This is a book about social and environmental decay in African rural landscapes endowed with natural resources. The authors present evidence based research from Cameroon-Chad, Lesotho, Niger Delta, Nigeria, East Congo, Rwanda, Sudan and Ghana to illustrate how the planet, people and profit, so far, has failed to strike a balance and provide rec-ommendations based on findings the way forward. Many of the arguments focus on the local as well rnational political economy in which resources are extracted and exported and the impact on social and environment life and landscape in rural Africa. Automatic operation of the market and market actors' philanthropy to help communities' impoverished rural folk sounded old fashioned or resemble neo-colonialism was arbitrated.Term CSR, came into being whereby rural African people were theoretically able to get satisfaction as they drank toxic water as long as the companies were paying them back in kind under these companies' respective voluntary CSR interventions. The problem is that commercial soceities were created with multinational corporations in the lead. States found it hard to reverse or slow down the process at least until they could get a hang of it. Open market policies continue to remain resistent to such challenges despite mounting critique from many cor-ners. FDI is the buzzword and the saviour that alleviates Af-rica's poverty. Although a broader consensus has emerged within and outside of Africa and other developing countries about fundamental defects in the economic model and free market principles through which large multinationals conduct business, raw materials continue to flow from poor countries to rich countries with very little challenge. All this proves that the present way of doing business in Africa. Trade pacts need to be reopened in order to bring forth changes. This has become even more important now with the Red Capitalism.
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Case studies from
Cameroon-Chad,Lesotho,Nigeria, Rwanda,Sudan,East Congo,andGhana
Nilani L. De Silva
Nicholas A. Jackson
Copyrights©All Authors, 2013
All Rights Reserved. No part of this publication may be produced without prior permission from the publisher.
Swedish Library Cataloguing-in-Publication-Data
National Library of Sweden
Published by Nordic ePublisher
111 60 Stockholm
The Annotated Table of Contents
The Political Economy of Exporting Regions
Macroeconomic Adjustments & Rural poverty
Dependency, Political Disorder, and Social Decay
Application of New Institutionalism
Rhetorics of Resource Based Development
Structure the of the Book
Chapter2:2:A Failure but the Oil Keeps Flowing: The Chad-Cameroon Petroleum Development Project
The Official CCPDP Narrative
Outside of the Official Documents: Political Contestation
Why Does Oil Continue to Flow with Little Impediment?
Governance, Rights and Social Transformation
Chapter 3: Perception of the Impact of Diamond Mining on Local Communities in Lesotho
Lesotho’s socioeconomy in nutshellin nutshell
Diamond Mines in Lesotho
National and local Regulatory Frameworks
Studying local communities in diamond mining areas
Positive and Negative Impacts
Trivalising Adverse Effects
Lack of Cost and Benefit Calculation
CSR Failed Diamond Mining Community in Lesotho
How to strike a Balance? Few recommendations
Chapter 4: Oil and Rural Poverty in the Niger Delta
Ignoring the Obvious
Niger Delta at Two Stances
Socioeconomic Conditions in the Niger Delta
Public Expenditure and Rural poverty in Niger Delta
Inequality in Allocation of Funds
Link between Resource Allocation & Enviroment
How Oil Spills Accenturate Poverty
Gas Flaring and enviornment Damages in Villages
Land Grabbing and Oil Production
Oil related Conflicts and Rural Political Economy
Women’s Plight in the Delta
The Way Forward
Chapter5: Gunningfor the Barrel: The Oil Dimension to the Inter Communal Violence in theCityWof Warri
Interface between Oil & the Recurring Inter communal Rages
Oil and violence: A review of Interface
Who Owns Warri?
An Analysis of the Nature of the Crisis in Warri
Choosing the Arms Option
Impact of the Crisis
Peace and Conflict Resolution Initiatives
Taming the Curse
Investigating Abandoned Mines in Rwanda
The Gatumba Mining District
Soil sampling and sample preparation
Poor Condition of Soil and Harmful Toxic
Concluding of the status
Chapter 7: Lundin Oil Block 5A: Sudan
Vicious Progression of Colonial Past
Sudan in a Nutshell
Swedish Companies in Conflict Zones
Analysing HR and Accountability
Keep Blaming Bad Governance
It is a Joint Failure
Chapter8:Corporate Social Responsibility (CSR) in the Ghanaian Mining Sector
Contextualising Ghanaian Mining Sector and CSR
How CSR fared in Ghana?
