7/01/2009

Exclusive Iraq oil deals go to Chinese and British...

It was very encouraging to see Iraq award exclusive oil deals to British Petroleum (BP) and China National Petroleum Company (CNPC) for the right to work in the Rumaila Field, the country's largest known oil field in Iraq with 17 Billion barrels in reserves. I say this not because I am happy the contracts were not awarded to American firms (ideally they would have been), but rather because it speaks volumes about the current stability of the war torn country's core infrastructure and its prospects for success moving forward independently in a global economic environment.


The Chinese are typically willing to brave dangerous conditions to access valuable natural resources and CNPC is perhaps among the most successful energy companies in the world when it comes to managing production in turbulent environments, evidenced by their unwavering commitment to facilities in much less stable regions like The Sudan. Critical to the CPNC strategy is employing as many locals as possible and supplying the communities surrounding its projects with large non-energy related aid and resources, such as medical supplies and support for education programs that go above and beyond the typical multi-national corporate agenda.


I have long argued that the China model for growing economies in Africa and the Middle East is far superior to the Western models. This is primarily because it relies on social/human capital and the ability to embed its culture and expertise on the ground in large numbers of human bodies, rather than the default Western strategy of distributing vast amounts of monetary aid according to complex economic formulas developed by elite Western academics totally removed from the reality of the conditions taken into consideration.


Dambisa Moyo (@dambisamoyo) has recently made serious waves among elite Ivy thinkers with a new paradigm for Western aid to Africa which is founded on her personal experiences as a child of Africa and as a student of the finest Western institutions and as a distinguished economist at the most powerful/respected investment bank in the world - a truly unique perspective that must not be diminished. She too has recognized the value proposition of a highly engaged Chinese presence in developing nations in Africa and I suspect would extend this recognition to a similar role for the Chinese in Iraq and other struggling (but promising) Middle Eastern economies. I commend Ms. Moyo for her courage and hope she will continue to fight against the intellectual mainstream, because in the end she (and I) will be vindicated by the results of powerful ideas.




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