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.

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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.

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