The scramble for Africa's oil

Within a decade, the US will be heavily dependent on African oil. Little wonder the Pentagon is prep

The Pentagon is to reorganise its military command structure in response to growing fears that the United States is seriously ill-equipped to fight the war against terrorism in Africa. It is a dramatic move, and an admission that the US must reshape its whole military policy if it is to maintain control of Africa for the duration of what Donald Rumsfeld has called "the long war". Suddenly the world's most neglected con tinent is assuming an increasing global importance as the international oil industry begins to exploit more and more of the west coast of Africa's abundant reserves.

The Pentagon at present has five geographic Unified Combatant Commands around the world, and responsibility for Africa is awkwardly divided among three of these. Most of Africa - a batch of 43 countries - falls under the European Command (Eucom), with the remainder divided between the Pacific Command and Central Command (which also runs the wars in Iraq and Afghanistan). Now the Pentagon - under the Joint Chiefs of Staff and the defence department - is working on formal proposals for a unified military command for the continent under the name "Africom".

This significant shift in US relations with Africa comes in the face of myriad threats: fierce economic competition from Asia; increasing resource nationalism in Russia and South America; and instability in the Middle East that threatens to spill over into Africa.

The Pentagon hopes to finalise Africom's structure, location and budget this year. The expectation is that it can break free from Eucom and become operative by mid-2008.

"The break from Europe will occur before 30 September 2008," Professor Peter Pham, a US adviser on Africa to the Pentagon told the New Statesman. "The independent command should be up and running by this time next year."

A Pentagon source says the new command, which was originally given the green light by the controversial former US defence secretary Donald Rumsfeld, is likely to be led by William "Kip" Ward, the US army's only four-star African-American general. In 2005, Ward was appointed the US security envoy to the Middle East and he is reportedly close to President George W Bush. He also has boots-on-the-ground experience in Africa: he was a commander during Bill Clinton's ill-fated mission in Somalia in 1993 and he served as a military representative in Egypt in 1998. Ward is now the deputy head of Eucom.

America's new Africa strategy reflects its key priorities in the Middle East: oil and counter-terrorism. Currently, the US has in place the loosely defined Trans-Sahara Counter-Terrorism Initiative, incorporating an offshoot of Operation Enduring Freedom that is intended to keep terrorist networks out of the vast, unguarded Sahel. But the lack of a coherent and unified policy on Africa is, according to some observers, hampering America's efforts in the Middle East. US military sources estimate that up to a quarter of all foreign fighters in Iraq are from Africa, mostly from Algeria and Morocco.

Moreover, there is increasing alarm within the US defence establishment at the creeping "radicalisation" of Africa's Muslims, helped along by the export of hardline, Wahhabi-style clerics from the Arabian peninsula.

"The terrorist challenge [has] increased in Africa in the past year - it's gotten a new lease on life," according to Pham.

But it is the west's increasing dependency on African oil that gives particular urgency to these new directions in the fight against terrorism. Africa's enormous, and largely untapped, reserves are already more important to the west than most Americans recognise.

In March 2006, speaking before the Senate armed services committee, General James Jones, the then head of Eucom, said: "Africa currently provides over 15 per cent of US oil imports, and recent explorations in the Gulf of Guinea region indicate potential reserves that could account for 25-35 per cent of US imports within the next decade."

These high-quality reserves - West African oil is typically low in sulphur and thus ideal for refining - are easily accessible by sea to western Europe and the US. In 2005, the US imported more oil from the Gulf of Guinea than it did from Saudi Arabia and Kuwait combined. Within the next ten years it will import more oil from Africa than from the entire Middle East. Western oil giants such as ExxonMobil, Chevron, France's Total and Britain's BP and Shell plan to invest tens of billions of dollars in sub-Saharan Africa (far in excess of "aid" inflows to the region).

