Looting Africa

The Looting Machine: Warlords, Smugglers and the Systematic Theft of Africa’s Wealth

Tom Burgis

Harper Collins (2017)

Book Review

This book centers around something global economists refer to as the “Dutch curse.” In 1959, the discovery of oil in the Netherlands led to massive unemployment outside the oil industry. A big increase in dollars generated by oil exports caused major inflation in the local currency. This made imports cheaper than locally produced goods, shutting down hundreds of Dutch businesses and putting thousands out of work.

It’s typical of mineral and oil/gas mining everywhere (including here in New Plymouth) that these industries require vast capital investment but employ only small numbers of workers. According to Burgis, it was the “Dutch curse” that resulted in Russian’s oil-fueled criminal oligarchy prior to the rise of Putin. As the continent richest in natural resources, Africa, which has been ruthlessly exploited by multinational corporations, has a severe case of the “Dutch curse.”

Although multinationals pay far less than market value for oil, gas and precious minerals, they pay corrupt puppet dictators enough that they don’t need to tax their citizens. Burgis maintains this absence of taxation results in a lack of accountability to their citizenry. Instead of holding leaders to account for their failure to provide basic infrastructure, citizens of “resource states” are far more likely to angle for their share of the loot. Retaining power becomes a simple matter of maintain elaborate patronage (payoff) systems and harsh military/security networks.

Burgis also refutes the myth that Africa’s multiple civil wars stem from tribal and religious conflict. Most African wars are pure resource wars (often triggered by CIA and French and British intelligence), with the conflict used as a cover for resource smuggling and even lower net cost to multinationals.

The US government has attempted to crack down on its own corporations via stricter enforcement (since 2000) of the 1977 Foreign Corrupt Practices Act and a section of the 2010 Dodd Frank Act that prohibits the the purchase of Coltan* from armed rebel groups. The new law, which has done little to reduce Coltan smuggling, has opened the door to a Chinese monopoly on the Coltan market.

The Looting Machine presents a detailed country by country analysis, as well as an examination of the Chinese company responsible for most private investment in Africa (there’s less publicly available information about investment by state-owned Chinese companies). Both engage in far more infrastructure development than Western agents do.

• Angola – principle export oil, with 70% of oil ventures owned by Hong Kong billionaire Sam Pa, operating as Queensway Group or Chinese International Fund. Half of Angolan residents get by on less than $1.25/day.
• Congo – second most important produce of Coltan outside of Australia, also gold, tin, tungsten and diamonds. Residents live on less than $1.00/day.
• Nigeria – oil and gas. Cotton/textile industry that flourished in 1980s shut down (causing mass unemployment) by continuous flood of smuggled Chinese counterfeit textiles. Sam Pa and the French oil company Total have teamed up to challenge Shell’s longstanding monopoly on Nigerian oil.
• South Africa – rich gold, diamond and platinum exports financed the creation of the apartheid state, in which a tiny white minority controlled the entire economy. Since the fall of apartheid in 1994, this minority has been joined by a handful of Black entrepreneurs.
• Botswana – diamonds. Somewhat protected from “Dutch curse” by the creation of value added industries that cut and polish their diamonds prior to export.
• Guinea – among world’s richest reserves of iron and aluminum. Bought out by Sam Pa as a result of Western sanctions.
• Niger – rich in uranium and the world’s poorest country. France previously held monopoly on Niger’s uranium industry, being replaced by Queensway group based on agreement to invest in infrastructure development and employ local labor. (In most countries, Chinese investors import Chinese labor.)
• Ghana – gold. Financed by Chinese Investment Fund after IMF tried to impose structural adjustment conditions** to refinance a World Bank Loan.
• Zimbabwe – diamonds, platinum, nickel, gold. Mugabe used revenues from export industries to finance particularly brutal security force. Diamond industry bought out by Queensway as direct result of Western sanctions.

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*Coltan is a rare precious metal in high demand for cellphones and laptops.

