Wednesday, September 23, 2009

When good news isn’t

On my flight back to Freetown on Tuesday night, I sat next to a group of drunk rough-and-tumble middle-aged guys, many of them Scottish. A friend and I sized them up and figured they must be miners. Or mercenaries, but there aren’t as many of those running around Freetown these days.

In fact, as we discovered later in the flight when a particularly drunk and offensive member of the group tried to chat us up – “You actually live in this godforsaken country?” he slurred, throwing back yet another gin and lemonade – they were members of an oil drilling team working for a large petroleum company. According to him, they’d just struck oil off the coast of Sierra Leone.

After another offshore find last year in Ghana, this wasn’t particularly surprising, but I still put even odds on the fact that he was full of it. But sure enough, Wednesday morning brought headlines on the BBC, Financial Times, and others, that the US Anadarko Petroleum Corporation and its partners had found oil off the coast of Sierra Leone.

This should be good news for Sierra Leone, I suppose. A new and lucrative industry to create jobs, generate tax revenue, and bring foreign currency into the country is surely welcome. Images of tiny Gulf states made impossibly rich by oil revenue, or a childish cartoon with an oil geyser bursting from a backyard, come to mind. “We’re rich, Ma, we’re rich!”

Sadly, among the world’s poorest countries, the presence of valuable natural resources has tended to lead not to the reduction of poverty, but to the creation of rent-seeking, kleptocratic elites growing richer while the vast majority of the population continues to live in gripping poverty. Take the Niger River Delta in Nigeria, where abundant oil resources have failed to benefit the local population and instead have fuelled terrorism and popular unrest, while causing tremendous damage to the natural environment. Or the many poor economies in which, as Paul Collier argues in his book the Bottom Billion, “resource rents … make democracy malfunction.”

So I want to celebrate Sierra Leone’s latest opportunity for economic growth, but I worry that oil – like diamonds in the 1990s – could prove more of a curse than a blessing. Two members of the Visit Sierra Leone online forum express these duelling reactions: saint_dracula says Genuinely horrifying, depressing news...Yet another curse... Don't expect much,” while SaloneBoy celebrates, in Krio “Betteh don kam oh, betteh don kam!!”

I hope you're right, SaloneBoy. I hope good things have come.