Canada blocks debt relief as Congo marks jubilee

[anansi]

KINSHASA (Reuters) – Canada delayed an $8 billion debt relief deal for Democratic Republic of Congo in a dispute over mining rights, depriving the Central African country of a chance to mark the 50th anniversary of its independence on Wednesday with the accord.
Congolese President Joseph Kabila had pushed for the relief to be finalized in time for the celebration to show the world his country was putting its painful past behind it, following the 1998-2003 war in which some five million people died.
But a World Bank decision on the debt was postponed at Canada's request due to a legal dispute that exploded last year between Vancouver-based First Quantum Minerals and the Kinshasa government over mining rights, officials said.
"Canada did it due to ongoing concerns related to governance, rule of law, and preoccupations about what these realities mean for sustainability of the debt relief program," said a Canadian official who requested anonymity.
The debt accord was meant to be a high point of celebrations attended by United Nations Secretary-General Ban Ki-moon and King Albert II of ex-colonial power Belgium.
A spokesman for Canadian Finance Minister Jim Flaherty cited concerns about the cancellation of mining contracts after a review of the sector by Kinshasa and noted that Canada had slowed the debt relief process last year due to its concerns.
"We will continue to work with our international partners to ensure Canadian investment in the DRC is protected, while empowering those within the country as they work toward peace and sustainable economic development," the spokesman said.
The International Monetary Fund, the World Bank's sister organization, approved debt relief for Congo on Wednesday, saying the authorities had met all of the conditions under global programs to ease the debt burdens of poor countries.
John Lipsky, the IMF's first deputy managing director, said the Congolese government was "strongly committed" to tackling corruption in the mining and oil sector, important for securing foreign investment and further donor support.
Both bodies must approve the deal and a World Bank official said the board had rescheduled the meeting for Thursday to approve debt relief for Congo. A U.S. official said Washington was supportive of the debt deal.
A source familiar with discussions said the World Bank board was expected to approve the debt deal despite Canada's misgivings. The Bank is also expected to approve a $50 million grant to improve governance in Congo's mining sector. "Debt relief is expected to go through and (the impact) is almost instantaneous," the source said.
"SLEEPING GIANT"
Before the celebrations, Kabila did manage to secure the start of the withdrawal of U.N. peacekeepers from his country.
He wants the entire force out by the end of next year. But the U.N.'s Ban told Reuters that he stressed to Kabila that the drawdown must be based on a "common assessment of the situation," and Congolese army reforms.
Hundreds of thousands of Congolese turned out for a parade in Kinshasa, the bedraggled national capital which has been given a hurried facelift by Chinese laborers for the occasion.
"Slowly but surely Congo is recovering, as a giant who is waking up after a long sleep," Kabila said in a speech in front of parliament which drew only muted applause.
The speech was at times barely audible and it was not clear if Kabila made any reference to debt relief. Earlier, religious leaders led prayers at the venue for a speedy debt write-off.
Investors in Congo's lucrative minerals sector were unnerved by its move last September to close First Quantum's Kingamyambo Musonoi Tailings (KMT) copper and cobalt project. The company is seeking international arbitration.
Last month, Congo's Supreme Court also annulled the Vancouver-based company's rights on two other mining titles.
The party mood in Kinshasa has been further dampened by the still-unexplained death this month of Floribert Chebeya, the country's main human rights campaigner, who spoke out against arbitrary killings and torture of political dissidents.
Yet despite high levels of public dissatisfaction at the state of the country before next year's general election, and continued violent rebellions across the country, there is also a streak of pride that it can hold such a celebration at all.
"Despite all the problems facing our country we are proud today," said polio victim Baudouin Mangula, named after a Belgian king and celebrating his own 50th birthday on Wednesday. "It's thanks to peace in our country that we can parade here -- that is a big achievement."

OH Canada!! Dear Canada!! saying to the people of the Congo.You got flag independence we got you by the balls.
When will the African Union folks start pulling and pooling together to form a cartel for their mineral resources..

[franklin]

Remember the article that you posted on the Middle East which also has vast resources? If anything the developed world will could simply suppress any African cartel in favor of developing vast resources from Afghanistan. The scramble for Africa for the most part wasn't even profitable. Adam Smith himself recognized that capital and resources were being diverted in such a way that it hurt all other countries including the country that the policies were made in favor of. How about all the wasted resources given in the form of bad loans that won't be paid back and aid to Africa?