Mining Companies Contributions
Gaps in Ghanaian National Legal Framework Affecting Mining Sector
Institutional Structure Governing the Mining
Rural Structure and Mining Impacts as seen on the Ground
Caputring CSR Dimention of Large Scale Mining Companies
Good and Bad: Cast Study
Policy Implications and Recommendations
Chapter 9: Artisinal Mining (AM) for Poverty Alleviation and Rural Sustainability in East Congo
The Structure of Artisanal Mining Community
Artisanal Mining Sector in East Congo
Developing Framework to Analyse the Sector
External Interventions and Negative Outcomes
Hypothetical Benefits of Collective Acton
Hypothetical Determinants of Sustainable Collective Action
Government Revenue and Thoughtless Interventions
Mining Activities found in East Congo
Controversial Bisie Mining Camp
Insider Views in East Congo Camp Sites
Factors that affect the Economic and Social Viability of AMS
Horizontal and Vertical Business Formats
Tension between the State and Artisanal Minors
East Congo’s Hope should not put on for cheap Sale
Chapter10 :Perception10: Perception, Governance and Extractive
industryIndustry Exploitation: The Rise of
Corporate Social Responsibility
Real World Explanation
CSR, the Bottom Line and the Rise of Corporate Citizenship
Governance-Centered CSR&Privatisation of Public Policy
What is to be done? Social Movements and Corporate Neoliberalism
ABSTRACT This is a book about social and environmental decay in African rural landscapes endowed with natural resources. The authors present evidence based research from Cameroon-Chad, Lesotho, Niger Delta, Nigeria, East Congo, Rwanda, Sudan and Ghana to illustrate how the planet, people and profit, so far, has failed to strike a balance and provide recommendations based on findings the way forward. Many of the arguments focus on the local as well rnational political economy in which resources are extracted and exported and the impact on social and environment life and landscape in rural Africa.
Automatic operation of the market and market actors’ philanthropy to help communities’ impoverished rural folk sounded old fashioned or resemble neo-colonialismwas arbitrated.TermCSR, came into being whereby rural African people were theoretically able to get satisfaction as they drank toxic water as long as the companies were paying them back in kind under these companies' respective voluntary CSR interventions. The problem is that commercial soceities were created with multinational corporations in the lead. States found it hard to reverse or slow down the process at least until they could get a hang of it.
Open market policies continue to remain resistent to such challenges despite mounting critique from many corners. FDI is the buzzword and the saviourthatalleviates Africa's poverty. Although a broader consensus has emerged within and outside of Africa and other developing countries about fundamental defects in the economic model and free market principles through which large multinationals conduct business, raw materials continue to flow from poor countries to rich countries with very little challenge.
All this proves that thepresent way of doing business in Africa. Trade pactsneed to be reopened in order to bring forthchanges. Thishas become even more important now with the Red Capitalism.BRICS, (Brazil, Russia, India, China and South Africa), CIVETS (Indonesia, Vietnam, Egypt, Turkey and South Africa) and MIST (Mexico, Indonesia, South Korea and Trukey) areotherswho want to benefit fromnatural resources while African resourcesare still remaina cheap sale.This is not to say BRICS is as bad as the conventional actors in the West. The question is whether African lions ever will be ready to pick up and march alone with these actorsor whether they will allow, yet again, someone else to pluck fruits from Africa's endowed resources.
Since the end of the cold war, theWesthascontrolledalarge portion of the world's economy. The USAin particularhas asserted that its way of doing business should be universally applicable to the world.In fact, the American dream became a beacon for most, andglobal institutionssuch astheWorld Bank, IMF, WTOand other associate bodieswere made to act as crusaders, holding the torch for the realisation ofUSgoals.With the impetus of globalisation,thesituationwasaggravated,neoliberal free market principles were used to expand the economic playing field, and economic rationality becamethe ideal.When it comes toAfrica,natural resources played a crucial part, simply rich world want to have a large piece of the natural resources pie.
The emergence of the EU did not change the status quo.Europeanshavebeen workingin collaboration with the USandEuropean trade policieshaveworkedagainsttheir owndevelopment policies. Aid failed to a point some, so called poorcountries tacitly refused it and instead asked for more investments. Europe did not find Africa as their equal,aid drums continued, so do thegovernmentality of African policy landscape. The bilateral contacts European countries had with African countrieshaveweakenedwith the impetus of multilateralism.
Furthermore, the EU simply failed to providethebalance of powerthatmany expectedin the international arena from trade to security issues.Perhaps the EU was tormented by the endlessaccumulatingproblems or, as stated by Henry Kissinger in his book analysinginternational diplomacy, the EU was not clear that it wanted to operate in a way to balance power. However, analysisofsome EU polices regarding trademakes itevident that the EU wanted to avoid an ideological fight with theUSand it mostly collaborated with the US and its sponsored institutionsand their interests. In fact, the EUfollowed free market logic based on the neoliberal schemethat had beeninvented in the US to continue accumulation ofcapital. This means that the EU conformed to American visions of trade liberalisation.
The collapse of communismin some parts of the worldinfactstrengthened the process. The EU slowly adopted protectionist methods of economic management. The international trading system consists ofafree market philosophy promotingcapitalismfromAlaska to Cape Pointcontinued. With economic globalisation in full swing, these actors took for granted that their way was the right way for all, no matter how much it hurt other economies.
