Ottawa Is No Caracas

Debating what it means to be a "rogue petrostate." 

I wish I could turn a phrase like Andrew Nikiforuk, who makes the case for Canada as a "rogue petrostate" ("Oh, Canada," July/August 2013). No, you are not misreading that -- it is Canada he compares to Saudi Arabia or Venezuela. Instead, I have to rely on evidence, and unfortunately, the evidence in Nikiforuk's case is far from convincing.

Canada has not bet its entire economy on resource industries -- far from it. In fact, the share of GDP from oil, natural gas, and mining has, with a few interruptions, largely decreased since the 1960s. In April 2007 (the earliest date for which the Canadian government provides a direct comparison to current economic figures), oil, gas, and mining collectively accounted for 8.34 percent of GDP. In April 2013, that number was 8.30 percent. Nikiforuk would have you believe that Canada's oil sands petroproject has led to a rapid increase in economic dependence on unconventional oil. He's right in a sense: Dependence has increased 40 percent since 2007 -- but from just 1.3 percent to just 1.8 percent of GDP. The share of Canadians working directly in mining, oil, and gas has also increased, from 1.1 percent of employment a decade ago to 1.5 percent today. Even if oil and gas production were to increase drastically to account for half of export revenues, more than a fifth of GDP, and a quarter of government revenue, that would put Canada on par with Norway, which could hardly be called a petrostate in the pejorative sense.

Nikiforuk suggests that these small increases, like a canary in a coal mine, are but a preview of a disastrous future for Canada, carved out by policy changes intended to ease access to the resources driving this dependence. Some laws have done so, but to focus on them alone is to ignore many recent decisions that have done just the opposite. For example, the federal government has curbed tax incentives for oil and gas companies, placed further limits on asset sales to foreign companies (including those from China), and refused, despite heavy lobbying from the oil industry, to give favorable tax treatment to liquefied natural gas plants. Alberta, home to Canada's oil sands, has significantly increased royalty rates and even introduced a carbon-pricing regime. These changes cost the industry and those who invest in it.

Canadians could be forgiven for believing industry and government rhetoric and concluding that their economy is or will be dominated by resource development. But is Canada a petrostate? Hardly. The national economy is less dependent on resource extraction today than it has been at almost any time in the last 50 years, and that trend is likely to continue. Canadians should scrutinize their national energy and environmental policies, particularly with regard to the fast-growing oil sands sector, but that scrutiny must focus more on the evidence and less on the noise.

Associate Professor
Alberta School of Business
Edmonton, Alberta

Andrew Nikiforuk replies:

Andrew Leach not only misses the point of my article but avoids the central issue: the corrosive influence of oil revenue on the political character of oil-exporting countries.

Petrostates occupy a continuum of dysfunction that includes everything from Vladimir Putin's Russia to Sarah Palin's Alaska. And yes, Norway is a petrostate, too. Canada, which now supplies the United States with 28 percent of its oil, most closely resembles Britain during its ugly foray into its North Sea reserves: Prime Minister Margaret Thatcher used the proceeds from offshore petroleum not only to fund a right-wing political revolution, but also to create a charming myth of economic well-being based on the rapid spending of oil wealth.

Canadian Prime Minister Stephen Harper, a genuine petrolista, has followed in Thatcher's footsteps and is spending oil dollars to socially re-engineer Canada in his own frightful image. Like an untidy tin-pot regime, his government offers no fiscal plan to deal with oil wealth, no coherent energy plan, and no realistic targets on climate change. You know you live in a petrostate when the federal government obsessively talks about pipelines and bitumen as the country's economic engine -- or when status quo economists such as Leach try to minimize the political side effects of resource dependence with numbers that can't capture the dysfunction now undoing Canada.


Congo Is Too Big to Fail

We've already tried breaking up the DRC -- and more than 1 million people died. 