Africa was once important for palm oil but now from what I've read it is produced domestically not for export anymore. They lost their share of that trade. Today many African countries can produce cotton efficiently with the lowest cost of production in the world so they should be able to be competitive in textiles but instead the United States subsides cotton and sells it at below the cost of production, exports it to China which in turn dumps cheap textiles on Africa. Also notice the fall in copper noted here

Any Africa politician/activist/businessmen who tries to do something about it will end up like King Jaja being sent into exile

Remember this from the conspiracy theory thread

18th Meeting of Tepcow.
Theme: "Accelerating Trade and Investment in Africa"

Reference Conference Document: " Promoting Trade and Investment to Accelerate Africa's Development "
Addis Ababa, 29 April 1997 (Note this is an old article from 1997 but it shows the history)

www.uneca.org/cfm/23/cm23-thm.htm

[Africa's share of world trade, accordingly, has fallen dramatically over the past thirty to forty years. In the particular case of Sub-Saharan Africa, the share of that subregion's exports to the world at large has fallen from 3.1 percent of world trade in 1955 to less than 1.2 percent in 1990. Similarly, there has been marked erosion of Africa's international competitiveness. The continent's share of world trade has not only declined in absolute terms but also product by product. For instance, Africa once was the most important producer of copper alloys -- accounting for 32 percent of all OECD imports during the period 1962-1964. By 1991-1993, Africa's share had dropped by 22 percentage points to just 10 percent!]

They won't even allow Africans to can their own tomatoes (displacing canned tomatoes in South Africa itself), and they ensure that Africans can't sell any to countries like Japan. That is a far cry from being able to create cartels

European Union Polices Block African Agricultural Exports

Action for Southern Africa (ACTSA)

www.worldhunger.org/articles/africa/actsa.htm

[The EU gives aid to its tomato canners and to the EU farmers whose tomatoes are canned. It also drastically limits the amount of South African canned tomatoes sold in the EU by imposing a 14.4% tariff on entry. EU canners are displacing South African canned tomatoes in the USA, Japan and in South Africa itself. This has already resulted in two thousand seasonal and permanent job losses in the South African canning industry. The EU does allow other Southern African countries to export canned tomatoes to the EU duty free. But, as none except South Africa has the industrial capacity to produce them efficiently and cheaply, this system continues to ensure that European tomatoes are protected from competition.]

[anansi]

quote
Any Africa politician/activist/businessmen who tries to do something about it will end up like King Jaja being sent into exile

Any single politician/activist/businessmen that is!! but not an organization of African leaders political and business such as the A.U and regional economic zones.

All that is needed is for them to stand firm and don't sell-out.. look the Russians and the Chinese when it suits their purpose can tell the west to go take a hike and ignore their criticisms and protest and imo they are better off for it.

[franklin]

Will the policies of the Europeans and the United States are not even profitable, flooding Africa with not only manufactured goods but also food and raw materials, often at below the cost of production, so that Africans can't produce it for themselves. A great part of the earnings from exports in African countries are actually used to import food which while cheap incomes in African countries are low because of suppression of trade. How do you compromise with people who have such strange and insane practices as that. The very same people that spend trillions of dollars in order to suppress the mineral wealth and resources of people all over the world i.e. the Middle East. Some people in Afghanistan would prefer to have the Taliban back so that they could develop their natural resources

Why does Africa have so little textile industry, is an overall importer of food and very dependent on food imports, and still has less than 3% of world trade. How is going to have any kind of cartel going to work when Americans and the United States could simply get resources from somewhere else? How are Africans going to pay the debts they are obligated to pay if trade continues to be suppressed? They could of course make deals with Brazil and Russia, but both of these countries are food exporters and will want African countries to open up to cheap food imports so making trade deals will also mean making more concessions

There is nothing in Africa that can't be made/mined/grown anywhere else. Not while untapped resources still exist in South America/the Middle East/Asia

I should add that since the United States exports cotton at below the cost of production "Standing up" and "not selling out" will not do anything unless they can somehow force the United States to stop subsidizing cotton. This is pertaining to the textile industry as Africans will have a hard time competing in the world market. If they close themselves off from textiles from countries like China it would hurt trade relations with those countries. In this way the United States supports China at the expense of Africa. In this respect there isn't selling out by Africans. For example the case with canned tomatoes Africans can't really do anything about it if Europeans dump canned tomatoes on Japan and the United States thus hurting their exports. However they could be said to be sell outs in allowing canned tomatoes to be dumped in their own countries, purchasing from Europeans rather than purchasing from their African neighbors. However African countries are not sell outs when Europeans and United States have tariffs on African processed goods, raw materials have low tariffs but the more processing the higher the tariff is. This is not African countries can control

