capitalism


Alassane Ouattara is the current President of Ivory Coast, selected by France and the United States on behalf of the international community, and with the assistance of U.N. mission chief to Ivory Coast Y.J. Choi, they declared Ouattara the winner of the November 2010 Ivoirian presidential election in 2011. Ouattara spent much of his career at the IMF, including serving as Deputy Managing Director of the IMF from 1994-1999.

A popular photocartoon of Ouattara as Sarkozy's puppet. I think it is appropriate here.

On Feb. 17 we heard that Alassane Ouattara Is the new Chairman Of ECOWAS. In his acceptance speech he concentrated on security issues, which works well with the the priorities of France, the US, and NATO.

The Ivorian president was elected for a single-year tenure at the 40th Ordinary Session of the Authority of Heads of State and Government of ECOWAS concluded in Abuja on Friday.

Quattara said in his acceptance speech that his administration would define common policy and combine resources to fight terrorism, piracy, banditry and proliferation of small arms and light weapons in the sub-region.

The Ivorian president also said that he would ensure the modernisation of ECOMOG to tackle security challenges.

He thanked his immediate predecessor, Jonathan, for his efforts in piloting ECOWAS in the resolution of the Ivorian political crisis and consolidation of peace and stability in other member- states.

The next summit of ECOWAS has been fixed for the Ivorian Capital, Yamussoukrou, on a date to be announced by the chairman.

At Nairaland, where the comments can be interesting, in comment #5 here, Danka7777 wrote:

Quattara – a known former IMF executive, this guy that was hand picked by the western countries to rule Ivory Coast. We are finished. Nigerians reading this, don’t take my words at face value, go and do your own research on why former President of Ivory Coast, Gbagbo was hunted and ousted from power. This guy was trying to untie Ivory Coast from the shackles of colonial France, in other words, he was trying to untie Ivorian currency from french currency. … essentially what this means is that the former colonial master(France) still controls the currency value of Ivory Coast. Gbagbo was hunted because he VOWED to untie Ivory Coast from the shackles of colonial slavery. They tell you in the mainstream media that Quattara won? Lets put this in context: how did he win? Who decides on who won elections? What constitutional body has absolute and final say on election malpractices? Is it the supreme court or electoral body? My judgement tells me its the Supreme court and most of you will agree. Who decided the election of President Goodluck Jonathan vs. Buhari few weeks ago and in the past elections, was it Supreme court or Electoral body(INEC)? Of course it was the Nigerian Supreme court. Who decided the election of Bush vs. Gore in 2000? United Supreme court did. Now, conversely, when the Ivorian Supreme court ruled that Gbagbo was the winner of the election in Ivory Coast, the western world said, No! no! no! … Who did these people think they are fooling? Like we are babies and can’t think for our selves.

IMF policies, particularly the market theology inspired SAPs, structural adjustment programs, have been responsible for the death and suffering of hundreds and thousands of people and the dismantling and destruction of vital institutions of government in many developing countries around the world. The IMF is the tool of bankers, with a banker’s view of the world. Currently we can see how harmful that can be in Greece.

I think it is important to consider this in the light of recent studies and information about the nature of global finance.

Revealed – the capitalist network that runs the world

An analysis of the relationships between 43,000 transnational corporations has identified a relatively small group of companies, mainly banks, with disproportionate power over the global economy.

The study’s assumptions have attracted some criticism, but complex systems analysts contacted by New Scientist say it is a unique effort to untangle control in the global economy. Pushing the analysis further, they say, could help to identify ways of making global capitalism more stable.

The work, to be published in PLoS One, revealed a core of 1318 companies with interlocking ownerships (see image). Each of the 1318 had ties to two or more other companies, and on average they were connected to 20. What’s more, although they represented 20 per cent of global operating revenues, the 1318 appeared to collectively own through their shares the majority of the world’s large blue chip and manufacturing firms – the “real” economy – representing a further 60 per cent of global revenues.

When the team further untangled the web of ownership, it found much of it tracked back to a “super-entity” of 147 even more tightly knit companies – all of their ownership was held by other members of the super-entity – that controlled 40 per cent of the total wealth in the network. “In effect, less than 1 per cent of the companies were able to control 40 per cent of the entire network,” says Glattfelder. Most were financial institutions. The top 20 included Barclays Bank, JPMorgan Chase & Co, and The Goldman Sachs Group.

Crucially, by identifying the architecture of global economic power, the analysis could help make it more stable. By finding the vulnerable aspects of the system, economists can suggest measures to prevent future collapses spreading through the entire economy. Glattfelder says we may need global anti-trust rules, which now exist only at national level, to limit over-connection among TNCs. Sugihara says the analysis suggests one possible solution: firms should be taxed for excess interconnectivity to discourage this risk.

the super-entity is unlikely to be the intentional result of a conspiracy to rule the world. “Such structures are common in nature,” says Sugihara.

I don’t believe much in conspiracies, eventually people talk. The more people that know a secret, the less likely it is to stay a secret. Common interests are a different matter. Individuals and groups can organize and act as powerful forces to protect their own interests without the need to conspire.

As a long term employee and official of the IMF, Ouattara is a part of the global financial structure and likely to work for its interests above the interests of Ivory Coast, West Africa, or the continent of Africa. To date he has shown no sign that his allegiances are with Ivory Coast or with Africa above the IMF, Sarkozy, France, and the bankers.

The US ambassador to Tripoli tells US companies: “oil is the jewel in the crown of Libyan natural resources”. Total victory promises 35% of Libyan oil concessions to the French oil company Total.

Assault on Sirte, the Libya map as of October 8, 2011 (WSJ)

[This] is the first time that the UN Security Council explicitly gave the green light … to armed intervention against a sovereign State … and that its secretary general, Ban Ki-moon, played an active role in unleashing hostilities.

intervention has never been, and will never be, anything other than the intervention of the strong in the affairs of the weak

The action by the UN against Libya threatens the people and countries of every continent. When will the “international community” want our resources, and what will they do to us to get them? Who in my country may be coopted by them?

NATO forces arrayed against Libya. (WSJ)

Total victory

The pun is easy but unavoidable, especially since Libération published the letter in which the National Transitional Council (NTC) promised to grant 35% of concessions to the French petroleum giant Total “in exchange” (the term used) for French military engagement (a document which naturally triggered a hasty denial from the Quai d’Orsay). The fight for freedom is such a noble cause. The author nevertheless concluded his article by taking note of “the strong odor of petroleum hanging over the whole business.”

It is by themselves — and never from the outside — that peoples gain their freedom.

Beyond the case of Libya, that is the point, the most essential, which deserves to be discussed among all those who adhere to the right of peoples to decide their own destiny — what used to be called anti-imperialism.

Used to be? In fact, it was so up until the fall of the USSR and the Warsaw Pact opened the way to the reconquest of the entire planet by capitalism, its dominations and its imperial rivalries. And that left no other choice to countries except to align themselves with the canons of “human rights,” the “rule of law,” and the “market economy” — three terms which have become synonymous — or else find themselves under fire from the cannons of the planetary policemen shamelessly calling themselves the “international community.”

Granted, when it comes to armed intervention against a sovereign State, the so-called “international community” is no beginner. But it is the first time that the UN Security Council explicitly gave the green light, and that its secretary general, Ban Ki-moon, played an active role in unleashing hostilities. The full implications of such a situation need to be weighed: the brutal challenge to the sovereignty of States has been legalized — even if not legitimatized. The dominant planetary oligarchies, whose final horizon is “world governance” without borders, have thereby scored a major point: interventionism (“preventive” at that, according to Mr. Luck) can henceforth be the rule.

This conception, which explicitly contradicts the United Nations Charter, is a time bomb: it undermines the very foundations on which it was written and could mean a veritable return to barbarism in international relations.

For there is one obvious truth that should never be forgotten: intervention has never been, and will never be, anything other than the intervention of the strong in the affairs of the weak. The respect for sovereignty in international relations is what the equal vote is to citizenship: certainly no absolute guarantee, far from it, but a substantial asset against the law of the jungle. The latter is what could very well take over the world stage.
from: Libya: NATO Provides the Bombs; The French “Left” Provides the Ideology by Pierre Lévy

You cannot bomb a country into democracy, but of course democracy was never the true objective in Libya, no matter how humanitarian the justifications and rationalizations for the blatant aggression.

In the Wall Street Journal:

TRIPOLI, Libya—Six weeks after the fall of Tripoli, the palmy days of rebel unity have begun to disintegrate into a spiral of infighting, political jockeying and even the occasional violent flare-up threatening to derail Libya’s post-Gadhafi transition.

This is what everyone who knew anything about Libya predicted. Libya, with it multitude of factions and arms could devolve similar to Somalia.

US Ambassador Cretz appears to have a tin ear for the language of imperialism. Jewel in the crown was the part India played in Britain’s global empire. This is just one more indication of how naked and blatant the imperial aggression against Libya has been.
From the NYT:

Ambassador Gene A. Cretz … participated in a State Department conference call with about 150 American companies hoping to do business with Libya.

“We know that oil is the jewel in the crown of Libyan natural resources, … “If we can get American companies here on a fairly big scale, which we will try to do everything we can to do that, then this will redound to improve the situation in the United States with respect to our own jobs.”

His remarks were a rare nod to the tacit economic stakes in the Libyan conflict for the United States and other Western countries, not only because of Libya’s oil resources but also because of the goods and services those resources enable it to purchase.

Oil was never the “predominant reason” for the American intervention, Mr. Cretz said, but his comments … underlined the American eagerness for a cut of any potential profits.

The entire intervention against Libya was driven by potential profits. Pierre Lévy quotes a 2007 speech by Sarkozy:


“Europe is today the only force capable of carrying forward a project of civilization. … America and China have already begun the conquest of Africa. How long will Europe wait to build the Africa of tomorrow?
While Europe hesitates, others advance.”

Not wanting to be left behind, Dominique Strauss-Kahn around the same time expressed his desire for a Europe stretching “from the cold ice of the Arctic in the North to the hot sands of the Sahara in the South (. . .) and that Europe, I believe, if it continues to exist, will have reconstituted the Mediterranean as an internal sea, and will have reconquered the space that the Romans, or Napoleon more recently, attempted to consolidate.”

And Lévy reminds us:

After years of being subjected to embargo and treated as a pariah, Colonel Kadhafi undertook the rapprochement mentioned above with the West, which notably took the form in December 2003 of an official renunciation of any nuclear arms program in exchange for guarantees of non-aggression promised specifically by Washington. Eight years later, there is no getting around the fact that that commitment lasted only up until the day when they felt they now had reasons to trample it under foot. Suddenly, in the four corners of the earth everyone can measure the worth of the word given by the powerful and just how much they value the commitments they have made.

Sarkozy speaks in the voice of previous centuries, when Europe would supposedly bring the three Cs to Africa, Christianity, civilization, and commerce, with the unlimited arrogance to call Europe “the only force capable of carrying forward a project of civilization“. European and American development has been financed for centuries by Africa. France would have been a minor player in international affairs without the wealth of Africa. The west owes Africa for western development, instead it plans returning to take more. The doctrine of the self styled “international community”, the US and Western Europe, is our old nemesis: might makes right.

When banks are too big to fail, whole countries fail instead. Bankster greed is destroying our nations, our cultures, and the water, air, and land where we drink, breathe, and live.

What the markets want, as one commenter points out:

The markets want money for cocaine and prostitutes

Paul Krugman featured this comment in one of his columns:

“Kevin O´Rourke has a post, What do markets want , raising the same issues I´ve been discussing about debt, austerity, etc.

But never mind all that: read the comments, specifically this one:

The markets want money for cocaine and prostitutes. I am deadly serious.

Most people don´t realize that “the markets” are in reality 22-27 year old business school graduates, furiously concocting chaotic trading strategies on excel sheets and reporting to bosses perhaps 5 years senior to them. In addition, they generally possess the mentality and probably intelligence of junior cycle secondary school students. Without knowladge of these basic facts, nothing about the markets makes any sense-and with knowladge, everything does.

