Schwartz: Miami Beach, Angola, is a long way from Baghdad, but the two are inextricably linked. The worse it gets in Iraq, the better business gets here.

American man: We’re building a new American embassy here. We’re building, as a matter of fact all over Africa, over the next four or five years, we’re building many, many embassies

Schwartz: Texans love Angola. Luanda is the sister city of Houston – you can fly here direct twice a week. But it’s not just Americans who sense a bonanza. Angola’s annual oil and gas conference attracts the industry’s major players from around the globe.

Taylor: Anyone who is anybody within the international oil business has to be in Angola – there is no other choice

Schwartz: After three decades of civil war, Angola is emerging as the world’s hottest new oil market. It’s already a major supplier to the United States. Within a few years it’ll be pumping more oil than Texas. With conflict and uncertainty clouding Middle Eastern markets, Angola’s strategic stock is rising.

Murphy: From the US perspective, energy security is one of the most important issues the world faces today. Our African trading partners are critical in this respect.

Schwartz: At the oil and gas conference in Luanda, the Bush Administration makes no secret of its interest in Angola.

Murphy: Angola is blessed with producing over 800,000 barrels a day and that number is likely to increase to about 1.4 million a day by 2005.

Schwartz: If Angola is blessed, most Angolans don’t know it.
Life at the top usually means twenty flights of stairs, no electricity, and no running water.

Rafael: As you can see you have a great paradox in Angola. You have a beautiful view of the bay, you have the harbour which is extremely comfortable, the oil industry and the real Angola – the shacks. And the government wanted to remove these shacks by force to build an oil residential complex here for the rich with houses up to a million dollars.

Schwartz: Lawyer, Rafael Marques, is an advocate for human rights and democracy. His campaign against the demolition of this area saved most homes – but not all.

Schwartz: There’s an area cleared - were there houses there before?

Rafael: Yes, there were houses and the government has razed them to the ground. Over 3,000 families lost their houses and were put in tents.

Schwartz: Did the people have any choice about whether or not they’d be moving?

Rafael: The people had the choice either to get into the trucks with their belongings or get their belongings destroyed with the houses – and them shot!

Schwartz: Had the government plan succeeded, Rafael Marques says 60,000 people would now be in tents on the outskirts of the capital.

Rafael: For the majority of Angolans oil essentially is a curse – because people have never benefited from oil profits. Never.

Schwartz: Oil accounts for more than 80 percent of the government’s revenue. But billions of dollars in payments have apparently never even made it to Angola’s shores.
The International Monetary Fund has been studying Angola’s trade accounts. Its leaked report says almost four and a half billion U.S. dollars were unaccounted for in the five years to 2002. It says all foreign oil receipts should go through Angola’s stately central bank.. Instead, the IMF found payments have been channelled through offshore accounts operated by subsidiaries of the national oil company Sonangol. Furthermore, it found Sonangol tended to underestimate its returns. Are we able to do a short interview with you? Pinning down Angola’s Petroleum Minister for a response is difficult – he’s a man in demand. In a brief exchange in between conference sessions, Jose Vasconcelas denies any state oil money has been misappropriated.

Vasconcelas: Is not true that this money was go out --is not true.

Schwartz: You don’t believe any money went missing?

Vasconcelas: No any money went missing no.

Taylor: Around a billion plus dollars every year have been syphoned off through overpriced invoicing for virtually all of the commodities associated with the conduct of the war from the government’s side.

Schwartz: Simon Taylor works for the London-based pressure group “Global Witness”. He’s spent two years investigating corruption linked to Angola’s oil industry. His report is a tale of dodgy arms deals, inflated oil-backed loans and lucrative favours among the world’s elite.

Schwartz: Why has no one been brought to account for this?

Taylor: I think part of it is the international relations between the key oil consuming states and West Africa in general, but certainly Angola, because Angola is one of the most promising new markets. Nobody wants to upset the government because of oil interests. That is the hard problem we have to deal with.

Schwartz: Rooting out corruption is not just a moral issue for Angolans – it’s a matter of survival. In the capital most people are poor, in the provinces, many are starving.

Schwartz: Huambo lies in the fertile central highlands. This was once the granary of Angola. Today its fields are sown not with corn or coffee, but land mines.

Schwartz: Two million Angolans now rely on emergency aid. The World Food Programme needs 250 million dollars to keep them alive until the end of the year. But it’s struggling to raise the cash. The Angolan government could pay that amount four times over just with the money which disappeared from state coffers last year.

