Saturday, August 31, 2013

Africa: Giving ordinary Africans a 'fair go'

Source: ISS

Giving ordinary Africans a 'fair go'

Is Western opposition to corruption just another manifestation of imperialism in Africa? This was one of the questions raised by a participant in the Africa Down Under mining conference in Perth, at a side event in which an international legal company offered advice to investors on how to manage the issue of corruption.

The question prompted some knowing titters around the room. One businessman nodded his head approvingly, whispering to his neighbour that he operated in Kenya, ‘And in Swahili there is no word for integrity,’ he said, significantly.

Swahili was taking a knock elsewhere too, as the day before, Australia’s ambassador to Zimbabwe Matthew Neuhaus had advised his country’s mining investors not to be na├»ve about Africa ‘and always look for the hidden agenda’. Ask about the relationship between the mining minister and the President, he also advised. ‘Fair go is not at a premium in Africa,’ he continued, noting that Swahili had a word – ujanja – that meant cunning or shrewdness. ‘That’s a leadership quality in Africa and they admire it in you.’

The lawyers giving the presentation on how to deal with corruption thanked the man in the audience for his interesting philosophical question about whether opposition to corruption was a kind of neo-colonialism. In essence their answer was that the question was legally rather superfluous, since Western companies operating in Africa or any other foreign parts were increasingly coming under the jurisdiction of their own national laws – such as the United States’ Dodd-Frank Act – as these extended their global reach.

Nonetheless, the question has moral and social implications. Neuhaus was not proposing that his compatriots indulge ujanja, but rather that they be wary of it. For the real question about corruption is not how the African mining ministers, presidents and other politicians whom investors deal with, regard it, but what it means for the ordinary African.

As Kofi Annan’s Africa Progress Report made starkly clear, very little of Africa’s commodity boom has trickled down to the poor. If anything, its analysis showed, there is an inverse relationship between resource wealth and poverty alleviation. This is, of course, just another manifestation of the resources curse.

The fight against corruption is analogous to the quest for democracy in that sense. Maybe Swahili or other indigenous languages have the odd word or idiom that pours pragmatic scorn on that concept too. And many leaders would heartily agree that democracy is a Western fetish, which Westerners are trying to foist on them in a neo-imperialist fashion.

Nevertheless it is ordinary Africans, obviously, who suffer from the democracy deficit.

But how foreign investors ensure either is the big question. The Africa Down Under conference as a whole had an upbeat tone, as Australian investment in African mining and hydrocarbons has been growing exponentially.

As Western Australia’s Premier Colin Barnett told African mining ministers, his state alone – which is the country’s largest mining state – has 197 companies involved in over 880 mining projects in some 30 African nations at the moment. Such projects have made a large contribution to making Western Australia the driver of Australia’s economy for the last decade or so and lifted its GDP per capita to an impressive A$100 000 a year (about R1 million). These investments have also contributed to the resources boom, which has greatly helped to lift Africa’s economic growth to an average of 5% a year for a decade.

However, from the vantage of Harare, Neuhaus understandably emphasised Africa’s challenges, lamenting Zimbabwe’s ‘totally rigged’ 31 July presidential and parliamentary elections and the fact that Africa’s new criterion for an acceptable election was that it should be peaceful, rather than democratic. Clearly, Western, including Australian, efforts to impose the neo-imperialist concept of democracy on Zimbabwe through sanctions have failed.

And what about ensuring a ‘fair go’ economically? Do Western countries have more leverage than they do in trying to ensure a ‘fair go’ politically?

Potentially, yes. The Extractive Industries Transparency Initiative (EITI) has been in existence for a decade, requiring its signatories – Western and developing country governments and companies – to publish what investors pay governments for their mining and hydrocarbon concessions. However, it has had little visible impact, not least because it is voluntary and not many companies or governments have signed up to it. Perhaps the greatest vote of no confidence in the EITI has been that, although then British Prime Minister Tony Blair introduced it, Britain did not sign it. Nor did any other developed country governments, except for Norway.

Their argument for not doing so was essentially that if any one of them signed without their competitors doing so, they would suffer a comparative disadvantage, including likely victimisation, by mineral-rich developing countries.

Now that seems to be changing. Last year the US passed the above-mentioned Dodd-Frank Act requiring listed mining and hydrocarbon companies to publish what they pay host governments. The US has now said it will sign the EITI and so have France and current UK Prime Minister David Cameron. As a result, advocacy groups such as Oxfam are now increasing pressure on Australia, Canada and other major Western mining countries to do the same. They seem likely to go with the Western flow.

Then attention will turn to the big emerging nations, notably the Brics – Brazil, Russia, India, China and South Africa.

In particular China’s aggressively unconditional, pro-government approach to investing in African extractive industries – most notably in Angola’s oil – has so far undercut the EITI and other similar measures, such as efforts by the International Monetary Fund (IMF) to prise open Angola’s oil accounts as a condition for receiving loans.

China – and perhaps other emerging nations – have allowed countries like Angola an unproblematic alternative to pesky Western countries trying to impose their neo-colonial measures like honest government upon them.

South Africa has resisted signing up to the EITI because it has also seen it as a hypocritical Western manoeuvre, which has not been a hard case to make until now, with none of the Western majors signing it. If they do, however, that argument will lose its force and, for the sake of Africa’s people, whom it professes to care for, South Africa should sign up and persuade its fellow Brics to do so too.

Peter Fabricius, Foreign Editor, Independent Newspapers, South Africa