Control of Resources

The Colorado River crosses five American states and continues into Mexico where it finally flows into the sea. Or rather, that’s what’s supposed to happen. But in 2018, due to drought and poor management of this resource (overexploitation), the river stopped flowing into the sea. This impacts Mexico because access to water is a problem. The sharing of water between the United States and Mexico is difficult and fuels tensions between the two countries. In 1944, they signed an agreement.  Mexico would supply  water from the Rio Grande and, in return, the United States would ensure a minimum flow of the Colorado River. But since then, the Rio Grande has run dry, so the United States wants to keep the Colorado River’s water for itself.

The Islamic State (IS) armed group had an estimated revenue of between $500 million and $3 billion per year in 2015. One of its largest sources of income was oil wells in the territories it successfully took over (mostly in Syria, but also in Iraq). The IS then sold this oil to Syria. This was paradoxical because by buying oil from the IS, Syria was financing the armed group that was invading it. But the Syrians needed oil so much that they had to purchase it, even if it came from the IS. The IS also smuggled oil into Turkey.

Learn more by exploring the IS section on the CBC website. and the New York Times.

• An armed group, or a non-state armed group, is independent from a state, so it makes its own decisions. Its members are recruited from the population and sometimes include child soldiers.

• Smuggling is the act of illegally transporting goods or people from one country to another.

The exploitation of natural resources led to the war in eastern Congo which resulted in an estimated 5 million deaths between 1999 and 2019, many of which were civilians. Denis Mukwege, a gynaecologist and human rights activist from the Democratic Republic of the Congo (DRC), received the Nobel Peace Prize in 2018. In his speech, he spoke out against the violence committed by groups greedy for natural resources.

Here is an excerpt:
I come from one of the richest countries on the planet. Yet the people of my country are among the poorest of the world. [...] We all love nice cars, jewellery and gadgets. I have a smartphone myself. These objects contain minerals found in our country. Often mined in inhumane conditions by young children, victims of intimidation and sexual violence. [...] Take a minute to reflect on the human cost of manufacturing these objects.

Armed conflicts have been increasing in the DRC since 1994. The dictator Mobutu was forced out in 1997 after holding power since 1965. His fall was followed by political instability. The entire political system had to be changed because some people had tried to take advantage of the instability during this period of uncertainty, with the country essentially left to run itself. Armies from surrounding countries entered the DRC and took substantial amounts of energy and resources from the state. Some groups, such as multinational companies, state armies and armed groups took advantage of this situation to gain control of mining resources.

Watch this excerpt and background context: Nobel Peace Prize 2018: Denis Mukwege points the finger of responsibility, in French with English subtitles.

What’s the difference between Congo and Democratic Republic of the Congo (DRC)? They are not synonyms. They are two separate countries: Congo and the DRC. Congo is west of the DRC and is also known as Republic of the Congo. It was colonized by the French (French Congo). The DRC corresponds to the former Congo, which was colonized by the Belgians (Belgian Congo). French Congo was created in 1882 and Belgian Congo in 1908. To confuse things even more, Congo is also known as Congo-Brazzaville and the DRC as Congo-Kinshasa. The names of their capitals are added to tell them apart.

Several gold deposits have been found in the Sahel region. In 2016, armed groups in Mali, Burkina Faso and Niger started taking over these mining sites which provide a source of financing. Sometimes they even use these sites to recruit new members and train them on the use of explosives. A mine is a strategic place for this.

The Sahel is a region of Africa that stretches from the Atlantic Ocean in the west to the Red Sea in the east. It extends across several countries. It is a semi-arid area with a Saharan desert climate in the north and a humid tropical climate in the south.

The Spratly Islands are an archipelago, or group, of more than 700 islands in the South China Sea, rich in gas and oil resources. The countries that border the South China Sea (China, Vietnam, Philippines, Malaysia) all lay claim to these islands. In May 2014, a Chinese ship rammed a Vietnamese boat at a time when Vietnam was accused of drilling for oil in the waters of that area. Since China is a major power, the United States decided to get involved in 2015 to undermine China’s ambitions, sending U.S. military ships to cruise the area.

