by Alex Perry
The aid world’s usual response to such negative assessments is angry denial. Oxfam released a report in April 2010 that accused much of the “barrage of criticism” of aid of being “incorrect and irresponsible.” Drawing a line between “political and ineffective aid” and providers of “good quality, 21st century aid”—Oxfam, presumably—the charity said the case for the latter was “more pressing now than ever.” But to illustrate its case, it went on to repeat the same untruths about the recession making the poorest countries poorer. “Last year, the global economic crisis crashed across poor country borders, exacting heavy economic damage and blowing a fiscal hole in the finances of developing countries. Low-income countries—already hit by the prolonged impact of the food and fuel crises—have now seen severe falls in Gross Domestic Product (GDP) growth, resulting in millions more being pushed into poverty.”22
It’s that kind of persistent dissembling that leads aid’s harshest critics to declare they don’t want to reform the system—they want to tear it down. Among them is William Easterly, who, after he left the World Bank, wrote The Elusive Quest for Growth and The White Man’s Burden, two books that argue aid is often ineffective and frequently damaging. Easterly has become Sachs’s nemesis in American academia. The two frequently launch public attacks on each other, and their heated arguments skirt the limits of polite debate. Easterly has now been joined by Zambian former Goldman Sachs banker Dambisa Moyo, whose best-selling 2009 book Dead Aid argued assistance should be phased out entirely. In 2010 the Dutch journalist Linda Polman published War Games, documenting her experience of aid and the perverse effects it can have. In one agonizing example, Polman uncovers self-congratulation so powerful it leads a group of unqualified Americans to perform surgery on children in West Africa, with predictably lethal results. She also encounters a guerrilla group that admits to carrying out amputations in the hope of drawing more aid.
“I’m sorry to be so unkind to someone who has good intentions,” says Easterly, “but you don’t get a get-home-free card just for having good intentions. You have to do things that make sense. If a surgeon is about to operate on me, I’m not all that interested in whether he has good intentions. I hope he doesn’t have evil intentions, but I’m much more interested in whether he knows what he’s doing.”23
Tellingly, these Western critics find rising support in the developing world. In Africa, aid’s most prominent critic is Rwandan president Paul Kagame. “In the last fifty years, you’ve spent $400 billion in aid to Africa,” Kagame told me in an interview in 2007. “The question for our donors is: what difference did it make? What is there to show for it? Obviously somebody’s not getting something right. Otherwise, you’d have something to show for your money.”
It is that background of rising skepticism to aid that explains the cynicism and pessimism that initially greeted Sachs’s proposal to tackle malaria. Aid had already spectacularly failed with malaria once before, and any new plans for elimination or eradication sparked accusations of delusion. For others, piling millions more dollars into an industry whose reputation was increasingly in question was plainly irresponsible.
But encouraged by antipoverty campaigners such as Bono and Bob Geldof, talk of a new campaign against the disease began to circulate in the years around the turn of the millennium. It quickly became apparent, however, that this new initiative would be different.
Next to Sachs, the three people emerging as the key advocates of a fresh drive against malaria were the then world’s richest man, Bill Gates, his wife, Melinda, and a Wall Street multimillionaire, Ray Chambers. Not only did none of the three have any expertise in either malaria or public health, these well-funded and well-connected individuals were vowing to merge aid and business as never before. The aid world needed a dose of business discipline, they declared. Campaigns would be run like businesses. Effectiveness and results were the new watchwords.
Disquiet radiated through the aid world. Change was coming, and maybe not for the better. Everything and everyone would henceforth be measured and assessed. More and more, aid agencies would resemble businesses. That was a problem of principle for many. But there was concern about conflicting interests too. Wasn’t it business, aid professionals whispered, that for decades had trapped hundreds of millions of Africans in poverty and war?