What the markets, bond and speculators, etc, want right now is for Ireland to give them a feel good feeling, nothing more. A single sharp, sweeping budget would do that; a four year budget plan will not. Remember that most of these guys won´t actually still be trading in four years. They´ll either have retired or will have been promoted to a position where they don´t care about Ireland anymore. Anyone that does will be a major speculator looking to short the country for massive profit.

In lieu of a proper budget, what the country can do-and what will work-is bribe senior ratings agencies owners and officials to give the country a better rating. Even a few millions spent on bumping up Ireland´s rating would save millions and possibly save the country.

Bread and circuses for the masses; cocaine and prostitutes for the markets. This can be looked on a unethical obviously, but since the entire system is unethical, unprincipled and chaotic anyway, why not just exploit that fact to do some good for the nation instead of bankrupting it in an effort to buy new BMWs for unmarried 25 year olds.”

That´s what I call a policy recommendation – and it´s better than most of what passes for wisdom these days.”

I have a friend working in a posh hotel in New York. When I sent him this passage he wrote back:
“… having served many of these dudes at my hotel…..very true.”

For more on the American lead in all this see:
Griftopia: Bubble Machines, Vampire Squids, and the Long Con That Is Breaking America by Matt Taibbi, taking off from his legendary Rolling Stone article. You can also read about the book discussed here.

Another book about the US financial crisis that sounds interesting is All the Devils Are Here: The Hidden History of the Financial Crisis. I have not seen the book yet, but did watch an interview with the authors that interested me.

Others who know far more than I have discussed all this and more. I have always been a fan of political cartoons, and the video above is an inspired example of the genre, worth spreading far and wide.

The world’s wealthiest speculators set up a casino where the chips were the stomachs of hundreds of millions of innocent people. They gambled on increasing starvation, and won.

Johann Hari writes: How Goldman gambled on starvation. As he describes:

It starts with an apparent mystery. At the end of 2006, food prices across the world started to rise, suddenly and stratospherically. Within a year, the price of wheat had shot up by 80 per cent, maize by 90 per cent, rice by 320 per cent. In a global jolt of hunger, 200 million people – mostly children – couldn’t afford to get food any more, and sank into malnutrition or starvation. There were riots in more than 30 countries, and at least one government was violently overthrown. Then, in spring 2008, prices just as mysteriously fell back to their previous level. Jean Ziegler, the UN Special Rapporteur on the Right to Food, calls it “a silent mass murder”, entirely due to “man-made actions.”

Most of the explanations we were given at the time have turned out to be false. It didn’t happen because supply fell: the International Grain Council says global production of wheat actually increased during that period, for example. It isn’t because demand grew either: as Professor Jayati Ghosh of the Centre for Economic Studies in New Delhi has shown, demand actually fell by 3 per cent. Other factors – like the rise of biofuels, and the spike in the oil price – made a contribution, but they aren’t enough on their own to explain such a violent shift.

… through the 1990s, Goldman Sachs and others lobbied hard and the regulations were abolished. Suddenly, these contracts were turned into “derivatives” that could be bought and sold among traders who had nothing to do with agriculture. A market in “food speculation” was born.

Here’s how it happened. In 2006, financial speculators like Goldmans pulled out of the collapsing US real estate market. They reckoned food prices would stay steady or rise while the rest of the economy tanked, so they switched their funds there. Suddenly, the world’s frightened investors stampeded on to this ground.

So while the supply and demand of food stayed pretty much the same, the supply and demand for derivatives based on food massively rose – which meant the all-rolled-into-one price shot up, and the starvation began. The bubble only burst in March 2008 when the situation got so bad in the US that the speculators had to slash their spending to cover their losses back home.

As Professor Ghosh points out, some vital crops are not traded on the futures markets, including millet, cassava, and potatoes. Their price rose a little during this period – but only a fraction as much as the ones affected by speculation. Her research shows that speculation was “the main cause” of the rise.

So it has come to this. The world’s wealthiest speculators set up a casino where the chips were the stomachs of hundreds of millions of innocent people. They gambled on increasing starvation, and won. … What does it say about our political and economic system that we can so casually inflict so much pain?

As Hari begins his story:

By now, you probably think your opinion of Goldman Sachs and its swarm of Wall Street allies has rock-bottomed at raw loathing. You’re wrong. There’s more. It turns out that the most destructive of all their recent acts has barely been discussed at all. Here’s the rest. This is the story of how some of the richest people in the world – Goldman, Deutsche Bank, the traders at Merrill Lynch, and more – have caused the starvation of some of the poorest people in the world.

Read the entire article, which explains what happened more clearly and in greater detail: How Goldman gambled on starvation.

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To my regular readers, apologies for being absent lately. We are having a major reorganization at my work, and at the same time, major activity with the farms in Ghana. This may keep me fairly busy for another week or two, but for now the major portion of my work on these projects is done.

The International Institute for ICT Journalism created a blog for following news of oil finds, oil wealth, and the oil industry in Ghana:
Reporting Oil and Gas


FPSO, Floating Production Storage and Offloading vessel for the Jubilee Field and sub sea FPSO production facilities diagram from a presentation at Kosmos Energy

For awhile there was not much published, but in the last couple of months there have been new stories posted almost daily, sometimes several times per day. Many of these stories are taken from various media in Ghana. That makes Reporting Oil and Gas a very useful tool for collecting and following the stories on oil development in Ghana. At the end of each story the blog provides the link to the original source. This news blog is still in its early stages, but I hope it continues and expands. It is quite useful and much needed.

On February 1 it reported that Ghana is considering setting up a sovereign wealth fund for oil revenues.
Ghana Eyes Sovereign Wealth Find For Oil Morey -Minister

Ghana is considering setting up a sovereign wealth fund to channel surplus revenues from oil production, which are due to start rolling later this year, Finance Minister Kwabena Duffuor has said.

“We have held a couple of meetings already it’s something we’ re seriously working towards and we hope to put the proposals before Cabinet in about a month,” Dr. Duffuor said in an interview with Reuters.

He said if Cabinet backs the proposals, a bill will then be drafted for consideration by parliament, Duffuor said.

The Finance Minister gave no details of the size of the possible fund. But a Ghanaian government source close to discussions on the matter said it will be largely shaped by the size of oil revenues.

The source noted that it was not certain that the fund would be given the green light, noting an alternative option-investing in key domestic infrastructure project was also under discussion.

Ghana is the latest Africa state, alongside Nigeria, Angola and Tunisia to study ways to ring fence energy windfalls for future generations.

Ghana, the world’s number two cocoa producer and Africa’s second –biggest gold miner after South Africa expects to starts oil production late this year when its offshore Jubilee energy field starts operation.

And Is “Oil Fund” all Ghana needs to defeat the Resource Curse? by Stephen Yeboah from the Department of Planning, Kwame Nkrumah University of Science and Technology

The case for the economic and political significance of oil funds remains very bleak. It is now argued by some economists that oil funds are no more effective than other measures for mitigating the threats of Dutch Disease.

… the country needs accountability, openness and transparency to defeat the resource. And what makes these three pillars meaningful in any democratic dispensation? Ghana ought to rejuvenate its institutions and governance structures to solve the paradox of plenty.

Most importantly, regulatory and legal framework in the oil and gas sector and in managing the oil fund should be made operational. Would Ghana have the capacity to enforce the laws that would govern the oil industry?

The statement by the Deputy Minister of Energy, Emmanuel Armah-Kofi Buah, that the Ministry of Energy would oversee the disbursement of funds in the “Oil and Gas Business Development and Local Content Fund” leaves much to be desired. Here, it is definitely the adherence to the political disincentives in the country where virtually the executive wields leverage even over parliament. This situation would allow public spending for personal gains. Ideally, the role to oversee and monitor the disbursement of funds should solely be assigned to an independent oversight body and parliament respectively. Parliament should exercise the authority of debating, approving and scrutinizing petroleum agreements, government transactions in and out of the oil fund.

Concerning the role of civil society organizations, there is a seemingly brighter step since Ghana is blessed with vibrant groups that are always in place to have a say in government decisions. But in the context of the oil sector, are civil society groups empowered enough to meet the difficult challenges ahead? It is worthy of note that an oil fund with small number of actors operating in nontransparent and poorly linked manner would encourage misappropriation and abuse of power. The outcome of the issue here is that limited roles of CSOs mean that the tool for ensuring transparency and openness in the oil sector is made ineffective. The Extractive Industries Transparency Initiative (EITI) is the best medium that can enjoin the role many actors, from government representative to civil society organizations.

Again, what is always significant is for the ordinary Ghanaian to be educated and made informed of what goes on in the oil and gas sector. This is to clamp down on possible uncontrolled grievances that may cause revolts.

The latest stories as of today are dated February 4th.
World Bank gives Ghana $30m for capacity building for oil and gas industry

The World Bank in a programme is giving the country an amount of $30 million for training to build capacity for the industry.

Diwan said the Bank was embarking on an “ambitious programme to train Ghanaians in the universities, financial institutions, for taxation and management” to prepare the country to be in a position to manage the oil resources.

This development has given hope to many observers who believe that the discussions are an opportunity to lead the country to develop a sound plan on how to manage the oil and to avoid the problems that many oil-rich African countries are going through presently.

I doubt any plan of the World Bank will help avoid the oil curse. The pattern of the World Bank and the IMF is to tear down any responsible government institutions with structural adjustment programs, leaving countries at the mercy of predatory global capitalism, without any institutional defense system. This is largely the point of structural adjustment programs. Ghana has already suffered and continues to suffer from loss of personel in the public sector due to structural adjustments, preventing the government from carrying out its responsibilities to the people of Ghana.

Reporting Oil and Gas is very simple in design and only puts two or three stories on a page. This is smart design, as it makes it much more useful in Ghana where there are not so many high speed connections to the internet. And Ghana is where this information is really needed.

The other story on the front page today is Investment conference in Ghana in March

International Business Event Management Ghana Limited, in collaboration with the Ghana Investment Promotion Centre (GIPC) and other stakeholders, is to host a multi-sectoral conference in March, this year, for potential investors to the Ghanaian business terrain.

The conference, dubbed: “Investing and Growing Your Business in Ghana- Challenges and Opportunities (IGB-Ghana 2010), follows the launch of the International Business Event Management Ghana Limited (IBEM-Gh. Ltd) on January 13, this year, in Lagos

“IGB Ghana 2010 conference will not only present a unique business networking opportunity for participants but would also provide the opportunity to meet and deliberate with service providers, government regulators, development partners, law firms, government agencies, ministries, Ghana Chamber of commerce and financial institutions,” he stated.

Mr. Ampah said:” the conference is bringing together manufacturers from Africa, Europe, Asia, and thee United States, adding that regional and multi-national corporate bodies, gas companies, embassies, banks and financial institutions as well as private sector operators would participate in the conference.”

Shedding some light on the launching event in Lagos, Mr. Ampah said many investors expressed their interest in investing in Ghana but expressed the need for regular power supply to avoid disruptions in their operations.

Irregular power supply is a huge handicap to businesses in Ghana, and to doing business in Ghana. It can make many activities and transactions impossible. It would be nice to see some progress to solving the problem.

There is one thing I hope Reporting Oil and Gas adds to their stories, and that is the name of the original author, if it is available. They do link to the original story, so it is possible to find who wrote a story if the author is named, but it would be nice to bring that information into the stories at Reporting Oil and Gas. Nevertheless Reporting Oil and Gas performs a valuable service well, and I recommend it to your attention.

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Added February 10:

Subsea Equipment Ready For Oil Production

The subsea equipment required for the production of oil from the Jubilee Oil Fields off the coast of Ghana in the Western region, have begun arriving in the country.

A statement issued in Accra and signed by the Communications Manager of Tullow Ghana Limited, Mr. Gayheart Mensah, said, “this is a strong indication that the operator of the Jubilee Field, Tullow Ghana Limited, is ready to produce first oil from the Jubilee Field by the last quarter of this year.”

