Tag: privatisation

WEF ditched democratic, inclusive pretences by facilitating new G20 privatisation

WEF ditched democratic, inclusive pretences by facilitating new G20 privatisation

The World Economic Forum (WEF)-Africa conference in Durban just hosted some of the world’s most controversial politicians: not just Jacob Zuma and his finance minister Malusi Gigaba plus regional dictators Robert Mugabe, Yoweri Museveni, King Mswati and Edgar Lungu, but also the most powerful man in Europe, the notoriously-corrupt neoliberal German finance minister, Wolfgang Schäuble.

At a public lecture last Thursday hosted by the University of KwaZulu-Natal, Schäuble undiplomatically threatened Britain’s Prime Minister Theresa May, in the midst of her election campaign: “The [Brexit] negotiations will become terribly difficult for the UK. They will see it.”

Schäuble re-scrambles Africa

The next day at the WEF-Africa summit, Schäuble sold his plan for reviving multinational corporate investment in Africa. It is a priority, he said, because “In Europe, we have come to understand that Africa represents one of the most important issues for the growth and stability of the global economy.”Africa as an ‘issue’ for global economic ‘growth’ – managed by imperialist elites – dates to an earlier Berlin project: the infamous “Scramble for Africa” in 1884-85. The continent’s dysfunctional borders were drawn then, with nary an African in sight, in order to facilitate property rights for colonial extractive industries, all the better to ensure infrastructure investment. Roads, railways, bridges and ports needed to withdraw resources have been cemented into place ever since, and now require refurbishing and expansion.

In addition to imperialist aspirations, another explanation arises: Germany’s national election is in September. Schäuble’s boss Angela Merkel needs a rhetorical device to explain to voters how the million African refugees who entered Germany over the last dozen years can be kept at bay in future. Hence the ‘Compact’ with African elites.

Schäuble was speaking on behalf of a G20 bloc that will hold its annual meeting in Hamburg in two months’ time. Amongst the world’s largest economies plus multilateral financial institutions, South Africa – with only the 3rd largest African economy and sixth most populous society – represents a continent glaringly absent from view.


The ‘C20’ group of civil society critics (within which I find myself occasionally) has expressed concern not only about Schäuble’s top-down process, but “higher costs for the citizens, worse service, secrecy, loss of democratic influence and financial risks for the public… … and the multinational corporations involved demand that their profits be repatriated in hard currency – even though the typical services contract entails local-currency expenditures and revenues – and that often raises African foreign debt levels, which are now at all-time highs again in many countries.”`

In contrast to Berlin, Donald Trump’s Washington regime has proposed malign neglect: cutting the USAID budget dramatically and diverting $54 billion in state funding to the military. But while once preaching isolationism, Trump has already expanded hectic albeit low-profile “Africa Command” interventions against what the Pentagon names as belts of Islamic extremism, from the Maghreb across the Sahel to the Horn, according to researcher Nick Turse who last week analysed newly-declassified US army data.

On June 12-13, more Compact details will be shared with G20 finance ministers at a Berlin meeting reportedly to be co-chaired by Schäuble and Gigaba. In spite of the latter’s occasional leftist rhetoric, Gigaba’s record of white-elephant infrastructure promotion when he was State Enterprises minister suggests how prone Pretoria remains to offering massive public subsidies to construction and mining corporations. That tendency overlaps precisely with Schäuble’s aims.

In addition to South Africa, five countries have initially signed up to the Compact with Africa – Côte d’Ivoire, Morocco, Rwanda, Senegal and Tunisia – with many more anticipated to join, so as to maintain aid and political favour with the European Union.

Euro-corruption and African infrastructure

Schäuble’s Compact was released in March in the German resort of Baden Baden without substantive African input (in contrast to Tony Blair’s 2004-05 Commission for Africa which coopted a comprador elite including Finance Minister Trevor Manuel). Schäuble  not only sidelined the more generous ‘Marshall Plan’ strategy advanced by Merkel’s development ministry, he also insisted that African governments provide more public subsidies – and take on much more risk – for ‘Public Private Partnership’ infrastructure. This typically amount to profits, pilfering and – for consumers of commercialised infrastructure – pain.

In his new autobiography and a Guardian article last week, former Greek finance minister Yanis Varoufakis described Schäuble as a hypocritical financial dictator who privately confessed that his ongoing squeeze of the Syriza government and Greek people – on behalf of the Euro – should really have been rejected by Athens. The very day Schäuble spoke in Durban, he was also busy imposing more austerity on Greece and rejecting a previously promised bail-out.

