Free Crude World by Peter Maass Page A

the oil companies they protected. His uprising depended, for its rallying cry and financial sustenance, on attacking some oil facilities while siphoning crude from pipelines operated by Royal Dutch/Shell, Chevron and other firms. Depending on your view, Asari was a thief, stealing from the companies a resource that was not his, or Asari was a Robin Hood, restoring to his people what was being stolen by foreign companies and a corrupt government. We would talk once he awoke.
    When oil was discovered in Nigeria by geologists working for Shell, the country had a growing industrial sector and a healthy farm economy. With its British-educated elite, Nigeria’s prospects were bright in 1960, when it became independent; its people were led to believe that the just-discovered treasure in the delta guaranteed a brilliant future. One of them was Annkio Briggs, a senior aide to Asari, who told me of Shell managers visiting her village with a movie projector. The villagers, most of whom had never seen a movie, gathered to watch a company film about the prosperity oil would bring. “They showed pictures of how white people lived in suburbs,” Briggs recalled. “Water came out of the taps. Children were getting into cars. Like them, we would live the good life.” Shell was welcomed into the Niger Delta.
    Now the world’s eighth-largest exporter of oil, Nigeria earned more than $400 billion from oil in recent decades, yet nine out of ten citizens live on less than $2 a day and one out of five children dies before his fifth birthday. Its per capita GDP is one-fifth of South Africa’s. Even Senegal, which exports fish and nuts, has a larger per capita income. Nigeria’s wealth did not vanish, as in a magic trick. It has been stolen by presidents, generals, executives, middlemen, accountants, bureaucrats, policemen and anyone else with access to it. This is what can happen in a country with weakly enforced laws and a weak sense of national identity: it becomes every region for itself, every tribe for itself, every family for itself. But the fruits of thievery are lopsided. The World Bank estimates that 80 percent of Nigeria’s oil wealth has gone to 1 percent of the population. A few years ago the national police chief was convicted of stealing $98 million, and the punch line was his sentence: six months in jail—one month for every $16 million. As for the money that wasn’t stolen, much was squandered on projects like the multibillion-dollar Ajaokuta steel complex, which has not made a single slab of steel.
    The cruelest joke is that even if oil money is not stolen or wasted, it can nonetheless have negative economic consequences. The problem begins with the influx of foreign currency from oil sales, which seems like a stroke of great luck. When large amounts of foreign currencyflood into an exporter’s economy, the local currency tends to appreciate. When this happens, foreign products become cheaper to buy with the strengthened local currency while domestic products become more expensive for foreigners to buy. As a result, the exporter’s industrial and agricultural sectors can lose local and foreign customers. The loss may not hurt until the boom subsides and the flood of oil revenue turns into a trickle; the exporter’s economy is left with industrial and agricultural sectors that have atrophied. This is known, in economics, as the Dutch disease, named after the decline of Dutch industry in the 1960s in the wake of an influx of revenue from the sale of North Sea natural gas. One remedy, economists have realized, is to “sterilize” oil revenues by keeping them offshore—investing a chunk of them in foreign stocks and bonds, for example. But a government that is mismanaged, greedy or just in desperate need of funds will let the money rush in. The Dutch economy recovered, but others have not been so fortunate.
    Nigeria is like a specimen exposed to multiple diseases. Legions of young men, turning away from hard and