CHAPTER 5
The Business of Caring
I have a map of Lagos, but from the air I can see it will be useless. The city appears below me as we drop out of the clouds, and it is endless—a plain of dusty tile and tin roofs extending all the way to the horizon. Veins of traffic, electric red and white, glitter prettily in the evening light. Lagos’s southern edge, where I am headed, looks particularly busy: a maze of skyscrapers jostled against the sea, seemingly squeezing cars and trucks to a standstill. This is Africa’s megacity, the biggest metropolis in Nigeria, its most populous country and, so the authorities reckon, soon to be the third largest in the world—though nobody seems sure whether it is home to 10 or 17.5 or even 20 million people.1
It is December 2009, and in two days I’m meeting Chambers in Nigeria’s inland capital, Abuja. But I’ve arranged another encounter first. Henry Okah is a guerrilla leader, head of the Movement for the Emancipation of the Niger Delta (MEND) and Nigeria’s most wanted man. He served more than a year in an Angolan jail on a Nigerian arrest warrant and is now living in self-imposed exile in South Africa. A few days ago he slipped back into Lagos, and, protected by the anonymity of this limitless city, he tells me he is happy to meet at a seafood restaurant in one of the city’s swankier neighborhoods. After a three-hour ride from the airport, I arrive.
Okah is more dressy than you might expect for a rebel leader: a polished bald head, a neat goatee, smart dark slacks, and a black open-necked shirt. When he talks, he has an unsettling ability to be both charming and angry. He tells me that when he started out as a militant in 2005, his discovery that a small band of men with guns cruising the creeks of southern Nigeria could hike the world price of crude oil by threatening an attack on a pipeline or kidnapping a Western oil worker initially surprised him—then encouraged him to do it again. After four years, MEND has cut Nigeria’s oil output by a quarter and sometimes manages close to half. The government, finally, has promised to share the Delta’s oil wealth with its people. MEND has declared a cease-fire.
But in 2009 peace negotiations are going nowhere. Okah recounts a list of false promises and examples of bad faith and official incompetence. The government even tried to buy him off, he says, offering him his own personal oil field. His clothes indicate he is not averse to money, but his patience is wearing thin. This time, he declares, he will step things up and “turn the Delta into something like Iraq.” He might attack Lagos or Abuja. He chuckles: “The world has no idea how much trouble it’s in.” Ten months later, in September 2010, Okah is arrested in South Africa and held for extradition back to Nigeria after a multiple bomb attack in Abuja kills twelve people.
Africa has become such a byword for war and poverty that it’s easy to forget it is naturally rich. It has oil (accounting for 12.65 percent of global production).2 It has timber and farmland to spare. It has the world’s largest deposits of commercial minerals and gems, producing 61 percent of the world’s diamonds,3 while South Africa alone has half the world’s gold reserves. Other elements in abundance include chromium (almost all the world’s reserves), bauxite (Guinea-Conakry is the world’s largest producer), and enough nickel and copper, uranium and plutonium, vanadium, asbestos, cobalt, aluminum, and iron ore to make Africa a natural industrial center of the world. So what happened? How did a place so endowed with wealth manage to be so riddled with war and poverty?
Part of the answer lies in bad luck, part in bad government. Africa regularly suffers some of the world’s worst natural disasters. So do Asia and the Caribbean, but Africa copes less well because it has also been ruled by some of the world’s worst governments. For centuries, Africa was plundered by colonial powers. Come indep
endence in the 1950s, 1960s, and 1970s, instead of protecting their assets, or building skills, industry, infrastructure, or general wealth—or even extracting a reasonable price for their exploitation by others—many of Africa’s leaders contented themselves with having foreigners pay rent on their country’s resources into Swiss bank accounts. In Nigeria’s case, the World Bank estimates its generals and gangster politicians effectively stole $300 billion in this way in the three decades prior to 2006. Nigeria’s own anticorruption watchdog, the Economics and Financial Crimes Commission, says they took $400 billion between 1960 and 1999—a figure that trumps not only all the aid to Nigeria over that period but all aid to Africa. It was a pattern repeated across the continent. Trampled in the elite’s scramble for riches were human rights, the environment, and development. In Nigeria’s oil-rich Delta, the behavior of the government and oil companies sparked MEND’s civil war. It is that sorry postcolonial history that earns Africa its reputation as the “Hopeless Continent,” as the Economist called it in 2003.