Varoufakis regrets trusting Europe’s “Deep Establishment” during the critical first half of 2015, and indeed he should have known better. Fifteen years earlier Schäuble had been expelled as leader of the Conservative Party for accepting and then publicly denying a cash bribe – the equivalent of R770 000 – from arms dealer Karlheinz Schreiber (whose generosity also wrecked the once-invincible Helmut Kohl’s reputation.) A comeback thanks to Angela Merkel’s generosity gave Schäuble first the German Home Affairs and then Finance portfolios.

Likewise, IMF managing director Christine Lagarde is a close Schäuble collaborator and endorser of the Compact with Africa. Less than six months ago, she too was convicted in French courts for a €403 million payout to a major conservative party contributor, Adidas owner Bernard Tapie, when she was finance minister. Her comeback was far faster than Schäuble’s: she continues in her present job, even gaining a re-endorsement on the day of her Paris conviction by IMF directors including those representing the Brazil-Russia-India-China-South Africa bloc.

Meanwhile African infrastructure has failed to attract anywhere near the investment in the manner envisaged in the African Development Bank 2010 Programme for Infrastructure Development in Africa and the wildly overoptimistic 2012 Southern Africa Development Community regional master plan.

But this not only a function of weak local systems – including widespread corruption in Africa’s construction sector – but another factor for which Schäuble, Lagarde and other elite financial managers are partly responsible: an utterly unreformed, chaotic world economic system.  Africa faced commodity price hikes of 380% from 2002-11 and then crashes by more than 50% in 2014-15, to unprofitable levels. And no Compact with Africa aiming to incentivise multinational corporate investment merely with state supply-side subsidies can reverse those inherent crisis conditions within global capitalism.

Given the financial imperialist-subimperialist alliance, WEF-Africa readily hosted the politicians Schäuble and Zuma (still facing 783 corruption counts) along with South Africa’s rancid state-owned enterprises (Eskom CEO Matshela Koko is under investigation for R1 billion+ nepotism while Transnet’s CEO Siyabonga Gama – one of five WEF-Africa co-chairs – was found  guilty of multi-million rand corruption by Transnet in 2010), plus dozens of corporations whose fraud records are prolific and – especially in South Africa – largely unpunished.

The WEF-Africa sponsoring partner Hitachi, for example, was hired to build boilers at Eskom’s R200 billion Medupi Power Plant. But 7000 welds needed redoing at what is the world’s largest coal-fired power plant under construction (with the World Bank’s largest-ever loan), a project now eight years behind schedule. Aside from the payoff to Hitachi’s local 25% shareholder Chancellor House (the African National Congress investment company via then Eskom chairperson and ANC finance committee member Valli Moosa), Medupi’s main beneficiary will be big corporations who pay a below-market price for power. BHP Billiton, the largest mining house on earth, gets electricity at 1/10th the price ordinary poor and working-class people pay thanks to the continuation of apartheid-era deals.

Bubbling up from this swamp of corporate corruption, WEF-Africa issued some mild-mannered rhetoric about inequality, to balance the standard neo-liberal pro-corporate pablum. Last year in Rwanda, WEF-Africa promoted a coming high-tech ‘Fourth Industrial Revolution’ – though only a third of the continent’s population has home electricity – and this year’s follow-up was a nod to the ‘internet of things’ which “could be the key to Africa’s development” (yeah right, unless Central Intelligence Agency hackers take over).

One illustration of how the WEF’s technology fetish has harmed Africa is the group’s virulent defense of Intellectual Property Rights and with it, corporate branding. Applied to life-saving medicines, this philosophy was debilitating, costing HIV+ patients more than $10,000/year at the turn of the century. Life expectancy plummeted from 65 to 52. Treatment Action Campaign activists began demanding free generic medicines for 40 million HIV+ people globally, of whom six million live in South Africa (and more live in Durban than any other city on earth).

Though the call was made most forcefully in 2000, at the same Durban convention centre – then hosting the international AIDS convention – it took another 18 months before World Trade Organisation leaders consented to the supply of much cheaper generic drugs to Africa, and another four years before the South African government agreed to roll out treatment. But thanks to perseverance by those activists, SA’s life expectancy rose back to 62 today.

Still, in 2010 at the WEF-Africa summit in Dar es Salaam, nine activists who peacefully protested outside for sustained public funding for treatment were arrested and deported.

