{"id":176456047,"date":"2015-06-19T01:41:38","date_gmt":"2015-06-19T06:41:38","guid":{"rendered":"http:\/\/kalamu.com\/neogriot\/?p=176456047"},"modified":"2015-06-19T01:41:38","modified_gmt":"2015-06-19T06:41:38","slug":"review-book-the-looting-machine-by-tom-burgis","status":"publish","type":"post","link":"http:\/\/kalamu.com\/neogriot\/2015\/06\/19\/review-book-the-looting-machine-by-tom-burgis\/","title":{"rendered":"REVIEW\u2014Book: The Looting Machine by Tom Burgis"},"content":{"rendered":"<p><a href=\"http:\/\/kalamu.com\/neogriot\/wp-content\/uploads\/2015\/06\/foreign-affairs.jpg\"><img decoding=\"async\" loading=\"lazy\" class=\"alignnone size-full wp-image-176456048\" src=\"http:\/\/kalamu.com\/neogriot\/wp-content\/uploads\/2015\/06\/foreign-affairs.jpg\" alt=\"foreign affairs\" width=\"166\" height=\"61\" \/><\/a><\/p>\n<p><span class=\"article-header__metadata-date\"><a title=\"Read more from this issue of the magazine\" href=\"https:\/\/www.foreignaffairs.com\/issues\/2015\/94\/4\">July\/August 2015 Issue<\/a><\/span><\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<div class=\"container review__header-top\">\n<div class=\"l-review-column\">\n<header class=\"review__capsule-header\">\n<h1 class=\"article-header__headline\"><span style=\"font-size: 36pt;\">The Plunder of <\/span><\/h1>\n<h1 class=\"article-header__headline\"><span style=\"font-size: 36pt;\">Africa<\/span><\/h1>\n<h2 class=\"article-header__deck\"><span style=\"font-size: 18pt;\">How Everybody <\/span><\/h2>\n<h2 class=\"article-header__deck\"><span style=\"font-size: 18pt;\">Holds the Continent Back<\/span><\/h2>\n<p>&nbsp;<\/p>\n<div class=\"article-header__byline-container\"><span class=\"review--authors\"><span class=\"review--authors\"><span style=\"color: #000000; font-size: 14pt;\"><strong>By\u00a0<\/strong><\/span><a class=\"article-header__byline init-author-bios-processed\" title=\"More articles by Howard W. French\" href=\"https:\/\/www.foreignaffairs.com\/authors\/howard-w-french\"><span style=\"color: #000000; font-size: 14pt;\"><strong>Howard W. French<\/strong><\/span><\/a><\/span><\/span><\/div>\n<\/header>\n<\/div>\n<\/div>\n<div class=\"container\">\n<div class=\"l-article-tools faom-selector=.l-article-tools&amp;location=article-tools&amp;name=index&amp;event=\">\n<nav class=\"article-tools\">\n<div class=\"article-tools-item__icon\"><a href=\"http:\/\/kalamu.com\/neogriot\/wp-content\/uploads\/2015\/06\/looting-machine-01.jpg\"><img decoding=\"async\" loading=\"lazy\" class=\"alignnone  wp-image-176456049\" src=\"http:\/\/kalamu.com\/neogriot\/wp-content\/uploads\/2015\/06\/looting-machine-01.jpg\" alt=\"looting machine 01\" width=\"500\" height=\"760\" srcset=\"http:\/\/kalamu.com\/neogriot\/wp-content\/uploads\/2015\/06\/looting-machine-01.jpg 600w, http:\/\/kalamu.com\/neogriot\/wp-content\/uploads\/2015\/06\/looting-machine-01-197x300.jpg 197w\" sizes=\"(max-width: 500px) 100vw, 500px\" \/><\/a><\/div>\n<\/nav>\n<\/div>\n<div class=\"l-detail\">\n<div class=\"top_content_at_page_load article-icon-cap\">\n<p><span style=\"color: #000000; font-size: 14pt;\">Discussions about the fate of Africa have long had a cyclical quality. That is especially the case when it comes to the question of how to explain the region\u2019s persistent underdevelopment. At times, the dominant view has stressed the importance of centuries of exploitation by outsiders, from the distant past all the way to the present. Scholars such as the economist William Easterly, for example, have argued that even now, the effects of the African slave trade can be measured on the continent, with areas that experienced intensive slaving still showing greater instability, a lack of social trust, and lower growth. Others observers have focused on different external factors, such as the support that powerful countries offered corrupt African dictatorships during the Cold War and the structural-adjustment policies imposed by Western-led institutions in the 1980s\u2014which, some argue, favored disinvestment in national education, health care, and other vital services.<\/span><\/p>\n<p><span style=\"color: #000000; font-size: 14pt;\">At other times, a consensus has formed around arguments that pin the blame on poor African leadership in the decades since most of the continent achieved independence in the 1960s. According to this view, the outside world has been generous to Africa, providing substantial aid in recent decades, leaving no excuse for the continent\u2019s debility. There\u2019s little wrong with African countries that an end to the corruption and thievery of their leaders wouldn\u2019t fix, voices from this camp say. Western media coverage of Africa has tended to provide fodder for that argument, highlighting the shortcomings and excesses of the region\u2019s leaders while saying little about the influence of powerful international institutions and corporations. It\u2019s easy to understand why: Africa\u2019s supply of incompetent or colorful villains has been so plentiful over the years, and reading about them is perversely comforting for many Westerners who, like audiences everywhere, would rather not dwell on their own complicity in the world\u2019s problems.