Category Archives: economics

by | 25 September 2021 · 10:50 am

Early Origins of the Taliban in Kandahar

From No Good Men Among the Living: America, the Taliban, and the War through Afghan Eyes, by Anand Gopal (Henry Holt, 2014), Kindle pp. 79-80:

Most writing on the Taliban assumes that they originated in extremist Pakistani madrassas in the 1980s. In fact, the group’s origins lie much deeper in the Afghan past. Visiting Paktika in 2010, I came upon a small hilltop village where locals had gathered around a silent, downcast man. Nearby, a young herder paced back and forth, watching him intently, and, off to a side, tribal graybeards stood conferring. One of them approached, pushing his way through the scrum, and announced a verdict: for killing Rahim Gul’s cow, Moheb Jan was to pay him two sheep and twenty days’ worth of labor. Afterward, I sat down with the elder, who explained that each transgression in his community carried a fixed fine. Break someone’s nose in a fight, and you gave him a chicken. Break a bone, and you surrendered a sheep or goat. Murder, depending on the circumstances, could cost you a piece of land, your house, or even one of your women, who would go to the victim’s family in marriage.

This was how the hillspeople had learned to live with each other in a world without a state or police or judicial system. Each tribe had its own set of intricate rules, decided by elders elected by the clan’s entire male population. The elders derived their status from experience and the respect traditionally accorded to the aged. No man, however, outranked another in rights, and it was rare for one family to possess significantly more than any other. For men, at least, a deep egalitarian ethos ran through the tribal system.

For a long time, most of the Pashtun belt had functioned this way. Eventually, however, when some tribes moved down from the mountains into agricultural settlements, certain enterprising individuals developed ties with distant state authorities, and soon hierarchies sprang up. In eighteenth-century Kandahar, for example, the Safavid Empire of Persia had established suzerainty, incorporating tribal figures of their liking into their military or using them as intermediaries in dealing with the native population. The egalitarian system of the mountains slowly gave way to one dominated by tribal strongmen, and decisions were increasingly made not through traditional tribal law but on the whims and biases of a small clique of notables. It was not long before Kandahari tribes were the most thoroughly hierarchical in the country.

As a consequence, a different form of justice grew in popularity as an alternative to the tribal system: religious law, or sharia. Like tribal law, religious law expressed itself in a detailed set of punishments and restitutions for particular crimes. Its main practitioners were mullahs, who led Friday sermons and could adjudicate disputes. To become a mullah, you studied for up to twelve years in a madrassa, where you learned the intricacies of Islamic law, along with history, philosophy, and logic. In Pashto, such students were called taliban. Because a mullah was guaranteed employment for life, this was a course of study particularly well suited to those from the humblest backgrounds. It was in greater Kandahar, where tribal structures were the weakest, that the taliban were most fully integrated into social life.

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Filed under Afghanistan, democracy, economics, education, Iran, nationalism, Pakistan, religion

by | 16 September 2021 · 10:58 am

Negative Human Development in Resource States

From The Looting Machine: Warlords, Oligarchs, Corporations, Smugglers, and the Theft of Africa’s Wealth, by Tom Burgis (PublicAffairs, 2016), Kindle pp. 211-212:

In 1970, the year the Olympic movement expelled South Africa, the government passed legislation formally stripping blacks of their citizenship and restricting them to destitute “homelands,” and the authorities appointed a barbaric new commanding officer at Robben Island prison to watch over Mandela and his fellow inmates, South Africa produced some 62 percent of the gold mined worldwide. From the early 1970s to 1993 gold, diamonds, and other minerals accounted for between half and two-thirds of South Africa’s exports annually.

South Africa’s gold and diamonds provided the financial means for apartheid to exist. In that sense white rule was an extreme manifestation of the resource state: the harnessing of a national endowment of mineral wealth to ensure the power and prosperity of the few while the rest are cast into penury and impotence. None of Africa’s resource states today come close to the level of orchestrated subjugation of the majority that the apartheid regime achieved. Neither do they employ apartheid’s racial creed, even if ethnicity has combined poisonously with the struggle to capture resource rent in Nigeria, Angola, Guinea, and elsewhere. But as their rulers, in concert with the multinational corporations of the resource industry, horde the fruits of their nations’ oil and minerals, Africa’s resource states have come to bear a troubling resemblance to the divisions of apartheid.

