Reading on the resource grab, corruption

The New Yorker published an excellent story, “Buried Secrets — How an Israeli billionaire wrested control of one of Africa’s biggest prizes”

The Western world has always thought of Africa as a continent to take things from, whether it was diamonds, rubber, or slaves. This outlook was inscribed into the very names of Guinea’s neighbor Côte d’Ivoire and of Ghana, which was known to its British masters as the Gold Coast. During the Victorian period, the exploitation of resources was especially brutal; King Leopold II, of Belgium, was so rapacious in his pursuit of rubber that ten million people in the Congo Free State died as a result. The new international stampede for African resources could become another grim story, or it could present an unprecedented opportunity for economic development.

Guinea has an iron ore deposit that may be worth up to US$140 Billion. The mining rights, which had been granted to Rio Tinto, were mysteriously rescinded and granted to an Israeli company with no mining experience — under more than dubious circumstances. Read the story for an international thriller as the new, (more) democratic government of Guinea seeks to find the evidence of corruption that would allow them to claim the resources back. Read it also for a glimpse of just how difficult uncovering corruption can be.

Many Sub-Saharan African countries are in a tight spot: they are far poorer than they should be, and many are sitting on a vast wealth of resources that they don’t have the capital to extract. The Chinese are happy to help, and so are others. The question around these deals is always whether the nations in question get a fair share. Often, it seems, most of the benefit goes to élites and of course the foreign countries so generously providing funding.

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