New evidence of Africa’s systematic looting from an increasingly schizophrenic World Bank
Other regions of the world scored strongly positive ANS increases, in
the 5-25 percent range. Richer, resource-intensive countries such as
Australia, Canada and Norway have positive ANS resource outcomes partly
because their TNCs return profits to home-based shareholders.Africa’s smash-and-grab ‘development policies’ aiming to attract
Foreign Direct Investment have, even the Bank suggests, now become
counter-productive: “Especially for resource-rich countries, the
depletion of natural resources is often not compensated for by other
investments. The warnings provided by negative ANS in many countries and
in the region as a whole should not be ignored.”Such warnings – including the 2012 Gaborone Declaration by ten African governments – are indeed being mainly ignored, and for a simple reason,
the Bank hints: “The [ANS] measure remains very important, especially
in resource-rich countries. It helps in advocating for investments
toward diversification to promote exports and sectoral growth outside
the resource sector.”Africa desperately needs diversification, but governments of
resource-cursed countries are instead excessively influenced by TNCs
intent on extraction. Even within the Bank such bias is evident, as the
case of Zambia shows.
Zambia’s missing copper Last year, the Bank appointed Zambia the main pilot country study
within the project “Wealth Accounting and Valuation of Ecosystem
Services” (WAVES). Zambian forests, wetlands, farmland and water resources were considered the “priority accounts.” Conspicuously missing was copper, the main component of Zambia’s natural wealth.Was copper neglected in WAVES because such accounting would show a substantial net loss? One Bank estimate
of copper’s annual contribution to Zambia’s declining mineral wealth a
decade ago put it at a huge 19.8 percent of GNI. Were such data widely
discussed, it might compel a rethink in Zambia’s desperate privatisation
of mines and export of unprocessed ore.Naturally most World Bank staff work not in Zambians’ interests, but
on behalf of other international banks and TNCs. This compels them to
squeeze Zambia’s scarce foreign exchange: first, so TNCs can take
profits home, and second, so Lusaka repays loans no matter how
unaffordable and no matter how corrupt the borrowing government.
Repayment is now especially difficult given that the kwacha declined
from a level around 1 to the US$ in the 1990s to around 5 to the US$
from 2003-15, to the 9-12/US$ range since.From 2002-08, the Zambian government led by Levy Mwanamasa (1948-2008) came under severe pressure from the World Bank to sell the most valuable state assets to repay older loans, including those taken out by his corrupt predecessor, Frederick Chiluba (1943-2011). That debt should have been repudiated and cancelled.Even then, when selling Africa’s largest copper mine at Konkola,
Mwanamasa should have ensured at least $400 million went into Zambia’s
treasury. But the buyer, Vedanta chief executive Anil Agarwal, laughed
wickedly when bragging
to a 2014 investment conference in Bangalore, India, that he tricked
Mwanawasa into accepting only $25 million. “It’s been nine years and
since then every year it is giving us a minimum of $500 million to $1
billion.” (Agarwal is now in the process of buying Anglo American’s
South African mining assets, having purchased 20 percent of the firm in
2016-17.)
Against the looting of Africa: top-down or bottom-up?Zambia is not alone. The Bank reports that from 1990-2015 many
African countries suffered massive ANS shrinkage (a process termed
‘dissaving’ as a polite substitute for ‘looting’), including Angola (68
percent), the Republic of the Congo (49 percent) and Equatorial Guinea
(39 percent). As commodity prices peaked in the 2007-14 super-cycle
period, resource depletion was the major factor for Africa’s wealth
shrinkage. 