An equipment known as “The Christmas Tree,” which is an assembly of control valves, gauges, pipes, chokes and fittings and which is installed on the ocean floor, is used to control oil and gas flow from a completed well.

The statement said that the Sekondi Naval Base and the Takoradi Port have been the main entry points for the equipment, adding that before the vessels carrying the equipment set sail for Ghana, a team from Tullow Ghana Limited visited some of the companies contracted by the Jubilee Partners to manufacture subsea structures for the project.

According to the statement, the oil discovery in the Jubilee Oil Fields has come with “expectations among Ghanaians that the oil find should transform Ghana’s economy and spin off jobs immediately. These are huge expectations that need to be managed.”

The statement is confident, “with the level of technology deployed by Tullow Ghana Limited, the operator of the Jubilee Oil Fields and the quality of personnel working on the project, the target date of producing first oil by the last quarter of this year will be met.”

An international discourse of China-in-Africa has emerged … China in Africa has more in common with the West than is usually acknowledged; … there are nevertheless notable differences between Western and Chinese presences in Africa

Map of Chinese investment in Africa 2005 (click to enlarge)

African exports to China (click to enlarge)

In December Asia Pacific Journal published:

Trade, Investment, Power and the China-in-Africa Discourse by Barry Sautman and Yan Hairong

They make a number of interesting points about the nature of China’s involvement in Africa.

An international discourse of China-in-Africa has emerged, particularly in Western countries with dense links to Africa: the US, UK and France.

The essence of the discourse then is to cast PRC policies in Africa as promoting human rights violations or “colonialism,” while implicitly comparing them invidiously with high minded US and Western practices. Some PRC activities in Africa do violate the human rights of Africans — not in ways that Western elites claim, but in much the same manner that Western policies do, through disadvantageous terms of trade, the extraction of natural resources, oppressive labor regimes, and support for authoritarian rulers, all common features of the modern world system. These are practices that China’s elites used to denounce, but now come close to extolling as dynamic capitalism. … the path taken by China is “consistent with the logic of market capitalism-liberal trade” and makes China not a colonialist, but “a successful capitalist in Africa.”

The discourse should not be inverted by arguing that China’s presence in Africa is positive and the West’s negative or that problematic Chinese activities in Africa are justified because abuses are shared with the West. The analysis of China-Africa should invoke neither a “win-win” nor dystopic representations; rather, the trees of China’s behavior should be seen as part of a world system forest and the discourse examined using comparative analysis. Our arguments are threefold: 1) given the world system, it is difficult to assess the pluses and minuses of China-in-Africa as a single phenomenon; 2) as a player in the world system, China in Africa has more in common with the West than is usually acknowledged; 3) there are nevertheless notable differences between Western and Chinese presences in Africa; many derive from China’s experience as a semi-colony, its socialist legacy, and its developing country status, features which together make PRC policies presumptively less injurious to African sensibilities about rights than those of Western states.

The US Treasury termed China a “rogue creditor.” Africa remains, however, in a Western-created “debt trap,” owing more than $300b and paying significant interest. Yet, as US Africanist Deborah Brautigam has noted, China “regularly cancel[s] the loans of African countries, loans that were usually granted at zero interest [and] without the long dance of negotiations and questionable conditions required by the World Bank and IMF.” …

OECD researchers have concluded moreover that increased PRC activities in Africa have not deepened corruption among African governments. China’s leaders know corrupt officials will siphon off part of their infrastructure loans, but its packaged loans are less likely than Western aid to being drained by corruption. As a Hong Kong journalist has noted, because China’s loans and aid are tied to infrastructure projects, that is, a large portion of the funds are allocated directly to contractors, “corrupt rulers cannot somehow use it to buy Mercedes Benzes.” A close US observer of PRC activities in Africa has argued that China’s aid is more effective than Western aid because much is used for “hydroelectric power dams, railroads, roads and fiber-optic cables, which have the potential to benefit ordinary people, no matter how corrupt the regime under which they live.”

Despite promoting a rhetoric of transparency regarding African oil-producers, Western states have not bound their citizens and corporations. Bids for oil blocks in Africa typically feature “signature bonuses,” paid to governments, which often run into the hundreds of millions of dollars. Foreign oil firms know host governments skim off large shares of what the companies pay. In a rare instance of disclosure, Western oil firms told the IMF that they paid $400m in 2001 for an Angolan oil tract, but the Angolan government claimed it received only $285m. Presumably the difference went into the pockets of government officials.

Most multinationals refuse to publish what they pay to secure oil rights. Western governments do not compel oil firms that are their own citizens to make disclosures, but “ask the tiger for its skin” (yu hou mo pi), as the Chinese say, by demanding corrupt governments publicize their own corruption.

Western policy interventions have not actually diminished the resource curse.

… oil is capital intensive, creates few jobs, is environmentally damaging and corrupts producing states. People in oil-rich regions, such as southern Sudan and Nigeria’s Niger Delta, receive so few benefits from their patrimony that violent conflict has ensued.

The China-in-Africa discourse will likely continue to focus overwhelmingly on oil in discussing PRC imports from the continent. American analysts particularly see the US as strategically competing with China for African oil. … The US government estimates African oil production will grow 91% in 2002-2025, while global production will grow 53%. Armed forces in a newly established US Africa Command will have as a main task protecting US access to oil.

US prominence in taking African oil is accompanied by its backing authoritarian rulers in almost all oil producing states.

Sautman and Hairong’s article discusses Chinese activities in Africa regarding the textiles and clothing (T&C) industries and also mining, particularly in Zambia. They provide detailed information of T&C in Africa and how it works in different countries.

If the affordability of PRC imports benefits grassroots African consumers, there are in any case only seven countries that receive a significant share (5-14%) of their imports from China. Basic consumer goods do not predominate among PRC exports, but rather “machinery, electronic equipment and high- and new-tech products.” A UK government study found that in only one African country, Uganda, are basic consumer goods more than a fifth of the value of all goods imported from China and that PRC imports into Africa mainly displace imports from elsewhere and have little effect on local production. The PRC government recognizes that some exports are of poor quality. Many Chinese goods are brought to Africa by private Chinese or African entrepreneurs whom the PRC government does not control. It nevertheless has “in place stringent measures to ensure that its goods meet all the minimum quality standards for exports [and] a ministry to ensure low quality goods are not exported.”

WB/IMF-mandated structural adjustment programs (SAPs) were the actual gravediggers of African T&C production. The influx of second-hand clothing from developed countries particularly reduced domestic markets for African T&C producers.

A balance of positive and negative impacts for China’s exports to Africa is not easily drawn. Yet, as to the T&C industry, the balance is less negative than the discourse makes out. Its fixation on Africa’s T&C industry is non-comparative and lacks historical context, as China did not contribute to the steep decline in African T&C through SAPs [structural adjustment programs], while Western states have yet to restrict their used and new clothing exports to Africa.

Most foreign direct investment (FDI) inflows to Africa come from Europe, along with South Africa and the US. These countries together account for more than half of Africa’s FDI inflows. China had only $49 million in FDI in Africa in 1990 and $600m in 2003. Its FDI stock in 2005 was $1.6b, of $57b in global PRC FDI. In 1979-2000, the most recent years for which figures are available, 46% of PRC FDI in Africa went to manufacturing (15% to textiles alone), 28% to resource extraction, 18% to services (mostly construction) and 7% to agriculture. The PRC has said it will encourage investment in Africa’s industrial processing, infrastructure, agriculture, and natural resources.

Investments thus also figure in the China-in-Africa discourse.84 Even more than with trade, the discourse is narrowly focused; its primary focus has been on only one investment by one Chinese SOE, among the more than 800 major PRC enterprises in Africa, 100 of them large SOEs. Western media have devoted hugely disproportionate attention to the Non-Ferrous Company-Africa (NFCA) Chambishi copper mine. The upshot of these reports is that “the Chinese” are Africa’s super-exploiters.

Sautman and Hairong discuss the low wages, no job security, lack of health care and unsafe working conditions for miners in Zambia. Zambian miners had previously enjoyed some health benefits and better wages. The authors point out that the lowered wages, reduced safety, and lack of health care date to the privatization of the mining sector mandated by the World Bank.

In drawing their conclusions they write:

The China-in-Africa discourse in the West for the most part insists that Chinese have particularly positioned themselves to exploit Africa and Africans; for example, by supporting authoritarian rulers in countries like Sudan and Zimbabwe. Several Western states, however, directly support despots by providing military assistance and legitimacy. In fact, US assistance to African rulers for purchases of US arms and the training of African states’ military forces has increased significantly under the Obama Administration. China is thus not likely to fare worse than the West in an evaluation of how foreign investments impinge on development and human rights in Africa.

The modalities of trade examined for development implications commonly involve the import and export of goods. There is also trade in money and people however. Western, but not PRC, banks have traded secrecy and interest to the exporters of 40% of Africa’s private wealth. Western states trade citizenship for the skills of professionals, especially doctors and nurses, trained in, but now largely lost to Africa. These forms of trade likely impinge as much as commodity exchange on Africans’ right to development.

The main problem with the China-in-Africa discourse is not empirical inaccuracies about Chinese activities in Africa, but the de-contextualization of criticisms for ideological reasons. Some analyses positively cast Western actions in Africa compared to China’s activities; others lack comparative perspective in discussing negative aspects of China’s presence, so that discourse consumers see a few trees, but not the forest. Such analysis reflects Western elite perception of national interests or moral superiority as these impinge on “strategic competition” with China. Many analysts scarcely question Western rhetoric of “aiding African development” and “promoting African democracy,” yet are quick to seize on examples of exploitation or oppression by Chinese interests.

To comprehensively interrogate Chinese and Western activities in Africa is to question a global system that has in many respects de-developed Africa and into which China is increasingly integrated. Failing that, one is left with little more than a binary between a Western-promoted new “civilizing mission” on behalf of Africans and activities of the “amoral” Chinese, who refuse to fully endorse that mission by not adopting trade and investment practices wholly compliant with neo-liberalism. China, after all, can and does throw this binary back in the face of its proponents by portraying the West as seeking a new tutelage for Africans and China as eschewing the role of intermeddler, while promoting “win-win” trade and investment. So too do many Africans. The popularity of features of China’s presence in Africa, compared with that of the main Western states, goes well beyond elites. The 2007 Pew Global Attitudes Survey asked Africans in ten countries to compare the influences of China and the US in their own countries. In nine of the ten countries, by margins of 61-91%, African respondents said Chinese influence was good. These percentages substantially exceeded those for the US. One important implication of the Chinese presence in Africa then is that Western states and firms may need to engage in greater self-reflection about their own presence in the continent.

There is much more, I can hardly do justice to this meticulously well sourced article and recommend you read it for yourself: Trade, Investment, Power and the China-in-Africa Discourse.

Secretary Clinton is visiting seven countries in Africa this week, Kenya, South Africa, Angola, the Democratic Republic of the Congo, Nigeria, Liberia, and Cape Verde. She is visiting to secure safe profits from Africa for American corporations. She began her trip by addressing an AGOA conference in Kenya.

Waiting for work in the EPZ

Waiting for work in the EPZ

Tuendelee Mbele EPZ Workers Welfare is a registered self-help organization founded in 2004 by workers in Kenya’s Export Processing Zones (EPZ).  EPZs have been set up around the world to provide cheap labour to corporations. In Kenya’s zones, as in those of other countries, national labour standards are not enforced. In Kenya companies get a 10 year tax holiday, exemption from import/export tariffs and no restriction on foreign investment and ownership. When Kenya allowed EPZs in the textile industry, the home-grown textile industry collapsed and workers were forced to take jobs in the zone where conditions are horrendous: harder work, less pay, brutal quota systems, no sick care, no sick leave, no maternity leave, extensive sexual harassment. Workers know what time they begin in the morning, but not what time they end.
Pamoja Tunaweza, a registered Kenyan CBO (non-profit), is currently delivering an outreach project with a focus on workers, women and teens. EPZs have been set up around the world to provide cheap labour to corporations. In Kenya’s zones, as in those of other countries, national labour standards are not enforced. In Kenya companies get a 10 year tax holiday, exemption from import/export tariffs and no restriction on foreign investment and ownership. When Kenya allowed EPZs in the textile industry, the home-grown textile industry collapsed and workers were forced to take jobs in the zone where conditions are horrendous: harder work, less pay, brutal quota systems, no sick care, no sick leave, no maternity leave, extensive sexual harassment. Workers know what time they begin in the morning, but not what time they end. Photos by Phil Vernon

AGOA is an act of the US Congress passed to benefit the US. It is not a treaty or an international agreement. In Kenya Steve Ouma Akoth writes that there are a number of subjects which are taboo in discussion of AGOA both for the US and for the countries supposedly benefitting from AGOA. He describes three of these taboo subjects.

