STWR - Share The World's Resources

18th Jan 07 - Patrick Bond, Socialist Worker

Author Patrick Bond on the neoliberal project:

Q: What are the dynamics of the looting of Africa?

Let's start with the process by which the new imperialism relies on the extraction of resources at ever-cheaper prices.

We are in a confused period, because since 2002, commodity prices--minerals, energy and even cash crops--have been on the rise. But many people will agree that it’s a small upturn in a commodity-price cycle that since the 1970s has been on a dramatic decline. It’s that sense in which multinational corporate power, and fealty to that power by African elites, has reached unprecedented peaks now.

This has become so extreme that even the World Bank has recognized that there’s no basis for economic development from the extraction of resources under the present regime. A little-known World Bank report, Where is the Wealth of Nations? which was published on the Web site this year, has even acknowledged the wealth drainage.

17th Jan 07 - Tonderai Matonho, The Herald (Africa)

The recent statement by former United Nations Secretary-General Kofi Annan that the gap between the rich and poor countries is ever-widening makes one wonder whether this schism is ever going to be closed or more aptly whether poor countries are ever going to catch-up with the rich nations.

There are interesting statistics to this effect that have been used since the 1990s that boggle the mind and that continue to deepen this puzzle.

According to the World Bank's World Development Report the per capita Gross National Product (GNP) for Industrial Market Economies, that is, the 20 richest capitalist countries was US$12 960 in 1986, with an annual average growth rate (1965-86) of 2,3 percent.

A simple calculation gives an annual increase in per capita income of US$298,08.

The per capita GNP for the poorest 33 countries in the same year was US$270 with a growth rate of 3,1 percent.

The same calculation gives an annul increase in income of only US$8,37.

Given this scenario, little wonder that the gap between North and South is getting wider every year.

James Waters ~ STWR Member, 20th Dec 06 - STWR

Here is a proposal for a new reality television show.  It is called “Country Swap! The UK Government goes to Africa”, or just “Country Swap!” for short.  The idea is that the United Kingdom Government is sent to a low income African country, and becomes their government for a decade or so.  Accusations of colonialism could be avoided in part by the politicians taking out full citizenship of their host country, which could keep them at the end of the show.  Sure, there would be democratic issues, but everyone involved could be handsomely compensated after the series by a major sponsorship deal from Coca Cola, Nokia, or some other suitable corporate partner.

 The press release could go like this: “Governance is the new buzzword in international economic parlance.  Leading brains have identified it as the missing part of the growth jigsaw, and conferences on the subject are spreading like an academic rash.  We take the pick of the UK political crop and sow them in Africa, and try to find an answer to the question: would Africa be successful if only they had leaders of British quality?”

Climate change will devastate Africa without substantial help from the world community, according to a new report released at the opening of a major U.N. climate change conference in Nairobi, Kenya Monday.

"Africa is the least responsible for climate change but will be hit the hardest," said Nick Nuttall, spokesperson for the United Nations Environment Programme (UNEP).

New scientific data shows that Africa is more vulnerable to the impacts than previously thought, Nuttall told IPS from Nairobi.

Seventy million people and 30 percent of Africa's coastal infrastructure face the risk of coastal flooding by 2080 linked to rising sea levels, the report found. More than one-third of the habitats that support African wildlife could be lost. Crop yields will fall due to warmer temperatures and more intense droughts.

The direct rationale of why Africa may have a comparative advantage in production and trade of innovative goods is beguilingly simple.  High quality educational skills are rather easier to acquire and maintain in the region than physical capital.  The institutional and economic environment can put non-mobile capital at risk and may make acquisition of foreign spare parts difficult.  Goods which have a high level of technical knowledge compared to physical capital are likely to be favoured.  The argument is one based on comparative, not absolute, advantage.  A developed country may innovate more cost-effectively than much of Africa, but in terms of the relative prices of innovative and capital intensive goods, the region has the advantage. 

Reality reasserts itself when the detailed requirements of high technology industries are examined.  The Western countries where they have grown have generally had high levels of research and development expenditure, and large and liquid stock markets.  The research and development expenditure ensures that innovative products are produced.  The large and liquid stock markets ensure that entrepreneurs can sell companies or raise more finance once they have taken the initial risks and established the company’s success.  Both appear to be necessary for the establishment of an innovative industry with a noticeable effect on economy-wide growth.  A recent study (*) of the new technological sector in Europe found that research expenditures are a prime determinant of expansion in patent numbers, and stock market size does not particularly matter for the expansion.  It also found that the contribution of internet and communication technologies to growth is probably more determined by the size of the stock market than research expenditures.  To overstate the case, we find that no research money means no innovation, and that small stock markets mean small growth benefits.