**IMF structural adjustment conditions typically require debtor companies to privatize state owned industries, legislate deep cuts in social services and accept extensive foreign investment as a condition of receiving World Bank loans.

 

 

 

 

Untold History of the US – Bush and Clinton Squandered Peace

Part 9 of Oliver Stones Untold History of the United States covers the Bush senior and Clinton presidency

Bush Senior Presidency

Stone begins by exploring the role of Bush’s father Prescott Bush and other Wall street figures in supporting the rise of Hitler and the Nazi war machine. The list of Wall Street corporations that supplied money, weapons, chemicals, tanks, aircraft and other material support to the Third Reich is a long one: Ford, IBM, GM, Hearst, Standard Oil, Dupont, Kodak, United Fruit, Westinghouse, Douglas Aircraft, ITT, GE, Singer, International Harvester, Union Bank, Chase Manhattan Bank, JP Morgan and the Bank of International Settlements.

Many of these companies demanded (and received) reparations when the Allies bombed their German factories.

Stone devotes much of this episode to the fall of totalitarian rule in Eastern Europe (1989-91), which he describes as the largest peaceful revolution in history. He also discusses the military coup by Boris Yeltsin that shut down parliamentary rule in the Russian Federation and the role of Wall Street, the World Bank, IMF and a handful of Russian oligarchs in systematically stripping the Russian people of their industrial wealth. During this period, many Russians died of malnutrition and medically preventable illness. The life expectancy would drop from 67 to 57 for men and from 76 to 70 for women.

Bush senior, surrounded by anti-Soviet hawks (eg Dick Cheney and Donald Rumsfeld who would go on to found Project for a New American Century) rebuffed all Gorbachev’s overtures for world peace. Stone maintains Gorbachev would never have been forced out of office if Bush had supported him.

The Clinton Presidency

Instead of delivering the promised “peace dividend” when the Cold War ended, Clinton initiated a new wave of defense spending and multiple military interventions overseas. Among them

• He launched a war on Yugoslavia to gain access to Caspian Sea oil for US oil companies.
• He authorized numerous bombing raids on Iraq, supposedly as enforcement of the no-fly zone in regions controlled by Kurds and Shiite rebels.
• He began expanding NATO to former Eastern Bloc countries to enable US oil companies to build pipelines to transport Russian oil to Europe.
• He ordered 75 cruise missiles (at $750,000 each) to be fired on a Sudanese pharmaceutical factory and Zawhar Kili Camp in Afghanistan to distract public attention from the Monica Lewinsky scandal.

Bush and Clinton: Squandered Peace – New World Order

The Ideology of Revolution

Trapped: What Happened to Our Dream of Freedom

Adam Curtis

BBC (2007)

Film Review

Part 3 We Will Force You to be Free

Part 3 is about the philosophy of revolution, as articulated by the Algerian psychiatrist Frantz Fanon (author of Wretched of the Earth and Black Faces, White Masks). Fanon, who studied in Paris, was strongly influenced by French philosopher Jean Paul Sartre. Sartre, who viewed economic equality as essential to personal freedom, believed true freedom was only possible through the overthrow of bourgeois society via violent revolution. Fanon was convinced that the western elites got into people’s heads and turned them into zombies devoid of the ability to think critically or act altruistically for the collective welfare of the community. He also believed that the mere act of organized violence freed people from their competitive individualistic conditioning.

Fanon’s ideas had major influence over numerous third world revolutionaries, including Che Guevara in the 1952 Cuban revolution, Pol Pot in the 1975 Cambodian revolution and Grand Ayatollah Ruhollah Khomeini in the 1979 Iranian revolution.

Pol Pot believed the only way to rid society of bourgeois self-interest was to kill the entire bourgeoisie – all 3 million of them.

Positive and Negative Liberty

The documentary goes on to discuss the work of British political philosopher Isaiah Berlin (1909-1997). Berlin believed only two types of freedom, which he called positive and negative liberty, were possible. He labeled Fanon’s type of freedom “positive liberty,” as it involved a new elite forcing the masses to adopt a new way of thinking through violence. In contrast, “negative liberty,” allowed individuals to do whatever they want so long as they don’t infringe on the rights of anyone else.

