Angola: The Client Who Came in from the Cold

01 အောက်တိုဘာလ 2000

Imagine a poor land, broken by decades of organized greed and violence. Imagine that in March of this year, Coca Cola begins operations in the country; in April the IMF gets a hammerlock on management of state finances; in May a visiting American viceroy applauds, with few ifs or buts, the client government's aim to smash its internal opposition with force of arms; finally, in June a Godfather among corporate bagmen testifies that foreign firms have for decades paid many millions in kickbacks to senior government figures.

Normally, if the country in question were, say, Guatemala, Indonesia or Burma, such facts would be raw meat for progressive commentators and activists in the West. But here the response was subdued. For the country is Angola. Normal responses aren't what they used to be. In Angola, you see, there are always mitigating circumstances. Senior figures are perhaps more sinned against than sinning. And there's a war on.

Inside Angola, however, it's been anything but subdued. Journalists, church people and independent politicians are standing up and "speaking truth to power". By way of Angola's threatened independent media and in such events as the Peace Congress convened by church leaders in Luanda in July, they are trying to set a new agenda. In August a new political movement, perhaps akin to Zimbabwe's successful MDC, held its first public meeting, encouraged by a "colossus" of post-colonial Angolan politics, Lopo do Nascimento, who had signaled his readiness to abandon the ruling party. Do Nascimento was the country's first Prime Minister under President Neto, later Planning Minister and, for most of the 1990s, General Secretary of the MPLA. He represents the party's older, emancipatory wing that stood for progressive values of democracy and social justice. In September, however, do Nascimento announced his refusal to accept widespread appeals that he run for the presidency backed by a new center-left coalition. Meanwhile, in the face of police riflebutts, telephone wiretaps, unsolved break-ins and assassinations, many Angolans who would otherwise be active have been sidelined or cowed into passivity.

Rumbles in the Jungle

The conflicted, murky politics of Angola's elites are not well-mapped. Local sociological wisdom holds that there are thirteen families atop the pyramid of power and wealth. The most important political schism is said to be within the ruling MPLA: the rivalry between the sidelined "Colossi" and the powerful clique based in the presidential grounds at Futungo de Belas - the "Futunguistas". Deeper analyses by the French political scientists Patrick Chabal and Christine Messiant are among the most trenchant and insightful available. A forthcoming book about Angola by the British economic journalist Tony Hodges, sub-titled From Afro-Marxism to Jungle Capitalism, should throw more light in these shadowy realms.

In external affairs the murk is also hard to penetrate, in part because a lot of money and effort is spent on muddying the waters and directing our attention to the pretty corners of the swamp. But in the past twelve months a series of powerful reports and testimony have cut through this morass, exposing hitherto obscure circuits of money and goods.

Human Rights Watch Report:

In September 1999 came the Human Rights Watch report, Angola Unravels, by the indefatigable and well-informed Alex Vines; along with solid chapters on human rights abuses and civil society, a central chapter tells how both the government and Unita obtain arms. In December another London-based NGO, Global Witness, published a bombshell exposé, A Crude Awakening: The Role of the Oil and Banking Industries in Angola's Civil War and the Plunder of State Assets. The Angolan government is taking a Lisbon newspaper to court for having given this report extensive coverage. In mid-March 2000 came the report on for the UN Security Council by United Nations Sanctions Committee Chairman, Canadian Ambassador Robert Fowler about sanctions-busting on behalf of Unita. Diplomatic feathers flew on its release, as it named several African presidents and a host of companies as conspirators in contravening UN anti-Unita sanctions, some of them dating from 1993. In July, there came blockbuster revelations out of a long running judicial inquiry into "l'Affaire Elf", the biggest corruption scandal in postwar French history (extending through the French foreign ministry to Francois Mitterand and on to ex-chancellor Helmut Kohl of Germany). The source: a former top Elf executive, known as "Monsieur Afrique" for his role for three decades as the main French liaison (and bagman) to African leaders whose "cooperation" was needed in the face of fierce US oil company competition. His testimony, implicating the top of the Angolan hierarchy (who hotly deny the allegations) includes details of bribes totaling in the tens of millions every year for twenty years.

