Friday, February fourteenth, the UN says at least 22 people have been killed in a village in the Northwest region of Cameroon. Over half of those killed were children. No one has claimed responsibility for Friday’s incident but the opposition parties blame the killing on the government.
Why Africa's wealth does not make Africans wealthy
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Katanga province in the Democratic Republic of Congo is blessed with enormous natural wealth, including vast deposits of precious minerals such as diamonds, gold, and tantalum.
Katanga
saw a spectacular mining boom around the turn of the century, when President
Laurent-Desire Kabila and then his son Joseph licensed international mining
companies to tap its treasures.
This
arrangement generated riches for the Congolese elite, and vastly more for the
prospectors, but offered little to the poverty-ravaged population. From 1999 to
2002, the Kabila regime "transferred ownership of at least $5 billion of
assets from the state-mining sector to private companies under its control...
with no compensation or benefit for the State treasury," a United Nations investigation found.
The
bonanza coincided with a ruthless crackdown on dissent. In 2004, a small,
mostly civilian group took over a mine operated by the Australian firm Anvil
Mining in Kilwa village, protesting that the company was making huge profits
without rewarding the local workforce.
According
to a UN report, the Congolese army crushed the uprising
and killed around 100 people, many by summary execution.
Workers
extracting cobalt from a lake in Katanga province, DR Congo.
Modern
colonialism
The
combination of staggering wealth, rampant violence, and
abject poverty in DR Congo is no
coincidence, but part of a pattern causing devastation across Africa, according
to Financial Times investigative journalist Tom Burgis.
In
a new edition of his book The Looting Machine,
the author probes the paradox of "the continent that is at once the
world's poorest and, arguably, its richest."
Burgis,
a former correspondent in Lagos and Johannesburg, finds a wide variety of
kleptocrats and rackets over his travels through dozens of resource-rich countries.
But a common thread is that the wholesale expropriation of resources during
colonial times has barely slowed through the post-independence era, albeit with
new beneficiaries.
"Western
governments are not supposed to wield commercial and political power at the
same time, and certainly not to use one to benefit the other," says
Burgis. "In colonial states...The British or Portugese would cultivate a
small group of local people who would fuse political and commercial power to
control the economy."
"When
the foreign power leaves, you are left with an elite that has no division
between political and commercial power. The only source of wealth is mines or
oilfields, and that is a recipe for ultra-corrupt states. Somewhere like
Nigeria, an 'extractor elite'...wanted to draw to itself the rent that oil and
mining resources generate."
Burgis
cites another colonial hangover in the continued presence and power of oil and
mining firms.
"The
multinational companies hold enormous economic and political power in post-independence
African countries," he says. "In this way, there is a pretty straight
line from colonial exploitation to modern exploitation."
British
businessman Cecil Rhodes (center) founded the De Beers diamond company in South
Africa, implicated in colonial atrocities.
Fueling
oppression
The
ability of governments to rely on resource revenue leads to corruption and
oppression, Burgis argues, as they are not accountable to their people through
a social contract based on taxation and representation.
He
cites Angola, which earns almost half of its GDP from oil, as an example of
government as "a service for the elite." A 2011 IMF audit revealed that $32 billion
disappeared from official accounts between 2007 and 2010, a quarter of the
state's income.
The
Angolan elite rejects accountability and does not tolerate any challenge from
the public, Burgis adds, recalling the recent case of activists being jailed for a
public reading of a pro-democracy book.
"Government
can behave that way if it doesn't need the consent of its people," the
author says.
Angola
has taken steps to address such criticism in recent years, with the 2012
election deemed "generally free and fair" by neutral observers. But human rights groups attest that
oppression remains a fact of life.
Garbage
piles up as so little of Angola's wealth trickles down to the communities.
Secret
deals
The
growth of offshore banking in the late 20th century created new opportunities
for resource tycoons to cover their tracks, a practice laid bare in the Panama
Papers.
Israeli
businessman Dan Gertler was an early pioneer. After forging a close friendship
with DR Congo President Joseph Kabila, he was granted a near monopoly on
exporting the nation's diamonds, and quickly became a billionaire. Gertler
routed the cash through an elaborate network of offshore accounts in tax
havens, keeping the details of controversial deals secret.
"In
the case of African resource deals, offshore funds have been shown to conceal
questionable transactions," says Burgis. "In the 1980s, bribes were
literally cars full of cash and you handed the key to the official you were
trying to bribe."
"Bribery
now is much more sophisticated, and has become harder to define as bribery if
it's (through) offshore transactions or people being given equity shares in
offshore companies...You have to crack open a lot of offshore secrecy to see
the conflict of interest that lies at the heart of them."
The
era of global finance has opened African markets to a new generation of
mysterious traders. Burgis spent years on the trail of elusive Chinese
businessman Sam Pa, who has cycled through multiple aliases while making deals
across the continent from Angolan oil to Zimbabwean diamonds. Pa is believed to
lead the secretive Queensway investor group, and Burgis claims
he has represented the Chinese state,
although the government denies this.
China's
President Xi Jinping shakes hands with Zimbabwe's President Robert Mugabe in
Harare
Breaking
the chain
Burgis
is skeptical that resource industries can ever be reformed.
"There
is a troubling possibility that it's not possible to put natural resources in
these countries to work for the common good," says Burgess. "(Almost)
everywhere that receives a significant share of its income from oil or mining
is badly run and often violent -- it's in the nature of these industries to
cause these problems."
Botswana
and South Africa have befitted from moving up the value chain -- developing
high-skilled industries from natural resources rather than just exporting raw
materials, such as diamond polishing or manufacturing metallic goods. Burgis
believes that diversifying economies away from a single resource -- as
President Buhari's government in Nigeria is attempting to do -- can mitigate
the effects of dependency.
He
suggests another option is to keep resources in the country and implement high
tariffs to protect domestic industries, but African leaders have been reluctant
to adopt such measures.
"We
have a world trading architecture with strict rules on imposing tariffs,"
says Burgis. "African countries have adopted the market orthodoxy that led
them to pare down states and embrace global economic competition -- in which
they are overwhelmingly the losers."
A
diamond polishing factory in Botswana, part of a high-skill industry that has
been developed from the nation's raw materials.
Collective
complicity
Responsibility
for the plight of resource-dependent nations goes beyond traders and dictators.
The global economy still requires a huge supply of raw materials that originate
in Africa, creating an imperative to maintain the existing, destructive model.
Burgis
applauds steps such as the Kimberley Process for
preventing 'blood diamond' trade, but feels that developed nations could go
much further.
"The
lesson for those in the West who want to address the damage from oil and mining
industries, and the corruption that goes with them, is 'put your own house in
order,'" he says. "There has been a tendency to lecture African
rulers (but) the problems are in the world financial system."
The
author suggests a global public registry of companies and trusts to counter the
use of shell companies in illicit deals.
"That
financial secrecy is available is not Africa's fault," says Burgis.
"Address the part that sits within the global system, which can be regulated
from Western capitals.
The
nature of the global supply chain means that complicity with the crimes around
resource extraction extends from African dictators all the way to a European mobile
phone buyer.
At
every level, delusion is a powerful barrier to change. Burgis recalls a meeting
with a leading figure of Angola's kleptocratic regime, who argued passionately
that he was protecting his people from even worse abuses.
"It's
human nature," says Burgis. "Nobody thinks they are the bad
guy."
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