RIIA: West has exaggerated fear of Asia over African oil

Aug. 24, 2009
Western fears about increasing Asian interest in securing African oil resources are highly exaggerated, according to a recent report by the UK's Royal Institute for International Affairs (RIIA).

Western fears about increasing Asian interest in securing African oil resources are highly exaggerated, according to a recent report by the UK's Royal Institute for International Affairs (RIIA).

"In spite of fears expressed in Western capitals about an Asian takeover in the Nigerian and Angola oil sector, the reality is different," said the RIIA report authors, adding that "these fears were highly exaggerated."

The report noted that the presence of Asian oil and gas companies in Africa is comparatively recent and that in the face of such new competitors, established Western oil majors still "dominate production and hold the majority of reserves."

The report, entitled "Thirst for African Oil," concludes that neither Nigeria nor Angola fits the stereotype of weak African states being ruthlessly exploited by resource-hungry Asian tigers.

In Nigeria's case, a cash-hungry political class sought to profit from its Asian partners' thirst for oil, while in Angola the relationship with China was nurtured in a pragmatic, disciplined way to the mutual advantage of both countries.

The report also compares the experiences of Chinese companies with those of India, South Korea, and Japan and assesses the growing competition between China and India where China's deeper pockets have put a brake on India's ambitions.

Some of the report's other key points include:

  • Neither Nigeria nor Angola has relations with Asian countries that fit the stereotype of weak African states being ruthlessly exploited by resource-hungry Asian tigers. In Nigeria's case, the Asian-tiger stereotype was turned on its head as a cash-hungry political class sought to profit from its Asian partners' thirst for oil. In Angola, by contrast, the relationship with China was nurtured with care and grew steadily in a pragmatic but disciplined way to the mutual advantage of both countries.
  • It is not possible to generalize about the impact of Asian oil companies in Africa, but it is clear that vastly different political cultures and practices have a strong bearing on determining impact and outcomes. While Nigeria was playing politics with its Asian partners, Angola was driven by economic necessity to quickly access funds to finance its post-war recovery. Nigeria simply lacked the imperative. As a result, the oil-for-infrastructure concept worked in Angola but not in Nigeria.
  • Many of the general assumptions about Asian involvement in Africa need to be revisited. The failure of the oil-for-infrastructure deals in Nigeria was not due to chicanery by the Asian oil companies but rather to the failure of the Obasanjo government to manage the scheme. By contrast, Angola has on the whole managed its relationship with China and its oil companies to its benefit in spite of occasional hiccups along the way. With less of a political agenda, Angola's version of the oil for infrastructure scheme has been much more successful for both sides.

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