<\/span><\/p>\n<p><span class=\"blockquote--inline-offset\" style=\"color: #000000; font-size: 14pt;\">Reading about African villains is perversely comforting for many Westerners who, like audiences everywhere, would rather not dwell on their own complicity in the world\u2019s problems.<\/span><\/p>\n<p><span style=\"color: #000000; font-size: 14pt;\">One of the many strengths of Tom Burgis\u2019\u00a0<em>The Looting Machine<\/em>\u00a0is the way it avoids falling firmly into either camp in this long-running debate. Burgis, who writes about Africa for the<em>\u00a0Financial Times<\/em>, brings the tools of an investigative reporter and the sensibility of a foreign correspondent to his story, narrating scenes of graft in the swamps of Nigeria\u2019s oil-producing coastal delta region and in the lush mining country of the eastern Democratic Republic of the Congo, while also sniffing out corruption in the lobbies of Hong Kong skyscrapers, where shell corporations engineer murky deals that earn huge sums of money for a host of shady international players. Although Burgis\u2019 emphasis is ultimately on Africa\u2019s exploitation by outsiders, he never loses sight of local culprits.<\/span><\/p>\n<p class=\"subhead\"><strong><span style=\"color: #000000; font-size: 14pt;\">GIMME THE LOOT<\/span><\/strong><\/p>\n<p class=\"subhead\"><span style=\"color: #000000; font-size: 14pt;\">Sure signs that Burgis is no knee-jerk apologist for African elites arrive early in the book, beginning with his fascinating and lengthy account of \u201cthe Futungo,\u201d a shadowy clique of Angolan insiders who he claims control their country\u2019s immense oil wealth, personally profiting from it and also using it to keep a repressive ruling regime in power. The country\u2019s leader, Jos\u00e9 Eduardo dos Santos, has been president since 1979, and in 2013,\u00a0<em>Forbes<\/em>\u00a0magazine identified his daughter, Isabel, as Africa\u2019s first female billionaire. \u201cWhen the International Monetary Fund [IMF] examined Angola\u2019s national accounts in 2011,\u201d Burgis writes, it found that between 2007 and 2010, \u201c$32 billion had gone missing, a sum greater than the gross domestic product of each of forty-three African countries and equivalent to one in every four dollars that the Angolan economy generates annually.\u201d Meanwhile, according to Burgis, even though the country is at peace, in 2013 the Angolan government spent 18 percent of its budget on the Futungo-dominated military and police forces that prop up dos Santos\u2019 rule\u2014almost 40 percent more than it spends on health and education combined.\u2029<\/span><\/p>\n<p><span style=\"color: #000000; font-size: 14pt;\">Those who tend to blame Africa\u2019s woes on elite thievery seize on such examples with relish. But Burgis tells a much fuller story. Angola\u2019s leaders may seem more clever and perhaps possess more agency than other African regimes\u2014and indeed, other African states seem to be eagerly adopting the Angolan model. But the regime relies on the complicity of a number of actors in the international system\u2014and the willful ignorance of many others\u2014to facilitate the dispossession of the Angolan people: Western governments, which remain largely mute about governance in Angola; major banks; big oil companies; weapons dealers; and even the IMF. They provide the political cover, the capital, and the technology necessary to extract oil from the country\u2019s rich offshore wells and have facilitated the concealment (and overseas investment) of enormous sums of money on behalf of a small cabal of Angolans and their foreign enablers. Because Angola\u2019s primary resource, oil, is deemed so important to the global economy, and because its production is so lucrative for others, Angola is rarely pressed to account for how it uses its profits, much less over questions of democracy or human rights. Burgis shows how even the IMF, after uncovering the $32 billion theft, docilely reverted to its role as a facilitator of the regime\u2019s dubious economic programs.