Is Africa’s ‘resource nationalism’ just big business as usual? – by John Childs (The Conversation U.S. Pilot – May 14, 2015)

http://theconversation.com/us

Big mining firms in the Democratic Republic of Congo are worried. For the past decade they’ve made good money from the country’s huge reserves of cobalt, diamonds, gold and copper, and now the government wants to grab more of the action: a document leaked to Bloomberg reveals plans to raise royalties and profit taxes, and increase the state’s share in any new ventures.

This is so-called “resource nationalism” in action, and the DRC is far from alone in seeking greater economic control of its natural resources. The state is back, the theory goes, and it’s taking on the multinational. From Scotland to Namibia, Zambia to Ecuador, resource rich nations throughout the world are rhetorically reclaiming gas, oil and minerals as their own.

The trend is widely reported as the enemy of trade, investment and energy security alike. In the UK, for example, the Telegraph called it a “spectre” and government economists have labelled it as both a “threat” and “anti-competitive”.

On the other side of the coin, governments argue they are simply ensuring foreign businesses don’t unfairly benefit from resource extraction. Take Zambia, for instance. The landlocked African nation is a major copper exporter yet most of the population still lives below the poverty line. After the government looked to crack down on tax avoidance by multinational mining firms, one senior politician defended the move: “The situation is win on one side – only the shareholders are winning; the people of Zambia are still in abject poverty”.

The question of whether resource nationalism really is something to be feared is therefore a whole lot more complicated than it would first seem, for the three following reasons.

It isn’t really nationalism at all

Governments, most prominently those of Sub-Saharan countries like Ghana, Sierra Leone, Guinea or Tanzania, have argued for huge tax hikes on mining, oil and gas contracts in the name of the “national interest”. However, move beyond the rhetorical strength of such statements and resource nationalism is less the enemy of big business than a cover for a business-as-usual bias towards the interests of neo-liberal, foreign investment.

For the rest of this article, click here: http://theconversation.com/is-africas-resource-nationalism-just-big-business-as-usual-41647

One Response to Is Africa’s ‘resource nationalism’ just big business as usual? – by John Childs (The Conversation U.S. Pilot – May 14, 2015)

  1. Nicholas Gust May 14, 2015 at 1:13 pm #

    The Congo has the right to raise royalties on material being mined in their country. I wish Canadians would get a larger cut of the raw materials being shipped out of this country. Our metals, oil and other finite resources are being handed out to foreign buyers for dirt. We have a small population and huge resource reserves, the people of Canada should be the richest in the world, but we aren’t. Likewise in Congo, the resources belong to the people and the people should be paid for them.