is a significant risk factor for civil war. They argue that these facts suggest that greed (resource capture) is a more common motivation for civil war than grievance.
This analysis applies well to the resumption of war in Angola in 1992. Hodges (2001, 94) observes that with the MPLA's abandonment of Marxism-Leninism after 1989, there were no substantial ideological differences between the warring parties, and that the war became exposed as a competition for control of the $2.2 billion annual government oil revenue. The return to war gave UNITA the immediate payoff of access to the resources generated through control of diamond mining areas, and those resources provided the opportunity to pursue control of the state (and the resources that would come with it).
Over much of the war's 27-year history, the United States and apartheid South Africa provided UNITA with crucial funding and military aid. Between 1986 and 1991, UNITA received approximately $250 million from the United States, and substantially more from South Africa (Le Billon 2000). But with the end of the cold war, and the demise of the apartheid state, international assistance to UNITA stopped. Instead of encouraging the continuation of the war, international pressure was crucial in bringing the two parties into a political bargaining process in 1991. But following UNITA's defeat in the Parliamentary elections and failure to gain a majority in the first round of the presidential election, Savimbi decided to return to war.
Footnote
[1] Examples include state collapse and civil war in diamond-rich Liberia and Sierra Leonne, widespread corruption and institutional incapacity in oil-rich Nigeria, a decades-long brutal and corrupt dictatorship, followed by a continuing civil war in the Democratic Republic of Congo, which has a variety of mineral resources. Important counter examples include stability and relative prosperity in diamond-rich Botswana, and mining and energy-based industrialization in South Africa.
References
ALLAFRICA 2002 "Interview with UNITA interim leader Paulo Lukamba, (General Gato)", June 18, 19.
COLLIER, P AND HOEFFLER, S 2001 "Greed and Grievance in Civil War", World Bank Group Research.
HODGES, T 2001 Angola from Afro-Stalinism to Petro-Diamond Capitalism, Indiana University Press.
LE BILLON, P 2000 "Political Economy of Resource Wars" IN Angola's War Economy - The Role of Oil and Diamonds, Cilliers, J & Dietrick, C, Institute for Security Studies.