Africancountries, andparticularly countries with natural resources, weresubject to neoliberal globalisation prescriptions. Theyhad no option but tocaveinto the free market systemin orderto attract Foreign Direct Investment (FDI), to balance deficits andtoservice loans thatAfricanleaderskeep accumulating.As theymismanagedthecontinent’s assets, theWestapproached withtheusual medicinepouch:loans, aid andmacro economicadjustments. Africanleadersgenerallyrushedto liberate their national assetsby practically handingthemover towesternmultinational companieswho havea single-minded interest innothing butpursuitofprofit.They knew what was under worth a fortune; that thinking excluded what is on the earth—people and environment.To make the matter worst, intothis businessof neoliberalism,another ofAfrican political elitewas born.Atellingexample is the leader of Equatorial Guinea— a countrythatonce hadtheworld’s highest per capita GDPisamongthe lowest inincome per capita. This leader, according toarecent articlethatappeared intheInternational Herald Tribune(20 August, 2012), owned 11 pricy cars and a five-story mansion equipped with spashavinggolden decors;cinemas;andnightclubsin one of themostluxuriousquartersin Paris. Guestsare served with Petrus, the world'smost expensive wines worthincartres,andthey aredriven around by Bugatti Veyribs, themost expensive and powerful cars in the world.To make the matter worst for already torn off rural population, one of his sons was recently made the forest minister. In fact, forest ministers in someof thesecountries are the best land dealers. They pass deeds onto multinational companies while cashing outthelump sumas commission. They areAfrica’s biggest headachesand AU’s soft spot, too lenient to pinpoint.
Unfortunately, theculture of impunity lookssetto stayasdemandsfor African land and mineralsincreasewhiletheimpoverished populace hangsinalimbobetweenhope and uncertainity. Some of the former coloniesspeak in‘slang’ofcorrupt money contributing topoverty in Africaby not clearing toxic air in their backgarden.Theyaredeliberately failingto scrutinise multinationals who are the givers, and some leaders who are the takersof bribes. Countries like France arebenefiting as wellaccommodating such people and their corrupted money—hipocracy. No body cares of leaders spending thrifts or what kind of cars they drive around Avenue des Champs-Elysees. But if it’s the money that must have been spent on schools, hospitals and rural development, then it matters, and it hurts all, not only people live in Africa, but also people beyond Africa, we all had different kind of revolutions in our history to deal with such leaders, and African people are never alone.
I must say, although this is not the case for all leaders and corporateactors,butthe majorityofdeals taking place today make it impossible for thecontinentto fight poverty, profits are not shared properly.It was expectedthatFDIwouldattend toAfrican social engineering, alleviate poverty and fix governance issues.AsAfrican own think tankersascertain, African countries with natural resources rushedto market-based economic blueprintswithout assessingtheirappropriateness. With this rush, countriesfaced different typesofchallengesand, indeed,many disablingparaphenalia, I must say. They were subjected to the governmentality of external forcescomingmostlythroughglobal organisations such astheWorld Bank,theIMF andtheWTO,or even academic community,who are largely influenced by wisdom and finance of powerful countries in theGlobalNorth.
The World Bank approached countries to draft country programmes. Democratically elected leaders (mostly) were told how to govern resources and how to run economies, as if elected African leaders did not know their realities and were not capable of writing their own country programmes. Leaders who refused World Bank intervention and external meddling were isolated. The international media completed the job by painting them as 'red.'Collectively,global organizationsdictated agendas and set ground rules so that oilkeptflowing and mineralskeptbeingshippedfrom Africato rich countries mostly situated in the West. African leaders were objectified as well assubjectified whilerural African people becamevictimisized.African think tankers and politicians failed to work together.
AsImentionedabove, international trade and development policiesfailure toworklike ahorse and carriagemade matters complicated asextrinsic motivationscontradicted each other.For instance, US tariffs on importsfrom India, Indonesia, Sri Lanka and Thailand cost USD2.06 billion in 2005, twicewhat the US committed tothese countriesfor tsunami relief in 2006.Moreover, iftheEU and the US dropped trade barriers,this in itselfwould lift more than 200 million people out of poverty in a short period of time. However, this thinking was not included in development, trade and poverty allevation discourses orfor that matterstrategies proposedto achievetheMillenium Development Goals (MDGs).FDIretoricsparticularlyin natural resource sectorhascontinuedto bea primary way of acheiveing such goals. Inthecase of Africa, natural resources, oil and rare minerals have providedformidable dividends toWesternshareholders, but not for African rural population.The question we raisedhere is how comemultinationals companieshavemade billionsinprofit while rural populationsin Africahave beenpractically pushed fromthefrying paninto the fire?How can we let that happened as we march towards mid of 21stcentury?
