Is there such a thing as resource curse?

19 Jul, 2019 - 00:07 0 Views

eBusiness Weekly

This is a Part Two series of “Is there such a thing as resource curse?”)

Clifford Shambare

I have been following up the question of natural resources and their exploitation and use by man, the world over, for some time now.

In the process I have come to realise that there has never been-and most probably, never will be-anything clean, gentlemanly, ethical and professional about a fight for natural resources.

In the past the fight was largely for land, now it is for mineral resources, including fossil fuels.

Be that as it may, it is also true to assert that over time, man has tried to polish up the fighting act but the basics of the game are still the same; resources have to be fought for, one way or the other. The new approach that I want to boldly describe as ‘sanitised’ here-can only be deliberately created for a reason, by those involved.

I can give quite a few examples for this assertion but let me dwell on the one nearest to us — the South African case. In this case the same book Oppenheimer and Son, that I referred to above, is a real gem in exposing the ugliness of the fights for minerals that can, and actually do flair up, between governments and the private sector. Interestingly, these are fights in which the public inadvertently gets caught up, one way or the other.

In this case, the fight for minerals in South Africa was juxtaposed on the politics of occupation between the Afrikaners, also referred to as the Boers —the earlier colonisers of that part of the world — and the latecomers, the British. Overall, these were conditions in which the Africans — the even earlier occupiers of the same area — ended up being pitifully used as mules or even as tools, by both sides-mining minerals which the system did not allow them to benefit from.

At one time I used to chat during beer drinks at our local pub, with someone who had once worked in the Johannesburg gold mines in the 1960s, who poignantly described to me, the callous treatment meted to black mine workers in which they were put into hot gas/steam chambers on leaving the mine tunnels so that they could vomit or crap out any gold nuggets they may have swallowed while deep in the mine tunnels!

Interestingly and ironically, even though the Africans as represented by Kwameh Nkrumah, Samora Machel, Julius Nyrerere-and more closely, Robert Mugabe and others — were often depicted as hardcore communists because of their desire to nationalise their economies, starting with natural resources — the Afrikaners held the same view of the British.

During long debates in parliament, the Boers through Hedrick Verwoerd, the minister of Native Affairs and the architect of apartheid and Strijdom, the then prime minister of South Africa — fought hard battles with the British represented by Harry Oppenheimer, then chairman of Anglo American, over capitalism as espoused and practiced by the British and the Americans — and themselves. Interestingly, during these fights, the Afrikaners did not articulate what economic system they themselves, actually believed in.

According to the Afrikaners as explained in the said book, capitalism was the major reason for their desire to drive the former out of that country! However, the major reason behind this desire was the Afrikaners’ goal to finally nationalise that economy thereby benefiting the most from its natural resources, then consisting mainly of gold and diamonds.

The interesting thing here is the fact that in the end, the Boers managed to wrestle a major chunk of South Africa’s economy. Today, it is only the blacks who are on the periphery of that economy.

So back to Zimbabwe, people get confused when it comes to this issue of mineral resource ownership and extraction. In this country the mentality is that whatever a foreign company — especially an international mining conglomerate such as the said Anglo-American Corporation — does in the area of mining-is sacrosanct.

Be that as it may, a deeper look into the matter throws up an interesting scenario. This perception of sacrosanctity seems to apply only if the corporation is Western and not from any other region of the world. I say this because when Karo Resources of Cyprus-a country that is in Eastern Europe-was setting up shop in the Great Dyke to mine chromium, all hell broke loose; the private media went to town accusing it of indulging in all manner of shenanigans. The same attitude has been expressed by the same media over Russia’s involvement in the same area.

This state of affairs, however, should not be surprising given Anglo-American’s close ties with the British South Africa Company that has been the main player in the mining industry in Southern and Central African region for over one hundred and ten years.

Today there is a serious scramble for mineral resources among all the countries of the world-from the developing, to the emerging, to the developed ones. This is a situation that has come about because of two reasons namely; the depletion of mineral reserves of the developed world and new developments in technology triggered by, among other reasons, the need to find cleaner and more efficient ways of using energy for production and heating purposes.

Interestingly, the last category of countries is only involved as passive players — victims in actual fact — in this scramble, largely because they are not yet industrialised.

It is in this realm (particularly in Africa, Zimbabwe included) no one, including the government, should try to reclaim any mining claims that these conglomerates may currently hold, in order to give to the indigenes, whether the former are exploiting them or not.

In the view of those who take an extreme position on the matter, who surprisingly include some Zimbabwean indigenes — it is also wrong for the government to demand a piece of the mineral cake from these conglomerates or any other mining company for that matters — for the benefit of the country’s population!

The resultant commotion in the country, or any part of Africa for that matter-regarding the extraction and trading of these minerals-is the origin of the “resource curse” mentality and mantra. So, as should be expected, the question is: How can the Africans (Zimbabwean included) get out of this messy situation?

My position on this matter is that there is need for a paradigm change in the way we regard and consequently, act on such issues. But since it is difficult to change mindsets, our immediate solution will not come from this area but from the technological development arena. But why and how so — you may want to know? You see, today Zimbabwean blacks cannot be said to have no power to exploit the country’s mineral resource base; they have, but the results have so far been disastrous. Many mining deaths, misuse of foreign money-mainly the US dollar-and a few minor social ills, have been some of these negative results.

In this case I want to suggest that government intervenes immediately through a number of strategies, which should comprise among others, clear laws to control the activities of the small scale miners as well as where to, and not, to mine. These laws should be seen to result in appropriate punitive measures by the system. The current kid — gloving approach to the matter can only lead to more disaster and a very bad image of the country to the outside world — that is, if it has not already done so.

Secondly, but not in any order of implementation, the small scale miners should be trained properly on safe mining methods. Thirdly, government, working with Small Miners’ Federation-should avail funds through some loan facility and/or grants, to purchase and install such items as mining props, ropes and all the paraphernalia that is required in this industry.

I am not a miner myself but I know that as time goes on, mines go deep, and the operations become more complex and too expensive for these miners to afford.

So at that stage they need more capital to purchase the said equipment; they also need better management and operational skills among those concerned.  In the book referred to above, Earnest Oppenheimer chronicles how the South African mining companies battled for a period of over thirty years trying to find capital to finance their mining operations until they resorted to a bit of financial juggling in which such banks as J C Morgan Stanley and  Rothschild’s took a no mean part.

In addition, they had to set up their own investment houses to strengthen and stabilise their mining financing systems.

The action (or lack thereof) that we see today in this respect, is a far cry from what needs to be done here. Politics or no politics, the authorities cannot continue to treat this matter as if it were some Cinderella activity in the economy any more.


 Clifford Shambare is an agriculturist cum economist and is reachable on 0774960937


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