If these revelations have a common sub-text, it is this: Global regulation of markets in high-value commodities is a joke, and colluding African elites and their Northern confreres are laughing all the way to their offshore banks.

But some important people are not amused. At the top of Northern establishments, officials are worried about spreading fall-out from meltdowns like Angola's. Disorder in Africa, from Sierra Leone to Nigeria to the Congos, is proving much more intractable, contagious and dangerous than previously imagined. On the southern coasts of Spain every week this year, hundreds of desperate migrants fleeing African wars and oil-drenched social collapse are washing ashore, dead and alive.

For those keen to promote the Anglo-Saxon brand of de-regulation, such trends carry a further unpleasantness: they put the urgent matter of democratic control back on public agendas. Such concessions to the democratic principle are unwelcome, given decades of careful effort to confine economic management to the plush backrooms of policy-making, where neoliberal regulatory laws such as the Maastricht Treaty and the MAI are prepared.

The international dimensions of Angola's crisis are many and complex. What dilemmas and tensions do they pose, especially for the United States, Angola's main partner in trade, investment and politics? This article considers the question, and concludes with remarks on spaces emerging for the pursuit of emancipatory agendas.

New Client, Old Patron

Since the 1960s, when Angola's crude oil began flowing, corporate enthusiasm for Angola has never flagged. Despite the violent bullying of the Cold War, when Kissinger and later Reagan set out "in search of enemies" in Angola, key Western corporations and business leaders have stood by the MPLA-led government. Patrician banker David Rockefeller was one of Luanda's stoutest defenders in the courts of establishment opinion. In the face of heavy anti-communist Rollback propaganda of the Reagan years, the public relations machine of the Gulf Oil Corporation provided the Luanda government with covering fire on the US front. During 1980s the US began providing food aid via NGOs, thus penetrating yet one more African food market. The Export-Import Bank eased business terms for Boeing and other US corporations. With the consent of the US Treasury Secretary, the IMF and World Bank granted Angola membership in 1989, five years after the MPLA first expressed interest in joining the Bretton Woods club. Civil society was not to be left behind: in 1990, a number of oil and related firms set up the US-Angola Chamber of Commerce, whose membership today numbers 75, including a few US private aid agencies like PACT and Africare.

In the mid-1980s the Trader fraction of the US establishment may have suffered setbacks in ideological skirmishes. But they were never in real danger of defeat at the hands of inward-looking Cowboy fraction represented by Ronald Reagan. Indeed for the Traders, the bigger worry was that European firms, especially French ones, would steal a march on them in Angola and claim the most profitable pickings. The greater the intensity of French - American oil rivalries, the fatter the Lichtenstein bank balances of the Angolan leadership. For as Elf's "Monsieur Afrique" explained when describing the system of high-level bribery, "In Africa, all the oil companies acted in the same way".

Today in corporate and diplomatic circles almost everyone's outlook on Angola is bullish. Its deepwater oilfields have become "the world's hottest exploration prospect". Executives talk about a "world class oil province", representing "a North Sea scale opportunity". Mere hype to boost share prices? It appears not. In late 1999 some $18 billion in foreign investment deals had been lined up for the coming four years in the petroleum sector. In November 2000, direct flights between Luanda and Houston will begin (seat configuration: 138 economy, 91 business class). An oil industry newsletter recently depicted "managers preparing to inhabit the fenced-off residential settlement will enjoy splendid views of Luanda's Mussulo Bay from a commanding position atop a coastal bluff south of the decrepit Angolan capital. This comfortable patch of middle America, nicknamed Nashville by oil industry expatriates and just 15 minutes drive from the presidential palace, is evidence of a big push".

Production is on a roll. From 617 thousand bpd (barrels per day) in 1995, Angola's crude oil output may approach 1 million bpd this year, and 1.4 million pbd in 2003. With massive new offshore reserves discovered regularly, Angola's output could surpass the current 2 million bpd of oil giant Nigeria, whose population is about ten times larger than Angola's. Since 1973, the United States has bought the lion's share of Angola's crude oil. As state revenues come overwhelmingly from the oil sector, a significant, but seldom-noticed fact becomes clear: American motorists, via US oil companies, have effectively bankrolled the Angolan government, war and all, from the beginning.