We detect few turning points.During the recession that started in 2007, one of the worstin recent history, the US corporate banking sector collapsedandthe corporate sector suffered worse duress. Householdswere significantlyaffectedand thecapitalist systemwassubjected to scrutinity. Countries in the EU struggled to save members from defaulting. The U.S., which maintained that its revolutionary way of doing things was the right way, could not save the capitalist systemand so the UScitizens tumbling down the hil. Some, all of a suddenstarted to talk about inclusive capitalism, not defining properly what it is aboutTheinvisiblehand of themarkethadbehaved incorrigibly andsocountries continue to talk about market regulation,giving attention to areas that were neglected under neoliberal prescriptions. Corporate citizens, as they were called, and their ethical conduct was thought egalitarianwas questioned.Tax evation,avoiding profit tax,toxic dumping, product safety violence, occupational hazards, human rightsviolations, bid-rigging, over-billing, lack of risk management, perjury and violations ofcommunity space, environmental neglectand allunethical behaviourwerediscounted by corporate citizens whohave beensingle mindedly pursuing profit. Majority in the academiaknew that ethics in capitalismisvirtuously extrinsicin such a business environment.
Automatic operation ofthemarket and market actors’ philanthropy to helpcommunities’impoverished rural folk sounded old fashionedor resemble neo-colonialismwas arbitrated.TermCSR, came into beingwherebyruralAfricanpeople weretheoretically abletoget satisfaction as they dranktoxic water as long asthecompanieswerepayingthem back in-kind underthese companies'respective voluntary CSR interventions.The problem isthatcommercial soceities were created with multinational corporations in the leadso far behaved bad. States found it hard to reverse or slow down the process at least until theycouldget a hang of itor if they ever get a hang of it.
Meanwhile open market policies continue to remain resistent to such challenges despite mounting critique from many corners. FDI is the buzzwordand the saviourthatalleviates Africa's poverty.Although a broader consensus has emerged within and outside of Africaand other developing countriesabout fundamental defects in the economic modelandfree market principlesthrough whichlarge multinationalsconduct business, rawmaterialscontinue to flowfrom poorruralcommunitiesto rich countriesin the West, of course now China, and others,with very little challenge.
We must not forget toanalyse howopen-market trading has workedso far for rural commiunities in Africa where mining and oil extraction is taking place and multinationals are in action.Socialand environmentaldecay in the rural landscape: inequality, landgrabbing, land dealsandhuman right violence. Acatalogue of related issuesexamined in this bookusingin-depth exploration ofAfrica´s rural spacein ordertoextendthe understanding of these trepeditions.We think those who have lived in experience are the best to tell what is going onin Africanrural landscape, where multinationals are extracting oil and minerals to cater the demanding world.
All this proves that thepresent way of doing business in Africa need to change. Trade pactsneed to be reopened in order to bring forthchanges. Thishas become even more important now with the Red Capitalism.BRICS, (Brazil, Russia, India, China and South Africa), CIVETS (Indonesia, Vietnam, Egypt, Turkey and South Africa) and MIST (Mexico, Indonesia, South Korea and Trukey) areotherswho want to benefit fromnatural resources while African resourcesare still remaina cheap sale.This is not to say BRICS is as bad as the conventional actors in the West. The question is whether African lions ever will be ready to pick up and march alone with these actorsor whether they will allow, yet again, someone else to pluck fruits from Africa's endowed resources.I believe in African Lions and lionesses, and I wish rest of the world need to do so.
Nilani L De Silva
Nilani L. De Silva
This book is about social and environmental decay in African rural landscapes endowed with natural resources. The book presents case studies from Cameroon-Chad, Lesotho, Niger Delta, Nigeria, East Congo, Rwanda, Sudan and Ghana. Many of the arguments focus on the political economy in which resources are extracted and impact on social environmentlandscape in rural Africa.
ThePolitical Economy ofExportingRegions
Presently,the mining sector inmany African countries iscontrolled by foreign companies,with themajority beingfrom the West. Althoughareformed version of neoliberalismincreased thestate'spreviouslyminimalistrole by increasingemphasison socialand environment accountability,studiesconducted on the groundtell us a different story. Government revenue from mining is limited toroyaltiesand rents.The enclave nature of mining andtheoil sectorresults inlow labourabsorption. In addition,withglobaleconomicwoes, increasing competition,and increasing exploration costs,multinationalcompanies are more concerned now than ever before aboutcutting costsand increasing profitsrather thanfulfillingcostlyenvironment and social obligations.
