DEVELOPMENT, INVESTMENT AND CORUPTION

As NATO’s commitment to Afghanistan winds down, the Westminster Government is aiming to fund a £10 million pound programme to help Afghanistan exploit its huge natural resources. This may sound too many people like a lot of money but considering that estimates of what lies underground in Afghanistan range from some $1 – 3 trillion dollars (US) worth of gold, gems, iron ore, and oil and gas. Now this has little to do with largess, no doubt hoping for a percentage, David Cameron’s three-year funding programme, to support the Afghan Ministry of Mines was launched at an event at Downing Street (March 6th).

UK Mining Aid in Afghanistan: Throwing Good Money After Bad?

The announcement came as Mr Cameron hosted dozens of UK investors and mining contractors at Downing Street.  He said the UK had already played "a huge and honourable role" in stabilising Afghanistan, but that the country needed "prosperity, growth, jobs, investment and wealth". British mining companies welcomed the announcement. Cameron’s decision could be described as courageous, especially with the claims that the award of mining contracts in Afghanistan after the fall of the Taliban were directly affected by corruption.

Transparency International in 2012 Corruption Index (CPI) currently ranks Afghanistan as one of the (joint) most corrupt country with North Korea and Somalia. President Hamid Karzai in the United State for the NATO Summit in Chicago (in 2012) was asked by CNN’s Wolf Blitzer about this rampant corruption issue in Afghanistan. As usual, President Karzai’s answer was “it is the contractual mechanism that the US applies in Afghanistan” that encourages bribery, fraud, and corruption.

The Afghan President has always blamed the west for the loss of billions of aid dollars and the rise of corruption in Afghanistan. The reality is less simple as on a daily basis, ordinary Afghans are less concerned about the kinds of bribery that is (and does) occur when the US and Western  development agencies hand out big development contracts. Ordinary Afghans are more infuriated by the kinds of bribes that they often have to give to get what they are legally entitled to via “harassment bribes.”

Basically harassment bribes are like when a retired Afghan has to pay some cash to the pension officer to receive his retirement check. Or, when a young man or woman freshly graduated from college has to get his or her paperwork done in order to become a teacher. To accomplish this the prospective teacher will be asked to pay a hefty bribe. Or your Tazkira or national ID card is held up until you pay some cash to the officer in charge. These are all simple illustration of harassment bribes.

Harassment bribery is widespread in Afghanistan, and it plays a large role in breeding inefficiency and has a profoundly destructive effect on civil society. While President Karzai consistently wags the finger at the West for widespread corruption in Afghanistan, yet his administration has failed to take responsibility for banishing bribery on the lower level. The West has for a quiet life has looked the other way as local low level corruption tends to be written off as a fact of life something that indirectly may feed support for the Taliban.

Now it may be a question of scale, the World Bank has regularly appealed for future Afghan mining concessions to be better regulated and more transparent, and the UK’s new financial support is aimed at improving that process. Cameron’s theory is that by improving Afghan technical competence, and ensuring a transparent process, should help to secure that along with the concerns that vast investments made by companies from China and India have reduced  opportunities for others i.e. The UK.

When it comes to mining contracts it certainly appears to be a matter of scale. The award of a 30-year contract to a Chinese consortium to exploit the Mes Aynak copper mine in Logar province is one of the deals that has come in for particular criticism. The exact details of 2007 deal with China Metallurgical Group Corporation have never been made public, something that continues to fuel rumours of bribery and kick-backs along with serious concerns about the potentially massive environmental and cultural impact of the mining project on local communities and local people.

Some years ago, the Taliban blew up Afghanistan's ancient Buddha's of Bamiyan, provoking a degree of international outrage amongst the concerned and amongst the chattering classes. At the time the Taliban's brutal treatment of women and religious minorities oddly enough provoked less public outrage - no doubt because pipeline route deals (to get the oil out of Central Asia) were in the offing. Now, the country's rich archaeological heritage is facing a new and different threat - that of mineral exploitation and development of resources.

