FacebookTwitterRedditEmail

At the World Economic Forum-Africa, Germany Pitched a Dubious New G20 Corporate Strategy

Last week’s World Economic Forum (WEF)-Africa conference in Durban hosted some controversial, often repressive local politicians – host Jacob Zuma, Robert Mugabe of Zimbabwe, Yoweri Museveni of Uganda, King Mswati of Swaziland and Edgar Lungu of Zambia – but also the most powerful man in Europe, the notoriously-corrupt neoliberal German finance minister, Wolfgang Schäuble.

At a public lecture on May 4 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 also 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, for further extraction.

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 about “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.” The South African foreign debt to GDP ratio just hit 50%, far higher than the 40% in 1985 that accompanied a default, and the credit rating downgrade to junk status last month makes raising more hard currency to repay those loans even more expensive.

In contrast to Berlin, Donald Trump’s Washington regime has proposed 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 from the Maghreb across the Sahel to the Horn, according to researcher Nick Turse who last week analysed newly-declassified Pentagon 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 South African finance minister Malusi Gigaba. In spite of the latter’s occasional leftist rhetoric (amidst surprising praise for his WEF-Africa diplomacy), 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.

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). 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” in 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 $60 000 – 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.  African exporters enjoyed commodity price hikes of 380% from 2002-11 but then crashes in most commodities of 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.

More articles by:

Patrick Bond (pbond@mail.ngo.za) is professor of political economy at the University of the Witwatersrand School of Governance in Johannesburg. He is co-editor (with Ana Garcia) of BRICS: An Anti-Capitalist Critique, published by Pluto (London), Haymarket (Chicago), Jacana (Joburg) and Aakar (Delhi).

bernie-the-sandernistas-cover-344x550
November 14, 2019
Laura Carlsen
Mexico’s LeBaron Massacre and the War That Will Not Cease
Joe Emersberger
Oppose the Military Coup in Bolivia. Spare Us Your “Critiques”
Ron Jacobs
Trump’s Drug Deal Goes to Congress: Impeachment, Day One
Paul Edwards
Peak Hubris
Tamara Pearson
US and Corporations Key Factors Behind Most Violent Year Yet in Mexico
Jonah Raskin
Love and Death in the Age of Revolution
Robert Hunziker
Climate Confusion, Angst, and Sleeplessness
W. T. Whitney
To Confront Climate Change Humanity Needs Socialism
John Feffer
Examining Trump World’s Fantastic Claims About Ukraine
Nicky Reid
“What About the Children?” Youth Rights Before Parental Police States
Binoy Kampmark
Incinerating Logic: Bush Fires and Climate Change
John Horning
The Joshua Tree is Us
Andrew Stewart
Noel Ignatiev and the Great Divide
Cesar Chelala
Soap Operas as Teaching Tools
Chelli Stanley
In O’odham Land
November 13, 2019
Vijay Prashad
After Evo, the Lithium Question Looms Large in Bolivia
Charles Pierson
How Not to End a Forever War
Kenneth Surin
“We’ll See You on the Barricades”: Bojo Johnson’s Poundshop Churchill Imitation
Nick Alexandrov
Murder Like It’s 1495: U.S.-Backed Counterinsurgency in the Philippines
George Ochenski
Montana’s Radioactive Waste Legacy
Brian Terrell
A Doubtful Proposition: a Reflection on the Trial of the Kings Bay Plowshares 7
Nick Pemberton
Assange, Zuckerberg and Free Speech
James Bovard
The “Officer Friendly” Police Fantasy
Dean Baker
The Logic of Medical Co-Payments
Jeff Mackler
Chicago Teachers Divided Over Strike Settlement
Binoy Kampmark
The ISC Report: Russian Connections in Albion?
Norman Solomon
Biden and Bloomberg Want Uncle Sam to Defer to Uncle Scrooge
Jesse Jackson
Risking Lives in Endless Wars is Morally Wrong and a Strategic Failure
Manuel García, Jr.
Criminalated Warmongers
November 12, 2019
Nino Pagliccia
Bolivia and Venezuela: Two Countries, But Same Hybrid War
Patrick Cockburn
How Iran-Backed Forces Are Taking Over Iraq
Jonathan Cook
Israel is Silencing the Last Voices Trying to Stop Abuses Against Palestinians
Jim Kavanagh
Trump’s Syrian See-Saw: From Pullout to Pillage
Susan Babbitt
Fidel, Three Years Later
Dean Baker
A Bold Plan to Strengthen and Improve Social Security is What America Needs
ADRIAN KUZMINSKI
Trump’s Crime Against Humanity
Victor Grossman
The Wall and General Pyrrhus
Yoko Liriano
De Facto Martial Law in the Philippines
Ana Paula Vargas – Vijay Prashad
Lula is Free: Can Socialism Be Restored?
Thomas Knapp
Explainer: No, House Democrats Aren’t Violating Trump’s Rights
Wim Laven
Serve With Honor, Honor Those Who Serve; or Support Trump?
Colin Todhunter
Agrarian Crisis and Malnutrition: GM Agriculture Is Not the Answer
Binoy Kampmark
Walls in the Head: “Ostalgia” and the Berlin Wall Three Decades Later
Akio Tanaka
Response to Pete Dolack Articles on WBAI and Pacifica
Nyla Ali Khan
Bigotry and Ideology in India and Kashmir: the Legacy of the Babri Masjid Mosque
FacebookTwitterRedditEmail