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An Oily Offer of Friendship

Following the machinations of foreign policy are easy if you remember the old journalistic watchword: follow the money. In contemporary foreign policy, you don’t even have to follow the money if you’re too lazy or busy to try and understanding the complex financing schemes that are currently replicating the Iran-Contra Scandal and moving the US to attack Iran. All you have to do is follow the oil.

With reports that Chevron’s investment in offshore oil exploration in Cambodian waters has hit the 100 million USD mark, it’s not surprising that the United States has suddenly revised its policies on providing direct aid to the institution that legally controls that oil, the State of Cambodia. This decade-long ban in direct aid to the Cambodian government has been the reason why Cambodia is covered in well-meaning and largely ineffective NGOs, which absorb most of the aid intended for Cambodia. Still, and despite the valid criticisms of the NGO sector as a whole (while excepting a few absolutely tremendous NGOs), this is a better situation that directly funding and propping up a regime that resembles a one-party state, where the Prime Minister systematically destroys dissent. The coup de force of 1997 was a major reason for the implementation of this ban, and a decade later, there’s less reason than ever before to consider lifting this ban, at least under the old criteria. Corruption is as powerful a force as it’s ever been, with Transparency International ranking Cambodia as the twelfth most corrupt country it ranks, out of 163 countries. Violence against domestic dissent is at an all time high, and hunger and economic instability are serious problems.

But of course, the criteria are not the same. Oil changes everything. So it’s no surprise to find that the oily friendship offered by Ambassador Joseph Mussomeli comes with the requisite warnings against abusing this new friendship. Don’t let the elite siphon off all this oil wealth, Mussomeli warns, as if they’re even capable of doing anything else. That sounds like a lovely idea, though. And it’s a good piece of advice. Of course, it comes at the same time as much more specific advice from Mr. Mussomeli:

‘Some countries have made the irritatingly human decision to use the resources to relax fiscal discipline,’ Mussomeli warned. ‘Like children who never think about the long-term consequences of the choices they make, they act as if the revenue will never stop flowing and they never act responsibly.’

Whenever you have a US Ambassador warning a resource-rich country to be careful about ‘relaxing’ fiscal discipline, it’s important to look at the historical meanings of that phrase: Look at US attitudes towards the nationalization and socialization of resource wealth in Latin America, Western Africa, or Central Asia. Sure, like any other capitalist interest, keeping good, incorrupt records is vital. But it’s even more important not to spend the wealth alleviating the suffering and poverty of the poor. Of course, the poor really want their suffering alleviated, and as long as the money is in the hands of a government nominally intended to serve them, they can exert some small pressure. Most of that can be removed (and the threat of covert military action and subversion avoided) if the marketing (that is, the sale – the control of pricing and destination) of the oil is removed from the government’s hands. And that is precisely what is happening in Cambodia. The Director-General of Cambodia’s National Petroleum Authority has already made that clear:

Tara added that Cambodia had studied the experiences of countries such as Angola and Nigeria and learned from them. Angola, he said, made the mistake of marketing by themselves and Nigeria had made errors because it did not know how to market.

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