But though the Gulf of Guinea is one of the few parts of the world where oil production is poised to increase exponentially in the near future, it is also one of the most unstable. In the big three producer countries, Nigeria, Equatorial Guinea and Angola, oil wealth has been a curse for many, enriching political elites at the expense of impoverished citizens. Angola is now China's main supplier of crude oil, supplanting Saudi Arabia last year. The Chinese, along with the rest of oil- hungry Asia, are looking covetously at the entire region's reserves.

Realpolitik of what suits

Looming over West Africa is the spectre of the southern Niger Delta area, which accounts for most of Nigeria's 2.4 million barrels a day. Conflict here offers a taste of what could afflict all of sub-Saharan Africa's oilfields. Since 2003, the Delta has become a virtual war zone as heavily armed rival gangs - with names such as the Black Axes and Vikings - battle for access to pipelines and demand a bigger cut of the petrodollar.

Oil theft, known as "bunkering", costs Nigeria some $4bn (£2.05bn) a year, while foreign companies have been forced to scale back production after kidnappings by Delta militants. Such uncertainties help send world oil prices sky-high.

The Pentagon's new Africa policy is to include a "substantial" humanitarian component, aimed partly at minimising unrest and crime. But the reality is that a bullish China is willing to offer billions in soft loans and infrastructure projects - all with no strings attached - to secure lucrative acreage.

"It's like going back to a Cold War era of politics where the US backs one political faction because their political profile suits their requirements," says Patrick Smith, editor of the newsletter Africa Confidential, widely read in policy circles. "It's a move away from criteria of good governance to what is diplomatically convenient."

According to Nicholas Shaxson, author of Poisoned Wells: the Dirty Politics of African Oil, "[Africom] comes in the context of a growing conflict with China over our oil supplies."

Africom will significantly increase the US military presence on the continent. At present, the US has 1,500 troops stationed in Africa, principally at its military base in Djibouti, in the eastern horn. That could well double, according to Pham. The US is already conducting naval exercises off the Gulf of Guinea, in part with the intention of stopping Delta insurgents reaching offshore oil rigs. It also plans to beef up the military capacity of African governments to handle their dissidents, with additional "rapid-reaction" US forces available if needed. But - echoing charges levelled at US allies elsewhere in the "war on terror" - there are fears that the many authoritarian governments in sub-Saharan Africa might use such units to crack down on internal dissent.

Raising hackles

The increased US military presence is already apparent across the Red Sea from Iraq, where, in concert with Ethiopia, Washington has quietly opened up another front in its war on terror. The target: the Somalia-based Islamists whom the Americans claim were responsible for the 1998 bombings of US embassies in Kenya and Tanzania. Earlier this year, US special forces used air strikes against suspected al-Qaeda militants, killing scores.

FBI interrogators have also been despatched to Ethiopian jails, where hundreds of terror suspects - including Britons - have been held incommunicado since Ethiopia's invasion of Somalia in December last year, according to Human Rights Watch. The problem with this more confrontational approach in Africa is apparent. "There's definitely a danger of the US [being] seen as an imperial exploiter," says Shaxson. "The military presence will raise hackles in certain countries - America will have to tread lightly."

Nonetheless, the Pentagon is hoping that Africom will signal a more constructive foreign policy in the region and a break with the past. "Politically [Africa] is important and that's going to increase in coming years," says Pham. "It's whether the US can sustain the initiative."

African oil: the numbers

22% of US crude oil imports came from Nigeria in the first quarter of 2007

25% of US crude imports came from Saudi Arabia in the same period

75% of the Nigerian government's income is oil-related

800,000 Nigerian estimate for barrels of oil lost each day through leaks, stoppages or theft by rebels

$2.3bn cost of building Chevron's Benguela Belize platform off the coast of Angola

Research by Jonathan Pearson

This article first appeared in the 18 June 2007 issue of the New Statesman, New Britain - The country Brown inherits

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The secret anti-capitalist history of McDonald’s

As a new film focuses on the real founder of McDonald’s, his grandson reveals the unlikely story behind his family’s long-lost restaurant.