In 2018, China installed missiles on three of these islands as a signal to the world that it owned them. On several other islands, it also built infrastructure that could have military uses, such as ports and landing strips, increasing tensions with competing countries, especially the United States. In 2019, tensions were high between China and the United States. The United States wanted to maintain its influence and often conducted reconnaissance missions in the region despite China’s ban. This caused a deterioration in the climate between the two powers.

The main issue was gas and oil deposits, but a new dimension became part of the conflict: struggle for power and influence.

Nationalization happens when a state takes ownership or control of certain assets, resources or private companies. For example, in Quebec, Hydro-Québec is a company that was created after electricity was nationalized. It has become public property and is controlled by the Quebec government.

Hydro-Québec is a state-owned company. This means that the company is owned by the Quebec government. Revenue from a state-owned company goes to the government.

Venezuela has about 18% of the world’s largest oil reserves. Oil was nationalized under President Chávez. Since then, Venezuela’s economy and most of its social programs have been dependent on oil revenue (oil accounts for 96% of the state’s income). The national oil company PDVSA has many service stations and refineries in the United States and Venezuela

In 2014, the price of an oil barrel dropped by 50%, significantly decreasing the country’s income. The majority of everyday consumer goods were imported from abroad, so Venezuelans could no longer afford to buy and bring in these goods. Store shelves were often empty. Since then, the country has been in a huge economic crisis with severe shortages of medicine and food.

In 2017, the country was deep in debt and had to cut several social programs due to a lack of money (or mismanagement of money, because the price of a barrel of oil had been increasing since 2016). More than three out of four Venezuelans were living below the poverty line.

There was also a political aspect: approval ratings were falling for Maduro, the new president who succeeded Chávez, because Venezuelans held him responsible for the miserable living conditions, among other things. Those in political power at the time appeared to be involved in corruption and human rights violations. There were many protests and the people called for Maduro to resign. In 2017, this social and political crisis resulted in 120 deaths and 600 000 Venezuelans left the country. In 2018, 80% of Venezuelan families faced food insecurity. Since 2019, an ongoing political crisis involving the president, which was still raging in 2020, has led to many protests.

We can see that by nationalizing oil, Venezuela now depends on a single source for most of its revenue. So when the price of a barrel of oil dropped, the country didn't have any other revenue sources to make up for oil-related losses

In 2006, Bolivian president Evo Morales announced that the state was taking control of all hydrocarbons. He gave the 26 foreign companies exploiting hydrocarbons in the country 180 days to leave. This was a mass nationalization effort. The state sent in the army to ensure that companies complied with these directives. The nationalization of hydrocarbons was the first in a series of nationalizations in the following years that included telecommunications, metallurgy, water and electricity. In 2012, Bolivian armed forces were sent to the offices of a Spanish company that managed three quarters of Bolivia’s electricity with the goal of taking it over. The same action was taken for several iron, tin and indium mines owned by foreign companies. All of this gave the state additional revenue. Between 2005 and 2017, the percentage of Bolivians in extreme poverty dropped from 38% to 17%. However, since then, the rate has stayed at the same level, which is one of the highest in Latin America.

Granting of concessions is when a state transfers the exploitation of a resource to a private company. In exchange for a concession, the state sometimes imposes certain conditions on the company.

These flaws enabled the situation in the Democratic Republic of the Congo (DRC) discussed above. This country has many natural resources, but the state doesn’t manage them. Result: In 2019, people living in the DRC were the eighth poorest in the world. Corruption tied to natural resource exploitation is devastating the country. A Global Witness report showed that just over $1 billion in mining revenue was diverted by the DRC government between 2013 and 2015.

Niger has large reserves of uranium, a resource used mainly in nuclear reactors. The Niger government partnered with French company AREVA (named ORANO since January 2008) to mine this resource. In other words, this partnership granted (uranium) mining concessions to AREVA. This company developed and exploited uranium mines, particularly in northeastern Niger in an area inhabited by Tuareg nomads.