While the children of eastern Congo, northern Nigeria, Guinea, and Niger waste away, the beneficiaries of the looting machine grow fat. Amartya Sen, the Nobel Prize–winning Indian economist who has examined with great insight why mass starvation occurs, writes, “The sense of distance between the ruler and the ruled—between ‘us’ and ‘them’—is a crucial feature of famines.” That same reasoning could be applied to the provision of other basic needs, including clean water and schooling. And rarely is the distance Sen describes as wide as in Africa’s resource states.

Many of Africa’s resource states experienced very high rates of economic growth during the commodity boom of the past decade. The usual measure of average incomes—GDP per head—has risen. But on closer examination such is the concentration of wealth in the hands of the ruling class that that growth has predominantly benefited those who were already rich and powerful, rendering the increase in GDP per head misleading. A more revealing picture comes from a different calculation. Each year the United Nations ranks all the countries for which it can gather sufficient data (186 in 2012) by their level of human development, things like rates of infant mortality and years of schooling. It also ranks them by GDP per head. If you subtract a country’s rank on the human development index from its rank on the GDP per head index, you get an indication of the extent to which economic growth is actually bettering the lot of the average person in that country. In countries that score zero—as Congo, Rwanda, Russia, and Portugal did in 2012—living standards are roughly where you might expect them to be, given that country’s GDP per head. People in countries with positive scores enjoy disproportionately pleasant living conditions relative to income—Cuba, Georgia, and Samoa top the table with scores of 44, 37, and 28, respectively. A negative score indicates a failure to turn national income into longer lives, better health, and more years of education for the population at large. Of the ten countries that come out worst, five are African resource states: Angola (–35), Gabon (–40), South Africa (–42), Botswana (–55), and Equatorial Guinea.

Equatorial Guinea’s score (–97), comfortably the worst in the world, is all the more remarkable because its GDP per head is close to $30,000 a year, not far below the level of Spain or New Zealand and seventy times that of Congo.

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Filed under Africa, Angola, Congo, democracy, economics, energy, Equatorial Guinea, industry, labor, nationalism, Nigeria, South Africa

by | 14 September 2021 · 7:36 am

“Survival of the Fattest” in Rentier States

From The Looting Machine: Warlords, Oligarchs, Corporations, Smugglers, and the Theft of Africa’s Wealth, by Tom Burgis (PublicAffairs, 2016), Kindle pp. 188-190:

A governor of one of Nigeria’s thirty-six states is effectively president of his own fiefdom. He has immunity from prosecution and controls the state security budget. The chairman of each of the 774 local governments is answerable to the state governor. To win a presidential primary a candidate needs two-thirds of the states to back him. That backing is in the gift of the governors. The Governors’ Forum is perhaps the most potent gathering in the land. Only about half of Nigeria’s oil revenues are allocated to the federal government. A fifth goes to the local governments. The governors control the quarter of oil revenues that goes to the states.

Oil-producing states receive an additional 13 percent share of Nigeria’s oil income before it is divided between the tiers of government. The state houses of the Niger Delta are powerful pistons of the looting machine. When he agreed to meet me in late 2010, Timipre Sylva had succeeded Goodluck Jonathan as governor of Bayelsa, one of the Delta’s three main states. I had hoped to interview him at Gloryland, the gubernatorial palace set well apart from the shacks that house his constituents. Instead, I was summoned to the penthouse suite of a five-star hotel in Lagos, where Sylva was staying with his entourage during a visit to the commercial capital.