As a result,thesocial and ecological spacein many African countriesis experiencing rollbacks, wheregrabbing of land fromrural populationhavegivenrise to congested urbanghettos oflandless peasants. Ethiopians who made prosperous and fruitful back yards, and built a good life is now selling their land to foreingers; threemillion hectares of arable landwere givento foreign investors foruse asbiofuel plantations. In Congo, 48 per cent of agricultural land is controlled byforeigners,andmassivepieces of landhavebeen set aside by multinational companies(West and East)for futuremineralexploration. Chineseentrepreneursare leasing African land and land dealersareturningagricultural spots and paddy fields into future FDI interventions.Familiesthathavealreadysold their agricultural land todevelopersused the windfall to buyconcreteblockhousesin crowdedshanty towns in city suburbs.They have given up farming, hoping to take up jobs thatarenot available.
Macroeconomic Adjustments Increased Rural Poverty
Renownedscholarssuch asOlukoshi, Rodrik, Krueger and Stiglitzhavelongbeingargued that the focus on macroeconomic fundamentalsin Africahas increased poverty levels and inequality.However,despite the complexity of the relationship between poverty eradication andforeign direct investment, singularly on natural resource sector, so far have done harm than good to Africa, especially that western dirve had beenadjustment ofmacroeconomic architecturesto attract FDI.EvenasStructural Adjustment Programmesand the IMF have been criticized during the early 90s as failures, thesepolicies andtheirorganizationshave retained influencein the continent. Such policies arebeing appropriated even today byexternalactorswhen dealing with Africa.
Western policy makers increasingly applied the multilateral approachwith their dealings withAfrica.No doubt, there are certain things that can be better achieved through multilateral means, but multilateralismhas simplybecome anotherspace foruniversal maxims. Regardless of different political systems, histories and market development phases, universal solutionshaveprescribed. Foreign Direct Investment inAfrica'slocomotive (natural resources) in this sensehas beenseen as the sole criterion for a transformation of Africa andalleviation ofpoverty.
While holding a large share of natural resources and energy resources as payment for huge loans, the global organisationshavefor the last half century been lighting the torch for theWest. They objectified African leaders and kept on promotinginconsistence policiesand unsuitable interventions.Although the present system is more refined and subtle, inflammatory rhetoric and red carpets continue without challenge.
Recentstrategic plansmore specificallyfailed toincludeimportant elements thatdoconnect FDI topovertyalleviation.These includewell-thought-outmining codes that include social and environment costs;regulatorymechanismsthat protect communities from market competition and myriadother policiesthat stimulate growth and sustainability of rural communities. But theleaders in respectivecountriesdid notstop to ask whether the natural resource sector needs more regulation, orwhetherthose who imposedeconomicmodalitiesaretruly equipped for the job.
On the other hand,there has beencontinuous hammering on poor governance, accountability and transparencyofAfrican leaders.Buzzwordssuch as bad governance, fragile leaders,and lackof institutionshave become a genetic codeusedto describe African states andthatfurther paralysesAfrica’s legitimacy.It is incorrect to say that African countries do not have any institutional structure, and therefore cannot govern their people, let alonetheirresources.People need to read the history.The truth is that Africa does have an institutional structure, and hadbeengoverned through traditional decentralised mechanisms in the pastthat actually hadasuperiorelement of democracy. In addition, Africa, like many colonisedregions, managed to maintain informal institutions, with socially shared rules, usually unwritten, to govern people. Although such institutions are considered to be inadequate, butwhen it came to people’s needs, they managed quite well.
Moreover, the institutions created by former colonial powers – although having greater power imbalances – were retained by most African countries. This is to say that Africa has a hybrid of institutional structures. However, unlikeEuropeaninstitutionsthatmay be run by politically independent technocrats, in Africa,political meddling is a common problem. Oil and mineralwealth haveprompted skewed public administration;and thecentral governmentfailstodisseminatepowertoregionalinstitutionsand local bodies, thusrestrictingparticipatory democracy.This is to saythe line between public and private is a thin onewhere political leaders hold the hammer when it comes to distribution of wealth collected from natural resource exports.Nonetheless,this argumentdisregardsthe needforrestructuring the skewed global economic system which is fostering ill practices.
Dependency, Political Disorder, and Social Decay
The culture of mineral andoil dependencytypically affect corruption withinoroutside ofinstitutionsunless there is a political will toprosecute those whoareabusingpower. According to Max Weber, an institutionalised state is different from a neo-patrimonial state. An instituionalised state is governed by politicians together with meritocratic and service oriented actors. There is a clear demarcation between private and public spheres. Neo patrimonial or patrimonial states, is charachterised by nepotism, cronyism and corruption and there is a thin line between private and public sphere (Weber, 1984 Economic and Society).
Houngnikpo (2006) draws attention to lack of political willforcombating corruption and improvingpublic administration.According to him thepresent economic structurethat is designed to perpetuateWesterneconomic interests (and increasingly the interests ofAsian dragons and tigers) leaveroom for corruptionandrent-seekingbehaviourbyneo-patrimonial authoritarian regimes. These regimes not only selectively distribute wealth from resources but also assume control over a variety of resources.