<\/span><\/p>\n<div id=\"attachment_176456050\" style=\"width: 610px\" class=\"wp-caption alignnone\"><a href=\"http:\/\/kalamu.com\/neogriot\/wp-content\/uploads\/2015\/06\/looting-machine-03.jpg\"><img aria-describedby=\"caption-attachment-176456050\" decoding=\"async\" loading=\"lazy\" class=\" wp-image-176456050\" src=\"http:\/\/kalamu.com\/neogriot\/wp-content\/uploads\/2015\/06\/looting-machine-03.jpg\" alt=\"Angolan President Jose Eduardo dos Santos leaves a meeting at the Elysee Palace in Paris, France, April 2014. \/ PHILIPPE WOJAZER \/ REUTERS\" width=\"600\" height=\"400\" srcset=\"http:\/\/kalamu.com\/neogriot\/wp-content\/uploads\/2015\/06\/looting-machine-03.jpg 800w, http:\/\/kalamu.com\/neogriot\/wp-content\/uploads\/2015\/06\/looting-machine-03-300x200.jpg 300w\" sizes=\"(max-width: 600px) 100vw, 600px\" \/><\/a><p id=\"caption-attachment-176456050\" class=\"wp-caption-text\"><span style=\"color: #000000; font-size: 10pt;\"><strong>Angolan President Jose Eduardo dos Santos leaves a meeting at the Elysee Palace in Paris, France, April 2014. \/ PHILIPPE WOJAZER \/ REUTERS<\/strong><\/span><\/p><\/div>\n<p><span style=\"color: #000000; font-size: 14pt;\">For those who insist that foreign aid to Africa compensates for the role that rich countries, big businesses, and international organizations play in plundering the continent\u2019s resource wealth, Burgis has a ready rejoinder. \u201cIn 2010,\u201d he writes, \u201cfuel and mineral exports from Africa were worth $333 billion, more than seven times the value of the aid that went in the opposite direction.\u201d And African countries generally receive only a small fraction of the value that their extractive industries produce, at least relative to the sums that states in other parts of the world earn from their resources. As Burgis reveals, that is because multilateral financial institutions, led by the World Bank and its International Finance Corporation (IFC), often put intense pressure on African countries to accept tiny royalties on the sales of their natural resources, warning them that otherwise, they will be labeled as \u201cresource nationalists\u201d and shunned by foreign investors. \u201cThe result,\u201d Burgis writes, \u201cis like an inverted auction, in which poor countries compete to sell the family silver at the lowest price.\u201d<\/span><\/p>\n<p><span style=\"color: #000000; font-size: 14pt;\">Meanwhile, oil, gas, and mining giants employ crafty tax-avoidance strategies, severely understating the value of their assets in African countries and assigning the bulk of their income to subsidiaries in tax havens such as Bermuda, the Cayman Islands, and the Marshall Islands. Some Western governments tolerate and even defend such arrangements, which increase the profits of Western companies and major multinational firms. But these tax dodges further shrink the proceeds that African states earn from their resources. According to Burgis, in Zambia, one of the world\u2019s top copper producers, major mining companies pay lower tax rates than the country\u2019s poor miners themselves. Partly as a result, he reports, in 2011, \u201conly 2.4 percent of the $10 billion of revenues from exports of Zambian copper accrued to the government.\u201d Ghana, a major gold producer, fared slightly better, with foreign mining companies paying seven percent of the revenue they earned in taxes\u2014still a tiny amount, Burgis points out, \u201ccompared with the 45 to 65 percent that the IMF estimates to be the global average effective tax rate in mining.\u201d<\/span><\/p>\n<p class=\"subhead\"><span style=\"color: #000000; font-size: 14pt;\"><strong>A RACE TO THE BOTTOM<\/strong><\/span><\/p>\n<p class=\"subhead\"><span style=\"color: #000000; font-size: 14pt;\">African countries\u2019 unequal relationships with powerful international financial organizations and large multinational firms help explain the \u201cresource curse\u201d so frequently lamented in discussions of the continent\u2019s economies. Rather than issuing from some mysterious invisible force, the curse is to a large degree the product of greed and the disparities in leverage between rich and poor\u2014and its effects are undeniable. Burgis quotes a 2004 internal IFC review that found that between 1960 and 2000, \u201cpoor countries that were rich in natural resources grew two to three times more slowly than those that were not.\u201d Without exception, the IFC found, \u201cevery country that borrowed from the World Bank did worse the more it depended on extractive industries.\u201d \u2029<\/span><\/p>\n<p><span style=\"color: #000000; font-size: 14pt;\">A case in point is the arid, Sahelian country of Niger, which for decades has served as a major supplier of uranium to France, its former colonial master. According to Burgis, the French company Areva pays tiny royalties for Niger\u2019s uranium\u2014an estimated 5.5 percent of its market value. And the details of the company\u2019s contracts with Niger\u2019s government are not publicly disclosed. Reflecting on this situation during an interview with Burgis, China\u2019s ambassador to Niger adopts a posture of moral outrage, proclaiming that Niger\u2019s \u201cdirect receipts from uranium are more or less equivalent to those from the export of onions.