A tall and intelligent man, Sylva was under pressure. Politics in the Niger Delta is unremittingly volatile. Gunmen drift between the militias of MEND, crime gangs, and squads of political thugs that freelance for competing aspirants to power. As Sylva’s rivals sought to force him from office, loyalists were exchanging tit-for-tat attacks with his enemies. Relations with Jonathan, recently elevated to the presidential palace by Yar’Adua’s death, had soured. Little wonder, I suggested, that others coveted his job: his immediate predecessor had found himself president and the one before had siphoned off so much cash that he, like Joshua Dariye and James Ibori, the former governors of Plateau and Delta States, had snapped up enough assets abroad to earn the attention of the British police.

Sylva accepted that there had been widespread corruption among the governors. But he was, he pleaded, just a cog in a patronage system not of his making. “If a chief walks into my office, he expects me to take care of his problems because that is what the military used to do,” Sylva said. “That’s what he’s used to. If I don’t, I’ve got a very big political enemy.”

So you have to “settle” them, I suggested, using the Nigerian term for the dispensing of cash.

“Yes. And you will read that as corruption. But me, I probably will read that as political survival, because I have to survive before I become incorruptible.”

“And you use public funds to do that?” I asked.

“What does he expect me to do? I don’t have that kind of money; the kind of money he’s expecting. Even if I have it privately, I won’t do that with it. And he’s coming to me because I’m governor. If, for example, the big chief comes, and he has to go for a medical check, it shouldn’t be my problem. But it is. If a very big traditional ruler dies somewhere, and they want to do an elaborate burial ceremony, they come to me. I have to do it.”

Me, I probably will read that as political survival. To justify corruption, Sylva reached for the same word—“survival”—that Mahmoud Thiam had chosen when he explained why pariah states are willing to deal with the likes of Sam Pa and the Queensway Group. Said Djinnit, the UN’s man in west Africa, called the competition to control political power in the resource states “a struggle for survival at the highest level.” Paul Collier talks about the law of “the survival of the fattest” in rentier states.

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Filed under Africa, China, democracy, disease, economics, energy, military, Nigeria, U.N.

by | 13 September 2021 · 7:08 am

How Multinationals Dodge Taxes

From The Looting Machine: Warlords, Oligarchs, Corporations, Smugglers, and the Theft of Africa’s Wealth, by Tom Burgis (PublicAffairs, 2016), Kindle pp. 165-167:

Two-thirds of trade happens within multinational corporations. To a large extent those companies decide where to pay taxes on which portions of their earnings. That leaves ample scope to avoid paying taxes anywhere or to pay taxes at a rate far below what purely domestic companies pay.

Imagine a multinational company making rubber chickens, called Fowl Play Incorporated. Fowl Play’s headquarters and most of its customers are in the United States. A subsidiary, Fowl Play Cameroon, runs a rubber plantation in Cameroon. The rubber is shipped to a factory in China, owned by another subsidiary, Fowl Play China, where it is made into rubber chickens and packaged. The rubber chickens are shipped to Fowl Play’s parent company in the United States, which sells them to mainly US customers.

Fowl Play could simply pay taxes in each location based on an honest assessment of the proportion of its income that accrues there. But it has a duty to its shareholders to maximize returns, and its executives want the bonuses that come from turning big profits, so its accountants are instructed to minimize the effective tax rate Fowl Play pays by booking more revenues in places with low tax rates and fewer revenues in places with high tax rates. If, for example, Fowl Play wanted to reduce its tax liability in Cameroon and the United States by shifting profits to China, where it has been granted a tax holiday to build its factory, it would undervalue the price at which the rubber is sold from the Cameroonian subsidiary to the Chinese one, then overvalue the price at which the Chinese subsidiary sells the finished rubber chickens to the parent company in the United States. All this happens within one company and bears scant relation to the actual costs involved. The result is that the group’s overall effective tax rate is much lower than it would have been had it apportioned profits fairly. Many such tax maneuvers are perfectly legal. When it is done ethically “transfer pricing,” as the technique in this example is known, uses the same prices when selling goods and services within one company as when selling between companies at market rates. But the ruses to fiddle transfer pricing are legion. A mining company might tweak the value of machinery it ships in from abroad, or an oil company might charge a subsidiary a fortune to use the parent’s corporate logo.

