The following is an excerpt from the new book Blood Oil: Tyrants, Violence, and the Rules that Run the World by Leif Wenar (Oxford University Press, 2016):
In 1995, Exxon found oil off the shores of Equatorial Guinea, a tropical country on the bending west coast of Africa. This discovery, at a time when Western powers were searching for safe sources of oil outside the Middle East, drew Equatorial Guinea to the attention of global markets. Within ten years, Equatorial Guinea had become a leading energy exporter in sub-Saharan Africa, selling more oil per capita than Saudi Arabia. Until recently, most of Equatorial Guinea’s oil has been tankered from offshore platforms to the United States, Canada, and Europe through the placid waters of the Atlantic.
Because of the huge influx of oil money, Equatorial Guinea’s average income grew faster than any other country’s in this century’s first decade, to surpass even the average incomes of Britain, Germany, and Japan. Yet this average income is deceptive—almost all of the money that the state gets from oil exports (recently valued at $16 billion per year) goes to the top. The World Bank reports that three-quarters of ordinary people live on less than what $2 a day would buy in the United States, and half the population does not have access to clean drinking water or proper sanitation.
Equatorial Guinea has been dominated since 1979 by the strongman Teodoro Obiang, who has not shied from having state-controlled radio pronounce him to be “like God in heaven,” who has “all power over men and things.” Nor has Obiang shied from having his guards urinate on political prisoners, slice their ears, and smear their bodies with grease to attract stinging ants. The UN Special Rapporteur on torture said, after a visit to the country, “They don’t even hide the torture instruments . . . I’m deeply convinced it is a governmental policy.” The British Foreign Office once estimated that up to a third of Equatoguinean nationals were living in exile because of “fierce political repression” over two decades. The US State Department’s 2014 report reads like a comprehensive catalogue of human rights—all of them violated and denied.
With imagination, one can build up a picture of life in this muggy dictatorship. News of the outside world is heavily censored; the single private television and radio network belongs to the President’s son TeodorÃn. Even basic information about government policies is secret (the last Open Budget Survey gave the country a score of 0 out of 100). Transparency International’s Corruptions Perceptions Index ranks the country as one of the most corrupt in the world. Only members of the ruling party get well-paid work, inside or outside the government. The police act with impunity and, when required, with brutality. People sometimes disappear without warning into the prisons; anyone joining an opposition group may be held indefinitely. Judges often check with the president before making their rulings and imposing sentences.
Even in 2006, Forbes judged Obiang to be richer than Queen Elizabeth II, with an estimated personal wealth of $600 million. (This was after Obiang had spent 55 million of his petrodollars buying one of six private jets—a Boeing 737 with gold-plated bathroom fixtures.) Earlier, we heard a former US ambassador to the country calling Equatorial Guinea “the world’s finest example of a country privatized by a kleptomaniac without a scintilla of social consciousness.” Today, life expectancy there is below the world average by eighteen years. A study in The Lancet found that neonatal, postneonatal, and childhood death rates all increased between 1990 and 2010—that is, children died more often after the oil revenues began to come in. Even as the oil raised the national income by over 400 percent, educational levels rose not at all. Obiang does not need to worry about the health or education of the people, as he gets all the money he needs to sustain his rule from allowing companies such as Exxon and Hess to set up oil platforms offshore.
Teodoro Obiang’s tempestuous playboy son and possible heir, TeodorÃn, formerly earned $7,000 a month as the country’s agriculture minister, yet spent over $30 million each on a mansion in Malibu and a private jet. Human Rights Watch claims that TeodorÃn Obiang spent almost $44 million on houses and high-end cars in the United States and South Africa between 2004 and 2006, while the total educational budget of Equatorial Guinea in 2005 was only $43 million. Part of TeodorÃn’s wealth appears to come from a “revolutionary tax” that he imposed as minister and insisted be paid directly to him.