Against those tens of billions of US petrodollars to the Luanda government, the estimated $250 million of CIA funding to Unita looks like peanuts. Together, those two streams of money created a hugely destructive mix. US covert resources and overt encouragement for Savimbi provoked Luanda into pouring its petrodollars into the sinkhole of a war economy. Those warbucks helped drive, and also camouflage, the many rackets that unite military and political elites and their foreign accomplices in common pursuit of gain, and of war. Peace is unwelcome for them since it would mean loss of privilege and power. For the many "conflict entrepreneurs" on both sides, peace would mean sharing the loot with others including - unthinkable sacrifice - the Angolan citizenry at large. With its motorists bankrolling the oil economy, the US's investments in Savimbi's barbarism helped lock everyone into the logic mutual antagonism, political decay, and a war capitalism red in tooth and claw. For Washington entanglement with Angola has until recently required discretion and enough distance to maintain "plausible deniability". It took no responsibility for the flow of petrodollars for Luanda. Indeed Washington could claim to be "making peace in rough neighborhoods", bang on about democracy, and lecture others about the importance of cutting military spending.

Risk Aversion

All this hype and humbug could lead one to over-estimate Angola's importance for the United States. Problems brewing in Colombia, Venezuela and Peru are of much greater concern, and the byzantine oil politics in central Asia pose big puzzles and risks. With US currently getting close to half its oil from abroad, the international risks are evident. Certainly the domestic political risks attached to the oil economy have been concentrating politicians' minds in recent months. Cheap gas at the pump has become a de facto human right in the West. Threats to that entitlement evoke motorists' wrath. Politicians rarely fail to recall the sheer political and financial muscle of the oil industry and the ways it lubricates and massages the US political system - not to mention the Lilliputian political systems in Africa. Exxon-Mobil's declared operating profits worldwide in the first half of 2000 alone ($7.5 billion) are nearly double Angola's recorded gross domestic product.

Angola may a way of mitigating those risks. In Washington DC, several facts stand out: In 1999, Angola supplied about 7 percent of crude oil imports to the US - a dependence much greater than that on Kuwaiti oil at the time of the Iraqi invasion. By 2008, it is projected to account for10 percent of US oil imports. Angola is the largest non-OPEC supplier outside the Western Hemisphere.

Since 1993, when the Clinton administration recognized the MPLA government officially, the frequency and scope of contact between Luanda and Washington have grown apace, with stepped-up exchanges of top-level government, military and business visits. In mid-1999 the US and Angola set up a Bilateral Consultative Commission to keep on track, and add momentum to the growing traffic in business, aid, security and financial relations. Last year, in the month of December alone, two State Department heavyweights, Under Secretary of State Thomas Pickering and Ambassador to the UN Richard Holbrooke, made separate visits to Luanda. Their rhetoric was bullish and firmly pro-government: "The United States will stand with you, politically and economically, as well as through assistance". Visiting Luanda in May 2000, Assistant Secretary of State for African Affairs Susan Rice told reporters that "...the military response [to Unita] is a necessary part of government efforts to reach peace".

The growing patron-client relationship has been sealed by a new agreement with the IMF, ratified in April. Its first phase is to run until the end of the year. Details were kept secret, but eventually some leaked out. Angola's first task is to pay off debts to the multilateral banks, then negotiate repayment of bilateral debts, also in arrears. It will have to stop printing so much money, and curb inflation through standard austerity measures. These include politically risky cuts in military spending and higher taxes combined with actual collection of taxes.

But the measure most likely to upset applecarts is the tracking of oil revenues. The aim is to ensure that oil company payments are duly deposited in Angola's central bank, and duly registered in national accounts, rather than disappear in the "Bermuda Triangle" between the state oil company (which has functioned as a shadow finance ministry and central bank), the central bank itself, and the political leadership at Futungo. If carried out, this shift of power would shake up the way the Angolan elite, and their oil company partners, do business. Human Rights Watch criticised the lack of transparency surrounding the IMF deal, which is supposed to promote transparent management of oil revenues. With too little knowledge of the deal's contents, journalists and civil society bodies will be unable to fulfil their roles (usually vaunted by Western officials in the case of African governance) as public watchdogs.