PRECARIOUS AND POVERTY JOBS
NATIONAL LABOUR LAWS AND PRACTICE
TRADE POLICIES OF THE US GOVERNMENT AND PURCHASING PRACTICES

Of the first, precarious and poverty jobs, he writes:

… for the first time after the industrial revolution, such huge numbers of unorganised labourers, especially women, are coming under the productive sway of large-scale capital.

Although the zones boast of creating 30,000 jobs, mostly for women, many of the women workers interviewed feel that their jobs are failing to help them and their families work their way out of poverty. So they are struggling and campaigning to turn their jobs into the potential they promise – to be a path for poverty reduction for themselves, their households and their communities.

Of national labour laws:

… there has been enormous pressure on the government of Kenya to trade away workers’ rights, in law and in practice, for a place in the global economy.

Pressure has also been coming from the International Monetary Fund (IMF) and World Bank. The two institutions, which were major sponsors of the EPZs, have advised the government of Kenya to adjust their labour laws to meet sourcing companies’ demands. This conveys an unspoken message: Labour standards should be defined not by governments, but by market forces.

This creates horrendous conditions for workers, who among other practices are forced to work extensive unpaid overtime. This is slavery:

Workers are forced to sign-out for official records and then remain locked in factories to meet the ‘targets’.

And of US trade and purchasing practices:

The third taboo subject relates to trade policies of the US government and their corporate courtiers who are the sourcing companies from Kenya’s EPZs. Take textiles for instance. Under AGOA, Kenya is expected to attain sustained and competitive domestic production of cotton by 2012. 2012 is the sunset date for the exception under the rule of third party origin. Thus for Kenya to continue exporting apparel products to the US, the cotton used from 2012 must originate from Kenya. The idea of producing cotton domestically is a good one. But this assumes that all cotton producing countries or those with the potential for production like Kenya are collectively governed by the World Trade Organization (WTO) rules. This aspiration is silent on America’s trade-distorting domestic subsidies which amount to about US$3.8 billion or 80-90 per cent of total US support for cotton. Domestic subsidies also make up almost all of the European cotton subsidies. The over-subsidy of cotton by the US (held at ransom by big corporations and its domestic farm barons) has been a taboo topic not only in AGOA but also within the WTO circles. During the WTO meeting in 2005, the African Ministers had demanded that 80 per cent of domestic subsidies for cotton be eliminated by the end of 2006, and the rest within a few years. There has been no move on this subject. It is a taboo subject that received not even a mention from the US President Obama during his most recent trip to Ghana.

Phil Vernon of SOLID and Pamoja Tunaweza, reports regarding the Kenyan EPZs:

When Kenya allowed EPZs in the textile industry, the home-grown textile industry collapsed and workers were forced to take jobs in the zone where conditions are horrendous: harder work, less pay, brutal quota systems, no sick care, no sick leave, no maternity leave, extensive sexual harassment. Workers know what time they begin in the morning, but not what time they end.

If you scroll down the Pamoja Tunaweza page, you will find a slide show of pictures revealing more about working and living conditions with the EPZs.

Steve Ouma Akoth tells us the attitude towards labour of US corporations operating in Kenya, and in other countries under AGOA is simple:

Make it flexible and make it cheap. …
The companies’ toolkit includes hiring more vulnerable workers who are less likely to organise – women, often immigrants into the urban centres – and intimidate or sack those who do try to create trade unions and stand up for their rights.

Firoze Manji writes:

With China, India, Brazil, Saudi Arabia, Russia and other emerging powers competing for access to Africa’s natural resources, including oil, there is little doubt that the US belligerence during the era of the Bush junta has potentially created conditions favourable to the new players. Clinton’s visit is directly related to seeking to protect and advance American corporate interests in oil and natural resource exploitation in Africa.

However, as reported by Reuters: China, others shove US in scramble for Africa

A presidential visit followed by U.S. Secretary of State Hillary Clinton’s African tour cannot conceal a stark reality: China has overtaken the United States as Africa’s top trading partner.

Chinese labor practices also involve horrendous slavery conditions. But these are the way China practices business at home. This is capitalism without democracy.

In Sudan China focuses on oil wells, not local needs.

Andrew Small, a China specialist at the German Marshall Fund, a public policy institute, points out that many of Beijing’s worst practices in Africa today stem not from colonialist attitudes, but from China’s own level of development. “Every mining disaster in Zambia, forced resettlement around [Sudan’s] Merowe dam,and corrupt deal with government officials, has its counterpart in[China’s] Dongbei, the Three Gorges dam, Shanghai, and elsewhere,” he points out.

“There is an attitude among many Chinese that Africa – like Asia decades before – is primed for a developmental take-off … making it a business and investment opportunity rather than just a benighted part of the world that needs to be saved or solely a repository of natural resources,” he says. “[China] will be in the unusual position of being both a superpower and developing country for some time to come, with parts of the Chinese interior having far more in common with Africa than with the West.”

True, perhaps, but the colonial comparison itself is meaningless, says Robert Rotberg … the Chinese are stripping thecontinent of raw material as fast as they can and are fairly ruthless about bringing their own laborers for projects and ignoring locals.

And more from Firoze Manji regarding the breathtaking arrogance of the US Africa Command:

And that brings us to the third dimension. This visit is also about negotiating for AFRICOM to have greater presence in Africa. It is hardly a coincidence that just as Clinton begins her junket, so AFRICOM announces its MEDFLAG initiative in Swaziland.

‘African Command’ does not mean Africans in command, just as the African Growth and Opportunity Act is not about growth and opportunity for Africa, but rather for US corporations. Security is high on the agenda. But it is the security of US corporate interests that is at the heart of Clinton’s agenda, not human security, the security of ordinary people to thrive, to be secure that their children will be safe from impoverishment, secure in the knowledge that they will be able to work; and working, to transform their world to serve the interests of humanity, not the narrow interests of a minority in the North.

There is no democracy in the institution of the Africa Command, as there is no democracy in the trade practices described above facilitated by AGOA. America’s advantage is as an example and advocate of democracy and human rights. When the US undermines democracy and human rights, as with the labor practices in the EPZs, it undermines its own advantage in Africa. Although Bush did enormous damage to the US brand, it may be possible to recover, but only if the US practices some of the democratic and human rights principles it preaches. Being poor does not mean people are blind or stupid. They know when they are being cheated and abused. As Steve Ouma Akoth points out:

People who sell their labour have certain inalienable rights. These rights are premised on the fundamental belief that human beings are entitled to a dignified life. Therefore, working conditions must satisfy the minimum requirements of dignified existence. And this is a fundamental principal in the International Labour Organization (ILO) Conventions. It is on this logic that ILO prohibits any form of slavery, servitude and forced labour. The practices above and sexual harassment that constitute the trademark of EPZs in Kenya are coming under microscopic scrutiny due to the value attached to human dignity.

________

Added September 18, 2009:

I made some updates and corrections above as advised by Phil Vernon in the comments. He also recommends reading:

Manufacture Of Poverty

Abstract:
In its advocacy for worker’s rights, the Kenya Human Rights Commission’s research into Women Working in Precarious Conditions in Export Processing Zones confirms the negative effects the conduct and actions of these key non-state actors have on human rights. Hence, justifying the need for monitoring by civil society in this new world order, where private corporations exercise inordinate influence over local laws and policies. With the decline in state authority, focus must therefore be turned to those sectors that have filled the void. The conduct and actions of these non-state actors have a direct impact on human rights ranging from violations of workers’ rights to environmental degradation.

Commonly hired on short-term contracts – or with no contract at all – women work at high speed for low wages, in unhealthy conditions, and they are forced to put in long hours to earn enough just to get by. Most get no sick leave or maternity leave, few are enrolled in health schemes and almost none have savings for the future. The insecurity of these jobs is not only material: they work under threats of sexual harassment. Traditionally, women are the care-givers in the home – raising children and caring for sick and elderly relatives. Women are still forced to play that role even when they have become cash-earners. Doubly burdened, and with little support from their governments or employers to manage, the stress can destroy their own health, break up their family lives and undermine their children’s chances of a better future.

The result? The very workers, who are the backbone of export success in many developing countries, are being robbed of their share of the gains that trade could and should bring. The impact falls on poor communities in rich countries, too, where workers employed in competing trade sectors likewise face precarious conditions. Many workers in the Kenyan Textile Industry feel worn-out after several years of hard work.

These charts tell us all we need to know about the militarization of the US economy, which has marched hand in glove with the militarization of US foreign policy.

US durable goods shipments from 2000-2009

US durable goods shipments from 2000-2009 (shown full size)

___________

US shipments and orders of durable goods 2008-2009

US shipments and orders of durable goods 2008-2009 (shown full size)

This trend is a particularly ominous sign for American democracy. Back in 2006 Harpers published a conversation about American democracy and the military over the question of whether a military coup is possible in the United States, American coup d’etat: Military thinkers discuss the unthinkable. Participating in the conversation were Andrew Bacevich, Brig. Gen. Charles J. Dunlap Jr., Richard Kohn, Edward Luttwak, and Bill Wasik. A number of interesting points were discussed.

BACEVICH: … another crucial reason there could never be a military coup in the United States: the military has learned to play politics. It doesn’t need to have a coup in order to get what it wants most of the time. Especially since World War II, the services have become very skillful at exploiting the media and at manipulating the Congress—particularly on the defense budget, which is estimated now to be equal to that of the entire rest of the world combined.

WASIK: If we are talking about a “creeping coup” that is already under way, in what direction is it creeping?

BACEVICH: The creeping coup deflects attention away from domestic priorities and toward national-security matters, so that is where all our resources get deployed. “Leadership” today is what is demonstrated in the national-security realm. The current [Bush] presidency is interesting in that regard. What has Bush accomplished apart from posturing in the role of commander in chief? He declares wars, he prosecutes wars, he insists we must continue to prosecute wars.

KOHN: By framing the terrorist threat itself as a war, we tend to look upon our national security from a much more military perspective.

BACEVICH: We don’t get Social Security reform, we don’t get immigration reform. The role of the president increasingly comes to be defined by his military function.

KOHN: And so our foreign policy becomes militarized. We neglect our diplomacy, de-emphasize allies.

BACEVICH: … Meanwhile, we’ve underfunded the State Department for twenty-five years.

DUNLAP: Well, I don’t think it’s anything new that the State Department is underfunded. The State Department has no bases in any state, so it does not have a constituency.

KOHN: One of the great pillars in our history that has prevented military intervention in politics has been the military’s nonpartisan attitude. That’s why General George Marshall’s generation of officers essentially declined to vote at all, as did generations before them. In fact, for the first time in over a century we now have an officer corps that does identify overwhelmingly with one political party. And that is corrosive.

WASIK: So it seems clear that whether we like it or not, the military has learned how to use the political system to protect its interests and also to uphold what it sees as its values. Thinking over the long term, are there any dangers inherent in this?

KOHN: Well, at this point the military has a long tradition of getting what it wants. If we ever attempted to truly demobilize—i.e., if the military were suddenly, radically cut back—it could lead if not to a coup then to very severe civil-military tension.

BACEVICH: Because the political game would no longer be prejudiced in the military’s favor.

KOHN: That’s right.