In 2010, a US Senate Permanent Subcommittee determined that TeodorÃn had illegally used shell companies to shift more than $100 million into the United States; he “owned at least three dozen luxury cars, including seven Ferraris, five Bentleys, four Rolls-Royces, two Lamborghinis, two Mercedes-Benzes, two Porsches, two Maybachs, and an Aston Martin, with a collective insured value of around $10 million.” He has regularly been accompanied by high-priced American escorts, to whom he grants lavish shopping sprees. But 2011 was a bad year for TeodorÃn: he commissioned but then cancelled a superyacht costing almost three times the country’s health and education budget, he lost a briefcase with $40,000 inside, and the US and French governments seized tens of millions of dollars of his assets. In 2012, the French issued an arrest warrant for TeodorÃn; his father appointed him to higher offices in an effort to give him diplomatic immunity. In 2014, a French court indicted him in absentia for money laundering.
TeodorÃn is by all accounts at least as determined as his father to control the country’s oil revenues for his personal use. A US intelligence officer called him “an unstable, reckless idiot.” Yet TeodorÃn might recall this reading of a speech by Mephistopheles in Goethe’s Faust:
I am ugly, but I can buy for myself the most beautiful of women.
Therefore I am not ugly, for the effect of ugliness—its deterrent
power—is nullified by money . . . I am bad, dishonest, unscrupulous,
stupid; but money is honored, and hence its possessor . . . I am
brainless, but money is the real brain of all things and how then
should its possessor be brainless? Besides, he can buy clever people
for himself, and is he who has power over the clever not more clever
than the clever? Do not I, who thanks to money am capable of all
that the human heart longs for, possess all human capacities?
Equatorial Guinea is a nation, as a local economist put it, where “[a]n opulent minority sails in a sea of misery.” Given their situation, the people of Equatorial Guinea may well feel cursed by their country’s resource wealth.
The repression of the citizens of Equatorial Guinea, and the denial to them of the revenues from the country’s oil, may strike outsiders as a cause for sympathy. The situation in the country appears grim, the oppression of the people seems unjust, and something should probably be done about it. One might think of an aid program to help the Equatorial Guineans, or of Western leaders pressuring Obiang to share more of the oil money with his people. These kinds of proposals may not spark much optimism: repressive governments often capture aid money, and rich dictators can resist a good deal of foreign pressure. However, the sense remains that something should be done to help these Africans in their dire conditions.
This natural course of thinking about the situation in Equatorial Guinea overlooks something. Outsiders are already connected to its citizens’ plight. Resource diseases like authoritarianism are only half about resources. Obiang could not after all overcome his political opponents by dousing them in crude oil. The other half of the equation is the foreign money that has flowed into Obiang’s bank accounts as he has sold the country’s oil abroad. It is this money that has increased Obiang’s ability to pay his security forces, to control the channels of patronage, and to disrupt possible challenges to his rule. It is the money that outsiders have paid for the resources of Equatorial Guinea that have financed the subjection of its people. In the seventeenth century, it was payments from the Sun King that funded absolutism abroad. In our time, it is our payments to Sunoco.
The contribution of external funds to internal repression is clear enough when pointed out, and reflecting on it may cause more discomfort. We don’t like to think of ourselves as funding misgovernment abroad, even indirectly. The thought that what we’ve paid to fuel our cars might have ended up spent in Obiang’s bedchambers, or torture chambers, is not at all welcome. Yet, one might think, this is the way it often is in our world. In a globalized market economy, we pay for all sorts of goods. We do not know—indeed, we mostly cannot know—where these goods originate or where the money we use to purchase them goes. Some of the money we pay at the pump may go to tyrants, but that seems just a part of modern life. If the Equatorial Guineans have a political problem in their country, then that is very unfortunate. But it is in the end their problem, and we should try to help them (if at all) through private charity or the political influence of our government.
This way of looking at the contribution that outsiders make to the situation in Equatorial Guinea is still incomplete, and it is particularly lacking from a market perspective. Resources do not disorder countries because the inhabitants are not brave enough or bright enough to handle their own affairs. Authoritarianism in Equatorial Guinea is powered by an anti-market rule left over from the era of European empires. A flaw in the enforcement of property rights forces consumers to fund violence, coercion, and corruption when they make their everyday purchases at the gas station and the mall.
Reprinted with permission from Leif Wenar’s Blood Oil: Tyrants, Violence, and the Rules that Run the World, Oxford University Press, 2016.