The colonial legacy explains some of Africa's economic dependency, political disorder, and social decay, post colonial African leaders have also played a debilitating role in their continent’s plight. Authoritarian rule and weak states combined with the international political environment to create deep disincentives for Africa's development. African leaders sought ever greater power by manipulating parliaments, extorting state funds for their personal enrichment, and creating mass parties designed to serve and glorify them. Therefore, we must learn to digest the fact that these leaders seem to lack the capacity and willingness to develop an institutional environment conducive to good governance and entrenchment of democracy.
While talking about weakAfrican governments, oil companies,theWorld Bank andtheIMFhaveworked together,refiningtheneo-liberalorder without addressingthesefundamental problems inorder to have an access toagriculturalland for fuelcrops, mineralsand oil.Moreover,western leaders who talk about human rights violence taking place in ruralareasdid notscrutinisehow their own governments offer political risk insurance and encouragecompanies to invest in poor countrieswith arguments thattheir political economic climate would improve.They maintain a reductionist view.
To make matters worst,natural resourcesare oftensituatedwithinstates that have contestednational bordersandconstant problemsbetweengroup, territorial and national identity. When these lands were taken over by oiland mineraltycoons, conflicts becomeunavoidable.At worst,governments havedeclared, with legal legitimation,people’s land as ‘unoccupied’ andtherefore available forleasingto oil, mineral or gasbusinesses. Thecivil population, mostly women,haveended up in the rotten end of the bad economicsystem.
Added to this isunwillingnessto confrontcorporategiants as well as emerging powerhouses like China, in the face of bad oil and mining contracts. There is nosustainable solution to ongoing problems relatedtohuman rights violence, and thereis inadequatecorporate supportformitigatingsocial problems and breaching environmental standards. Leaders need to realize that they cannot continue governing natural resources sectorbymodelingtheir economies on blue prints.
Countries likeBrazil, leadershavenot only fined but alsothreatenedaccess to new offshore exploration if oil giants failedto take responsibilityfor theenvironment costsofoil spills. African leadersfailed tomuster thesepolicies,and take a sturdy stance,andthe resulthas been adeterioratingpolitical economy in the rural landscapecharacterized bymassive refugeeflows, conflicts,food scarcityand vicious hunger.
Application of New Institutionalism
Some Africangovernments wereepitomisedas weak and fragile, corrupt and incapable of managing their own resources, thus enabling othersto govern the resources.MostAfrican countries started liberalising the mining sector in the 1980s and 1990s.There were also fears that rogue states would use natural resources, particularlyrareminerals such as uranium, as weapons, or would collaborate with countries that produce them.
The on-going level of state corruption wasexploited, under the claim that the privatisation of the natural resources sector would reduce it. Thisresulted in the increasingapplication of a new institutionalism,whichallows externalinvolvement in governing the sector.Insteadofstrengthening the existing institutional system first to deal with corporate giants and free market forces, African countries werepushed to adoptglobal governancemechanismsandaccept increasing intervention bythe corporate world.
Effectiveinstitutionsare a pre-requisite fornot onlymanagement of the natural resourcesbut alsocorporateactivities.Scholars from Africa and elsewherehaveattested to this. Olukoshi, Thandika, BurnellandRodrik have suggested that functional institutionsarea pre-condition for governanceat the same timeas they havedrawnattentiontopolicyinconsistencies, theminimalistrole ofgovernment,and thepremisesunderwhich Foreign Direct InvestmentoperatingintheContinent’snatural resources industry. In the same vein attention has been drawn by Stiglitz to the way in which Africa was introduced totheglobal economicorder, while Rodrik observesthatthe bifurcated nature of the state effectively disfranchisesamajority of population. Thandika for his part has suggested that institutional checks and balances are increasinglyrecognisedandareimproving in Africa, butit is necessary tobetter integratetraditional institutions into the governance system and enhancetheir capacity, accountability andperformance. Olukoshi suggeststhatexternal interferencehasworsenedthatcrisis of governanceandthusincreasedthecontinent'seconomic andpoliticalcost.Common to all of these reflections is the interfacebetween the state's nonchalantstance,thedominantneoliberaleconomic model,andexternal interventionspackagedin different sizes and shapes.
Indeed,21st-century Africa is full of technocrats and mediocratsandthere arealsoplenty ofvociferouscriticsdoingwell in strengthening Africa from within. However,these actorsare limited by dependency on outside forces. Theyare invisible, theyhave toaccedeto suggested agendas, andthey have tolisten to what they are told is good for themand very few resist and outspoken.Debt, fixed budget support, aid,and otherconditionalitiesandinterference affect their integrity and hence subjectivitycontinuing.