BACEVICH: But there is a more subtle danger too. The civilian leadership knows that in dealing with the military, they are dealing with an institution whose behavior is not purely defined by adherence to the military professional ethic, disinterested service, civilian subordination. Instead, the politicians know that they’re dealing with an institution that to some degree has its own agenda. And if you’re dealing with somebody who has his own agenda, well, you can bargain, you can trade. That creates a small opening—again, not to a coup but to the military making deals with politicians whose purposes may not be consistent with the Constitution.

Looking at the charts above, it looks like there has already been a coup of sorts on the economy. If spending on the military were reported the way spending on health care is reported, people would be asking some serious questions about this. One can certainly argue that public health and health in general is an equally important part of the defense of a country and its citizens, though I have not ever seen the argument framed in those terms. Of course the money issues are not going to be reported the same way. We have just seen what happens with our corporate dominated news business. Even when news reporting results in actual news getting reported, and is good for ratings, if the major corporations who own the news companies see it as harmful, it will be censored and shut down, witness the Olbermann O’Reilly feud.

China is the paymaster for current US military spending. And China is also a target of US military attention. China is perceived as a great rival for the natural resources of Africa, especially oil, which is one major reason for the creation of the US Africa Command, AFRICOM. We can infer a number of things from the charts above, especially if the trend they map continues. Among those is that the Africa Command will grow, and increase its interference with people, countries, and governments in Africa. The other is that China will have increased ability and power to control what the US says and does, much in the way that the corporate paymasters shut down the Olbermann O’Reilly feud. After all, when your finger is between someone’s teeth, you don’t hit him on the head.

The New York Times gave Darfur nearly four times the coverage it gave the Congo in 2006, while Congolese were dying of war-related causes at nearly 10 times the rate of those in Darfur.  Graph: John Emerson (backspace.com)

Two graphs, the New York Times gave Darfur nearly four times the coverage it gave the Congo in 2006, while Congolese were dying of war-related causes at nearly 10 times the rate of those in Darfur. Graphs: John Emerson (backspace.com)

Julie Hollar has written a superb analysis of why the conflict in the Congo is ignored by the media; Congo Ignored, Not Forgotten, When 5 million dead aren’t worth two stories a year. She covers when and why coverage was better, and what is going on now. I won’t repeat all she writes, it is well worth reading. Near the end she includes this paragraph:

Paying attention to the Congo would also mean reporting on the main factor fueling the conflict: the plunder of the country’s resources, which primarily benefits multinational corporations. The conflict areas of the Congo are rich with minerals like copper, tin, gold, diamonds, cobalt and coltan, a mineral used for cell phones and other common electronic devices. Rebel groups who hold these areas sell off the minerals at cut-rate prices, using the profits to maintain power as big companies look the other way. As happened with conflict diamonds in Sierra Leone and Angola, activists are pushing for a mechanism to make corporations verify that they aren’t buying the Congo’s conflict minerals.

The GDP of both Rwanda and Uganda include minerals stolen from the Congo. So far both countries are rewarded for this theft by praise for their economic progress, and of course by the money these minerals bring. Too many people in too many countries are profiting from Congo’s wealth. Canada is the largest mining interest in the Congo, and funds a lot of the conflict. Mostly all parties are perfectly willing to see the conflict continue. Despite the massive number of deaths, the use of rape as a form of terrorism, used along with murder and dismemberment to threaten and depopulate areas, and the conscription of children as soldiers by all sides, most of the media coverage of the Congo conflict involves endangered gorillas or Angelina Jolie. Media coverage discounts and ignores the people of the Congo.

The Congo conflict is sometimes known as Africa’s world war. Here is a list from 2001 of many of the parties involved, from Natalie Ware at American University.

  • The Democratic Republic of Congo (DRC):
    * Hutu Interhamwe militia – mostly from Rwanda and responsible for 1994 genocide of Tutsis in Rwanda
    * Former Hutu members of the Rwandan military – also responsible for 1994 genocide of Tutsis in Rwanda
    * Mai Mai – group of traditional Congolese local security forces
    These groups operate inside the DRC supporting the government “often as guerillas operating inside territory held by antigovernment forces” (U.S. State 2001)
  • Libya – provides arms and logistical support but no troops
  • North Korea – sent advisors to train government troops
  • Rwanda – supports Congolese Rally for Democracy based in Goma (RCD/Goma) and Congolese Rally for Democracy based in Bunia (RCD/Goma); majority Tutsi
  • Uganda – supports the Movement for the Liberation of the Congo (MLC); mainly non-Tutsi
  • Burundi – fights against various Hutu groups based in the DRC that are against the Tutsi-led Burundi government
  • Angola – supports the government of the DRC
  • Namibia – supports the government of the DRC
  • Zimbabwe – supports the government of the DRC
  • Sudan – supports the Alliance of Democratic Forces (ADF); Ugandan expatriates against the government of Uganda

The conflict in the DRC is often characterized as an ethnic conflict. It is a resource war. The various sides exploit ethnicity when it works to their advantage in the pursuit of mineral and other natural resources. All the groups engaged in fighting in the Congo engage in terrorism and conscript children.

China is missing from the above list, its presence has expanded greatly since 2001. The west is entirely missing from the list. Canada, the United States, the UK, countries of the EU, are all players in one form or another, and have been for some time. They are a huge market for the stolen mineral wealth of the Congo, and home base for the multinational corporations who fuel the plunder. Canada is the biggest player in mining. China is also heavily involved in mining in the Congo. The US is supplying a great deal of military training and arms transfers to Rwanda and Uganda, which extend their reach and power into the Congo.

Barclays off-shore banking will bring more of this to Ghana

Barclays offshore banking will bring more slums like this to Ghana

In a move guaranteed to increase poverty and crime throughout Ghana and West Africa, Barclays Bank, at the 2005 invitation of former President Kufuor, is setting up off shore banking in Ghana. Other big banks are waiting to join in the tax haven business in Ghana following Barclays lead.

Barclays bank is playing a lead role in the establishment of a tax haven in Ghana, in a move that could see huge mineral wealth in west Africa vanish into it from poverty-stricken countries’ coffers, the Observer can reveal.

The controversial British lender has for the last four years worked closely with the Ghanian government to start an International Financial Services Centre offering low taxes and minimal financial disclosure.

Development charities fear that the establishment of a fully operating tax haven so close to oil- and mineral-rich countries such as Nigeria, Sierra Leone and Equatorial Guinea will encourage a rapid increase in tax and capital flight.

There is also concern that cocaine barons, increasingly using west Africa as a trafficking route into Europe, could launder drug money through Ghana.

Oil-producing nations are plagued by corruption and drug trafficking and the creation of this international financial services centre will make this worse – not better.”

This move was initiated in 2005 by former President Kufuor. In light of what we now know about the theiving and raids on the treasury by himself and his cronies, it looks like they were planning ahead to hide stolen assets from the people of Ghana. We know Kufuor initiated this move from an article on GhanaWeb in 2005, when the offshore banking plans got underway:

Barclays Bank to assist Ghana establish off-shore banking
2005 Accra, March 30, GNA
Barclays Bank Plc is to assist the Government to establish off-shore banking in Ghana, Mr David Roberts, Executive Director of the Board of Directors of Barclays Plc and Barclays Bank Plc, said on Wednesday.

“We have to make the necessary arrangements to make off-shore banking operational in Ghana,” he said in reaction to an appeal by President John Agyekum Kufuor that the Bank cooperated with the Government to establish offshore banking.

President Kufuor made the appeal when a delegation of the Bank’s Directors attending the first International Executive Committee Meeting outside Europe in Accra, paid a courtesy call on him at the Castle, Osu.

The discovery of oil in Ghana was not announced until June 2007. But by 2005 they knew it was in the works. The Cape Three Points Deep Petroleum Agreement was signed in 2002, and potential oil fields mapped, also in 2002. So it seems likely Kufuor and his NPP cronies were planning for the influx of oil cash, and a place to stash and hide the money conveniently close to home. Even without oil, their misappropriation of government assets is impressive. There are many examples documented on GhanaWeb, such as Massive looting at Ministries, especially since the change in government has brought a bit more transparency. Financial transparency is what every watchdog group says is needed in the African oil and resource business. Financial transparency is what off shore banking is designed to eliminate.

Barclays Bank has been repeatedly implicated in illegal and unethical banking operations. In March the Guardian published a number of internal memos from Barclays, from WikiLeaks:

The documents are copies of alleged internal memos from within Barclays Bank. They were sent by an anonymous whistleblower to Vince Cable, Liberal-Democrat shadow chancellor. The documents reveal a number of elaborate international tax avoidance schemes by the SCM (Structured Capital Markets) division of Barclays.

According to these documents, Barclays has been systematically assisting clients to avoid huge amounts of tax they should be liable for across multiple jurisdictions.

A commentator to the Financial Times stated:

I was lucky enough to read through the first of the Barclays documents…

I will say it was absolutely breathtaking, extraordinary. The depth of deceit, connivance and deliberate, artificial avoidance stunned me. The intricacy and artificiality of the scheme deeply was absolutely evident, as was the fact that the knew exactly what they were doing and why: to get money from one point in London to another without paying tax, via about 10 offshore companies. Simple, deliberate outcome, clearly stated, with the exact names of who was doing this, and no other purpose.

Until now I have been a supporter of the finance industry – I work with people there regularly and respect many of them, and greatly enjoy the Financial Times and other financial papers. However this has shone a light on something for me, and made me certain that these people belong in jail, and companies like Barclays deserve to be bankrupt. They have robbed everyone of us, every single person who pays tax or who will ever pay tax in this country (and other countries!)

If Barclays can get away with this in the UK, with UK laws and enforcement, how much more can they get away with in Ghana, where the current legal and enforcement communities have a much shorter history, and are grossly underpaid.

Barclays have also been implicated in corrupt associations and illegal dealings with Equatorial Guinea, and along with other banks in Angola. From the BBC:

The same lax regulation that created the credit crunch has let some of the world’s biggest banks facilitate the looting of natural resource wealth from poor countries.

I have quoted Nicholas Shaxson in previous posts, but what he says regarding the movement of money is right on the mark:

There are basically three forms of dirty money. One is criminal money: from drug dealing, say, or slave trading or terrorism. The next is corrupt money, like the fromer Nigerian dictator Sani Abacha’s looted oil billions. The third form, commercial money – what our finest companies and richest individuals hide from our tax collectors – is bigger. The point – and this is crucial – is that these three forms of dirty money use exactly the same mechanisms and subterfuges: tax havens, shell banks, shielded trusts, anonymous foundations, dummy corporations, mispricing schemes, and the like, all administered by a “pinstripe infrastructure” of mainstream banks, lawyers, and accountants.
. . .
In this parallel secret universe the world’s biggest and richest individuals and firms, News Corporation, Citigroup, and, yes, ExxonMobil – can quite legally cut themselves loose from pesky full taxation and grow explosively, leaving smaller competitors, who pay their full dues along with the rest of us, choking in their dust. This undermines the very notion of capitalism: the big companies’ advantage has nothing to do with the quality or price of what they produce. If you are worried about the power of big global corporations, don’t always attack them directly, but attack bank secrecy instead. This is the clever way to take on the big fish, using a net that would also snag the Sani Abachas, the Mobutus, the North Koreas, the terrorists, and the drug lords.
(Poisoned Wells: The Dirty Politics of African Oil, by Nicholas Shaxson, p.225&227, ISBN 978-1403971944)

In 2007 Kufuor and Barclays raved on about what a wonderful opportunity offshore banking would be for Ghana:

President Kufuor said … the Government was fully aware of the numerous challenges and difficulties inherent in the operation of the facility and gave the assurance that the necessary safeguards had been put in place to stave off abuses.

Legal and administrative measures, he said, had been enacted to provide the needed checks and balances within the economy in particular and society in general.

“These measures should promote best practices in service delivery. More importantly, they should affirm the good faith and determination of the entire society to make Ghana a safe, secure and peaceful environment for investment.”

President Kufuor, through whose initiative the offshore banking had become a reality, said It must help to transform the financial system for accelerated socio-economic development.

He said last year, 658 billion dollars was transferred from developing countries to the developed countries, noting that if about half of this had been lodged in such a facility in Africa, the pace of development of the Continent would have been tremendously enhanced.

