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Economic analysis – Africa, the Victim of Its Own Resources
Published in AL HAYAT on 01 - 02 - 2010

The World Economic Forum in Davos concluded its week-long meetings and sessions, wherein the participants held debates and discussions that centred on the world's economic, financial and climate problems, and in which many differences in opinions emerged, regarding issues such as the proposed mechanism for economic stability, and the reduction of social differences among people.
However, the issue that the forum failed to address, and which the EU raised, while the latter's Humanitarian Aid Department warned against, is that “millions of people are at risk of starvation and malnutrition in West Africa, particularly in the Niger, as a result of the drought that affected the agricultural crops”. A severe food crisis is threatening 2.7 million people in the Niger; there is an estimated shortage of one million tons in grain crops. Moreover, five million others are at a similar risk, albeit at a lesser degree. Shortage in food production is currently affecting Niger, Chad, northern Burkina Faso and northern Nigeria.
This warning by the EU brings back the issue of the African paradox back into the limelight. This continent, which is considered a prime and unique reservoir of raw materials, is the poorest continent in the world, a continent that fifty years of independence beginning with the 1960s did not seem to uplift. In fact, Africa now plays a pivotal role in the global economy, while whetting the appetite of countries such as China for expansion, and the appetite of multinationals, which despite the crisis, have managed to realize hefty profits in Africa.
According to many experts, global financial institutions and donor countries use two weapons in steering the affairs of the continent: the financial card (aid, refusing to forgive stifling debts) and the rights card (setting standards for these rights through agreements and institutions such as the World Trade Organization); both of these weapons have questionable benefits. Nevertheless, the African continent seems to be obedient to these institutions, and according to the international criteria of this system, Africa has proven to be the most open region for free trade. But the masks were dropped quickly: In Africa, and faster than anywhere else in the world, the concept of the free market is translated into famine, and into a lethal form of inequality where 44 percent of the population south of the Sahara live on less than one dollar a day.
These weak states, or states that have entered into partnerships with developed countries, have left the multinationals free to invest without limit, and employ locals in a manner that gives them only microscopic rights. This only fuels more conflicts, of which the eastern Congo, with its abundant raw materials and armed militias is only one example.
Meanwhile, statistics indicate that the African continent only represents two percent of world trade; but this means that the continent is definitely being marginalized, because it otherwise plays a significant role in the global economy. Given the fact that this continent possesses 30 percent of minable resources in the world, Africa is consequently a prime attraction for other countries and multinationals. Moreover, the continent enjoys a strategic array of all types of resources, especially high value commodities such as oil, iron and gold, and is hence indispensable for the global economy, as it supplies the latter with hydrocarbons and essential minerals.
However, the African continent's local populations are not benefiting of this at all, and have thus no choice but to emigrate. This is despite the fact that the soil of the continent, which contains 30 percent of the world's minerals, is very strategic, especially when examining the types of the minerals. For instance, 80 percent of the world's ‘Coltan', used in manufacturing cellular phones, is in Africa, in addition to 90 percent of the world's platinum, 50 percent of the world's diamonds, and 40 percent of the world's gold. Such wealth in resources fuels the greed of multinational companies, which are supported by their home countries that pave the way for their investments by means of loose agreements. These latter facilitate the multinationals' task to seize Africa's resources, while competing among each other for these resources and thus creating the grounds for strife and conflict there. In addition, agriculture and arable landmass also whet appetites, particularly after giant investments by U.S corporations introduced genetically modified crops in Africa, although this is rejected by the natives.
As such, despite the fact that Africa is rich in resources, it is being subjected to deliberate impoverishment. And often, African states that have the most wealth and resources, suffer the worst from sluggish progress in combating and eliminating poverty.
As a result of harsh regimes, the compliance to the policies of free trade, and the adoption of neoliberal policies as recommended by international financial institutions, Africa remains the continent of poverty and inequality, at a time when other regions are witnessing a shift in the economic balance towards betterment and improvement.
For these reasons, immigration has become a gamble – which is for humanitarian causes as it is for economic ones – when compared to the remittances by immigrants into their native countries. Also, this immigration is often motivated by the destruction of fishing activities, as 9 million Africans out of 35 millions in the world depend mainly on fishing for their livelihoods. The majority of fishing areas lie in the sub-Saharan countries which are already beleaguered with excess debt. Hence, fishing rights are given to Japanese, European and Canadian companies.
Moreover, African farmers were further impoverished as a result of the OECD's subsidy of their own agricultural sectors (estimated to be 350 billion dollars in subsidies in 2006). This hampered the export of African agricultural produces into OECD markets, and caused a systematic damage to the food crops agricultural sector in Africa. This in turn spawned waves of forced immigration and displacement, following the abandonment of agriculture.
Such abuse against the continent led to an increase in the number of Africans suffering from malnutrition, from 81 million in 1972 to 203 million in 2002, exacerbating the disputes in WTO sessions, and at the Copenhagen Climate Summit.
Will the continent then benefit from its reservoirs of underground resources?


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