Another faddish narrative is ‘inclusive growth,’ in part because the international charity Oxfam played a WEF-Africa co-hosting role. WEF’s website now includes ideas like a guaranteed Basic Income Grant.

WEF-Africa wants peace, quiet and Oxfam International

Such rhetoric notwithstanding, WEF-Africa is regularly accused of exclusivity, a charge I too would make after my media application to cover the event for Cape Town-based Amandla! magazine was simply rejected, with no explanation.

Protests against Lungu and Mugabe were held near the convention centre last Thursday. On Wednesday, led by Durban anti-pollution activist Des D’Sa, a People’s Economic Forum (PEF) march of several hundred activists recalled protests held against the same meetings here in June 2002 and June 2003. (During the 2003 protest, police horses knocked down famed poet Dennis Brutus.)

That march included a stop to protest at the US consulate near City Hall; Durban activists had also offered solidarity marches with US women fighting Trump’s misogyny on January 21 and with US scientists fighting defunding on March 22.

The previous day, May 2, Oxfam officials had explained to dozens of concerned community activists why its international chairperson, Winnie Byanyima, had decided to enrol as one of five co-chairs of the WEF-Africa, thereby giving the 1% elite renewed legitimacy. The charity’s insider route was unconvincing, and even Oxfam staff ruefully conceded the truth of the open letter signed by Byanyima three years earlier, when top international NGO officials confessed the dangers of insiderism at a South African meeting co-convened by Durban activist and former Greenpeace leader Kumi Naidoo:

“We are the poor cousins of the global jet set. We exist to challenge the status quo, but we trade in incremental change. Our actions are clearly not sufficient to address the mounting anger and demand for systemic political and economic transformation that we see in cities and communities around the world every day…
“A new and increasingly connected generation of women and men activists across the globe question how much of our energy is trapped in the internal bureaucracy and the comfort of our brands and organisations. They move quickly, often without the kinds of structures that slow us down. In doing so, they challenge how much time we – you and I – spend in elite conferences and tracking policy cycles that have little or no outcomes for the poor.

WEF-Africa’s divide-and-rule tactic was evident: providing invited spaces for civilised society supposedly representing oppressed people, versus its disregard for those not considered worthy of being inside. After PEF complaints about WEF spokesperson Oliver Cann’s refusal to meet the marchers, eventually a South African Treasury spokesperson accepted their memorandum, again signifying how close the WEF is to political power.

In contrast to Oxfam International’s ineffectual WEF-assimilation strategy, PEF activists (many of whom were generously supported by Oxfam South Africa, itself led by battle-hardened activists) will continue uncompromising resistance to multinational corporate predators’ profits at the expense of African societies and ecology.

For example, Zuma still yearns for R1.3 trillion worth of nuclear reactors from Moscow-based Rosatom (now already benefiting the notorious Gupta brothers and Durban’s Vivian Reddy patronage networks). From the standpoint of climate change, just as distressing are ExxonMobil’s attempt to drill for oil offshore Durban (a project begun under US Secretary of State Rex Tillerson’s leadership in 2012); the frack-attacks on in the Western Cape’s sensitive Karoo region (by Shell) and Drakensburg mountain ransge (by Rhino from Texas); the R250 billion plan for a new Durban Dig Out Port plus container-trucking depot, mega-refinery and doubling of the main oil pipeline to Johannesburg; and the extraction and export of 18 billion tonnes of coal (benefiting Anglo American, ArcelorMittal, Exxaro, Sasol  and other multinational corporations) at the expense of the climate.

The latter is Transnet’s and the National Development Plan’s first mega-project. The network of Mining Affected Communities United in Action, led by Matthews Hlabane (founder of the South African Green Revolutionary Council) and Zama Ntuli (from one of the main coal-field struggles, near the historic iMfolozi nature reserve), pointed out the combined local devastation of the R200 billion plan to local lungs, water, land, air and climate change.

In practicing their arguments against the world elite’s pro-corporate event last week in Durban, PEF activists will inexorably also confront the G20 – the throne behind the power of world capital – when Schäuble’s Compact with Africa becomes more widely known. Such contradictions must also make leftist-sounding Pretoria politicians squirm when describing imperialist power dynamics to their constituents, when simultaneously South Africa is meant to loyally represent Africa’s best interests within the G20… but when in reality Zuma and Gigaba cannot help but do the very opposite.