If that money had gone into offshore facilities in or near the developing countries, it would have made no difference. The reason for offshore banking is to evade the checks, balances, and safety measures. In fact, offshore banking will allow and promote the legal and illegal theft of money from Ghana, and is designed to do just that. Corporate money, drug money, stolen money, money from arms deals, money from illegal bunkering and corrupt politicians, all disappear offshore. Barclays and other big banks take money out of the reach of the countries those assets came from, and out of the reach of the governments and the citizens they are supposed to serve. I doubt Kufuor’s lavish praise for offshore banking was due to naivité. He was planning to be one of those advantaged by the bank at the expense of his own country. It is not for nothing he is known as Thiefuor to many of his countrymen.

Aside from those few who become very rich indeed, oil, and other extractive resources can make a country much poorer. The phenomenon is described in this article in Foreign Policy:

Collier’s model shows that producers of oil, timber, and minerals would on average see their gross domestic products rise by 10 percent in the first seven years, only to have them crash two decades later to only 75 percent of where they started. Sudden cash flows in unprepared countries, he says, lead to unsustainable public consumption, rising inflation, soaring inequality, trade protectionism, and a real danger of civil war.

As Shaxson points out:

People often put the problem like this: oil money would be a blessing but politicians steal it, so people don’t see the benefits. But it’s much worse: the oil wealth not only doesn’t reach ordinary people, but it actively makes them poorer.

Barclays and other big banks help make and keep the majority of people poorer. They insure there is no level playing field. Offshore banking is the tool that possessors of criminal money, corrupt money, and commercial money use to hide that money from its source, and to prevent reinvestment in the people and the places the money came from. That is why it is so shameful for Ghana to be setting up offshore banking. It is shameful that a former president initiated and promoted this tool to steal from the Ghanaian people, and it is shameful for the current government if they allow this to proceed as planned. If offshore banking goes forward, slums such as in the picture above will expand exponentially, people will suffer and die because their assets are being stolen from them, and they have nothing to fall back on.

imfpoultryEU dumping chicken parts on Ghana, cartoon by Khalil Bendib for corpwatch.org

Once again it looks like Africa will get to to subsidize the disasters of western capitalism.

In past global downturns, the severity of the impact on Africa varied considerably from state to state. This downturn is washing up on all of the continent’s shores, cramping both the formal and informal sectors as currencies lose value, the cost of imports rise, and living standards fall. As the big engines of regional growth have slowed – South Africa in the south, Nigeria in the west, and Kenya in the east – the contagion has spread to poorer countries in the landlocked interior.

Economists, investment analysts and policymakers were all slow to see this coming. Until late last year, many believed that the poorest continent would escape relatively unscathed from the gathering storms. This was partly because African banks were not exposed to the toxic assets eating away at Wall Street and the City of London.

It also resulted from the belief that the continent’s strengthening economic performance has been the result of interwoven trends, not just the commodity boom. …

it now seems painfully obvious just how vulnerable this emerging recovery was likely to be, given its roots in world trade and a relatively narrow base of exports.

Ghana has already suffered at the hands of the free marketeers, the banksters who are eliminating the middle class, and crushing the poor everywhere. Ghana has been the victim of agricultural dumping, chicken and tomatoes from the EU, plus rice from the US. From CorpWatch in 2005:

In 1992 domestic poultry farmers supplied 95 percent of the Ghanaian market, but by 2001 their market share had shrunk to just 11 percent. The imported chicken is available (wholesale) at a price that is only slightly more than half of the wholesale price of local chicken.

The accompanying loss of jobs has also been remarkable. The industry has lost 150 jobs in the past few months alone, say the Farmers Associations. Commercial poultry farms — which do not include small rural producers — employ up to 5,000 people. Any job loss has far reaching implications for Ghana’s 20 million people because each worker often provides support for numerous others in their household.

Foreign producers currently pay a 20 percent tariff or tax on the poultry they send to Ghana. Two years ago, the Ghanaian Parliament passed a law allowing an additional 20 percent tariff to be imposed on imported chicken, bringing the overall tariffs to 40 per cent.

In a dramatic move, just two months after the law was passed, the Customs and Excise Preventive Services (CEPS), the body responsible for implementing the tariffs, issued an order reversing the decision. The new tariffs were said to be in conflict with regional tariffs. In other words, the proposal have been blocked by the International Monetary Fund (IMF), an institution in which the Ghanaian government has less than 0.5 per cent of the vote.

Adding insult to injury:

The IMF made it clear that it was opposed to the higher tariffs on the grounds that it will hurt Ghana’s poverty reduction program.

Wheareas IMF policies consistently increased the number of unemployed, expanded poverty, and decreased productivity and self sufficiency in Ghana as in most countries.

There is some question as to whether a 40 percent tariff on the chicken would actually solve the problem. According “For Richer or Poorer” an April 2004 report released by Christian AID, it was estimated that “tariffs would need to be 80 percent, four times their current level” to allow local producers and processors to compete fairly with EU imports,” because “European producers gave enjoyed decades of subsidies, support and protection from their government.”

In fact IMF policies expand and increase the reach of poverty:

“It is through no fault of ours that our production costs are high,” he adds. “Just look at electricity and water tariffs, as well as the price of petrol and diesel. So, in plain terms, our government is telling us to fold up.”

As pointed out farther along, those electricity and water tariffs are the direct result of IMF actions.

In fact, most members of the once thriving 400,000 member National Association of Poultry Farmers have folded up. And Ghana’s rice and tomato industries are equally threatened.

… Ghana was on the way to becoming self-sufficient in rice production in the 1970s and 1980s. But the IMF structural adjustment program halted farm subsidies to rice farmers. Ghana now produces a mere 150,000 tonnes of rice, or 35 percent of its domestic need.

No longer able to farm because of the high prices of agriculture inputs, many young people are flocking to the urban centers searching for non-existent jobs. More displaced people from the rice and poultry sectors are bound to increase the numbers drifting to the urban centers, causing social problems.

The greed and theft of Wall Street are hitting Ghana through no fault of Ghanaians:

This is a good place to survey what Wall Street and the City of London did to the world. Ghana, which has met its millennium goals on children in primary education and cutting poverty, has been an economic and political success story, with high growth. A centre-left government has just taken over after hard-fought but peaceful elections. It is better protected than some, the prices of its gold and cocoa holding up in the recession. Offshore oil will flow in a few years.

But last year world food and oil prices soared. China’s slashed demand for raw materials is harming much of Africa. Global warming caused a drought that drained the dam powering Ghana’s electricity, requiring crippling oil imports. The last government borrowed to cover these unexpected costs, the currency dropped in value, inflation rose to 20% and credit has dried up.

Economists at the NGO Oxfam point out that this was not caused by profligacy, but by external events last year. A further source of bitterness: if rich countries had kept their 2005 Gleneagles promises, as Britain did, Ghana would have received $1bn, with no need to borrow at all.

Where should Ghana turn? To the IMF, of course, now the G20 has swelled its treasury. But there is deep political and public resistance after previous bad experience. Remember how humiliated Britain felt going cap in hand to the fund in 1976. Ghanaians know how World Bank and IMF largesse came with neoliberal quack remedies.

Cutting public services, making the poor poorer, putting cash crops and trade before welfare was the old IMF way. It was the IMF that insisted on meters for Ghana’s water supply, demanding full cash recovery for the service, steeply raising costs for the poorest. The World Bank insisted on a private insurance model for Ghana’s health service that has been administratively expensive and wasteful. The new government rejects it, promising free healthcare for children. The IMF wants subsidies for electricity removed, again hitting the poorest hardest. A market policy of making individuals pay full cost for vital services instead of general taxation has made the IMF hated; Ghana has now voted for more social democratic solutions. Freedom from the IMF feels like a second freedom from colonialism to many countries.

No wonder the new government hesitates to apply for a loan

The IMF protests that it has changed: it no longer prescribes or monitors so oppressively, and countries seeking loans can set their own goals. A British cabinet minister was quoted on G20 day as saying that it should be no more stigmatising than “going to a spa to recuperate”. Arnold Mcintyre, the IMF’s representative in Ghana, insists that it would be entirely up to the government to propose its own measures. This is, to put it politely, disingenuous.

Every government knows what it has to do to get credit, so Ghana has already said it will lower its deficit from 15% to 9.5% of GDP in one year, steeply cutting public sector costs. “They can do it through efficiency savings, with no damage to services,” says Mcintyre breezily. The government grits its teeth and says it can, and will: IMF economic thought often enters the soul of finance ministers. IMF power makes it the sole credit-rating agency for all other donors and lenders – an IMF thumbs-down means money from everywhere is cut off.

Oxfam’s senior policy adviser and economist, Max Lawson, doubts such cuts are needed, just a loan to tide Ghana over. “The IMF is too brutal … demanding balanced books within one or two years. The only way to make such a deep cut is in social spending: teachers’ salaries are the main item.”

It’s a strange irony that Barack Obama and Gordon Brown embrace a Keynesian fiscal stimulus and in its name pour out global largesse to the IMF to distribute. But loan recipients risk a Friedmanite tourniquet, cutting off their economic lifeblood. Will Obama and Brown see how their policy is translated on the ground?

Free market is a religion, a belief. It is not science or economics. We have brutal global evidence that it does not produce the advertised results, or live up to its promises. As long as the true believers are in charge, there will be no substantive change. The article quoted above points out that microcredit, and local credit unions are the way to raise productivity, relieve poverty, and increase the numbers of children in school and spending on education. The tiny local credit unions in Ghana discussed in the article have a 0% default rate on their microloans. But none of that is big and glamorous, and it does nothing to add to bankster CEO salaries and bonuses. So I doubt we will see much change in the behavior and policies of the IMF.

Note (4/28/09):
Khalil Bendib very graciously extended permisssion to use the cartoon above.  His cartoons combine elegant drawing with witty and incisive commentary.  You can see more at his website: The Pen is Funnier Than the Sword.  
You can buy his book here.

GEGGADE DESERT, Djibouti - French and American forces head out to a U.S. Marine CH 53 helicopter for transport to desert survival training in the Geggade Desert, Djibouti March 23, 2009. The training provided by the French Forces in Djibouti integrates U.S. service members deployed to Camp Lemonier, Djibouti and French military personnel while teaching survival skills specific to the Djiboutian deserts. (U.S. Air Force photo by Technical Sergeant Joe Zuccaro)

GEGGADE DESERT, Djibouti - French and American forces head out to a U.S. Marine CH 53 helicopter for transport to desert survival training in the Geggade Desert, Djibouti March 23, 2009. The training provided by the French Forces in Djibouti integrates U.S. service members deployed to Camp Lemonier, Djibouti and French military personnel while teaching survival skills specific to the Djiboutian deserts. (U.S. Air Force photo by Technical Sergeant Joe Zuccaro)

Daniel Volman and William Minter describe the problem succinctly in Making Peace or Fueling War in Africa:

The government has presented AFRICOM as a cost-effective institutional restructuring and a benign program for supporting African governments in humanitarian as well as necessary security operations. In fact, it represents the institutionalization and increased funding for a model of bilateral military ties — a replay of the mistakes of the Cold War. This risks drawing the United States more deeply into conflicts, reinforcing links with repressive regimes, excusing human rights abuses, and frustrating rather than fostering sustainable multilateral peacemaking and peacekeeping. It will divert scarce budget resources, build resentment, and undercut the long-term interests of the United States.

While AFRICOM may be new, there’s already a track record for such policies in programs now incorporated into AFRICOM. That record shows little evidence that these policies contribute to U.S. or African security. To the contrary, there are substantial indications that they are in fact counterproductive, both increasing insecurity in Africa and energizing potential threats to U.S. interests.

