Sofia, July 2008

Bulgarian corruption – a depressing lesson for Africa

How to eradicate a culture of political corruption? John Hamilton, for a decade a distinguished observer of Bulgaria’s transition economy and polity before moving to focus on North Africa and other issues at African Energy publisher Cross-border Information Ltd, revisited old haunts that put the question into perspective.

The question of how to eradicate a culture of political corruption bedevils countries throughout Africa whose rulers profit from great national wealth, while their populations remain mired in poverty. Although this injustice is particularly stark in Africa, it can be found everywhere. On a recent visit to Bulgaria, I found many old friends more depressed than ever by the mounting level of corruption. It seems that even with the human and physical resources available to the European Union, one of the world’s most sophisticated polities, solutions to this problem are depressingly hard to find.

Eight months after it joined the EU, Bulgaria is in the grip of a devastating moral and social crisis. The European Commission has frozen Eur500 million of funds designated for supporting transition, social cohesion, road building, and agriculture. Future funding totalling approximately Eur10 billion is at risk.

A report from OLAF, the EU anti-fraud office, a draft of which was leaked, has brought a ghastly picture into focus, revealing wholesale theft of EU funds. More shocking still is evidence of official determination to sabotage investigations into these crimes. In one devastating paragraph, the OLAF report revealed “instances of judicial proceedings which had been opened but, subsequently closed without justification, frustrating further investigation by OLAF. In addition, OLAF has been faced with instances of breaches of confidentiality, improper transmission and leaks of confidential information. There is strong suspicion of the involvement of organised crime.”

Another tale of governance gone wrong

A pathetic irony of this case is that money which had been allocated to bring standards of governance up to acceptable levels, build better infrastructure and extend the benefits to the rural provinces has rather fuelled a depressing degradation in what was already a fairly vicious bureaucracy.

The present crisis is profoundly demoralising for the general population of Bulgaria. EU membership has brought them prosperity. In Sofia, I saw some re-paved streets, new shops, brighter facades to many old buildings, and a lot of ugly new ones. Thanks to construction, unemployment in the city is now as low as 2%. But the withdrawal of present and future funds will hurt, particularly at a time when the solidity of the real estate boom is coming under question. More fundamentally, the people understand that being in the EU may not to solve the country’s main problem which is lack of the rule of law.

Defenders of the Bulgarian government claim it has simply been too slow in advancing reforms. This is a transparent lie. There is an active will not to reform. Bulgarian politicians have removed themselves beyond the reach of the law and are enjoying themselves with impunity. The past several years have seen countless scandals exposing corrupt politicians and their links to organised crime. Gangster assassinations are commonplace. In almost every case no one is prosecuted, let alone convicted.

With government, parliament, prosecutors and courts all complicit in corruption, there are no internal institutions with the credibility to act. By cutting off the money, the European Commission, the only external authority, is hauling on the only lever it possesses. For African countries struggling to clamp down on corruption and establish effective rule of law, this high profile European failure is not encouraging.

---

Tripoli and Benghazi, June 2008

Tripoli – thrilling and unpredictable

Arriving in Tripoli for the fourth time in just over six months is still a thrill, writes Cross-border Information’s John Hamilton. The frisson comes partly from the ever-present uncertainty about visas. I hope one day, these visits will become routine. They will have to if the much spoken about development of the tourism industry is ever going to get off the ground.

Welcome to Tripoli - view from the domestic terminal of Tripoli airport

Mentioning tourism brings to mind the other great uncertainty of this business trip – will I be able to take out enough time from meetings to travel up the coast to see the amphitheatre at Sabratha? This is supposed to be the most perfect Roman theatre in the world. I’m not even thinking about the possibility of getting to the Roman great city of Leptis Magna – which would take a whole day out of my schedule.

I am here with a Middle East Association trade mission with the aim of talking to some of CbI’s contacts about publishing projects. We arrive on Saturday evening and settle into the Corinthia Bab Africa Hotel, the only five-star establishment in the city. Work begins early on Sunday morning. I have set up some meetings in the hotel, which is where everyone seems to come to do business.