Suppose Fowl Play gets even cannier. It creates another subsidiary, this time in the British Virgin Islands, one of the tax havens where the rate of corporation tax is zero. Fowl Play BVI extends a loan to the Cameroonian subsidiary at an astronomical interest rate. The Cameroonian subsidiary’s profits are canceled out by the interest payments on the loan, which accrue, untaxed, to Fowl Play BVI. And all the while Fowl Play and the rubber chicken industry’s lobbyists can loudly warn Cameroon, China, and the United States that, should they try to raise taxes or clamp down on fiddling, the company could move its business, and the attendant jobs, elsewhere. (The BVI company is only a piece of paper and doesn’t employ anyone, but then there is no need to threaten the British Virgin Islands—its tax rate could not be lower.)

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Filed under Africa, Britain, Cameroon, Caribbean, China, economics, Europe, industry, U.S.

by | 10 September 2021 · 6:13 am

New African Infrastructure for Whom?

From The Looting Machine: Warlords, Oligarchs, Corporations, Smugglers, and the Theft of Africa’s Wealth, by Tom Burgis (PublicAffairs, 2016), Kindle pp. 147-149:

It is too simplistic to see China’s quest for African resources as a Manichean struggle for nature’s treasure between East and West. There is competition, but there is also cooperation in the business of resource extraction. And for all its increased attractiveness to rival investors from overseas, much of Africa remains locked at the foot of the global economy.

Ibrahim Iddi Ango, the industrialist who headed Niger’s chamber of commerce, told me that Niger’s rulers had sold the country short in their negotiations with the Chinese. “They need strategic resources. You must say, ‘You are interested in that? These are the conditions. First, you must use local labor. Second, all the needs you have—for example, the transit—you must use at a minimum 50 percent local operators.’ But when they came the government said none of this. The state took a percentage of the businesses and let the Chinese do what they want.” A brief window of opportunity to use China’s desire for African minerals to insist on securing for Niger the skills and infrastructure that might help to salve the resource curse by broadening the economy was closing. “To diversify, it’s central,” Iddi Ango said—and with good reason. Niger is among the African states most acutely dependent on a handful of raw commodity exports, their economic fortunes yoked to the whims of far-off consumers. On the African Development Bank’s index, where a higher score indicates a more diversified economy, relatively wealthy countries not shackled to the resource trade such as Mauritius and Morocco score 22 and 41, respectively. The average for the whole of Africa, including more prosperous North Africa, is 4.8. The most oil-dependent states, Angola and Chad, record the lowest scores, 1.1. Niger does only marginally better, with a score of 2.4.

“But if you let China do what it wants—as many African countries have—they pay for the oil or the resources and use Chinese labor, Chinese trucks. It’s a big problem,” Iddi Ango said. “They are coming because the resources are here. This moment will not be repeated. We can’t miss it. When the uranium or the oil is finished, they will leave.”

The fall of Tandja demonstrated the limits of China’s readiness to get involved in domestic politics to protect African allies. But Xia Huang, the Chinese ambassador in Niamey, encapsulated how China’s readiness to spend and build allowed Beijing to gain a foothold sufficiently strong that its interests could withstand a coup against an ally. “Today there is a bridge between the two sides of the River Niger,” he told me. “But there is also a bridge that links China and Niger.”

Yet the true value of China’s offer to guide Africa on a path to economic diversification and industrialization—the road that led the rich world to prosperity—rests on whether its construction spree is geared primarily toward cultivating the rulers who govern access to resources or toward broadening the opportunities of the population at large. Neither railways that simply connect Chinese-owned mines to Chinese-built ports for the export of commodities nor vanity projects of great cost but little economic usefulness will lift resource states’ inhabitants from their poverty. Martyn Davies, the chief executive of a South African consultancy called Frontier Advisory who has worked as an adviser on Chinese deals in Africa, told me, “When you have a commodity-driven economy, where a lot of people are excluded, it’s a silo economy. It’s very difficult to build infrastructure that supports inclusive growth. Is Chinese-financed infrastructure going to provide diversification? Which comes first?” He added, “African governments should never assume that responsibility for the development of our continent has been outsourced to Beijing.”

