Wednesday, September 21, 2016

Falling oil prices and violence in Nigeria

Countries with oil wealth often suffer a "resource curse" that can take a lot of forms, including encouraging corruption and violence rather than investment in education and manufacturing, and undermining democracy. 

Then there are the problems that arise for oil rich countries when oil prices fall. 

From Kim Yi Dionne's interview with Omolade Adunbi, regarding the Niger Delta Avengers:
The violence lasted from 1999 to 2009, when the Yar’Adua and Jonathan administrations crafted an amnesty program for former militants who agreed to lay down arms. But rather than address infrastructural deficits, ecological destruction and high unemployment, the (former president) Goodluck Jonathan administration basically created a program that paid former militants not to fight. Many insurgent leaders were paid huge sums to keep the peace. Former militant commander Government Tompolo, for example, got a $100 million contract to police the waterways of Nigeria. Foot soldiers were given monthly allowances far exceeding the national monthly minimum wage.
But when international oil prices collapsed, the state could not continue these payments. The result is that we are witnessing old insurgents clad in new names with the same style of agitation.

Although the Niger Delta Avengers agreed to a ceasefire in exchange for a resumption of monthly allowances. Others, such as the Niger Delta Greenland Justice Mandate group, continue to attack pipelines.