By 3pm, the intense part of my day is over. In the hot months, government employees work from seven or eight until two. Private sector people work all hours. A couple of my business contacts take me to the fish market for lunch. This is on the coast just to the east of downtown Tripoli. We start by choosing our fish from one of the stalls. There is a great variety and it is superbly fresh. We pick some red mullet, sea bream, squid and huge prawns. The trick here is not to get excited and over-order. On one previous occasion, we thought we had finished our meal, when the waiter came and asked if we were ready for the main dish.

Once you have picked your fish, you choose which restaurant you want to cook it. Almost before we have sat down at a table with a view of the sea and the rocky shore they are laying out our fish on the long charcoal grill outside the door. Libya is an alcohol-free country, but the waiter plays the game with a choice of grape juices. “Red or white, sir?” he asks. We agree that one has to drink white grape juice with fish.

A bit like dating…

The trade mission is made up of a number of export sales executives for a wide range of products and representatives from education and training companies. Everyone says this is a place that you have to keep coming back to if you want to get business. The problem is how many trips you can afford to make before getting a deal. The other problem – perhaps the most difficult anyone has to solve – is choosing a local partner or representative. You can’t do business without one. If you get it wrong your Libyan operation might never recover. One old Libya hand says it’s a bit like dating: you might be able to jilt one partner, but after two or three no one will want to go out with you. The business community is small and tight-knit. News soon gets around.

At the Tripoli Chamber of Commerce we enter into a business-like version of speed dating. We all sit at little tables and are interviewed by a succession of mostly young entrepreneurs who suggest that they could be our partners. Mostly they are training and education companies.

After this session, a board member of the chamber takes me up to the library on the top floor. Here a handful of women preside over a smallish collection of books and journals. The prize tome is a copy of the highly-educated National Oil Corporation (NOC) chairman Shukri Ghanem’s The Pricing of Libyan Crude Oil, which was published in Malta in 1975. There is a photograph on the dust jacket of the youthful author sporting a magnificent black and curly beard.

It’s still the Jamahiriya

Back at the Corinthia, the guests are in shock. A host of North African and Arab leaders are coming into town for a hastily-arranged summit called by Revolutionary Leader Colonel Muammar Qadhafi to discuss French President Nicholas Sarkozy’s Mediterranean Union proposal. To make room for them, all the guests are being evicted. I feel sorry for the management who have little choice in the matter. As we check out, everyone is dreaming of the moment when the Radisson’s upgrade of the Mahari is complete and when the huge Ghazala Intercontinental is built. In a few years time there will be a good handful of top hotels to choose from.

Al-Ghazala Hotel Intercontinental Tripoli coming soon.

By happy coincidence, we are travelling to Benghazi, so leaving the Corinthia is less inconvenient than it might have been. Despite its well-documented social problems, Libya’s second city feels more relaxed than Tripoli. Between the hotel and one of the city’s wide lakes there is a dusty park with palm trees and a couple of little cafés offering water pipes and coffee. Some donkeys are tethered under a tree. It is nothing special, but even so, Tripoli doesn’t have anything like this.

Back in the capital we only have to spend one night in an old state-owned hotel. We quickly dub it “Fawlty Towers” – not just because of the 1970s décor, but also because of the less than smooth service. One mission member proudly boasts about getting a hot shower – by waking at 5.30am.

As soon as we can, we retreat back to the Corinthia, where we are welcomed by exhausted and apologetic hotel staff. Former British Prime Minister Tony Blair, who helped push business for UK plc in the Jamahiriya (State of the Masses) including BP’s big deal with NOC, has also been in town, maintaining his friendly relations with the Brother Leader. Local conspiracy theorists – hardly the best-informed people in the world – think that talk of his working for Middle Eastern peace is nonsense. They believe Blair is doing business deals, and find this much easier to understand.

Sabratha – and Leptis – must wait for another trip. Perhaps a holiday…

---

Puntland, March 2008

Beyond global travel

African Energy contributing editor Nadine Marroushi visited this autonomous republic in the north of the fractured Somali state to hear more about its potential to become an oil producer.  She was rather more surprised by the former Italian colony’s camel bolognaise. 

