Oil and Globalisation – not working for Equitorial Guinea

This extract from Peter Maas’ excellent ‘Crude World’ illustrates how Equitorial Guinea hasn’t benefitted from ‘capital-intensive invesment’ by the oil industry – – I’m sure  this kind of thing is pretty much what’s going on with China’s expansion into Africa…

The book obviously talks about a lot more than what’s below, focussing on how the extraction and export of oil has affected a range of countries and not always in beneficial ways,  but I was struck by this extract as an excellent example of how Transnational Companies and economic globalisation don’t necessarily result in ‘development’ because those companies import help from outsdie the areas in which they are based rather than integrating into local communities. One assumes, that once the oil has run out, they will just disappear without a trace – other than the legacy of pollution and corruption left in their wake of course…  

From the book –

Even if Mother Teressa were president of Equatorial Guinea, the odds would be stacked against her subjects getting rich from the country’s mineral wealth. That’s because it is not just the thieving of the government officials that make it hard for average citizens to benefit from oil booms. The globalisation of labour, combined with the small number of workers needed for capital-intensive oil projects, ensured that most Equatorial Guineans would watch others profit from that boom.

Let’s begin at Marathon’s natural gas facility, the one whose immense flares brightened (and polluted) the nigh sky. Little of the $1.5 billion Marathon spent on the facility entered the local economy because the plant was built by foreign workers who lived on the construction site and sent their pay packets home to Manila and Houston. Even for manual labour – digging ditches and the like – workers were flown in from India and Sri-Lanka.

As we moved around the plant I noticed that almost all the workers were South Asian, while managers were American and European… Indians and Filipinos had previous experience and knew how to use welding torches and wre not hobbled by Malaria or yellow feavour which were rife among the native population.

The plant – like many oil installations in the developing world – would have been on teh moon for all the benefit it offered local businesses. Thanks to just-in-time supply networks that span the globe, Marathon saved money by iumporting what it needed rather than working with unfamiliar local suppliers. Instead of buying cement locally, Marathon set up its own cement factory on site. The plant has its own satellite network, power plant and sewage system.. it existed off the local grid.

Almost everything has to be imported – Paces (the author’s guide) explained

‘How about paint?’ I asked

‘Imported he replied’

‘Portable Toilets?’

‘Imported’

‘Yes’

Equatorial Guinea had a lumber industry so I asked whether the wood was at least local

‘No Imported’

‘Food?’

‘Most of it gets imported’

I pointed to the small rocks that had been lined up to denoted the shoulders of a small road

‘Those are local rocks, but importing them would have been cheaper’ he said.

Definately worth a read this book!

 

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