Joseph Fiennes: Poverty? War? Disease? Corruption? Blame oil

"Oil is the devil's excrement." Those are not my words. They were said by Juan Pablo Perez Alfonso, a founder of Opec – but they could have been mine too.

Oil has made Luanda, the capital of Angola, which amazingly is the most expensive city in the world after Tokyo. But the vast majority of people live in shacks, struggling to get by. This is oil's irony: it endows wealth beyond imagination, but none of it seems to touch the people around it. Angola is producing 900 million barrels of oil a day, earning the country billions of dollars, but it has languished at the bottom of the United Nations Human Development index for years. One child in three dies before the age of five.

I witnessed this paradox on a recent trip to the country with the charity Christian Aid. I met people who spanned the huge gap between the very rich and the very poor. I met a diamond dealer dressed in Versace. I met a mother with six children, a tiny income and full-blown Aids. I saw children playing in sewage-strewn rubbish piled against the banks of the Bengo river. I watched a group of privately-owned tankers picking up water from the river to sell directly to street vendors.

Sometimes this water is treated with chlorine. But more often it is sold neat, carrying dysentery or hepatitis or giving a nasty – for children possibly fatal – bout of diarrhoea. Two-thirds of people have no access to clean drinking water. Elsewhere I came across a group of men on a roundabout in the middle of a road, washing from a broken mains pipe – the first clean water they'd seen for months. One had a leg missing, probably the result of war or a landmine left behind.

They knew about the oil wealth that lines the pockets of the rich. They talked about it passionately. But they were too exhausted by the years of fighting in the country to organise a protest.

The people of Angola get nowhere near their oil, neither literally nor metaphorically. In Nigeria the refineries are onshore, which means they are part of people's lives. We have seen pictures in the papers of local people protesting that they are excluded from the wealth – and jobs – that oil creates. But Angola's oilfields are offshore. Its foreign employees live out of town in gated communities and fly on to the platforms in company helicopters. All the ordinary people get is poverty.

The main reason for this is corruption. Corruption here used to be nothing more iniquitous than "Do this and I'll buy you a cola" – so-called fizzy-drink democracy. Now, although bribes are still referred to as "gasosas", they have grown to far more menacing proportions. According to the International Monetary Fund, of the $5bn that the country earns in oil revenues, $1bn disappears into the private bank accounts of the élite, and does not pass through the central bank.

No one knows how much the oil companies pay the government for the right to exploit Angola's oil. The deals are done in the strictest secrecy. This is what leaves the door wide open for corruption. It also means that the ordinary people would be hindered in their ability to protest, even if they did have the strength to do so.

I heard it said plenty of times on my trip that the reason why the civil war lasted for 27 years was because the two sides were being propped up by the US and the USSR – a microcosm of Cold War politics. But less known is that one side of the war was funded by blood diamonds, while the other was funded by oil revenues, or "blood oil".

Now there is just one major power, but Angola is still a focus for world interest because it produces oil, but is not part of Opec. Unfortunately, rich countries are not interested in the fact that oil money is cursing the country.

In Angola I have seen this for myself. But it's the same story in most developing countries that have oil. Oil is bad news. What should be a blessing is more often a curse.

Last week Christian Aid published a report, Fuelling Poverty: Oil, War and Corruption, which explained why. First, oil is bad for democracy. In Kazakhstan it props up a semi-authoritarian regime which sometimes does not bother to collect taxes because it has so much income. In Sudan it has helped fund a war which has lasted 20 years. In Angola its revenues have allowed the same government to remain in power since independence in 1975.

But oil is also, perversely, bad for the economies of poor countries. Because wells spout liquid money, governments become reliant on them for cash. Meanwhile, the non-oil sectors such as agriculture or manufacturing are ignored. In Kazakhstan, although the Caspian Sea teems with fish, the fishing industry is languishing, and it is the catch of Russian boats that is sold in the shops.

Angola is a beautiful, lush, fertile country. Rainfall is plentiful and regular. Growing conditions are perfect. With its beautiful beaches and green mountains, it could be a tourist paradise. But the government has no incentive to encourage any domestic industry. It is only interested in the foreign oil companies, so what might be a country of plenty for all is a land of stark contrasts between rich and poor.

Of course, in the wider context, all this evidence is vital. Now, when there is daily news about how the oil wealth of Iraq is to be carved up, it is critical that the world finally gets it right on oil. If the people of Iraq, as well as countries such as Angola, Sudan and Kazakhstan, cannot stop oil money from draining into the pockets of their élites, they will never see their rightful share of oil money. If oil is to be a power for the good, rather than fuelling poverty, corruption and violence, it needs to be transparent, with some saved in properly managed trust funds. Just as diamonds are certified to show that they have been mined in an ethical way, there must be a system of identifying "blood oil" from conflict countries.

Christian Aid is also calling on the UK government to champion an international commission that will look in-depth at the connection between oil, conflict and poverty.

What struck me in Angola is that after all these years of war, people are still managing to survive, eking out a living by selling Biros or shirts. But it is a skin-of-the-teeth affair. When you ask if they are angry that the government doesn't take the garbage away and can't provide them with a simple waterpipe, they just shake their heads.

Now, as Iraq struggles to create a new future and Angola tries to stabilise its peace, the stakes have never been higher. From 900 million barrels of oil a day at present, Angola's extraction rate is set to double by 2008. It is time to come clean about oil revenues and make sure they benefit ordinary people.

Joseph Fiennes went to Angola with Christian Aid. To make a donation, you can give online at www.christianaidweek.org/give or call 08080 005005.