Beijing appears to be undercutting its side of the deal. Chinese goods like the counterfeit textiles flooding into northern Nigeria drown out hopes for industrialization, regardless of how many roads and railways Chinese companies lay. Lamido Sanusi, governor of Nigeria’s central bank from 2009 to 2014, put it well: “So China takes our primary goods and sells us manufactured ones. This was also the essence of colonialism. The British went to Africa and India to secure raw materials and markets. Africa is now willingly opening itself up to a new form of imperialism.”

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Filed under Africa, China, economics, industry, labor, Niger

by | 9 September 2021 · 4:39 am

Nigeria’s Smuggled Economy

From The Looting Machine: Warlords, Oligarchs, Corporations, Smugglers, and the Theft of Africa’s Wealth, by Tom Burgis (PublicAffairs, 2016), Kindle pp. 61-62, 65:

Weapons and unwilling human traffic cross Nigeria’s northern border covertly. But the flow of counterfeit Chinese-made textiles has grown so voluminous that it would be impossible to keep it secret even if secrecy were required to ensure its safe passage. All the same, most of the shipments go through under cover of darkness. Those who control the trade engage in highly organized “settling,” or bribing, of the border officials, smoothing the textiles’ transit.

The Nigerian stretch is just the final leg of a 6,200-mile journey. It begins in Chinese factories, churning out imitations of the textiles that Nigerians previously produced for themselves, with their signature prime colors and waxiness to the touch. By the boatload they arrive in west Africa’s ports, chiefly Cotonou, Benin’s biggest city, a tiny country beside Nigeria that has, like Montenegro in Europe or Paraguay in South America, become a state whose major economic activity is the trans-shipment of contraband. At the ports the counterfeit consignments are loaded onto trucks and either driven straight over the land border between Benin and western Nigeria or up through Niger and round to the border post with its taciturn chief. The trade is estimated to be worth about $2 billion a year, equivalent to about a fifth of all annual recorded imports of textiles, clothing, fabric, and yarn into the whole of sub-Saharan Africa.

Smuggling is a long-established profession here. Before colonial cartographers imposed the frontier, today’s smuggling routes were the byways of legitimate commerce. The border marks a delineation of what used to be British and French territory in west Africa, but no natural division of language or ethnicity exists. People on both sides speak Hausa, a tongue in which the word for smuggling, sumoga, strikes a less pejorative note than its English equivalent. The textile smuggling bosses are the oligarchs of the northern borderlands. For those in their pay, they can be generous benefactors.

…

The cheaper price of smuggled garments relative to locally produced ones was good news, superficially at least, for the traders’ hard-pressed customers but less so for the employees of Nigeria’s textile industry. “It is a pitiable situation,” said Hillary, apparently oblivious to his and his colleagues’ role in their compatriots’ downfall. “All the [textile factories] we have here have shut down. The workers are now on the streets.”

In the mid-1980s Nigeria had 175 textile mills. Over the quarter-century that followed, all but 25 shut down. Many of those that have struggled on do so only at a fraction of their capacity. Of the 350,000 people the industry employed in its heyday, making it comfortably Nigeria’s most important manufacturing sector, all but 25,000 have lost their jobs. Imports comprise 85 percent of the market, despite the fact that importing textiles is illegal. The World Bank has estimated that textiles smuggled into Nigeria through Benin are worth $2.2 billion a year, compared with local Nigerian production that has shriveled to $40 million annually. A team of experts working for the United Nations concluded in 2009, “The Nigerian textile industry is on the verge of a total collapse.” Given the power crisis, the near-impassable state of Nigeria’s roads, and the deluge of counterfeit clothes, it is a wonder that the industry kept going as long as it did.