The Peoples Republic of China (currently busy sourcing minerals and foodstuffs from around the world to feed its economy and its people) has its sights on another ancient Buddhist site in pursuit of copper. Mes Aynak ironically is an ex al-Qaeda training camp and home to a 1,400 years old Buddhist monastery. This site is relatively intact with walls, corridors, stupas brightly painted red Buddha's. The monks originally settled here because there was copper in the ground; part of a Buddhist kingdom and a Silk Road way-station, other things carried Buddhism from India to Tibet, and into China.

The China Metallurgical Group (MGC) has a 30-year lease to mine copper to develop a copper mine. The mine alone could give Afghanistan $1.2 billion (£755 million) per year in revenue along with much needed jobs. Chinese miners have set up camp and special armed security guards patrol miles of fencing around the site. Beneath the site lies the world's second-largest untapped copper reserve, and the Chinese have bought the mineral rights to the entire area.

The archaeological site was discovered during excavation of the site for MGC - archaeologists have three years to salvage the site, which could easily take 10 years to properly excavate. Afghan archaeologists are aware of what has been lost in thirty years of war, and have deep concerns that a lot of their cultural heritage has been destroyed, damaged and looted. Their concerns stretch well beyond Afghanistan as they perceive the artefact's as not just belong to their country, but as human treasure which belongs to all of us.

Overwhelmed by both large and small scale corruption what can an endemically corrupt Afghan government do to discourage bribe givers and takers (at all levels of government) even if it wanted to? Endemic corruption aside the security situation is the key, with NATO leaving and the Taliban waiting in the wings things don’t look good.

Yet if things stabilise then there may be new rush to exploit Afghan mining opportunities, but, at what cost to the Afghans themselves, who have seen what has happened in other post-conflict countries. Elsewhere in the world, in Africa and elsewhere, large deposits of mineral resources have often proved to be a curse, often enriching the few (and the mining companies) rather than benefiting local people who have often lost out.

THIS LAND IS NOT FOR SALE!

In the end it always comes down to the land, Who owns it? Who farms it? And who lives on it? Or who makes a living from it? Since Humans have been living in relatively settled communities land has been bought, sold and stolen fuelling grievances both real and imaginary. What is a relatively new in recent years is that land deals have become a new form of international trade. In recent years, sub Saharan Africa has been the public focus for this trade (the reality is that is been going on around the world for many years). A combination of commercial companies and the various commercial arms of the People’s Republic of China (PRC) have been chasing profits (and land) in Africa pursing profits and (in the case of the PRC) foodstuffs for the world (and the Chinese) market.

Between 2008 and 2009 the World Bank noted media reports of land deals that added up to something like 60 million hectares. The traditional UK media unit of measurement, Wales, won't help to illustrate the scale of the issue, that all adds up to something like the land equivalent to the Ukraine – some two-thirds of the land acquired happens to be in Africa. The evidence points to the fact that land deals are taking place on an unprecedented scale and at an increasing rate. Some of the specific land deals are pretty big, a recent deal in Liberia involved some 220,000 hectares.

The western media has tended to focus on the land deals signed by Middle Eastern and Asian government-backed operators but in reality Western commercial companies and Hedge Funds have also been heavily involved in the process – they don’t like the glare of publicity. One of the reasons why commercial companies are seeking to acquire land is because there is potentially big money to be made with cash crops as world food and commodity prices are expected to increase because of increasing demand for foodstuffs and also bio-fuels from China and India. Some of this is being driven by governments who are chasing land acquisitions abroad as a way to secure affordable food for their people at home.

In 1961 at or on the edge of independence Africa largely fed itself and even managed to export surplus crops. This is no longer the case, partially due to a neglect of the agricultural sector in many African countries, political instability, corruption and a chronic lack of investment to improve productivity and the means of getting surplus crops to both local and international markets. It goes without saying that not all types of investment is good and evidence is beginning to pile up that suggests that large scale land deals have a detrimental impact on indigenous local farmers.