Déjà Voodoo

In countries of the ex-Soviet Union, of course, the Bretton Woods Institutions and their superiors in the United States Treasury have for years promoted "reforms", guided by the voodoo economics of neoliberalism. These have been monstrous farces involving the very rent-seeking elites, non-transparent management of public revenues and gangster rule that the Bretton Woods people claim to abhor. Yet we hear scarcely a murmur of official protest, or dissent in the cheerleading mainstream media, about those social catastrophes.

But in far-off, poor, non-nuclear Angola, there's more room to throw your weight around, more liberty to draw the line. Washington's approach in Angola could betoken a new-found interest in pruning back the wilder growths of de-regulated, privatized life on the planet. For things can get out of hand. If the state can't provide of law and order (for enforcement of business contracts) and if fiscal management has broken down (how will those debts get repaid on time?) then mercantile foreign policy aims will be frustrated. Unless Angola can somehow quickly get back to normal, doubt will be cast on the purposes and legitimacy of key institutions like the IMF and World Bank, as well as instruments of convenience to the United States like UN blue helmets and those "useful idiots", the service-delivery NGOs.

But is "reform" in Angola merely a matter of returning to "normal"? That assumption seems to guide most aid and relief efforts. Yet a return to a status quo ante looks about as likely as the advent of democratic socialism. For three decades the center of gravity of Angola's political economy has inexorably moved offshore, and below the surface - both figuratively and literally. New oil wells are a hundred-plus kilometers from the coast, often at depths of a kilometer or more. Circuits of money and power also flow offshore, mainly among foreign oil companies, Angola's national oil company, and the elite in high-walled enclaves in Luanda. Private security services, local riot police, imported foodstuffs and a couple of new sewer systems will keep the lid on trouble and disease in cities; foreign law firms and accountants will keep the watch abroad over corporate contracts. Most Angolan labour, food and other commodities are at best of secondary importance. Indeed "onshore" life in Angola is largely irrelevant to the system as it is now.

Offshore Control, Onshore Hopes

The projects of hollowing-out and marginalizing the "developmental state", noted by John Saul & Colin Leys in their somber overview of Sub-Saharan Africa (Monthly Review July-August 99), and of re-channeling political and economic resources upward and outward, are virtually complete in Angola. What the Lancaster University Africanist Christopher Clapham terms "the project of external governance" is at hand. True, the current Washington-led projects to re-engineer government (more powers to the Central Bank and Finance Ministry, a fuss every now and then about multi-party elections, etc.) and civil society (promotion of local business associations and independent media) are important and could nudge things in democratic directions. And yes, something must be seen to be done about poverty onshore. Preferably anti-poverty measures should bypass the public sector. Whatever their scope and content, they should never be construed as citizen rights or entitlements. Whether it is about water or transport infrastructure, health care, security or rural development, the strategy of choice is via foreign for-profit or nonprofit agents, such as under the BOT formula: build, operate, after an certain number of years transfer the investment in question to local hands. Charitable investments are no longer the exclusive domain of the non-profits; in 1998, the Chevron oil company made 28 grants, mainly for school and health services, totaling more than $1 million, thus making it one of the larger private aid agencies operating in Angola.

What space and opportunities exist to support Angolans pursuing an emancipatory national project? In the short to middle run, the best prospects are in the towns and cities. That is where more than half, perhaps two-thirds, of Angola's population live, albeit largely as displaced people. And that is where armed combat least occurs. In 2001, some city dwellers will be facing a new spectacle, that of politicians competing for votes in municipal elections. That means added space for debate, and agenda-setting potentially with real consequences. Second, across Africa the World Bank and African Development Bank have said they will begin drawing up their annual spending plans, hitherto negotiated only with Finance Ministry technocrats, in ways that allow "consultation" with local "civil society". There are no known immediate plans for such things in Angola, but sooner or later they will appear. These are occasions created from the top down, and carry all the dangers of hollow, choice-less, "low intensity" democracy that is an emerging hallmark of globalized governance in Africa today. But they could provide moments, and training grounds, for Angolans to pursue deeper, emancipatory politics and to influence agendas on terms meaningful to them.

Copyright 2000 Southern Africa REPORT