Global Development: Views from the Center
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November 16, 2006
Equatorial Guinea's Corruption Scandal: African Poverty, Mansions, and the California Sun?
Posted by Kaysie Brown at 03:43 PM
What kind of home can you get as an African agriculture minister with a 60k salary? If you're the son of an African leader running an oil-rich country, apparently you can afford a Malibu mansion. The UK-based anti-graft watchdog, Global Witness, recently outed the son of President Obiang of Equitorial Guinea, who purchased a $35 million California home this spring, complete with 16 acres, a golf course, tennis court and a swimming pool.
This is bad news for the country, whose oil resources have so far only been seen to benefit high level officials. While Equatorial Guinea has seen extraordinary economic growth of around 16% due to the recent discovery of offshore oil reserves (making it the 3rd largest oil exporter in Sub-Saharan Africa), little of the money ever reaches its people. It ranks 121st on the Human Development Index, and 151st on the Transparency International Corruption Index. This year's human development report, Beyond scarcity: Power, poverty and the global water crisis, listed Equatorial Guinea as the worst off country in Africa, where nearly 60% of its population lacks access to clean water.
Given all of the attention focused on tackling corruption by bilateral and multilateral donors, the time is ripe to get serious with Equatorial Guinea. At the very least, it seems like a no-brainer that the U.S. would want to step up, given its recently launched Anti-Corruption Initiative, the National Strategy to Internationalize Efforts Against Kleptocracy. This would be a perfect test case to prove the U.S.'s resolve against big-ticket corruption, by seizing assets and imposing travel bans of foreign public officials such as Obiang. In the end, it's important to ensure that the newfound wealth from this oil-boom benefits the people living in Malabo, not the home-builders of Malibu.
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Comments
Two comments/questions:
(1) I don't know about the US policy on corruption overseas, but what about the Extractive Industries Transparency Initiative led by TI and supported by the EU and the US? Has there been any attempt to get Equatorial Guinea to sign up to this? I know Angola, for one, has refused.
(2)I understand the largest investors in Equatorial Guinea are French and Italian oil companies, which are perceived (rightly or wrongly) to offer more bribes than US, British or German companies. Maybe we should take this debate to the French press?
Posted by: Rupert Simons at November 20, 2006 02:33 PM
Getting tough with the foreign officials is fine, but the real issue is halting oil companies from signing contracts with corrupt governments. We (U.S. and other wealthy countries) support dictators like Mobutu for decades, allowing them to take aid money, rack up national debt, and sell their nation's mineral wealth for personal gain, leaving their people impoverished. It is tricky to deal with the notion of sovereignty when officials are elected, but our actions (governmental and private companies) are complicit in supporting corruption and we have to assume responsibility for those actions. Thomas Pogge has written articles making this point and I would encourage people to look him up.
Posted by: Bill Savedoff at November 21, 2006 10:30 AM
Dear CGD
I suggest anyone interested in Equatorial Guinea should read a recent Business Social Responsibility report "Social Development Fund" repared May 2005. Depite the corruption there still needs to be a way to engage the Government of EG to share their oil wealth through the social needs fund proposed by BSR for the benefit of their population. This report provides some concrete ideas for the development of this type of fund that could also be tried in other countries.
Clearly the larger governance issues will take longer.
Posted by: Brian Hannon at November 21, 2006 03:16 PM
A few observations:
The question raised by Rupert Simons raises another one: What is the African Union doing to help efforts to promote the implementation of the United Nations Convention against Corruption (UNCAC)?
International companies know that it is a criminal offence to bribe foreign public officials and officials of public international organisations.
The real challenge is to bring the AU, the ADB, the EU, the WB, the US, major corporations and other major international organisations genuinely interested in the fight against corruption and development more broadly to keep helping the building of a strong social capital in Africa, through among others, strong organic civil society, a healthy and pluralist democracy.
Corruption opportunities are minimised in developed societies because of a civil society that is capable of influencing public policy, and a capable and independent ( in some cases) media, and a professional public service that can serve a a whistle blower.
Donors need to strategically work on building a similar platform.
Partnership is one the keys.
Posted by: Aime Saba at November 21, 2006 07:42 PM