Research by the International Land Coalition suggests that a growing number of these large scale land deals are failing due to a combination of poor soil types, financial problems, local resistance and unrealistic business plans. Some of these land acquisitions have resulted in some pretty raw deals for local people and as a consequence have fuelled dissent and resistance (in Ethiopia and Madagascar to name but two).

Now this does not mean that African states and peoples should steer clear of all land deals. What is needed is for land deals to be implemented properly, transparently, with safeguards for local people and local involvement. Some of the world's poorest people are losing the land, water and natural resources that have supported their livelihoods and their communities for generations. In Uganda, Oxfam has noted that some 20,000 people who claim to have been evicted from their land have taken their case to court seeking redress.

Part of the problem is because of the massive power imbalance between multinational companies, African governments and local farmers and landholders. Many of these land deals are negotiated behind closed doors without transparency, without local consultation something which fuels local dissent and anger. Across much of Sub Saharan Africa, as noted by the International Institute for Environment and Development, there is lack of secure land tenure which affects local farmers, herders and gatherers. This is partially down to a lack of written documentation and also because a great deal of land is owned by the state, which can obviously allocate it to outside investors even against fierce local opposition.

There are some pretty successful business models out there that show what can be done by local people, one co-operative of 60,000 cocoa farmers (in Ghana) has been in business for almost twenty years and owns 45% of a UK company that manufactures and distributes chocolate. There are ways to improve productivity and market access that can support local farmers or at least give them a realistic chance of competing.

Many international companies are able to successfully source agricultural produce from local family farmers, and have invested in other activities along the production line to help secure their supplies and improve local livelihoods. Some farmers associations (in Mali and Zambia) own shares in the company they collaborate with, which gives them monetary benefits and a greater say. Co-operatives have reduced their costs by working with large numbers of farmers.

Some land deals could bring many benefits including increased food production; access to improved agricultural skills, secure land tenure for indigenous farmers and more sustainable development in rural communities. This is something that could help to slow one of sub Saharan Africa's greatest problems rural to urban migration. Civic groups in sub Saharan Africa are demanding far greater transparency and openness from their governments and from investors. If this is done right then local indigenous communities can be helped to become equal partners rather than ending up as victims.

LAND AND POWER

As multi nationals and the People's Republic of China (PRC) continue to chase to attempt to secure control of the worlds resources one thing they are both seeking to secure control of (for different reasons) is food and the land it grows upon. With purchasable governments in certain quarters of the world it's the small farmer who's felling the pinch, losing both his land, the ability to feed his family not to mention the ability to feed other people. Planet-wide it has been estimated that there are some 500 million small farms (less than two hectares in size) which feed around one third of the planets population.

Half of the planet's undernourished citizens are dependent on small farms for their food. Some 80% of food consumed in Asia and sub-Saharan Africa is produced by small farms. As our planet's population continues to increase (it's estimated to reach around 9.2 billion people by 2050) there will be a corresponding rise of around 70% in demand for food (UN). So with the PRC chasing food as well as minerals to feed it's population and it's economy and the multi nationals chasing a fast buck no doubt at the expense of local indigenous inhabitants who won't be able or willing to pay top dollar or euro for foodstuffs that are destined for distant foreign markets.

Local people will be driven into dire poverty, they lose their land in the process along with the ability to feed themselves and other peoples. Oxfam's recent  report 'Land and Power' makes interesting and alarming reading. One of the great ironies is that many of the developers are working with local governments who are being helped out by the world Bank and the International Monetary Fund - this surely is the kind of alleged 'free market' development much of Asia and sub-Saharan Africa can well do without.

DEVELOPMENT COSTS

The first quarter of the 21st Century may be written up by future Historians as the years when the Peoples Republic of China (PRC) rose to greatness and flexed its muscles on a global if not an imperial scale. Future historians may also note that these were the years when the PRC's influence in sub Saharan Africa grew at an exponential rate. There has been an almost imperial acquisition of resources in the sub-Sahara with one of the most sweeping, bare-knuckled, and bare faced acquisition of resource to feed the PRC's population and it's economy.