Rafael: Why doesn’t the international community start taking concrete action to freeze the oil money and set up as it’s done in Iraq and other countries – as long as people are dying of starvation you will not be able to use the money for anything else but to feed your own people. There are international mechanisms to do that because we have a humanitarian catastrophe in Angola.

Schwartz: We’re travelling to the town of Bailundo, 100 kilometres away. It’s a base for international aid agencies providing vital food and health care to villages in the north of the province. Until a day ago there were two routes to Bailundo. Now, because of land mines, there’s just this one. Bridges always make for nervous crossings. They were mined heavily by both sides during the war. The monsoon rains are now bringing mines to the surface, making aid delivery an often deadly business.

Schwartz: In Angola, one child dies every few minutes from malnutrition or preventable diseases.

Jennifer: This is intensivo where we receive the most acute patients with severe malnutrition or they may have a medical complication as well.

Schwartz: Australian Jennifer Catelan works at the emergency feeding centre in Bailundo. It’s run by the French agency MSF – Doctors Without Borders.

Jennifer: So this baby has been here for a month now and you can see that her hair isn’t quite normal – an orangey colour and bits have fallen out. But she’s actually a success story in that she’s responded to nutritional treatment and is very fat now.

Schwartz: So that’s not bloating?

Jennifer: That’s not bloating – that’s a fat baby! She smiles now. She never used to smile.

Schwartz: There are two hundred children in the clinic. Most were brought in by MSF teams distributing food in remote villages. Few would have survived on their own.

Jennifer: This here is Eugenia. Eugenia is four years old and she’s been with us about two weeks now and she’s come from a place called Moongo.

Schwartz: She’s tiny!

Jennifer: Yes

Schwartz: Eugenia’s mother died of measles. Without her milk, Eugenia became increasingly sick. In desperation, her father Antonio walked for a day through the bush in the hope he’d find help. He did – a mobile MSF team. Others won’t have that chance.

Jennifer: Due to the mine risk at the moment we can no longer get to a whole lot of places that were quite isolated.

Schwartz: 30,000 lives are now at risk in the Bailundo area alone. It’s a pattern being repeated across the country

Schwartz: In Luanda, foreign executives are queuing up to meet Angola’s leaders

Schwartz: Anti-corruption campaigners say oil companies should not stop doing business with Angola, but they should do it more transparently -- publicly declaring every payment they make to the state, and making their deposits with the central bank.

Taylor: You can’t ask where the money goes if you don’t know what comes in, in the first place. And you’re not going to find out what comes in, in the first place without the oil companies paying the actual money declaring what they actually pay.

Schwartz: Two years ago, BP pledged it would publish its payments to Angolan state authorities once it started pumping oil. Its commitment to do the right thing resulted in this stinging letter from Angola’s state oil company, Sonangol. It threatens to terminate BP’s contract if there’s any breach of confidentiality.

Taylor: In other words, probably soon to be the second, third, or fourth biggest investor in Angola, talking of putting in five or so billion dollars of investment in oil extraction and so on, were basically being threatened with being kicked out. And the letter was then cc’d to every single other oil company of any significance in the country.

Schwartz: The test of BP’s resolve will come later this year. Not surprisingly, no other oil company has made a similar commitment. Angola’s Petroleum Minister says he’s all for transparency. But I understand BP had said it would publish…

Vasconcelas: No there are some confidential figures, some confidential figures.

Schwartz: But the amount of oil a company produces and the taxes it pays to the government is that confidential information?

Vasconcelas: I have our budget, in national budget you can go there to see the figures.

Schwartz: Government critics say the published figures do not tell the whole story. They say only foreign pressure and a united approach from oil companies will yield results.
Simon Taylor says the Bush Administration could play a pivotal role.

Taylor: People like Condaleeza Rice, who’s the national security advisor who has a Chevron Supertanker named after her and who was a former board member of Chevron and so on. People like Dick Cheney, who was a former CEO of Halliburton which is one of the main oil services companies with actual major involvement in Angola.

Schwartz: Now the vice president

Taylor: Now the vice president. There is a real urgency to say, OK fine, the war is over, you know we want a strategic alliance with you because of oil interest, fine. But we’re also not putting up with this any more. This has to change.

Schwartz: The Angolan government says it’s aware of its responsibilities, and knows the world is watching. The problem for Angolans is that the world may be watching for all the wrong reasons. Oil has directed foreign policy towards Angola in the past. Now that there’s war in the Persian Gulf, there’s real doubt anything will change.