IMF


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 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.

________

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.

World Bank/IMF policies have consistently increased the number of unemployed, expanded poverty, and decreased productivity and self sufficiency in Ghana as in most countries. Once again Ghana is caught in that vicious cycle.

Anti WTO poster from the Thai Labour Campaign 2005, TNC = trans national corporations,  the results listed across the bottom read in English:  Privatisation, No job security, Suppression of union rights, Environmental destruction, State Violence against citizens, Displaced and landless population, De-democratization, Destruction of local culture, Increasing poverty

Anti WTO poster from the Thai Labour Campaign 2005, TNC = transnational corporations, the results listed across the bottom read in English: Privatisation, No job security, Suppression of union rights, Environmental destruction, State Violence against citizens, Displaced and landless population, De-democratization, Destruction of local culture, Increasing poverty (click image to enlarge)

An article on Ghana web gives a clue as to what Ghana is up against with loans from the World Bank and IMF, and shows it got into these problems by following the prescriptions of the World Bank and IMF. As an earlier article pointed out. Ghana has been an economic and political success story, 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.


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 … an IMF thumbs-down means money from everywhere is cut off.

And so Ghana needed a loan, and is trapped in the vicious cycle:

…Public sector labour freeze costs Gov’t 1billion dollars
Ghana’s, dependence on donor-fundings, and their attendant conditionalities, for the implementation of her fiscal policy year in and out, is beginning to take a heavy toll on the country.

News about the recent International Monetary Fund (IMF)’s $1billion total financial facility to Ghana for her budgetary support, as approved by its board on July 15, 2009 came just a day after the Attorney General, Hon. Betty Mould Iddrissu had disclosed that Government of Ghana (GOG) owes as much as over $1 billion dollars in judgment debts which have accumulated over the past 10 years.

She explained that the problem boils down to the fact that, the attorney general’s department lacks the human resource capacity to function adequately as government’s legal advisor in all transactions government enters into.

According to her, “Ghana lacks the capacity to retain attorneys for all Ministries, Departments and Agencies (MDAs), so out of frustration, the MDAs hire private legal practitioners to guide them in some of their transactions, some of which bring about legal problems.

“The department also lacks the requisite manpower to send attorneys to court to defend the state whenever those litigations come up”, she disclosed, adding, “it is a systemic and an endemic problem with the department which has been there over the years”

For this reason, government is now saddled with such a huge debt including those to CP Construction, Attachment Awards against the government in France, Britain Belgium, USA and Holland.

It has been suggested that the genesis of the problem of the lack of human resources in the public sector dates back to the late 1980s and 1990s when government was instructed to freeze public sector recruitments in return for World Bank/IMF supported Economic Recovery Programmes.

This same condition, of freezing public sector employments, is said to have been reaffirmed by the Breton Woods institutions in the current loan agreements, but Finance Minister explains it is government’s own decision to manage public funds prudently.

However another contradictory condition is also the call on government to establish a Public Sector Reform Ministry as a requirement for further assistance from the World Bank. Opinions are divided as to where manpower would be secured to run such a new ministry if recruitments into the public sector is to remain frozen.

Although Finance Minister, Dr. Dufuor has told this reporter that the AG’s department has been given the clearance to recruit 20 new attorneys, Financial Intelligence (FI) investigations have revealed that the problem of inadequate manpower is not peculiar to the Attorney General’s Department, but a general problem that has bedeviled the whole of the Civil Service in Ghana.

Departments such as the Veterinary Department, Extension Services of the Ministry of Agriculture and other government departments have been crying over the years for more personnel to be recruited to beef-up their activities.

For the Crop Extension Services and Veterinery Services, although their training schools in Kwadaso, Nyankpala, Ohawu, and Pong-Tamale have been churning out well-trained personnel over the years, due to World Bank conditions that were introduced as a result of the Economic Recovery Programme and The Structural Adjustment Programmes, employments of these personnel have remained frozen till date, leaving the departments with the only other option of replacing retiring and diseased staffs.

The Cocoa Services Division is on record to have attracted a large number of extension officers from the Agric Ministry, while engaging many others who had either completed the Agric Training Institutions as well as some Sixth Form leavers from the early 1990s, and current gains being made in that sector is believed to be as a result of those investments earlier made in human resources.

Questions are being raised as to whether it is prudent to continue freezing recruitments into the public sector, when evidence has started emerging that it can be costly in the long run as evidenced by happenings at the AGs department.

If the MDAs can find money to hire the services of private legal practitioners whose legal advice in transactions have proven to be costly to the nation, it would have been better if the state spent money employing full time attorneys for the AG’s department, for onward attachment to the MDAs.

A senior Lecturer at the University of Ghana Business School, Kwame Gyasi … “it is the public sector which moves the private sector and not the vice-versa, then; there is a problem if you freeze employment in the public sector down here”.

“Now that the private sector is collapsing, freezing employments in the public sector would not only end up in some costly financial consequences for the state as has happened in the judgment debts, but will also create upheavals”

Neoliberal free market practices have brought disaster on the western governments of the northern hemisphere. But the World Bank and the IMF continue to impose those policies on the developing countries when they issue loans.

As one impassioned comment on the article said (all caps are frequently used in the comments):

IMF AND WORLD BANK SUCCESS STORIES SOON TURN INTO MIRAGES EVERYWHERE. I CHALLENGE ANY IMF, WORLD BANK OR GHANAIAN OFFICIAL TO CITE ONE SIMPLE EXAMPLE OF REAL SUCCESS.

THE IMF IS THE ACRONYM FOR “I MOSTLY FAIL”, “INTERNATIONAL MONSTER WITHOUT FEELINGS”, “INTERNATIONAL MISMANAGER OF FINANCES”

THE WORLD BANK (WD) STANDS FOR “WORST BANDIT”, “WORLD DESTROYER”, “WORST DEATH”.

THEY REJOICE WHEN THEY SEE AFRICANS MARGINALIZED AND IMPOVERISHED. THAT IS WHY THEY PRESCRIBE STRUCTURAL ADJUSTMENT FOR AFRICANS WHILE THEY EMBRACE RESCUE PACKAGES.

Ghana does not have the personnel to oversee and regulate contracts because those staff were laid off and reduced, due to previous World Bank/IMF requirements to lay off and reduce staff. Without those public sector legal advisors providing advice and oversight, Ghana incurred expensive judgements.

At a time when the economy is contracting and losing private sector jobs, it is a huge mistake to also reduce public sector jobs. In fact, public sector jobs help create private sector jobs, particularly in health and education, which often suffer the most under World Bank/IMF requirements and structural adjustments. A healthy workforce is productive, the more healthy, the more productive. And an educated workforce brings business and employers looking for a large available pool of smart, healthy, and well educated people to work for them. A strong public education system, including universities, attracts and creates strong private sector growth.
But as the earlier article: What Wall Street did to Ghana said:

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.”

In the West governments are undertaking huge fiscal stimulus programs to repair their economies. But in the developing world those same governments and institutions continue to advocate reductions, restructuring and belt tightening. It looks like the plan is not to help but to prevent developing nations from developing.

________

Note: graphic above from here

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.

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.

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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