When the GAO published its February report on AFRICOM, PDF: Actions Needed to Address Stakeholder Concerns, Improve Interagency Collaboration, and Determine Full Costs Associated with the U.S. Africa Command, the conclusion was:

This report addresses three challenges that could affect the ultimate success of AFRICOM. First, DOD has not yet fully allayed concerns about the command’s role and mission both inside the U.S. government and with potential African partners. Second, AFRICOM has not yet determined how many personnel it needs from other U.S. government agencies or what functions they will perform, and interagency planning processes are still immature. Third, DOD has not yet decided the locations for AFRICOM’s permanent headquarters and presence on the continent, or agreed upon criteria with stakeholders for making such decisions, leaving considerable uncertainty about future costs at a time when defense budgets are projected to become increasingly constrained. DOD and AFRICOM are working to address these challenges but it is unclear when their efforts will be completed. Unless these challenges are addressed, the effectiveness of the command may suffer and costs are likely to escalate.

What the GAO report does not address is any overall justification for the command to exist at all. It assumes the command is a good thing and should go forward. It treats African and US skepticism as “misperception”. To assert this is to take the erroneous approach that all the problems are public relations problems: the truth does not matter, what an organization is doing does not matter, only the image projected in the advertising campaign matters.

AFRICOM hurts brand America, and stands in the way of any genuine multilateral efforts towards peacemaking or peacekeeping. AFRICOM stands in the way of civil society groups who are trying to strengthen democratic institutions in their own countries. It is often a threat to these same groups, treating them as “insurgents” or “terrorists” and assisting repressive governments to crack down on them. Bilateral military ties strengthen the military sector in its efforts to suppress competition and regulation from the civilian sector. This comes when Africans throughout the continent want the military out of government and back in the barracks. When the US supports only the military, the civilian sector can whither. We currently see this US policy at work in Somalia, Sudan, Ethiopia, Kenya, Uganda, the DRC, Rwanda, the Niger Delta, Mali, Senegal, just to name a few places. This hurts the people in those countries, and by doing so hurts the interests of the United States. It hurts support and goodwill for the United States.

Militarism limits the possibility of developing a climate where entrepreneurs can create business, except those businesses that can be carried out at the point of a gun. And it makes it difficult or impossible to develop the civil infrastructure and institutions necessary for peace and democracy. This strengthens the enemies of the US, by demonstrating the US does not care about the majority of the citizens in Africa or the world, and weakens US influence. Militarism is a lavish gift to the enemies of the US, giving those enemies more credibility, and enhancing their support and ability to attack US citizens and institutions.

Brand America has generally been popular in Africa. Bush policies did it tremendous damage. So far Obama seems to be continuing those same policies. The opportunity for positive change is still open.

At the Summit of the Americas yesterday Obama said:

“It’s a reminder for us in the United States that if our only interaction with many of these countries is drug interdiction, if our only interaction is military, then we may not be developing the connections that can, over time, increase our influence.”

The US War on Drugs has been an unbroken failure, and has now driven the drug trade to West Africa.  AFRICOM has been trying to promote its efforts at drug interdiction in Ghana and throughout West Africa as a way to get its foot in the door. The same goes for “terrorism” interdiction, and “insurgency” interdiction throughout the continent. Both Latin America and Africa would like to leave militarism behind. Let us hope Obama understands and means his own words.

To repeat and expand the wise words of Volman and Minter:

The government has presented AFRICOM as a cost-effective institutional restructuring and a benign program for supporting African governments in humanitarian as well as necessary security operations. In fact, it represents the institutionalization and increased funding for a model of bilateral military ties — a replay of the mistakes of the Cold War. This risks drawing the United States more deeply into conflicts, reinforcing links with repressive regimes, excusing human rights abuses, and frustrating rather than fostering sustainable multilateral peacemaking and peacekeeping. It will divert scarce budget resources, build resentment, and undercut the long-term interests of the United States.

While AFRICOM may be new, there’s already a track record for such policies in programs now incorporated into AFRICOM. That record shows little evidence that these policies contribute to U.S. or African security. To the contrary, there are substantial indications that they are in fact counterproductive, both increasing insecurity in Africa and energizing potential threats to U.S. interests.

There’s no one prescription for those countries now facing violent conflicts, much less for the wide range of issues faced by over 50 African countries. Africa’s serious problems, moreover, will not be solved from outside, either by the United States or by the “international community.”

Nevertheless, it’s important to ensure that U.S. Africa policy does no harm and that the United States makes a significant contribution to diminishing the real security threats on the continent. Once one recognizes that U.S. national security also depends on the human security of Africans, some essential elements of such a framework do become clear. To what extent they can be embodied into practice will depend not only on the internal deliberations of the new administration in Washington, but also on whether Africans working for peace and justice on the continent can themselves chart new directions and make their voices heard.

Africans working for peace and justice on the continent can only be heard if someone is listening. The US needs to listen to these groups, and find ways to include them in the conversation. Working towards democratic processes is needed everywhere. The US needs some work on democracy at home after the past eight years. It cannot be done with guns, or with structural adjustment programs. Without democratic oversight, capitalism is just organized crime.  Democratic oversight requires democratic participation of the people who live in a place.  The people on the ground throughout Africa must be able to participate in the decisions that affect their lives.

Unless the US is willing to engage with other than its military, it is wasting its money, showing its weakness, and making it far more difficult to achieve its goals or increase its influence. As Obama said:

“… if our only interaction is military, then we may not be developing the connections that can, over time, increase our influence.”

africa_on_earthcc Hitchster

In view of topics in my last two posts, AGRA & Monsanto & Gates, Green Washing & Poor Washing and African Bloggers At The G20, there are a couple of articles at Pambazuka that have a lot to say.

Yash Tandon writes about the crisis of the global North in relation to the global South:

Western civilisation has been going through a deepening crisis over the last 120 years – to be precise since around mid-1880s when serious colonisation began of the African continent as a desperate attempt to get out of the crisis created by the limits to growth within Europe. The present systemic crisis – whose most recent manifestations are the global financial crisis and the ecological crisis – is only its latest manifestation. Western civilisation’s crisis is deeper than most people realise or willing to acknowledge.

… The ruling political and corporate elites in the West are losing control both in their own countries and over much of the South. Judging by the attempts made by them in recent months, it is evident that they have no clue about how to get out of the dual political-economic and ecological crises. They have serious problems of resource depletion and global warming which compound to create a situation not unlike what they experienced in the 1880s when they faced limits to growth in Europe.

The re-colonisation option does not look promising for the future, because although they are presently attempting to neo-colonise the South, this will meet with stiff resistance not only from the South but also from progressive peoples in the North.

It must be recognised that much of the South is still in the phase of consolidating the gains of national struggles. The vilification of these efforts as ‘failed states’ or as ‘terrorist states’ is misguided and dangerous. We must not fall into that trap.

Tandon provides a great deal more detail describing the historical problem and suggesting approaches to work towards solutions. Read the whole article: Political, economic and climatic crises of Western civilisation – Dangers and opportunities.

Another essay with a lot to think about is The global financial crisis: Lessons and responses from Africa by Demba Moussa Dembele. As the article summary describes:

The crisis provides fundamental lessons, says Dembele, the first being that markets do not have self-correcting mechanisms, and that market failures are not less costly than state failures. Secondly, “the collapse of the neoliberal dogma is a major blow to the international financial institutions. What is even more devastating to them is the reversal of most of the policies they had advocated for decades in Africa and in other ‘poor’ countries under the now discredited SAPs (structural adjustment programmes). The IMF and the World Bank are supporting fiscal stimulus – expansionary fiscal policies – in the United States, Europe and Asia.”

Thirdly, its clear that the state remains a central player in solving crises caused by markets, and is not the sole cause of economic and social problems in Africa that neoliberal policy has categorised it as.

Dembele writes:

One major lesson for Africa is that they should no longer trust the IMF and World Bank and for that reason they should not listen to their ‘advice’ anymore. This is why it is incomprehensible and even a shame to see African countries hold a meeting with the IMF in Tanzania with the aim of building ‘a new partnership’. In the statement issued after that meeting, African countries are calling on the IMF to extend its ‘experience and expertise’ as if African leaders and policy makers had not learned enough lessons from the experience of nearly 30 years of ruinous IMF policies from SAPs to PRSPs (poverty reduction strategy papers).

Another major illustration of the crisis of legitimacy of the neoliberal system is the strong recognition that the state is a central player in solving the crises brought about by unfettered markets, and it will remain a key actor in the development process, whether in developed or developing countries. Some may recall former US President Ronald Reagan’s assertion in the 1980s that the state was ‘part of the problem, not of the solution’. This signalled the era of massive deregulation and the assault on the state and public service and ownership. It opened the door to some of the most sweeping and devastating structural adjustment policies in Africa. African states came under vicious attacks as ‘predatory’, ‘wasteful’, ‘rent-seeking’, ‘corrupt’ and ‘inept’.

All these qualifications were intended to discredit the state as an agent of economic and social development and the experience of state-led development that took place in the post-independence period up to the late 1970s. Despite the remarkable achievements of that period, the IMF and World Bank used every possible negative example to blame the state for all Africa’s crises. They told African leaders that the state was the main, if not the unique, cause of the economic and social crisis in Africa Accordingly, the solutions they advocated included withering away the state by eliminating or limiting its intervention in the economic sphere. Hence the imposition of fiscal austerity programs, the downsizing of the civil service and the dismantling of the public sector with the privatisation of state-owned companies.

But the financial and food crises show that the state is an indispensable and indisputable agent of development and part of the solution to the current global crises. It is deregulation and market fundamentalism that are part of the problem.

Still in the name of ‘comparative advantage’, African countries were forced to give priority to cash crops at the expense of food production. The food crisis and Africa’s great dependence on food imports illustrate once again that the IFIs have misled African countries into adopting policies that are detrimental to their fundamental interests. The IMF and World Bank, which bear a great responsibility in the food crisis in Africa, are now all too happy to ‘assist’ African countries in proposing them ‘emergency loans’ to buy food from Western countries.

The same IFIs are behind the attacks against the state that translated into the destruction of the public sector to the benefit of foreign capital.

… privatisation translated into massive job losses and social exclusion. It may be argued that there is some correlation between the aggravation of poverty and the growing foreign control of resources and assets, because this control is associated with repatriation of huge profits and tax evasion. In a sense, privatisation can be assimilated to a robbery of national patrimony – including strategic sectors – through the transfer to foreign control of assets built throughout years of sacrifices by the people.

Therefore, reversing privatisation is necessary in order to restore people’s sovereignty over a nation’s resources. It is time for African countries to put back into public and collective hands the control of key sectors and natural resources. No genuine endogenous development is possible without control of a nation’s wealth. So Africa should learn from the lessons being given by capitalist countries, including the United States, which are nationalising their banks and financial institutions. But more importantly, African countries should learn from the examples of other southern countries, like those of South America and Asia, where governments are taking back what was sold off to multinational corporations.

There is much more detail, discussion, and documentation, read the whole article, The global financial crisis: Lessons and responses from Africa

I cringe when I hear about the G20 stimulus package using the IMF and the World Bank. Supposedly it is intended to help Africa get out of current problems caused by the collapse of global financial capitalism. So long as the IMF and World Bank continue their traditional practices, they will bring disaster. I think Naomi Klein offers some targeted advice to the US and specifically to the US Congress:

It should first of all demand an independent review of the role the IMF played in creating and deepening the crisis (for instance, by requiring that loan recipients deregulate their financial sectors and eliminate capital controls, as the IMF did during the Asian Economic Crisis). And it should demand that the IMF never require recipients of this loan money to make deep cuts to social spending (on health, education and pensions…) or to lay off public sector workers in the midst of the crisis. This is crucial because the IMF has been requiring exactly these types of budget cuts and layoffs in exchange for loans in Latvia and elsewhere in Eastern Europe, causing massive unrest. Further, if governments decide that in order to meet the crisis, they need to do things like subsidize farmers (the major demand in the Greece protests, for instance), they must retain the flexibility to do that.