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Filed under China, economics, industry, migration, military, Nigeria

by | 8 September 2021 · 6:29 am

Congo’s Tantalum Wealth

From The Looting Machine: Warlords, Oligarchs, Corporations, Smugglers, and the Theft of Africa’s Wealth, by Tom Burgis (PublicAffairs, 2016), Kindle p. 30:

The Congolese are consistently rated as the planet’s poorest people, significantly worse off than other destitute Africans. In the decade from 2000, the Congolese were the only nationality whose gross domestic product per capita, a rough measure of average incomes, was less than a dollar a day.

Tantalum’s extremely high melting point and conductivity mean that electronic components made from it can be much smaller than those made from other metals. It is because tantalum capacitors can be small that the designers of electronic gadgets have been able to make them ever more compact and, over the past couple of decades, ubiquitous.

Congo is not the only repository of tantalum-bearing ores. Campaigners and reporters perennially declare that eastern Congo holds 80 percent of known stocks, but the figure is without foundation. Based on what sketchy data there are, Michael Nest, the author of a study of coltan, calculates that Congo and surrounding countries have about 10 percent of known reserves of tantalum-bearing ores. The real figures might be much higher, given that reserves elsewhere have been much more comprehensively assessed. Nonetheless, Congo still ranks as the second-most important producer of tantalum ores, after Australia, accounting for what Nest estimates to be 20 percent of annual supplies. Depending on the vagaries of supply chains, if you have a PlayStation or a pacemaker, an iPod, a laptop, or a mobile phone, there is roughly a one-in-five chance that a tiny piece of eastern Congo is pulsing within it.

The insatiable demand for consumer electronics has exacted a terrible price. The coltan trade has helped fund local militias and foreign armies that have terrorized eastern Congo for two decades, turning what should be a paradise into a crucible of war.

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Filed under Australia, Congo, economics, industry, labor, military, war

by | 7 September 2021 · 7:20 am

Africa’s Resource Curse

From The Looting Machine: Warlords, Oligarchs, Corporations, Smugglers, and the Theft of Africa’s Wealth, by Tom Burgis (PublicAffairs, 2016), Kindle pp. 4-6:

The sheer number of people living in what are some of the planet’s richest states, as measured by natural resources, is staggering. According to the World Bank, the proportion of the population in extreme poverty, calculated as those living on $1.25 a day and adjusted for what that wretched sum will buy in each country, is 68 percent in Nigeria and 43 percent in Angola, respectively Africa’s first and second biggest oil and gas producers. In Zambia and Congo, whose shared border bisects Africa’s copper-belt, the extreme poverty rate is 75 percent and 88 percent, respectively. By way of comparison, 33 percent of Indians live in extreme poverty, 12 percent of Chinese, 0.7 percent of Mexicans, and 0.1 percent of Poles.

The phenomenon that economists call the “resource curse” does not, of course, offer a universal explanation for the existence of war or hunger, in Africa or anywhere else: corruption and ethnic violence have also befallen African countries where the resource industries are a relatively insignificant part of the economy, such as Kenya. Nor is every resource-rich country doomed: just look at Norway. But more often than not, some unpleasant things happen in countries where the extractive industries, as the oil and mining businesses are known, dominate the economy. The rest of the economy becomes distorted, as dollars pour in to buy resources. The revenue that governments receive from their nations’ resources is unearned: states simply license foreign companies to pump crude or dig up ores. This kind of income is called “economic rent” and does not make for good management. It creates a pot of money at the disposal of those who control the state. At extreme levels the contract between rulers and the ruled breaks down because the ruling class does not need to tax the people to fund the government—so it has no need of their consent.

Unbeholden to the people, a resource-fueled regime tends to spend the national income on things that benefit its own interests: education spending falls as military budgets swell. The resource industry is hardwired for corruption. Kleptocracy, or government by theft, thrives. Once in power, there is little incentive to depart. An economy based on a central pot of resource revenue is a recipe for “big man” politics. The world’s four longest-serving rulers—Teodoro Obiang Nguema of Equatorial Guinea, José Eduardo dos Santos of Angola, Robert Mugabe of Zimbabwe, and Paul Biya of Cameroon—each preside over an African state rich in oil or minerals. Between them they have ruled for 136 years.