But besides bad luck and bad government, there is also bad business. Economists will tell you that, to some extent, Africa’s misfortunes were inevitable. They cite an illogical-sounding phenomenon known as the “resource curse.” Students of development economics like to joke that the curse describes the phenomenon of how, when a developing country discovers vast natural wealth, their professors erupt in expletives. In reality, the curse is not funny. The term was coined by British economist Richard M. Auty in 1993, when he noted that countries with rich natural resources tend to develop more slowly, more corruptly, less equitably, more violently, and with more authoritarian governments than others. One of the preeminent conundrums in economics, the curse has attracted some of its best minds. With fellow heavyweights Joseph Stiglitz and Macartan Humphreys in 2007’s Escaping the Resource Curse, Sachs noted the “strong association between resource wealth and the likelihood of weak democratic development, corruption and civil war.”
Every disaster is unique. But in Africa, the resource curse links many of its conflicts and much of its destitution. It explains the rich/poor divide in Nigeria and the rise of MEND. It accounts for the matching pattern of inequality, corruption, and instability in half a dozen other oil-producing countries around the Gulf of Guinea. It illuminates blood diamonds in Sierra Leone, Angola, Zimbabwe, and Côte d’Ivoire and how gold, tin, and cobalt fuel war in the Democratic Republic of Congo. And it helps explain the resentment felt toward miners and drillers across Africa—for the pollution they cause and the riches they take away.
The curse is often invoked by bad behavior. What should be a blessing for a poor nation turns out to be a source of ruin if it is appropriated by corrupt rulers or becomes an incentive for conflict. But Dutch Disease, a kind of resource curse subset, describes how even if governments behave themselves, their countries can still do badly. Its name derives from Holland’s experience of pumping oil in the 1970s, which pushed up wages and the exchange rate, making other Dutch products more expensive to produce and export, and so raising nonoil unemployment and depressing the wider nonoil economy. Farther north, Norway managed to use oil to transform itself from an economy based on trees, fish, and ships into a sophisticated center for information technology and science. But Norway is the exception, and for Africa the lesson is clear. Business has helped to keep Africa down.
But maybe a different kind of business could lift it up. The biggest oil producer in the Niger Delta, and the biggest business in Nigeria, is ExxonMobil. With an output of around 780,000 barrels a day in 2008, its infrastructure extends to scores of rigs, lines of storage tanks, a web of pipelines, and its own airfield. In the last few years, those have all become a target for MEND.
Oil companies generally claim they don’t accept the resource curse and attribute the turbulence that surrounds oil to bad government behavior. But as someone who travels the globe for ExxonMobil, often to its more remote and unstable corners, Steven Phillips is only too aware of the popular anger his company can attract. And for more than a decade, Phillips has been working on an answer. Not only for groups like MEND but something, perhaps, finally to lift the curse. The solution to one curse, he said, was to be found in fighting another: disease.
A specialist in occupational medicine, Phillips has been with the company since before it was created by combining Exxon and Mobil in 1999. In the run-up to the merger, he was part of a group that studied what the new oil giant would look like. “We had thirty refineries, forty chemical plants, and about a hundred forty thousand employees in over a hundred countries. I looked at a map of Africa and saw that ExxonMobil would be present in twenty-four African countries. Moreover, 25 percent of our upstream capital investment—in things like finding oil and gas—was going to be in Africa, at least for the next decade. And I said: ‘Holy shit! Not only are we going to be huge in Africa, this is the lifeblood of our growth!’”4
The trouble with that, Phillips saw, was that there was plenty wrong with Africa’s blood work. Tuberculosis was resurging, HIV/AIDS was “out of control,” and malaria was endemic. Phillips knew taking on disease in Africa was not something an oil company would tackle out of good conscience. “Back then, it was almost taboo to mention this stuff,” he says. “This was not a question of guilt or presenting the case in a moralistic way. The bottom line was we had no solid interest in it.”
