If there's one narrative that has been drilled to our collective head, it's that President Barack Obama's popularity overseas would pay big dividends for the United States. That it's become accepted conventional wisdom isn't shocking—Candidate Obama turning out record crowds in Berlin (becoming David Hasselhoff for a day) only confirmed the notion.
We're also told that where George W. Bush was popular—Africa, for example—Obama's popularity would exceed Bush's and usher in a new era of international cooperation. Indeed, when President Obama visited the West African nation of Ghana last July, a country where Bush enjoyed great popularity, Obama was treated as a hero. Not surprisingly, Obama returned the affection, offering praise not only to the people of Ghana but also the new government that took power last February. American relations with Africa, we were told, entered a new, more hopeful era.
So far, it hasn't been as advertised.
After exploring for oil over some 20 years, the Ghanaian government in 2007 contracted with Kosmos, a Dallas-based oil exploration company that discovered a massive oil field, the Jubilee Field. Last year, as the company attempted to sell the development rights (oil exploration and oil development are two very different processes), the new Ghanaian administration, in apparent political payback for a deal consummated with the previous administration, began to interfere—stalling the bidding process, ramping up the socialist rhetoric, and launching investigations that serve as bureaucratic red tape. One possible buyer, BP, mindful that Ghanaian President John Atta Mills employed similar tactics in declaring illegal a deal with Vodafone, pulled out altogether. Meanwhile, the Ghanaian government quietly reached out to China.
Throughout this, the White House and State Department have stood by and done exactly nothing, while the legal agreements with a U.S. company are held hostage by a government Obama praised during a decidedly high-profile visit. If, in the first year of Obama's presidency, there has been an opportunity to take advantage of the international goodwill we were promised, this is it. Instead, the administration sits idly by.
The issue, of course, is about more than one company. If respected companies such as Kosmos, Blackstone, and Warburg-Pincus can be harassed in this fashion, while an administration sits on its hands, what hope can there be for small firms and other ventures, and what will be the chilling effect on foreign investment in the region?
And if the White House can't even appeal for basic rule of law and established contractual agreements—in a country where Obama has personally invested his own diplomacy and prestige—why would any company put money into West Africa while Obama is president? And the real losers, of course, will be the citizens of these countries, who stand to lose billions in important investment capital.
Much of the international finance community is following the situation closely, aghast at the administration's indifference—as one private equity manager told me, "It's worse than doing nothing. What's the opposite of pro-business?"
There is also the pesky issue of China, our national creditor. While no one was looking, the Chinese have bought up as much oil as possible, including oil fields in Saudi Arabia and Venezuela. Now they're angling for a back-door deal worth an estimated 1 billion to 2 billion barrels. Generations ago, we asked, "Who lost China?" In 10 years, we may find ourselves asking the question, "Who lost the oil?"
In the meantime, all we're left with is the promise of what President Obama's vaunted international goodwill can bring. Obama is loved the world over, we're constantly reminded, but so far, that hasn't delivered a single tangible result.