From Russia’s oil-fired oligarchs to the conquistadores who plundered Latin America’s silver and gold centuries ago, resource rents concentrate wealth and power in the hands of the few. They engender what Said Djinnit, an Algerian politician who, as the UN’s top official in west Africa, has served as a mediator in a succession of coups, calls “a struggle for survival at the highest level.” Survival means capturing that pot of rent. Often it means others must die.

The resource curse is not unique to Africa, but it is at its most virulent on the continent that is at once the world’s poorest and, arguably, its richest.

Africa accounts for 13 percent of the world’s population and just 2 percent of its cumulative gross domestic product, but it is the repository of 15 percent of the planet’s crude oil reserves, 40 percent of its gold, and 80 percent of its platinum—and that is probably an underestimate, given that the continent has been less thoroughly prospected than others. The richest diamond mines are in Africa, as are significant deposits of uranium, copper, iron ore, bauxite (the ore used to make aluminum), and practically every other fruit of volcanic geology. By one calculation Africa holds about a third of the world’s hydrocarbon and mineral resources.

Outsiders often think of Africa as a great drain of philanthropy, a continent that guzzles aid to no avail and contributes little to the global economy in return. But look more closely at the resource industry, and the relationship between Africa and the rest of the world looks rather different. In 2010 fuel and mineral exports from Africa were worth $333 billion, more than seven times the value of the aid that went in the opposite direction (and that is before you factor in the vast sums spirited out of the continent through corruption and tax fiddles). Yet the disparity between life in the places where those resources are found and the places where they are consumed gives an indication of where the benefits of the oil and mining trade accrue—and why most Africans still barely scrape by. For every woman who dies in childbirth in France, a hundred die in the desert nation of Niger, a prime source of the uranium that fuels France’s nuclear-powered economy. The average Finn or South Korean can expect to live to eighty, nurtured by economies among whose most valuable companies are, respectively, Nokia and Samsung, the world’s top two mobile phone manufacturers. By contrast, if you happen to be born in the Democratic Republic of Congo, home to some of the planet’s richest deposits of the minerals that are crucial to the manufacture of mobile phone batteries, you’ll be lucky to make it past fifty.

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Filed under Africa, Angola, Cameroon, Congo, democracy, economics, education, energy, Equatorial Guinea, industry, labor, migration, Zimbabwe

by | 6 September 2021 · 6:06 am

Political Economy of the Roadblock

From The Looting Machine: Warlords, Oligarchs, Corporations, Smugglers, and the Theft of Africa’s Wealth, by Tom Burgis (PublicAffairs, 2016), Kindle pp. 44-45:

Our two-jeep convoy slowed as it approached a roadblock deep in the tropical forests of one of eastern Congo’s national parks. Manning the roadblock were soldiers from the Congolese army, theoretically the institution that should safeguard the state’s monopoly on the use of force but, in practice, chiefly just another predator on civilians. As my Congolese companions negotiated nervously with the soldiers, I stepped away to take advantage of a break in a very long drive and relieve myself, only to sense someone rushing toward me. Hurriedly zipping up my fly, I turned to see a fast-approaching soldier brandishing his AK47. With a voice that signified a grave transgression, he declared, “It is forbidden to piss in the park.” Human urine, the soldier asserted, posed a threat to eastern Congo’s gorillas. I thought it best not to retort that the poor creatures had been poached close to extinction by, among others, the army nor that the park attracted far more militiamen than gorilla-watching tourists.

My crime, it transpired, carried a financial penalty. My companions took the soldier aside, and the matter was settled. Perhaps they talked him down, using the presence of a foreign journalist as leverage. Perhaps they slipped him a few dollars. As we drove away it occurred to me that we had witnessed the Congolese state in microcosm. The soldier was following the example set by Kabila, Katumba, Mwangachuchu, and Nkunda: capture a piece of territory, be it a remote intersection of potholed road, a vast copper concession, or the presidency itself; protect your claim with a gun, a threat, a semblance of law, or a shibboleth; and extract rent from it. The political economy of the roadblock has taken hold. The more the state crumbles, the greater the need for each individual to make ends meet however they can; the greater the looting, the more the authority of the state withers.