So Phillips decided to try “to raise the flag in a way that resonated.” He conducted a company-wide survey of health hazards, making an assessment of all the risks to ExxonMobil’s employees around the world: motor vehicle accidents, industrial accidents, diseases, and so on. “Two things came out on top: HIV and malaria,” says Phillips. “So I presented that to the management and asked them, ‘What are we going to do about this? We can’t have these significant adverse impacts on our operations.’” Confronted with a case for disease control as being in their best financial interest, Phillips’s bosses could only agree. For HIV, the company decided it should make free testing and treatment available. In malaria’s case, Phillips argued that concentrating on the workforce alone wouldn’t work. The disease was “no respecter of a fence line,” he argued. “This is a war that needs a battle plan. We need to create some spending money and to start reaching out to governments where we work.” Again, his bosses agreed. Harry Longwill, then ExxonMobil’s director and executive vice president, asked: “Steven, how would you like a new job? We need you to make the malaria story happen for the private sector.”
Phillips was attempting a remarkable change. For decades, aid and development had been the preserve of governments, charities, and individual conscience. To the question of whether they were concerned about developing the nations in which they operated, Western businesspeople would retort that business was development. The new breed of megaphilanthropists who emerged at the turn of the millennium took a wider view than their corporations, but that was a matter of choice rather than a matter of course. Bill Gates gave billions away. His Microsoft cofounder Paul Allen gave away $1 billion as well, but also bought two of the world’s biggest yachts.5
The way Phillips told it, caring about malaria was also caring about the bottom line. “This was not beneficence or corporate social responsibility,” he says. “We put our resources in places where they earn the best value per dollar, and this had demonstrable shareholder value. It would improve our ability to operate: if our employees and their families didn’t get sick, they were going to be more productive. And it would improve our license to operate. ExxonMobil would be branded as one of the companies fighting malaria in Africa.” Within months of beginning the company’s malaria program, says Phillips, sick days plummeted, productivity rocketed, and ExxonMobil began to garner a name as the oil company that cared. “Chevron wasn’t in malaria. BP wasn’t in malaria,” says Phillips. “When our CEO went to talk to African heads of states, he would say: ‘Here’s what we are doing in malaria. Here’s what we can do for you. Here’s what that investment does for educati
on, agriculture and health.’ Malaria became our differentiator. At our AGMs [annual general meetings], it became not a question of whether we should be doing it, but whether we should do more.” Phillips pauses. “We had,” he says, “aligned our interests with attacking malaria. Tackling malaria had become good business.”
Nevertheless, “suiting up for malaria,” as Phillips puts it, was virgin territory for a private company. “There was no map or precedent,” he says. “I had to figure out the malaria landscape. Why was malaria in such disarray? Why were malaria programs not working? What could we do about it?” Phillips zeroed in on the poor organization of the malaria world. In particular, the Roll Back Malaria (RBM) Partnership—a coordinating body founded in 1998 to bring together governments, the UN, and aid workers—was “broken,” says Phillips. It was badly run and poorly funded, its authority was unclear, and its debates were reduced to interminable squabbles between rival aid groups. Employing a standard business response, Phillips raised $3.5 million from ExxonMobil, the Gates Foundation, and others to commission the Boston Consulting Group to conduct an audit and recommend reforms. “Boston came back with a diagnosis reduced to eight actionable recommendations. So we remade RBM, and by 2006–2007 it was a wellaligned, functional global apparatus.”
The remodeling of the RBM Partnership was Phillips’s calling card with the aid community. “When we first started out, we got a not-so-positive reception from the NGOs or the WHO,” he says. “In their view, the private sector was evil, greedy, and commercial. With the work we were doing on the RBM Partnership, the WHO declared their peace with us. We were accepted. It was a seismic shift.”