All the estimated value of the minerals that have been found in Afghanistan will not match the expense of occupying that country so far, and will not cover further occupation of that country. It would be extremely profitable for those involved in it but overall the occupation could never be profitable. Nor could Afghanistan be targeted simply for it's resources because if it were purely for resources they could have gone to Africa which still has plenty of untapped resources

Please see this on world trade barriers:

aviewofhistory.weebly.com/world-trade-barriers.html

"French Economic Policy in Tropical Africa" by Virginia Thompson and Richard Adloff

books.google.com/books?id=-e88AAAAIAAJ&pg=PA129&lpg=PA129&dq=#v=onepage&q&f=false

None of these colonial propagandists could have believed that imperialism would be financially profitable to France, but they argued cogently that it was indispensable for national prestige

books.google.com/books?id=-e88AAAAIAAJ&pg=PA130&lpg=PA130&dq=#v=onepage&q&f=false

To be sure, the French had never expected their colonies to be – nor have they ever been – a source of profit except to a few companies, businessmen and banks.

[franklin]

I assume the motivation behind a cartel, as you recommended having cartels, would be as a way to get better deals on exports of various natural resources. However this would mean making these resources more expensive for other countries that import while a major problem in Africa in the first place is that they are having a hard time competing in the world market, especially because Africans receive very little part of the world’s total FDI

I have done a little research and it seems with the downturn of the global economy there will not be as much demand for industries to purchase things like copper, and many things from Africa are made more expensive due to various kinds of trade barriers that make them more expensive and thus makes it harder for Africans to compete because they don't get investment

Actually right now copper prices are up these are old but this shows the recent history up to just a couple months ago

humanitarian news and analysis
a project of the UN Office for the Coordination of Humanitarian Affairs

“ZAMBIA: Lower copper prices will hurt the poor”

www.irinnews.org/Report.aspx?ReportId=81367

“Zambia hopeful copper prices to recover after Greece crisis” from Xinhua

world.globaltimes.cn/africa/2010-05/536591.html

Copper Mining in Zambia
- Overview

www.mbendi.com/indy/ming/cppr/af/za/p0005.htm

[The parastatal Zambian Consolidated Copper Mines (ZCCM) had been attempting to privatise its operations, a process that has taken more than seven years to conclude. By the end of 2000, most of ZCCM's assets had been privatised by a variety of international companies, with Anglo American taking the bulk.However, in early 2002, Anglo American decided to discontinue the funding of its investment in KCM. This includes the development of the massive Konkola Deeps Project, where Anglo American could not raise funding nor justify the development during historically low copper prices. The Zambian government has had a hard time trying to find a suitable strategic equity partner to replace Anglo American as the major technical shareholder in Konkola Copper Mines plc.]

[franklin]

The case with Jaja was actually that palm oil oil was encouraged to be grown in so many places that the price on the palm oil fell. This of course would hurt small scale producers because a monopoly was formed by Jaja to get higher prices. However palm oil was concentrated in Africa but for example today with sugar or cotton it can be grown in other places so it put African sugar and cotton producers out entirely.

However when Africans could export cotton and sugar it very clearly helped the poor and the same thing with copper it could help the poor when the price was higher

[franklin]

And remember that even China's farmers have opened up to cheap imports so the Chinese are also allowing themselves to be taken advantage of. I'm not sure why they are allowing this but China's soybean industry seems to be more and more dominated by foreigners

The cheap food thing is more damaging than the genetically engineered crops

"Chinese soybean producers lose out" By Li Xiang (China Daily) 2009-04-20

www.chinadaily.com.cn/bw/2009-04/20/content_7693349.htm



A ship loaded with imported soybeans is brought into port in Rizhao, Shandong province. China now imports 70 percnt of its soybeans. Li Xijin

[franklin]

You gave a response but you didn't address anything that I said

1. How does selling out create a situation in which you have "fallen from 3.1 percent of world trade in 1955 to less than 1.2 percent in 1990.".

2. How would having cartels help when you have trouble gaining market access for your copper in the first place. In fact right now silver prices are so low that metals like silver isn't economical to mine

3. How about dumping cheap canned tomatoes on Japan, something that took place outside of Africa so did not necessarily involve selling out when South Africa lost this market

The situation could just as easily be explained as incompetence which is different from selling out.