What can be done? There are really only two ways to address TNC
capture of African wealth: bottom-up through direct action blocking
extraction, or top-down through reforms.The futility of the latter is exemplified by the African Union’s 2009 Alternative Mining Vision (AMV). It proclaims
(without any reference to natural resource depletion capital
accounting), “arguably the most important vehicle for building local
capital are the foreign resource investors – TNCs – who have the
requisite capital, skills and expertise”South African activist Chris Rutledge opposed this neoliberal logic last year in an ActionAid report, The AMV: Are we repackaging a colonial paradigm?: “By
ramping up models of maximum extraction, the AMV once again stands in
direct opposition to our own priorities to ensure resilient livelihoods
and securing climate justice. It is downright opposed to any type of
Free Prior and Informed Consent. And it does not address the structural
causes of structural violence experienced by women, girls and affected
communities.”The first strategy – community-based opposition – could be far more
effective. According to a pamphlet prepared by Johannesburg faith-based
mining watchdog Bench Marks Foundation for the civil society Alternative Mining Indaba
in Cape Town this week, “Intractable conflicts of interest prevail with
ongoing interruptions to mining operations. Resistance to mining
operations is steadily on the increase along with the associated
conflict.”The Alternative Indaba’s challenge is to embrace this resistance, not retreat into reformist NGO silos – and not continue to ignore mining’s adverse impact on energy security, climate and resource depletion as it often has.Indeed, three years ago, Anglo American CEO Mark Cutifani conceded
that due to community protests, “There’s something like $25 billion
worth of projects tied up or stopped,” a stunning feat given that all
new mines across the world were valued that year at $80 billion. (A map
of these can be found at the Environmental Justice Atlas, http://ejatlas.org.)
Meanwhile, the World Bank’s lending staffers (distinct from the Changing Wealth of Nations researchers) are still subject to protests over mining here. Women living in the Marikana slums, organised as Sikhala Sonke, remain disgusted by the $150 million financing commitment made to Lonmin, which from 2007-12 the Bank bizarrely considered its ‘best case’ for community investment – until the police massacre of 34 workers there during a wildcat strike. (Bank president Jim Yong Kim even visited Johannesburg two weeks after that, but didn’t dare mention much less visit his institution’s ‘best case’ mining stake.)
The Bank’s other notorious South Africa operations included generous credits to the apartheid regime, relentless promotion of neoliberal ideology after 1990, a corrupt $3.75 billion Eskom loan in 2010 (the largest-ever Bank project loan, which still funds the most polluting coal-fired power plant under construction anywhere in the world), and ongoing lead-shareholder investments in the CPS-Net1 rip-offs of South Africa’s 11 million poorest citizens who receive social grants.
To top it all off, in spite of the embarrassing revelations about TNC exploitation unmistakeable in The Changing Wealth of Nations 2018, the Bank is a financial sponsor of this week’s African Mining Indaba at the Cape Town convention centre. Each year, it’s the place to break bread and sip fine Stellenbosch wines (though perhaps not water
in this climate-catastrophic city) with the world’s most aggressive
mining bosses and allied African political elites, conferring jovially
about how to amplify the looting.Patrick Bond teaches political economy at the Wits University School of Goverance in Johannesburg, and is author of, among other books, Looting Africa: The Economics of Exploitation, Zed Books, 2006.
Box: On Bank methods for bean-counting nature 
By way of a brief methodological explanation, the Bank calculates
‘consumption of fixed capital’ (wear and tear on machines), educational
expenditure (‘human capital’), depletion of non-renewable resources
(‘natural capital’) and pollution damage. In the calculation above, says
the Bank, “About half of gross national saving is used for the
consumption of fixed assets (depreciation), with a similar negative
contribution (with some variation over the years) resulting from natural
resource depletion. The losses from pollution are smaller, as is the
positive contribution of spending for education.”The negative contribution from mining is a conservative estimate,
because “some important resources are still not included because of a
lack of data, notably platinum group minerals, diamonds, and other
minerals.” Hence while three of South Africa’s major mineral exports are
calculated – coal, iron-ore and gold – the trillions of dollars
represented here by 85 percent of the world’s platinum are not included.
Vast levels of diamond extraction in Zimbabwe, Botswana, the DRC,
Sierra Leone and Liberia are also ignored, so the alleged 3 percent
annual decline in the region’s wealth is likely to be far worse.