Curtis contends that both types of so-called liberty involve violence and coercion. As examples, he offers the “shock therapy” the US corporate elite carried out in Russia in 1992 and in Iraq in 2003. While on the surface, both instances of “shock therapy” looks like pure exploitation by US banks and corporations, both were examples of the neoconservative doctrine of spreading “democracy” via armed force.

Shock Therapy in Russia

Following the collapse of the Soviet Union, US vulture capitalists invaded Russia and pressured the new regime to abandon its centrally controlled economy virtually overnight. All subsidies for food, energy and other basic necessities were discontinued and most of Russia’s state owned industries were privatized. Millions of Russians lost their jobs and were plunged into abject poverty, as Russian oligarchs and American venture capitalists stripped the newly privatized industries of their wealth. Face with the loss of government subsidies, ordinary Russians lined up on the street and traded everything they owned for food.

In 1993, with the economy on the verge of collapse, Boris Yeltsin dissolved Parliament and launched a military coup to install himself as absolute ruler. He had to borrow money from the oligarchs to run his government, for which he handed over the remaining state-owned industries.

By 1998, the oligarchs and their American investors had bled Russia dry and the currency collapsed. Yeltsin was forced to resign and the Russian people elected Putin as president. The latter moved quickly to strip the oligarchs of their wealth and jailed them or forced them into exile. The vast majority of the Russian people adored him. They didn’t care if they lost basic freedoms (e.g. of speech, the press and assembly) because it was a better alternative than starvation.

Shock Therapy in Iraq

The Americans applied similar shock therapy during their occupation of Iraq, privatizing all the state owned industries (selling them for a pittance to US investors) and writing a new constitution that allowed foreign companies to expatriate 100% of their profits tax free.

In Iraq, the brutal US occupation would enhance the rise of a radical Islamist movement violently opposed to both western colonization and exploitation and the selfish, hedonistic and morally bankrupt lifestyle that seemed to be the driving force behind US foreign policy.

The US and Britain, in turn, responded to the threat of Islamic terrorism by severely restricting the freedom of their own citizens.

Both Fanon and Berlin Were Wrong

The two conclusions Curtis draws is that 1) both the so-called positive and negative liberty Berlin describes lead to violence and coercion and 2) Berlin was wrong in claiming that all attempts to change the world for better lead to tyranny.

My own perspective is that both Fanon and Berlin are wrong. As educated members of the upper middle class, they both made the mistake of assuming that the working class thinks the same way they do, i.e. that the working class is afflicted to the same extent as the middle class by individualism and competitive self interest.

Both failed to appreciate or understand that working class people share a distinct culture with its own values, language and world view. In fact, the issue of working class culture received little attention in academic circles prior to the 1970s.* Basic to this culture are the loyalty and group allegiance based on shared hardship.

Both are deeply ingrained values stemming from early childhood experience, which makes them difficult to reverse with mass media messaging, no matter how pervasive it is.

This is certainly my experience in working with blue collar families for 33+ years. It’s also born out by working class patterns of charitable giving.**

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* Some of the better known authors on working class culture include Lillian Breslow Rubin (Worlds of Pain), Richard Sennett (Hidden Injuries of Class), Jake Ryan and Charles Sackrey (Strangers in Paradise: Academics from the Working Class), and Alfred Lubrano (Limbo: Blue Collar Roots and White Collar Dreams).

**Studies of working class charitable giving:

• Study (Aug 2012) shows lower income people donate a much bigger share of their income: America’s generosity divide
• Studies examining why poorer people are more charitable than the wealthy: Why poorer people are more charitable
• Study examining why the rich are so stingy: Why the rich dont give

 

Free link to Part 3: The Trap 3 We_Will_Force_You_To_Be_Free_BBC/