For the past four years, political scientists Jeffrey Herbst and Greg Mills have been pushing the idea that breaking up the Democratic Republic of the Congo into smaller states would make the country easier to govern. It's an argument Herbst and Mills -- an American and a South African, respectively -- have repeatedly voiced in Foreign Policy. See: "There Is No Congo" (March 18, 2009), "Time to End the Congo Charade" (Aug. 14, 2009), and most recently, "The Invisible State," in the July/August 2013 issue. But as tempting as the Balkanization of Congo may be, its intellectual foundation stands on lazy scholarship and a misreading of Congo's history and people.

This approach is not new. It has been tested in the past, and it failed. During the secession movements of the 1960s, the country became a mosaic of majorities and minorities. The secessionist, genocidal war that erupted in the regions of Katanga and South Kasai following their decisions to break off from Congo proper in 1960 resulted in an estimated 1 million deaths in four years. Despite their mineral wealth, neither region became a model of development, and today both should chasten the idea of Congo's breakup as a road map to peace.

And consider the latest in a long line of attempts to partition Congo: the Rwandan-backed M23 rebellion. Despite an aggressive public relations campaign and impressive logistical and political support, reportedly from both Rwanda and Uganda, the mono-ethnic, Tutsi-supported initiative has failed to rally Congolese support at the local and national levels. In 2012, M23's emergence caused thousands to protest around the country. But the protesters weren't rallying in support of M23; many were denouncing it as another sham to break up the country.

Congo belongs to a sovereign people who are proud of their nation and its history, culture, and wealth. Taken in full measure, Congo's ethnic groups, large and small, live peacefully together. But a new crop of non-Congolese analysts peddles a Conrad-esque narrative that portrays Congo as a primitive land pulled straight from Heart of Darkness and casts the Congolese people as incapable of determining their own destiny. These analysts emphasize local conflict, militias, state failure, sexual violence, and poverty. Their essays rarely mention Congo's strong civil society and resourceful population, instead relying on surveys and rankings like Foreign Policy's Failed States Index. But Congo is not a string of statistics, and no country can be reduced to such numbers. In fact, it is impossible to get a meaningful reading of developments in Congo through indices and surveys due to lack of accurate data.

There is no easy solution to Congo's problems, and no one understands these challenges better than the Congolese. But each crisis has made Congo stronger and better and brings the Congolese together as a nation. Analysts with no greater stake in Congo than their careers ought to be mindful of the ramifications of the narrative and solutions they promote. Congo, my home country, is not the property of an amorphous international community. Neither is it a proving ground for old, toxic ideas conceived in far-flung places.

Visiting Fellow, Hoover Institution
Stanford University
Palo Alto, Calif.

Jeffrey Herbst and Greg Mills reply:

It is notable that some Congolese are so attached to a country and state that has treated them so badly. It is even more remarkable that in the 21st century, when faced with endemic, often state-led violence against the population and a loss of life of world war proportions, all this is apparently deemed an inevitable and acceptable part of a "nation" finding its feet. There is little empiricism and considerable coldheartedness in believing that "each crisis has made Congo stronger and better and brings the Congolese together as a nation" in the face of such misery and death. Dismissing as unreliable the statistics available to describe Congo's plight is in itself a reflection of the scale of Congo's governance challenge.

Our article did not call for the Balkanization or breakup of Congo, a typically knee-jerk accusation of those responding to external critiques. Defense of the Congolese status quo based on reverting to Heart of Darkness symbolism is as crude and off the mark as it is inappropriate. We argue that, if violence and governance are any indication, international efforts to assist Congo have done very poorly -- and at great cost. The same could be said for attempts to govern the country's vast territory from Kinshasa. We think that Congo's fate should not be determined by the international community's refusal to contemplate alternatives to the current government. Congo's fate will not hinge on what that community thinks from the safety of Brussels, Washington, Johannesburg, or Palo Alto, but on how Congolese in Kinshasa, Bukavu, Lubumbashi, Kisangani, and elsewhere design a better system for their own citizens. To get there, Congolese should be given the political space to imagine what would be best for themselves.