Friday, April 02, 2010

Blood and Treasure

The tragic and often bloody conditions of the Congo is rarely out of the news and it is often commented upon . Socialist Banner read this about the Democratic Republic of Congo .

One of the world's richest countries is also one of its poorest.As far back as Congo's history is recorded, the wealth from this vast natural treasure house has flowed almost entirely overseas, leaving some of the planet's best-endowed land with some of its poorest people. It is often heard, "We wouldn't have so much trouble if we weren't so rich."

Gold is only one of a half-dozen or more lucrative minerals to be found in Congo, and together they constitute what may be the worst case on Earth of what has come to be known as the "resource curse" . As inevitably as oil drew the United States into Iraq, it is the temptations of this wealth—more than ethnic rivalries, the legacy of colonialism, or anything else—that has turned Congo into the horrific battleground it has been in recent years. A country with a lavish array of natural riches and a dysfunctional government is like a child heiress without a guardian: Everyone schemes for a piece of what she's got. Multinational corporations prefer a government weak enough not to tax and regulate heavily but strong enough to guarantee order.A failed state fails its people in many ways, and one of them is that, in a world of powerful corporate players, a weak and corrupt government has no bargaining power.

Congo has been in the grips of a fiendishly complex and brutal war whose exact toll no one knows. It may well be in the millions if you count those who died because fleeing their homes or living in packed, disease-ridden refugee camps cut them off from adequate food and medical care. Women and girls by at least the tens of thousands have been gang-raped by government soldiers and rebel militias. This has not been a civil war driven by ideology, but rather a multisided free-for-all driven by plunder.The warring militias assume that multinational corporations would have few scruples about dealing with warlords if the stakes were high enough. They turn out to be right.Congo has virtually no public health system, and AngloGold Ashanti,the world's third-largest gold mining company, a multinational company spending millions prospecting for gold in the desperately poor community, have largely ignored pleas for help.While spending millions of dollars prospecting, it has made only small contributions to a local hospital, schools, a soccer tournament, and the like, keeping at arm's length a coalition of local groups and churches lobbying for this desperately poor community. "Of everything we've put in our list of demands and grievances," says Richard Magabusini, an elected chief .
AngloGold Ashanti recently finalized a series of agreements with the government. Four other multinationals—based in London, Canada, and South Africa—have likewise concluded closed-door agreements over mining rights. No one will ever know what Congolese government officials may have reaped from these deals in the way of quietly promised jobs, favors, or money under the table, in a country where such rewards are routine. As the company takes its slice of the African cake, only a tiny percentage of the proceeds from those 2.5 million ounces of gold is likely to stay in Congo—and even then, much of what does will probably leak into high officials' private bank accounts.More than 97 percent of Congo's gold leaves the country without ever being taxed, according to one recent estimate by the Ministry of Mines. AngloGold Ashanti mined more than $1.5 billion worth of gold in neighboring Tanzania between 2000 and 2007, but only 9 percent of that money has remained in the country as taxes or royalties. Where do the profits go instead? A good chunk comes to the United States, for even though the company is based in South Africa, its largest single shareholder—hedge fund billionaire John Paulson—lives on the Upper East Side and summers in the Hamptons. He owns 12 percent of the company, and a number of other Americans have shares.

The big money in gold mining comes to those who can afford to dig massive mines and build refineries to process the ore. But those who cannot, an estimated 70,000 to 100,000 people in Congo's northeast—including some 10,000 children—dig for gold literally by hand, much the way men did in California in 1849. Sometimes, risking great danger in the hope of richer ore, these freelance miners slip into abandoned, partly flooded underground mines with rotted roof supports and hack out new tunnels. Health and safety regulations are in long-forgotten law books only, and no one even records the number of miners maimed or killed each year.

In the 60s, many Americans boycotted Californian grapes to help farmworkers unionize; in the '70s and '80s, many boycotted South Africa to help the anti-apartheid movement. In the late 1990s there was the push to ban "conflict diamonds," which led to the 2002 agreement, now signed by some 75 countries, to boycott diamonds produced by armed rebel groups in Africa and elsewhere. Shouldn't we help war-torn Congo by boycotting "conflict minerals"? Unfortunately, it's not clear that a boycott would do much more than put tens of thousands of miserably paid miners out of work. Take the rather toothless conflict diamonds accord (which came about only because the international diamond cartel saw "blood diamonds" undercutting its inflated prices): It already applies to Congo, but makes no practical difference since the country's diamonds, like the overwhelming majority of its other exports, don't come from areas currently at war.The real problem is not conflict minerals, but the fact that Congo's long-suffering people reap only a tiny share of their country's vast wealth.

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