Tuareg people from the Mouvement des Nigériens pour la Justice (MNJ) [Nigerian Movement for Justice] started a rebellion in northern Niger in 2007 by the name of the Tuareg rebellion. This huge mining project granted to AREVA was one of the causes of the revolt. This group took up arms to demand that the local population receive more benefits from the exploitation of local wealth. The situation evolved, the stakes grew higher and new players joined the conflict. In this conflict, Niger (backed by Mali) fought the MNJ and two other armed groups. It lasted until 2009, leaving 420 people dead and ending in victory for Niger and Mali.

The relationship between AREVA and Niger is more complex than it appears. The government of Niger granted mining concessions to AREVA in 2007, but financial returns were low that year. This caused a conflict between the two stakeholders. The two parties signed a new contract in 2009 and AREVA seemed to be bringing in more money for the Nigerian government. However, what real power did this government have when negotiating a contract? Over time, AREVA has become one of the largest employers in Niger. It is now an almost irreplaceable company that pays employees, even though most of the money it generates leaves the country. The company could decide to leave if Niger makes too many demands in exchange for granting concessions.

This would have a devastating effect on the country’s economy. However, AREVA’s mining operations also had a negative impact on Niger because most of the money was invested outside the country. This prevented Niger from becoming richer and more developed. So, it was a question of choosing the lesser evil: preserving jobs, therefore maintaining its partnership with AREVA, whom it depended on because they do not have the means to mine the uranium itself.

New negotiations took place between the two parties in 2014. Once again, Niger was the biggest loser. The agreement was renewed again in 2018. It reinforced the power of AREVA, which Niger was now dependent on, expanding France’s influence in the country. France colonized Niger in 1922 before the country successfully obtained its independence in 1960 during the decolonization movement. The kind of relationship we see between AREVA and Niger is sometimes called neocolonialism [in French only].

The Tuareg (Kel Tamasheq) are nomadic people. They mainly live in the central Sahara region (Burkina Faso, Chad, Mali, Mauritania, Niger, Libya and Algeria).

If you are interested in learning more about the control of resources, below is a list of relevant conflicts.

The Falklands War took place in 1982. In 2012, tensions between Argentina and the United Kingdom had still not been resolved. Both countries claimed that the Falkland Islands belonged to them. This area is sought after for its resources, among other things. The United Kingdom publicly claimed the islands in 2013, without consulting Argentina. No agreement had been reached by 2019.

Between February and July of 2005, local conflicts broke out in Kenya because people wanted access to water and fertile land around the Tana River to feed livestock. Several dozen people were killed in the conflict.

After Sudan was separated into Sudan and South Sudan in 2011, tension has been high between the two countries. One produces oil, while the other has infrastructure to export the oil, such as pipelines. Sudan taxes South Sudan heavily for using its infrastructure.

The War in Darfur started in 2003. Some people say it’s still going on, while others think it ended in 2009 with the arrest of Sudanese President Omar al-Bashir. Darfur is a province in Western Sudan. Darfur rebel movements want the country’s wealth and resources to be better redistributed. The government wants to take back control over the region and is using armed Islamist militias to do so. This isn’t the only cause of the conflict. The other causes include drought, population growth and ethnic groups that don’t get along. The separation of Sudan into two countries is another factor.

China is involved in the conflicts in South Sudan because it has an economic interest in the region’s oil, among other things.

The Golan Heights is a strategic area for military and economic reasons. This area has many water sources, particularly the Jordan River. The conflict between Israel and Syria is about which of the two countries occupies this area. This dates back to the Six-Day War between the two states in 1967 when Israel conquered this territory. The conflict between the two countries is still ongoing.

Oil is at the centre of several wars between the United States and the Middle East. These conflicts include the two Gulf Wars, the War in Afghanistan, the 2001 invasion of Afghanistan and the 2003 Iraq War.