Environment & the World

Tuesday, November 21, 2006

China’s Takeover of Africa

Filed under: China, Development, Environmental Justice — Cathy @ 2:17 pm

One thing that is sometimes overlooked when people (like Bono) talk about ending poverty in Africa is the huge role that multinational corporations play in extractive industries in Africa.  And more and more of those raw materials are now going straight to China.  According to a recent article, Angola is now China’s largest single oil provider.  China also gets ore and platinum from South Africa, copper and cobalt from the Democratic Republic of the Congo and Zambia, and timber from Cameroon and Congo Brazzaville.  The article states, “from a US$3 billion mark in 1995, trade between China and Africa last year stood at US$32 billion. Projections are that the figures will hit US$50 billion by the end of this year and will triple by 2015, the UN’s target year to halve poverty worldwide.”

The key question is: how will this rapidly growing trade impact the UN’s poverty alleviation goals? Certainly extractive industries in Africa do not have a good track record.  One need only look at the Niger Delta as a case in point. After about 40 years and more than $350 billion dollars worth of oil development, the people of the Delta are poorer than they were before.  The money has chiefly gone to the multinational corporations and to prop up a corrupt government, perpetuating a host of human rights abuses, including the murder of human rights and environmental activist Ken Saro-Wiwa in 1995. (see, eg, http://www.remembersarowiwa.com/delta.htm)

Is there any way to improve this situation?  Certainly it appears that the extractive industries are not going to leave Africa any time soon, if the above projections regarding China are even remotely accurate.  But large infrastructure or resource extraction projects are inherently not conducive to poverty alleviation.  For starters, the scale of the solutions to poverty issues are often orders of magnitude smaller than the scale of investment and profits from resource extraction.  Successful micro-credit poverty alleviation programs like the Grameen Bank (winner of this year’s Nobel Peace Prize) are based on the idea of distributing small amounts of money to large numbers of people and allowing them to develop their own small businesses; large resource extraction projects, which typically give a large amount of money to a very few people, are almost diametrically opposite to this idea. 

There is no easy solution to this problem.  Multi-national corporations in principle could insist on fair compensation for people displaced by their projects and make a sustained commitment to micro-credit and other small-scale projects.  But they have no incentive to do so.  I think it will ultimately depend on the activists in developed nations demanding that multi-national corporations make a serious commitment to appropriate technology development in Africa – instead of the usual model of throwing money at large dams and road projects, all the while propping up corrupt governments, and calling it development.

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