Today's Opinions, Tomorrow's Reality
Pity the Petro-Citizens
By David G. Young
Washington, DC, December 31, 2013 --
Violence in the world's newest petro-state is tragic even if it isn't surprising.
When civil war erupted two weeks ago in South Sudan, citizens of the world's newest nation added their names to the roster of people suffering from oil wealth. Check out the World Bank's list of countries with the highest oil earnings as a percentage of the economy and you will see a list of outlaw states: Iraq, Congo, Saudi Arabia, Angola, Equatorial Guinea, Chad, Venezuela, Turkmenistan, Yemen, Russia, Sudan — just to name a few.1
None of the states in the list above are functioning democracies. At best, Russia, Iraq and Venezuela are highly authoritarian states with a thin facade of democracy. At worst, Equatorial Guinea and Turkmenistan are brutal dictatorships.
South Sudan does not appear on the latest World Bank rankings for 2011 because it didn't vote for independence until the middle of that year. But by all accounts, Oil completely dominates the economy and it will likely come out on top of the next list.
South Sudan is a tragic case study in how oil wealth is a terrible curse for poor countries. Governments in petro-states receive the vast majority of their funding not from taxes on citizens, but from oil wells. This arrangement removes any pretense of the government serving the people, who become something between an annoyance and a threat to governments focussed on making more money off of the black goo being sucked out of the ground. In South Sudan, 98 percent of government revenues came from oil in the transitional years to independence.2
Making matters worse, poor countries by definition don't have very much economic activity going on, limiting opportunities to get rich or even get by. South Sudan is one of the least developed places in the world, with almost no paved roads outside the capital and most of its people living in traditional huts without electricity or running water.
For ambitious South Sudanese who want to improve their circumstances, competing for a share of the oil wealth is the only way to go. For those with the opportunity and a penchant for violence, a coup d'etat is the quickest way to take all the spoils.
This is hardly news to dictators and authoritarian leaders of the petro-states, which is undoubtedly why they treat their domestic political opponents so brutally. Despite wearing a trademark black hat worthy of an eccentric dictator (a gift from President George W. Bush), the jury is still out on South Sudan President Salva Kiir. But he would be defying all precedents if he somehow managed to survive in office of an impoverished petro-state without becoming a brutal tyrant.
Nobody knows how many have been killed by the violence in South Sudan, but the typical estimate is that 1000 were killed in the past two weeks.3 For Westerners outraged by such a situation, there is unfortunately little they can do. Sanctions or a boycott of South Sudanese oil might seem the only leverage point.
But this leverage cannot exist so long as China is the overwhelming consumer of South Sudan's oil production.4 China's policy of "non-interference" in the domestic politics (no matter how brutal) of other states means that it will not participate in any sanctions.
This all adds up to a pitiful situation for the citizens of South Sudan. Its people are unlikely to see benefits from oil money unless they are lucky enough to be part of the entourage of whoever occupies the throne. Competition for this throne, as we have seen in the past two weeks, does little more for the citizenry than convert poor people into dead people.
Related Web Columns:
The Reign of the Petro-Bully, August 19, 2008
Poisonous Windfall, May 13, 2008
Fueling the Next Turkmenbashi, December 28, 2006
1. World Bank Databank, 2011 Oil Rents Percentage of GDP, December 2013
3. BBC News, South Sudan President Salva Kiir Rules Out Power Share, December 30, 2013
4. The Diplomat, China's South Sudan Dilemma, December 25, 2013