The reasoning is simple: Obama is on record demanding that other G20 countries spend money on economic stimulus. The trillion dollar G20 pledge was presented to us as a global economic stimulus package. But the IMF is well known for demanding the exact opposite from its loan recipients: deep budgetary austerity, tax increases, and bans on subsidies. That means that unless there are clear conditions attached to the new IMF money, the extra trillion dollars could actually lead to deep economic contractions, with the new money just going to useless financial sector bailouts in countries around the world, rather than into real economy investments. It’s also worth noting that some of the money is going to the World Bank so it’s an opportunity to make demands that the World Bank invest in green energy and infrastructure, as opposed to dirty energy, a bad habit of the bank.

Satellite view of Africa

Satellite view of Africa from google maps

Sokari has been covering the G20, and writes:

It is ironic when you think of the lack of African representation considering the West’s dependency on Africa and not the other way around. This has been from slavery through colonialism to the present. Resources such as oil, copper, gold, silver, chromium, coffee, cocoa and more recently cash crops for feeding the West. Unfair trade policies, low commodity prices, failure to adequately tax companies operating in Africa and the complicity of Western governments and banking institutions in providing tax havens for money stolen by African politicians. If aid is not in itself a business would it not be preferable for example to pay fair prices for Africa’s resources?

Asked if anything positive will come out of this Summit – Not if one is thinking in terms of a major shift in policy towards Africa and Africans taking the initiative to come up with new strategies for development as I mentioned in my previous post. But I do agree with Bob one possible positive outcome may come from changes in Tax Haven laws whereby monies stolen by corrupt politicians is returned to the countries and access to tax havens is shut down.

Daudi is at the G20 too, and writes:

Relying on our current political leaders to draw up and implement a strategy to make Africa relevant in a positive way is a non starter. Indeed those who have succeed in making African relevant to international policy making have done so for increasing negative reasons, for example Mugabe in Zimbabwe and Bashir in Sudan. Ethan Zuckerman labelled the position taken by such political leaders as a strategy of, “If we act deranged enough, maybe they’ll just give us the country.

The burden rests on us, the ordinary citizens of Africa, to come up with a strategy that will increase our positive relevance to important global conversations and thus make it impossible to ignore Africa, Africans and the issues they feel important. I would love to hear your thoughts on what this strategy should adopt.

Also Michael Hudson points out something entirely missing in the US press when discussing the G20, or the US or global economy, in Financing the Empire:

The U.S. media are silent about the most important topic policy makers are discussing here (and I suspect in Asia too): how to protect their countries from three inter-related dynamics:

(1) the surplus dollars pouring into the rest of the world for yet further financial speculation and corporate takeovers;

(2) the fact that central banks are obliged to recycle these dollar inflows to buy U.S. Treasury bonds to finance the federal U.S. budget deficit; and most important (but most suppressed in the U.S. media,

(3) the military character of the U.S. payments deficit and the domestic federal budget deficit.

Strange as it may seem – and irrational as it would be in a more logical system of world diplomacy – the “dollar glut” is what finances America’s global military build-up. It forces foreign central banks to bear the costs of America’s expanding military empire – effective “taxation without representation.” Keeping international reserves in “dollars” means recycling their dollar inflows to buy U.S. Treasury bills – U.S. government debt issued largely to finance the military.

To date, countries have been as powerless to defend themselves against the fact that this compulsory financing of U.S. military spending is built into the global financial system. Neoliberal economists applaud this as “equilibrium,” as if it is part of economic nature and “free markets” rather than bare-knuckle diplomacy wielded with increasing aggressiveness by U.S. officials. …

… The U.S. media somehow neglect to mention that the U.S. government is spending hundreds of billions of dollars abroad – not only in the Near East for direct combat, but to build enormous military bases to encircle the rest of the world, to install radar systems, guided missile systems and other forms of military coercion, including the “color revolutions” that have been funded – and are still being funded – all around the former Soviet Union.

Pallets of shrink-wrapped $100 bills adding up to tens of millions of the dollars at a time have become familiar “visuals” on some TV broadcasts, but the link is not made with U.S. military and diplomatic spending and foreign central-bank dollar holdings, which are reported simply as “wonderful faith in the U.S. economic recovery” and presumably the “monetary magic” being worked by Wall Street’s Tim Geithner at Treasury and Helicopter Ben Bernanke at the Federal Reserve.

So the ultimate question turns out to be what countries can do to counter this financial attack.

AFRICOM, the US Africa Command, is the newest feature of this global military aggression, and expansion of military spending. There is a lot here to ponder, for Americans, if they ever hear about it, and for everyone else in the world.

ricemadagascar

Rice fields in Madagascar

Glenn Ashton of the The South African Civil Society Information Service has written a telling article about the new colonial land grabs in Africa titled Madagascar: the new land grab.

Just when colonialism was considered dead and buried, along comes neo-colonialism in its latest guise. Allied with its close relatives globalisation, free marketeering and lack of transparency, it is currently launching a new offensive on the disempowered population of this continent. …

Neo-colonialism is now garbed in new clothes. Powerful interests are presently seeking and gaining access to land in government-to-government deals as well as through private capital. These arrangements ostensibly offer to manage land that is not being economically utilised in order to improve food security. But for whom? …

The global food security focussed NGO, GRAIN, issued a report on this phenomenon in October 2008, where they cited more than 100 examples of this new neo-colonial land grab. These land grabs are primarily by nations that have insufficient natural capital or space – such as the desert-bound nations of the Middle East and overpopulated nations such as China and South Korea. They seek to improve the food security of those nations while undermining the ability of host nations to access similar benefits, through the alienation of prime agricultural land. The ecological impacts can also be significant.

Since the GRAIN report was published, the land grab has continued apace. The recent acquisition of a reported 1.3 million hectares (ha) of land in Madagascar by the South Korean company Daewoo Logistics Corporation on 99-year lease has raised eyebrows around the world. This land represents around half of that island nation’s arable land.

In Madagascar a reported 70% of the population suffer from food shortages and malnutrition. Nearly 4% are fed through aid programmes. Besides this, more than 50% of the population is below the age of 18. What hope is there for local youth when South African farmers are reportedly being recruited to run the highly mechanised and automated farms under the Daewoo lease? …

China is also actively seeking new land. Given its massive population and constrained access to farmland, China has moved aggressively into Africa with land interests in Zimbabwe, Mozambique, Nigeria, Uganda, Cameroon and Tanzania. …

Even the World Bank is continuing its role as a neo-colonial consensus agent by actively pursuing and financing access to ‘under-utilised land’ around the world through its International Finance Corporation.

Of course much of the land is “under-utilised” because African countries were following World Bank recommendations and requirements. Malawi used to provide free seeds and fertilizer to its farmers.

The results were impressive, but the subsidies ran afoul of the pro-market policies of the World Bank and International Monetary Fund (IMF), which argued that subsidies were “crowding out” commercial sales and constituted undue government interference in the economy. Under considerable pressure from these financing institutions, the programme was phased out. The IMF also insisted that Malawi sell much of its national grain reserve to pay off the debts of the state-owned maize marketing agency.

Most Malawian farmers, however, were too poor to pay commercial rates for fertilizer and seeds. As a result, maize yields plunged. When drought struck in 2001 neither farmers nor the government had adequate grain stores to see them through, and more than a thousand people are estimated to have died. Then after the failed 2005 harvest left 5 million of Malawi’s 13 million people on the brink of starvation, the newly elected government of President Mutharika defied the donors and launched the subsidy scheme with its own funds.

Without the seeds and fertilizer, the land was “under-utilized.” People starved because they could not farm. This has been World Bank and IMF policy throughout Africa. As Ashton points out:

… international finance instruments run by the then G5 (now expanded to the G8), such as the World Bank and the International Monetary Fund used aid and so-called development finance instruments to further their interests.

It has been established by repeated research over decades that the smaller the farm the greater the yield. For more information read the article Small is Bountiful, and check the references listed at the end. There are economies of scale with big agriculture. Big agriculture allows the proceeds to be concentrated among a few people unrelated to the people actually living on the land. It is generally harmful to the land, due to the use of toxic chemicals needed to sustain monocultures, and due to unsafe genetic engineering. It is harmful to the people who live in its vicinity, depriving them of their livilihood and damaging their health.

Ashton continues:

Perhaps more sinister is the recent news of leasehold rights being acquired for approximately 400,000 hectares of land in the Southern Sudan from the family of former warlord Gabriel Matip. In a deal struck by US financier Philippe Heilberg, who has used a British Virgin Islands subsidiary of his Jarch Group to facilitate the deal, private interests have intervened directly in disputed territories. Co-directors of the group reportedly include ex-CIA operatives. Given the ongoing instability in that nation and the forced eviction of millions in the neighbouring Darfur region, this sort of land acquisition is perhaps a harbinger of an unsavoury trend in who gets to control the land in disputed territories.

I wrote about this in an earlier post: Jarch Colonial Holdings, and quote Heilberg: “You have to go to the guns, this is Africa”. His intentions are clear. The Jarch management contains people with connections to both the current and the previous US administrations. You can see their management listed on the Jarch LLC website.

Ashton concludes:

Activities to increase agricultural growth in Africa have also been severely compromised by questionable alliances. For instance AGRA, the African Union endorsed ‘Association for a Green Revolution in Africa,’ has seen the undemocratic and unsolicited intervention of supposedly neutral funders such as the Bill and Melinda Gates foundation. The relationship between these funders and pro-genetically modified food interests (in what is now termed bio-colonialism) has served to actively undermine local agricultural collectives, NGOs and projects that aim to promote and share proven solutions to food insecurity and malnutrition.

This is perhaps the most dangerous manifestation of neo-colonialism as it operates behind a veil of philanthropy while (wittingly or unwittingly) undermining democratic structures and interests. The obscene profits accrued by capital over recent decades, instead of being taxed and distributed by state organs, are now in the hands of ill-informed and often ideologically biased do-gooders. For instance, given the technocratic origins of the Gates fortune, it is logical that undue emphasis will be placed on similar technocratic agricultural solutions.

These ‘solutions’ are imposed through slick public relations and the support of corporate aligned agri-business interests such as Africa-Bio and A New Harvest, both of which are linked to GM corporations such as Monsanto, the worlds biggest seed company and genetically modified seed distributor.

There is an urgent need to examine these new neo-colonial thrusts. Careful and objective analysis must be undertaken as to how food and land sovereignty is being compromised through naïve interaction with the new global powers of finance and trade. The interests of global capital need to be tempered by intervention and through more pragmatic approaches that take account of the historical relationships between land, community, food security and economic development.

It is ironic that while Africans have fought to cast aside colonial oppression and its concomitant heritage, we have instead opened gates (pun intended) to a new wave of colonial interests that threaten, yet again, to bypass the marginalised whilst enriching a well-connected minority.

It would be tragic to cast aside Africa’s recently won freedom for a yoke of a different design.

Under democratic governance the people who live on the land would determine how their land is used. As Vandana Shiva writes:

In a democracy, the economic agenda is the political agenda.

The US claims to support and foster democracy. This is a test. In fact, it is probably THE test. Without food, none of us survive.

Added January 31:

From the GRAIN website:

THERE ARE FOUR MAIN PARTS TO THIS LAND GRAB BRIEFING:

1. A summary and announcement – available online here:
http://www.grain.org/nfg/?id=610

2. The full report is available here:
http://www.grain.org/briefings/?id=212
Also available in PDF format:
http://www.grain.org/briefings/?id=212&pdf

3. The Annex to this briefing is a table with over 100 cases of land grabbing for offshore food production as presented in this report. It is available in a separate PDF file:
http://www.grain.org/briefings_files/landgrab-2008-en-annex .pdf

4. GRAIN has released a Google Notebook with full-text news clippings collected during the research for this briefing as a support to those who want to read more.
http://tinyurl.com/landgrab2008

The notebook is only available online, and the news clippings are not in any order, but it can easily be searched. We are doing this because this is not always an easy subject to research on the internet, if you want a broad picture. People may add further clippings to the notebook as they wish, to further build this collective resource – if you would like to participate, please send an email to landgrab@grain.org . GRAIN will not be maintaining nor be responsible for it. Most of the articles are at present in English. (A backup copy is available in PDF format from here: http://www.grain.org/m/?id=209 )

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