FacebookTwitterGoogle+RedditEmail

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

by

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).

January 15, 2018
Rob Urie
Democrats and the End(s) of Politics
Paul Tritschler
Killing Floor: the Business of Animal Slaughter
Mike Garrity
In Targeting the Lynx, the Trump Administration Defies Facts, Law, and Science Once Again
Thomas Hon Wing Polin
Hong Kong Politics: a Never-Ending Farce
Uri Avnery
Bibi’s Son (Or Three Men in a Car)
Dave Lindorff
Yesterday’s ‘Shithole Countries’ Can Become Classy Places Donald, and Vice Versa
Jeff Mackler
Lesser Evil Politics in Alabama
Jonah Raskin
Typewriters Still Smoking? An Interview with Underground Press Maven John Campbell McMillan
Jose-Antonio Orosco
Trump’s Comments Recall a Racist Past in Immigration Policy
David Macaray
Everything Seems to Be Going South
Kathy Kelly
41 Hearts Beating in Guantanamo
Weekend Edition
January 12, 2018
Friday - Sunday
George Burchett
Wormwood and a Shocking Secret of War: How Errol Morris Vindicated My Father, Wilfred Burchett
Roberto J. González
Starting Them Young: Is Facebook Hooking Children on Social Media?
Jeffrey St. Clair
Between the Null and the Void
Andrew Levine
Trump After Bannon: What Next?
John Davis
Mud-Slide
Ajamu Baraka
The Responsibility to Protect the World … from the United States
Robert Hunziker
Global Warming Stirs the Methane Monster
Paul Street
Lazy Liberals and “the Trump Effect”
Carmen Rodriguez
Trump’s Attack on Salvadoran Migrants
Mike Whitney
Oprah for President, Really?
Francisco Cabanillas
The Hurricane After Maria
Luciana Bohne
World War I: Crime and Punishment
Steve Martinot
The Ideology of Pepper Spray: Force and Violence in a Can
Martin Billheimer
Beyond the 120 Days of the Silicon Valley Dolls
Patrick T. Hiller
An Olympic Glimmer on the Horizon – North Korea and South Korea Stepping Down the Escalation Ladder
Ron Jacobs
The Vietnamese War: a Different Take
Binoy Kampmark
Fuming in the White House: the Bannon-Trump Implosion
Joseph Natoli
What to Worry About and What Not to Worry About
Colin Todhunter
Monsanto, Bayer and Neoliberalism: A Case of Hobson’s Choice
Brian Cloughley
Trump’s Bullying of Cuba
Kenneth Surin
Bigger in Texas
Arturo Desimone
The Untouchable Leader Who Stood Up to Gandhi
Peter Crowley
To Cheerleaders of Iran Protests: Iran is Not Our Enemy, a Sponsor of Terror or a Tyranny
Michael McKinley
Australia and the Wars of the Alliance: History and Politics
Jim Goodman
Free Trade Should Benefit the People Not Corporations
David Mattson
The Sad Case of Grizzly Bear Recovery and Distinct Population Segments
Clark T. Scott
Confidentially and Corporately Conning
Amir Khafagy
How Liberals Depoliticized White Supremacy
John V. Walsh
Why Progressives Should Support the Trump-Putin Efforts at Rapprochement
Missy Comley Beattie
Election 2020 Foresight
Rev. John Dear
The Year of “Nonviolence or Non-Existence”
Graham Peebles
A Moment of Significance and Opportunity for Ethiopia
Matthew Stevenson
Into Africa: Shadows of War Over Mafeking and the Making of Winston Churchill
Pauline Murphy
The Irish At Teruel
FacebookTwitterGoogle+RedditEmail