One afternoon in about the year 1988, an 11-year-old boy was eating at McDonald’s with his family in the city of Manchester, New Hampshire. During the meal, he noticed a plaque on the wall bearing a man’s face and declaring him the founder of McDonald’s. These plaques were prevalent in McDonald’s restaurants across the US at the time. The face – gleaming with pride – belonged to Ray Kroc, a businessman and former travelling salesman long hailed as the creator of the fast food franchise.

Flickr/Phillip Pessar

But this wasn’t the man the young boy munching on fries expected to see. That man was in the restaurant alongside him. “I looked at my grandfather and said, ‘But I thought you were the founder?’” he recalls. “And that’s when, in the late Eighties, early Nineties, my grandfather went back on the [McDonald’s] Corporation to set the history straight.”

Jason McDonald French, now a 40-year-old registered nurse with four children, is the grandson of Dick McDonald – the real founder of McDonald’s. When he turned to his grandfather as a confused child all those years ago, he spurred him on to correct decades of misinformation about the mysterious McDonald’s history. A story now being brought to mainstream attention by a new film, The Founder.


Jason McDonald French

“They [McDonald’s Corporation] seemed to forget where the name actually did come from,” says McDonald French, speaking on the phone from his home just outside Springfield, Massachusetts.

His grandfather Dick was one half of the McDonald brothers, an entrepreneurial duo of restaurateurs who started out with a standard drive-in hotdog stand in California, 1937.

Dick's father, an Irish immigrant, worked in a shoe factory in New Hampshire. He and his brother made their success from scratch. They founded a unique burger restaurant in San Bernardino, around 50 miles east of where they had been flogging hotdogs. It would become the first McDonald’s restaurant.

Most takeout restaurants back then were drive-ins, where you would park, order food from your car, and wait for a “carhop” server to bring you your meal on a plate, with cutlery. The McDonald brothers noticed that this was a slow, disorganised process with pointless costly overheads.

So they invented fast food.

***

In 1948, they built what came to be known as the “speedy system” for a fast food kitchen from scratch. Dick was the inventor out of the two brothers - as well as the bespoke kitchen design, he came up with both the iconic giant yellow “M” and its nickname, the “Golden Arches”.

“My grandfather was an innovator, a man ahead of his time,” McDonald French tells me. “For someone who was [only] high school-educated to come up with the ideas and have the foresight to see where the food service business was going, is pretty remarkable.”


The McDonald brothers with a milkshake machine.

McDonald French is still amazed at his grandfather’s contraptions. “He was inventing machines to do this automated system, just off-the-cuff,” he recalls. “They were using heat lamps to keep food warm beforehand, before anyone had ever thought of such a thing. They customised their grills to whip the grease away to cook the burgers more efficiently. It was six-feet-long, which was just unheard of.”

Dick even custom-made ketchup and mustard dispensers – like metal fireplace bellows – to speed up the process of garnishing each burger. The brothers’ system, which also cut out waiting staff and the cost of buying and washing crockery and cutlery, brought customers hamburgers from grill to counter in 30 seconds.


The McDonald brothers as depicted in The Founder. Photo: The Founder

McDonald French recounts a story of the McDonald brothers working late into the night, drafting and redrafting a blueprint for the perfect speedy kitchen in chalk on their tennis court for hours. By 3am, when they finally had it all mapped out, they went to bed – deciding to put it all to paper the next day. The dry, desert climate of San Bernardino meant it hadn’t rained in months.

 “And, of course, it rained that night in San Bernardino – washed it all away. And they had to redo it all over again,” chuckles McDonald French.

In another hiccup when starting out, a swarm of flies attracted by the light descended on an evening event they put on to drum up interest in their restaurant, driving customers away.


An original McDonald's restaurant, as depicted in The Founder. Photo: The Founder

***

These turned out to be the least of their setbacks. As depicted in painful detail in John Lee Hancock’s film, Ray Kroc – then a milkshake machine salesman – took interest in their restaurant after they purchased six of his “multi-mixers”. It was then that the three men drew up a fateful contract. This signed Kroc as the franchising agent for McDonald’s, who was tasked with rolling out other McDonald’s restaurants (the McDonalds already had a handful of restaurants in their franchise). 

