Africa's Oil Tycoons (Page 7)

Luanda, Angola

Benjamin Castello, director of the Angola chapter of Jubilee 2000, a coalition of advocates focused on debt relief, notes that despite their purported charity work, the oil companies give nothing to local pro-democracy organizations, which provide the only hope for holding the government accountable. "Oil companies know that if they support civil society, in the future they won't receive new petrol blocks," he said. (The United States has apparently decided such funding isn't in its interest either: The Agency for International Development has virtually eliminated its prior support for pro-democracy organizations that were critical of the government.) Oil companies are also resisting a campaign initiated by the Open Society Institute and Global Witness, and supported by more than 100 organizations worldwide, that asks companies to publish the payments they make to governments, under the theory that this would make it harder for government officials to steal the money. The companies say it would violate their contracts with the government of Angola and put them at a competitive disadvantage.

The United States has shown no interest in either making demands on oil companies or pressuring the Angolan government. On the contrary, with its interest in diversifying its sources of oil and staying on the right side of one of the most powerful military forces in Africa, Washington is publicly strengthening ties to the MPLA government. In 2002 the Bush Administration welcomed President Dos Santos to the White House, and that same year Secretary of State Colin Powell visited Angola. The United States is now building a mammoth, $40 million fortified embassy high on a hill overlooking Luanda; a low cement wall across the road hides the musseque built into the slope below. American officials say they prefer a carrot rather than a stick approach. "It's a partnership," said a senior US Embassy official, who spoke on condition of anonymity. "Angola can be a force for democracy, stability and economic development. It could be one of the wealthiest countries on the continent."

Hoping investors will see it that way, the Angolan government is beginning to talk about changing its ways. It has said, for example, that it will publish a complete budget that includes all of the state oil company's expenditures. But it won't allow any independent auditing, so if the private oil companies continue to hide payments, there will be no way to verify the government's revenues.

In the meantime, conditions for most Angolans continue to worsen. In 2002, despite the war's end and an increase in oil profits, Angola slid down the UN's Human Development Index, compared with the three years before. According to a recent report by Human Rights Watch, spending on social programs is now less than 3.5 percent of the national budget--significantly lower even than in neighboring Chad, Equatorial Guinea and the Democratic Republic of the Congo.

For Angola's elite, though, things are looking up. Shortly before I left in November, the Council of Ministers had just declared its support for a $600 million project to build two brand-new islands in Luanda Bay. They would boast a shopping mall, luxury hotels, apartments, restaurants and casinos.

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