Friday, December 27, 2013

The Rape of Africa continues unabated, Part I

As frequent readers of this blog might know, I make it a point to stay abreast of what is happening in many African nations, mostly because I feel too little attention is paid by much of the media and the public in this regard. What follows here is the first of a three part series on the state of Africa--mostly sub-Saharan--in general.
Several days ago, I wrote about the continuing conflicts in both the Republic of the Sudan and the Republic of South Sudan. The latter--South Sudan--achieved political independence just a few years ago, in 2011. That independence came as a result of a peace agreement reached in 2005 to end a lengthy civil war in the Sudan between government forces and the SPLA--Sudan People's Liberation Army (an org I explored at length in the above piece)--that had spanned over twenty years.

The agreement granted the southern regions of the Sudan political autonomy for six years, to be followed by a referendum on the issue of independence. The vote proved to be one-sided in the extreme, as over 98% of all votes cast were in favor of independence for the south. And so the Republic of South Sudan was born, even while many large-scale and small-scale conflicts continued within the region and within the Sudan as a whole.

Many people believed--and still believe--that this was a critical event, however, not just for South Sudan but for Africa as a whole, for it represented the often-cited Right of Self-Determination all peoples should supposedly have in the minds of some. Within an African nation like the Sudan, this was particularly noteworthy, given the history of the European Colonialism on the continent and the resulting arbitrary boundaries of the various countries within.

At the same time, there is the underlying issue of natural resources. The Sudan--the pre-2011 version of the nation--is home to significant oil reserves. Unfortunately for the Republic of the Sudan, over three quarters of these reserves lie in the south, in what is now South Sudan. Needless to say, there are those who believe that the treaty ending the civil war in the Sudan--which led to the creation of the southern republic--was engineered by outside forces in order to get easy access to that oil, along with other resources in the south like uranium and gold.

The fringier types attribute this all to a Rothchilds/Jewish kind of conspiracy, an idea seemingly buttressed by Israeli support for the southern nation. Others simply chalk it up to business as usual for the developed world, where Africa still represents a more or less free-for-all grab-bag of natural resources, where war--especially civil war--is a means to an end in this regard (along with being an excellent way to maintain a market in military equipment and services.

To this latter point, over the past fifty or so years, so-called "developing" nations in Africa have incurred a great deal of debt (to put it mildly), mostly for the solidifying of successive regimes' hold on power. In the case of the Sudan, prior to the 2011 split, it had amassed a foreign debt (real, actual debt from loans floated to the government) of over $35 billion. Since the split, the debt has increased substantially (with at least another $10 billion for the northern republic and even more for the south). Much of it is owed directly to the Paris Club (which may very well write most of it off down the road), the rest to other private concerns.

The total foreign debt for both nations (they have yet to reach an agreement on how to divvy up the pre-2011 debt) stands at around 85% of their combined GDP. Now, when compared to the debt to GDP ratio for many "first world" nations, this may not seem terribly problematic. The difference is, these developing nations have limited--severely limited--tools available to them for paying even the debt service on a year to year basis. Moreover, much of the GDP in nations like both the Republic of the Sudan and South Sudan is simply not remaining "in house" as it were. This kind of debt is a perpetual burden for these nations, especially given the near-continuous conflicts occurring in both, as their governments are simply unable to make consistent payments to creditors (which means the debt goes up, even without new loans).

And again, the monies loaned were often spent not on vital infrastructure or services (which could lead to real economic growth) but on military supplies and the like. It is, on the whole, an ugly and depressing pattern and not limited to the two Sudans in the least.

Despite all of this, despite the continued violence within both Sudans, there has been actual economic growth in these nations--particularly the north--since around 2005. But is such growth sustainable? Look at the GDP over time for the Republic of the Sudan, the Republic of South Sudan, and of the sub-Saharan nations bordering both:

At first glance, this chart seems to represent real progress, as apart from Eritrea and the CAR there are--at the very least--upward trends in GDP for these nations, significant ones for the Sudan, Ethiopia, and Kenya. However, look at the following chart, which indicates the flow of aid--in constant US dollars--to these same nations:

That's an awful lot of money, year in and year-out, going to these nations, dating back to the post World War II years. Total it up and there is more than enough--in most cases--to achieve significant improvements in things like infrastructure and standards of living.

And then look at this chart, which shows net inflows (new investment inflows less disinvestment) of foreign monies in constant US dollars (there is no data available for South Sudan here):

Since 2000, that's a lot of money going in, especially when we factor in the profit-taking that has been occurring.

What all this indicates is that the supposed growth in GDP for these nations is something of a mirage. Taking out the monies spent on militaries, on humanitarian aid, and that introduced from private concerns in order to access resources like oil leaves these nations with little to show for all of the dollars that have poured into them since the end of the Cold War. And as we know, there remains widespread violence, human right violations, and rampant corruption in all of them.

This is not evidence of growing economies, of rising standards of living in the least in my opinion. Rather it is evidence of an ongoing mercantilistic approach to this portion of Africa. An analysis of other sub-Saharan states would look similar, with a few exceptions (most notably South Africa).

Yet, Africa is the birthplace of mankind, of society, of civilization in general. Why is it that--as a continent--Africa appears to consistently trail the remainder of the world in economic development, in standards of living, and in so many other metrics, from education to health? These questions we will take up in Part II of this series.

Cheers, all.

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