The USA (and the West) have been struggling economically and politically with the consequences of the War on Terror and the consequences of the World wide Banking crisis. In barely a few years, the PRC has become one of the more aggressive investor-states in Africa. This admittedly commercial invasion has been (and is) probably the most important economic and political development in the sub-Sahara since the Cold War ended, the economic map of the world has been quietly redrawn.

There are more Chinese citizens resident in Nigeria than there were Brits during the height of their empire. Chinese state-owned and state-linked corporations and small entrepreneurs have roll led across the continent in an almost unstoppable wave. It has been estimated that potentially around a million Chinese citizens are at work in sub-Saharan Africa. The PRC has created collateral economies and population monuments across the continent as it searches for and seeks to develop and control minerals and food resources.

No other world power has come close to showing the same interest (or muscle for that matter) or sought to cosy up to Africa's leaders. Now this is no War on Terror, democracy (flawed or not) is no being encouraged, nurtured or spread by the PRC - this is solely about finding what the PRC needs to feed China (figuratively and literally). Aside for having a political impact and snaffling up increasingly scare resources there has been an impact within the Sub Saharan African nations.

This has been manifested as trade unions begin to fight against some pretty grim (PRC imposed) working conditions (obviously and somewhat ironically the People's Republic of China (a notional communist and pretty repressive state) is obviously no great lover of any real trade union's and any political opposition for that matter. And as indigenous local farmers (and their families) find themselves pushed off their land as governments swayed by the PRC's largess sells  the land form underneath them. Pro and anti Chinese candidates fight elections in those Sub Saharan states where meaningful elections take place that is, and you can guess which ones get the benefits of PRC funding.

INGOTS OR ARCHAEOLOGY?

Mes Aynak

In all honest most people tend initially not to associate Afghanistan and Archaeology,but, despite the savage war against the Soviets, the brutal civil wars and the war against terror Afghanistan (a literal crossroads of the ancient world) is awash with rich and largely UN-excavated (if sadly occasionally well pillaged and looted) archaeological sites.

Some years ago, the Taliban blew up Afghanistan's ancient Buddha's of Bamiyan, provoking a degree of international outrage amongst the concerned and amongst the chattering classes. At the time the Taliban's brutal treatment of women and religious minorities oddly enough provoked less public outrage - no doubt because pipeline route deals (to get the oil out of Central Asia) were in the offing.

Now, the country's rich archaeological heritage is facing a new and different threat - that of mineral exploitation and development of resources. The Peoples Republic of China (which is busy sourcing minerals and foodstuffs from around the world to feed its economy and its people) has set its sights on another ancient Buddhist site in pursuit of copper.

The site in question is Mes Aynak lies, in Logar province, not far from Kabul. Formerly an al-Qaeda training camp, is also home to a a Buddhist monastery that is more than 1,400 years old. This site is relatively intact with walls, corridors, stupas brightly painted red Buddha's. The monks originally settled here because there was copper in the ground; it was part of a Buddhist kingdom. The site was a way-station on the Silk Road, which amongst other things carried Buddhism from India to Tibet, and into China.

Now the China Metallurgical Group (MGC) has been granted a 30-year lease to mine copper to develop a copper mine. The mine alone could give Afghanistan $1.2 billion (£755 million) per year in revenue along with much needed jobs. Chinese miners have set up camp. Special armed security guards patrol miles of fencing around the site.Beneath the site lies the world's second-largest untapped copper reserve, and the Chinese have bought the mineral rights to the entire area.

The archaeological site was discovered during excavation of the site for MGC - archaeologists have three years to salvage the site, which could easily take 10 years to properly excavate. Afghan archaeologists are well aware of what has been lost in thirty years of war, and deeply concerned that a lot of their cultural heritage has been destroyed, damaged and looted. Their concerns stretch beyond Afghanistan as they perceive the artefact's as not just belong to their country, but as human treasure which belongs to all of us.

The Afghans could with some luck and the rich mineral; deposits could prove a break form the past a decent revenue stream to enrich the country and its people, but, in Afghanistan and elsewhere in the world it's about balancing development with preserving (or at least properly excavating) our archaeological heritage for this and future generations.