Kroc soon became frustrated at having little influence. He was bound by the McDonalds’ inflexibility and stubborn standards (they wouldn’t allow him to cut costs by purchasing powdered milkshake, for example). The film also suggests he was fed up with the lack of money he was making from the deal. In the end, he wriggled his way around the contract by setting up the property company “McDonald’s Corporation” and buying up the land on which the franchises were built.


Ray Kroc, as depicted in The Founder. Photo: The Founder

Kroc ended up buying McDonald’s in 1961, for $2.7m. He gave the brothers $1m each and agreeing to an annual royalty of half a per cent, which the McDonald family says they never received.

“My father told us about the handshake deal [for a stake in the company] and how Kroc had gone back on his word. That was very upsetting to my grandfather, and he never publicly spoke about it,” McDonald French says. “It’s probably billions of dollars. But if my grandfather was never upset about it enough to go after the Corporation, why would we?”

They lost the rights to their own name, and had to rebrand their original restaurant “The Big M”. It was soon put out of business by a McDonald’s that sprang up close by.


An original McDonald restaurant in Arizona. Photo: Flickr/George

Soon after that meal when the 11-year-old Jason saw Kroc smiling down from the plaque for the first time, he learned the true story of what had happened to his grandfather. “It’s upsetting to hear that your family member was kind of duped,” he says. “But my grandfather always had a great respect for the McDonald’s Corporation as a whole. He never badmouthed the Corporation publicly, because he just wasn’t that type of man.”

Today, McDonalds' corporate website acknowledges the McDonalds brothers as the founders of the original restaurant, and credits Kroc with expanding the franchise. The McDonald’s Corporation was not involved with the making of The Founder, which outlines this story. I have contacted it for a response to this story, but it does not wish to comment.

***

Dick McDonald’s principles jar with the modern connotations of McDonald’s – now a garish symbol of global capitalism. The film shows Dick’s attention to the quality of the food, and commitment to ethics. In one scene, he refuses a lucrative deal to advertise Coca Cola in stores. “It’s a concept that goes beyond our core beliefs,” he rants. “It’s distasteful . . . crass commercialism.”

Kroc, enraged, curses going into business with “a beatnik”.


Photo: The Founder

Dick’s grandson agrees that McDonald’s has strayed from his family’s values. He talks of his grandfather’s generosity and desire to share his wealth – the McDonald brothers gave their restaurant to its employees, and when Dick returned to New Hampshire after the sale, he used some of the money to buy new Cadillacs with air conditioning for his old friends back home.

“[McDonald’s] is definitely a symbol of capitalism, and it definitely sometimes has a negative connotation in society,” McDonald French says. “If it was still under what my grandfather had started, I imagine it would be more like In'N'Out Burger [a fast food chain in the US known for its ethical standards] is now, where they pay their employees very well, where they stick to the simple menu and the quality.”

He adds: “I don’t think it would’ve ever blossomed into this, doing salads and everything else. It would’ve stayed simple, had quality products that were great all the time.

“I believe that he [my grandfather] wasn’t too unhappy that he wasn’t involved with it anymore.”


The McDonald’s Museum, Ray Kroc’s first franchised restaurant in the chain. Photo: Wikimedia Commons

Despite his history, Dick still took his children and grandchildren to eat at McDonald’s together – “all the time” – as does Jason McDonald French with his own children now. He’s a cheeseburger enthusiast, while his seven-year-old youngest child loves the chicken nuggets. But there was always a supersize elephant in the room.

“My grandfather never really spoke of Ray Kroc,” he says. “That was always kind of a touchy subject. It wasn’t until years later that my father told us about how Kroc was not a very nice man. And it was the only one time I ever remember my grandfather talking about Kroc, when he said: ‘Boy, that guy really got me.’”

The Founder is in UK cinemas from today.

Anoosh Chakelian is senior writer at the New Statesman.