Travelling is no longer a luxury one enjoys as a annual holiday; it has become a normal, even expected, part of work, and often as a gap-year between school and university.  It seems hard to find a place that has rarely been trodden even by the adventure-seeking, off-the-beaten-track traveller.  But that’s what Puntland offers, a self-declared state that is not recognised by the international community, or even its neighbours in the Horn of Africa, but one that very much exists to its 2.7m inhabitants.  Puntland declared independence in 1998, and seeks to become a very autonomous part of a loosely-knit federal Somalia. 

It sits at the tip of the horn, with Somalia to the south, and to the west Ethiopia and Somaliland, another self-fashioned country.  The waters around its 1,650km of coastline are divided between the Gulf of Aden, which separates it from Yemen, and the Indian Ocean.

Its people are Muslim, and speak a mixture of Somali, Arabic (a Yemeni-dialect), English and Italian.  Prior to independence in 1960, Somalia comprised of a British protectorate and Italian colony. 

My two-day trip was funded and organised by Range Resources, an Australian E&P company – the only operator present in Puntland, and a subject of regular African Energy coverage.  Others on the trip included journalists, stock analysts, Range’s directors and the security team.

The adventure began at London Heathrow, from which we travelled to Nairobi’s Jomo Kenyatta International Airport.  A 30-minute car journey from Nairobi airport then took us to a smaller airport that caters for regional flights called Wilson Airport.  Waiting for us there were two Capital Airlines eight-seater planes, which flew us to Puntland’s port town of Boosaaso in four hours.

What struck me most when flying to Boosaaso was how arid and uninhabited most of the land is; from the air it looks like lava.  Even the capital city, Garowe, is a small cluster of buildings, surrounded by vast areas of dry land.  In March, the temperature was 30°C, and contrary to the advice from my local nurse there are no mosquitoes in Puntland.

 

 

Much to my relief, with such heat I was told that wearing a headscarf was not necessary; although, it was quite clear that seeing a foreign woman’s hair, face and western clothes was a rarity for Puntlanders.

Waiting for us at the airport, which is not much more than a sandy landing strip with an arrivals building under construction (with funds from Range Resources), were a convoy of four-wheel drives and plenty of security guards, some armed with AK-47 rifles.  We were taken to Range’s gated headquarters, which includes a four-storey building of offices and bedrooms and that is where we stayed for one night.

 

On day one, we were shown development projects, which include the airport, a livestock holding ground, and the port.  The former Italian colonial power began to build the port, but left it to the Somalis after independence.  Since then, they have been desperate to attract the investment to continue its construction.

 

We were received very warmly by the people of Boosaaso with cheers and smiles; unlike in Garowe, where it was clear that we were less welcome.

Puntland is extremely poor but its buildings are nevertheless often strikingly colourful.  Everywhere, they are painted in bright pastel colours, which contrasts starkly with the evident poverty and unemployment.  In the middle of the day, many people were just sitting around chewing (the mildly narcotic plant) khat (or qat).

 

Front of café in Boosaaso high-street. ‘Kismaay’ refers to a district in Somalia,
which is dominated by the same clans as those found in Puntland

Day two was much more about business, during which we met with the Republic of  Puntland’s president and other ministers in Garowe.  This was reported in African Energy issue 135. 

Before that we were treated to a flight over Hafun, which sits at the tip of the Horn.  It is completely uninhabited and surrounded by the turquoise blue waters of the Indian Ocean – it is no wonder Range dream of turning into a resort.

 

Lunch with the President offered some wonderful local specialities, including camel bolognaise with pasta.  We also ate papaya, and the sweetest bananas, grown locally.

The day ended with a flight over Conoco’s former camp, which it left behind after the civil war broke out in 1991, and then back to Nairobi and London.  And until Nairobi there was not a backpacker in sight.

 

Puntland government website: http://www.puntlandgov.net

Range Resources website: http://www.rangeresources.com.au