While we were visiting my historian brother during his sabbatical in Cameroon, we hired a driver to take us into the Southern Region. As we approached Lolodorf (a name dating back to German Kamerun), I stepped out of the car to take a photo of the sign. As I got back in the car, a policeman, who had been sitting in his car in the shade across the road, came over to tell us it was forbidden to take photos of road signs. After we politely asked why, he began to find fault with the windshield documentation required for the hired car. He went back and forth to his car several times, supposedly checking with his superiors, while we quietly waited to see how much of a bribe it would take to get free of him. He asked for all our IDs, and we gave him anything except our passports. After perhaps 20 minutes of quiet back and forth, we were able to pay him a “fine” equivalent to about US$10, enough for him to buy more beer for his afternoon in the shade.

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Filed under Cameroon, Congo, democracy, economics, labor, migration, military

by | 4 September 2021 · 6:46 am

Collapse of Lebanon’s Second Republic

From Beirut 2020: Diary of the Collapse, by Charif Majdalani (Other Press, 2021), Kindle pp. xii-xiv (preface to the English-language edition, which provides very helpful context for the diary entries, which I will refrain from excerpting):

But the main issue was that the war chiefs–turned–political leaders seized control of the government and public sector, in concert with the generals of the Syrian occupying forces, and together they developed a system of governance that was entirely based on clientelistic mafia practices. They took advantage of the huge public works program for the reconstruction of the country, and of the bountiful financial manna this generated, to shamelessly enrich themselves and to entrench corruption as a system of government and a way of life, with the culpable consent of a powerful caste of arrogant bankers. Nevertheless, this was the beginning of thirty years of renewed opulence, euphoria, creativity, and vitality, when the population shamefully closed their eyes to the actions of this noxious political class.

In 2005, the Sunni prime minister Rafic Hariri, the only politician who was not a former war chief and who showed himself to be extremely hostile to the Syrian control of the country, was assassinated by the Syrians with the help of Hezbollah. This sparked a huge insurrection, which forced the Syrians to withdraw. Those previously banished (Michel Aoun) or who were political prisoners (Samir Geagea) returned. But former allies of Syria, such as Berri, Jumblatt, and the Hezbollah chiefs, managed to stay in power. New alliances sprang up between them and those who had returned, which led to the persistence of the same clientelism and corruption in political practices as under the occupation. This finally brought about the collapse of the country in 2020—a disaster which the present diary documents from day to day.

Despite this tormented history, Lebanon really had been, and perhaps could still be, a laboratory for some important political and social experiments. The first of these experiments is the management of multiculturalism and religious coexistence, which have endured despite violent convulsions, and lead every day to new forms of acculturation and cultural diversity. This small country has also been the laboratory where the processes of transforming family, clan, and community affiliation into a sense of citizenship are repeated on a daily basis. In other words, it is like a small-scale reenactment under a bell jar of the very genesis of any democracy.

Unfortunately these experiments have been slow to be reflected in political practice. They have suffered from being subverted or misappropriated by the ruling class, whose poor governance, corruption, and clientelization of the citizenry on the basis of community affiliation might also serve as a test case. The crisis in Lebanon in 2020 showed the dangers resulting from hyperliberal economic policies and the absence of any regulatory authority or control over the country’s social or economic life, which have turned political leaders into mafia bosses in their dealings with the nation’s citizens. The Lebanese people were forced to endure this hyperliberalism and the transformation of the public sector into a mafialike structure. They were obliged, day in and day out, to invent original forms of social and civic regulation and transaction, in the absence of any higher authority doing so. For several decades, they thought that this might also serve as a model, before they understood that a world where the banks and the super-wealthy seek to manage the life of ordinary citizens by depriving them of any official recourse to government was a complete disaster on all levels—be it social, economic, urban, or ecological. In this way as well, Lebanon’s recent history and collapse might serve as a forewarning and alarm bell for the entire planet.

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