Pushing macroeconomic reformsat the cost of microeconomic variables--education,capacity building, improvedlife expectancyandmanufacturing (processing plants)-- haveseriously affected people in rural Africa.Even powerful technocrats could not reverse thetrendtoward such policies as themortgaging ofoiland mineralassets tosupport deficits; thereduction of rental tax;lower royaltyrates toattract foreigninvestments;and othertop-down policies included in the global financial institutions’ consensus for Africa.
Some of thesemacro economicpoliciesare not bad per se.But using the wealth from natural resources to produce socioeconomic mobility depends on many factors: the size and composition of the population,absorbing capacity ofmacroeconomic and fiscal policies, administrative structure, level of dependency on such exports, the fine balance between inward and outward-looking policies, civil war and unrest, andof course participatorygovernance.
This is to emphasise that nobody deniesthe importance ofgood governance, economic reforms,astrong fiscal system,internal democracyinpublic management, andhonesty.Africalike most countriesneedsto improve in these areas, and these facets work differently in different countries within the same continent.Butthese goals do not accord withturningovereconomies to accommodate FDI in enclave sectors, particularly as these sectors are especiallysusceptible towhat is termed "Dutch disease."
The booming enclave sector attracts productive resources away from more sustainable trade sectors, thus impeding their development. Furthermore, the appreciation of the exchange rate due to the increased revenue makes non-tradable goods more expensive.For example, theNigerian oil boomhasaffected the agricultural and other domestic industries and the country is still not recovered from this.
In addition to Dutch disease, countries with enclave sectors are considered to be subject to a "resource curse."Thepolitical leaders use large quantitiesof sudden wealth to maintain themselves in power, either through buying votes or by force.The irony is thatnobodyarguesagainst using the sector asa meansof achieving growth and sustainable development. Instead,FDI is linked to poverty alleviation, making the former seem nurturing, but what is taking place is mere exploitation,coated with nurturing discursiveelements;typical of post colonial discourse.
Multinationals take advantage ofbehaviourof power hungry leaders,under fedinstitutions and poor monitoring capacity of governmentofficers, lack of judicial resources to, power and unwillingness of states to implement law againstcorporations'social and environment sins.
Rhetorics ofResource Based Development
Although some African countries have been pronounced traders, the development of industry needs more attention in Africa especially, considering the cheap raw materials leaving the continent. It is common that countries that have resource-based development promote the industrial sector to add value to raw material. They protect national industries and even some state-run industries profit on behalf of the people and add the profit to tax base. Private corporations and governments have a healthy marriage, but not without regulations; interventionist government action protectsthe welfare of the people.
The fact remains that most African countries are slow in developing mid-range industries, owing to its weak negotiation power or lack of funds, or its lack of a robust system to facilitate small and medium-size business and industrial policies. In the period of 2000 to 2009, investment in the economically viable industrial sector—construction, mining, and manufacturing—hasonlyincreased from USD 1.2 billion to USD 2.2 billion. The productive sector agriculture, forestry, fisheries hasalsoremained stagnant(UNDP, 2010).
Government and business alwaysmustknowthat the environment and people had to be put first, if they were to continuebusinesstogether. Stateswere not just rent collectors and profit makers.They werealsoprovidersof social goods to citizens.The governments need to work withclear practical and obtainable goals together with technocrats and civilsociety. Independent mediaalsoplay a decisive role, not only scrutinize playing fields but also work together with international colleaguesto bring forth new information on multinational behaviour in their backyard.This is the background for a proper natural resources-based development.
The lack of technology, human resources, and infrastructure must not be seen as a hindrance to mineral extraction. In fact, long ago, for the sake of oil, America made a kingdom in the Persian Gulf desert and crowned Wahabians to be crude oil kings. While Chevron and other oil conglomerates extracted oil, America nourished them and made sure that oil income was spent on buying products made in the US. Presently Saudi Arabia is a leading investor as well as consumer of US products. In my recent visit to Phillippines, I happened to drive one of the finest highways in Asia to visit a volcanic mountain range. Subic Highway was used only by Americans in order to access to one of the biggest military base that was situated there. Today, there were hardly any cars on the Subic highway neither the military base, which was compelled to move after the erruption of Volcano but the ghostly Subic highway with no vehicles. We know that multinationals that operating in developing countried are not inclined by themselves to facilitate local growth and also it is not a necessary prerequisite of mining policy. Although, WTO endorsed capacity development in 2004, nobody seems following these leads. Leaders often comment on the brain drain, to which countries in the West must give attention. The arguments raised above are not to say that African actors should be the sole purveyors of the welfare of Africa's people, which includes the multinationals that had been scraping natural resources from Africa for generations; the more actors engaged in development and poverty alleviation the merrier. However, theoutsiders’role should not be to fine tune African institutional structures or policies, or to reinvent beleaguered agendas to achieve global goals. Let African regional actors, their leaders, civil society and people find the way to development. Meanwhile, the West can try to make sure that promoted ethical conditions are not jeopardised by economic agendas.
Structure of the Book
The book consists of teneight chapters including the present chapter. Each chapter covers a specific areawherenatural resourceproduction is related tosocialand/orenvironmentaldecay in rural Africa. Authors examine this issue in bothavertical and horizontal manner analysing empirical data collected in Cameroon, Chad, Lesotho, Niger Delta, Rwanda, Ghana and East Congo. In doing so, each chapter attempts to enhance readers understanding of the topic at a deeper level.
They explore external interventions, states nonchalant stances, gaps in Corporate Social Responsibilities of multinational companies, and ignorance of social and environment malady over economic rationality. They discussed unfulfilled objectives, deep division of state and populace, state violence, societal cleavages, crisis of distribution of wealth, inequality and poverty and finally the rural decay. The book concludes by looking at ways in which stakeholders can collectively work by adapting a new economic, social and ecological paradigm.
Although, each chapter focus on mineral and oil extraction, the analyses can apply to all forms of trade. Authors explore the crucial question of failure to strike a balance between protecting planet and people’ rights when pursuing global economic interests. They unveil hidden agendas, politically motivated draconian measure that had been used to govern such exports from the continent.
In the introductory chapter Nilani L De Silva identifies one of the central problems underpinning the natural resource sector in Africa She problematizes the premises in which foreign direct investment is encouraged without leaving room for negotiation and loop holes that breed embezzlement of public funds. The influence of grand economic models, the role played by global organisations such as the World Bank and WTO, and the power given to multinational corporations.
In the second chapter, Nicholas A. Jackson examines the Chad-Cameroon Petroleum Project. He analyzes the failure of this project to achieve social objectives. According to Jackson, the World Bank presented the Chad-Cameroon Petroleum Development Project as a model of neoliberal economic approaches emphasizing governance. When the project failed to achieve its objectives the World Bank argued that the design was satisfactory but government corruption doomed the project. Jackson provides answers to this trepidation. Why did the Chad Cameroon Petroleum Development Project fail so rapidly, while Petroleum continues to flow? The author lifts the veil of depoliticised spectacle to reveal the ‘clammy, sticky spaces’ of capitalist accumulation in the face of local resistance and consent.
The third chapter by Pius Tangawe examines the perception of community members and other stakeholders of the impact of diamond mining on communities around Liqhobong in Lesotho. He provides a chronological summary of negative as well as positive impacts on rural diamond mining communities in Lesotho. He concludes that mining companies neglect their social and environment responsibilities, and the government has failed to facilitate and to ensure the existing Mining Codes that was implemented in 2005.
The fourth chapter, by Ibaba Samuel Ibaba, examines the ongoing political conflict and generally excruciating environment of Niger Delta oil refinery areas. Of particular note is his concentration on the critical roles played by women in the local economies, and livelihood activities that have been hampered by environment disasters caused by multinational companies such as Shell and Chevron. This chapter dovetails Dauida S Garuba’s analysis in chapter five of inter-communal violence in the Niger Delta city of Warri. He deepens our understanding of how natural resources have altered the nature, character and intensity of intra state violence in Warri community in Niger Delta.
The sixth chapter, by Frances Girwa together with Nilani L de Silva, analyse two gold mining companies in Ghana. Drawing on qualitative and quantitative research, the authors argue that Ghana with its robust legal and institutional framework still failed to get companies to fulfil social and environmental obligations. One of the reasons discussed was the lack of government involvement in enforcement of CSR promises made by big companies.
In the seventh chapter, authors examine the effects of open-cast coltan mining on the quality of soil in Gatumba Rwanda, a landlocked country lacking agricultural and grazing land. Gatumba was an industrial mining area abandoned by an international mining company after 1985. The findings confirm the environmental damage and poor soil condition for agricutlral usage.
In chapter eight, Nilani L De Silva uses a case study from East Congo to make a political economic assessment of structural problems associated with the challenges and opportunities presented by the artisanal mining sector in East Congo. Drawing from empirical research, she concludes that there is a lack of willpower and effort from the central government to support artisanal minors in supporting inbuilt poverty alleviation mechanisms that exist in communities owing to lack of participatory democracy in the governing system.
In the concluding chapter, Nicholas A. Jackson engages in a theoretical argument exploring major developments in corporate exploitation, CSR and corporate citizenship. In addition to summarizingmain arguments in each chapter, Jackson givesparticular attention to agenda setting, policy, litigation tools and judicial resourcesthatcould serve to better develop the continent’s natural resources. All chapters bring for the recommendations how to strike a balance between planet, people and profit when multinational companies embarking into African rural landscape.
A Failure but the Oil KeepsFlowing: The Chad-Cameroon Petroleum Development Project
Nicholas A. Jackson
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