\u201d<\/span><\/p>\n<p style=\"padding-left: 30px;\"><strong><span class=\"blockquote--inline-offset\" style=\"color: #000000; font-size: 14pt;\">Rather than issuing from some mysterious invisible force, the &#8220;resource curse&#8221; is to a large degree the product of greed and the disparities in leverage between rich and poor.<\/span><\/strong><\/p>\n<p><span style=\"color: #000000; font-size: 14pt;\">This is a telling exchange, since many Africans believed that Chinese investment and influence on the continent would offer a way to lift the resource curse. Many greeted the arrival of the Chinese as big economic players in the region, which began in the mid-1990s, with great enthusiasm\u2014especially the leaders of states whose economies depend heavily on minerals. China\u2019s share of the global consumption of refined metals rose from five percent in the early 1990s to 45 percent in 2010; its oil consumption increased fivefold during the same period. In 2002, Chinese trade with Africa was worth $13 billion; a mere decade later, that figure had soared to $180 billion, three times the value of U.S. trade with \u2028the continent.<\/span><\/p>\n<p><span style=\"color: #000000; font-size: 14pt;\">The hope was that with China directly competing with Africa\u2019s economic partners in the West, African countries would win better terms for themselves. But as Burgis makes painfully clear, what has happened more often is a race to the bottom, in which Chinese firms focus their attention on African countries that face sharp credit restrictions or economic boycotts from the West, owing to coups d\u2019\u00e9tat or human rights abuses. In many such countries, including Angola, the Democratic Republic of the Congo, and Guinea, the Chinese have extended easy financing to governments, crafting secretive deals that reward Chinese investors with even more lopsided terms than Western governments and firms tend to enjoy. \u201cAccess to easy Chinese loans might have looked like a chance for African governments to reassert sovereignty after decades of hectoring by the [World] Bank, the IMF, and Western donors,\u201d Burgis writes, but, \u201clike a credit card issued with no credit check, it also removed a source of pressure for sensible economic management.\u201d In addition to this, critics point out that Chinese companies frequently bring in their own workers from China, providing little employment for Africans and few opportunities for Africans to master new skills and technologies.<\/span><\/p>\n<div id=\"attachment_176456051\" style=\"width: 610px\" class=\"wp-caption alignnone\"><a href=\"http:\/\/kalamu.com\/neogriot\/wp-content\/uploads\/2015\/06\/looting-machine-04.jpg\"><img aria-describedby=\"caption-attachment-176456051\" decoding=\"async\" loading=\"lazy\" class=\" wp-image-176456051\" src=\"http:\/\/kalamu.com\/neogriot\/wp-content\/uploads\/2015\/06\/looting-machine-04.jpg\" alt=\"An open-pit mine outside the southern Democratic Republic of Congo copper town of Lubumbashi, February 2006. \/ DAVID LEWIS \/ REUTERS  \" width=\"600\" height=\"455\" srcset=\"http:\/\/kalamu.com\/neogriot\/wp-content\/uploads\/2015\/06\/looting-machine-04.jpg 1008w, http:\/\/kalamu.com\/neogriot\/wp-content\/uploads\/2015\/06\/looting-machine-04-300x228.jpg 300w, http:\/\/kalamu.com\/neogriot\/wp-content\/uploads\/2015\/06\/looting-machine-04-920x698.jpg 920w\" sizes=\"(max-width: 600px) 100vw, 600px\" \/><\/a><p id=\"caption-attachment-176456051\" class=\"wp-caption-text\"><span style=\"color: #000000; font-size: 10pt;\"><strong>An open-pit mine outside the southern Democratic Republic of Congo copper town of Lubumbashi, February 2006. \/ DAVID LEWIS \/ REUTERS<\/strong><\/span><\/p><\/div>\n<p><span style=\"color: #000000; font-size: 14pt;\">Some of Burgis\u2019 strongest work follows the dealmaking of a shadowy Hong Kong\u2013based outfit called the 88 Queensway Group, which was founded by a man sometimes known as Sam Pa, whose background is reportedly in Chinese intelligence. By tracing a complex web of corporate relations, Burgis shows how Pa\u2019s group has put together lucrative deals in one African country after another, since starting seemingly from scratch in Angola during the early phases of China\u2019s push into Africa.<\/span><\/p>\n<p><span style=\"color: #000000; font-size: 14pt;\">In Burgis\u2019 telling, one mission of Pa\u2019s 88 Queensway Group and its associated companies, including China Sonangol and the China International Fund, seems to be offering the Chinese government plausible deniability when it comes to major transactions and contracts with some of Africa\u2019s most corrupt and violent regimes. But some African elites at the receiving end of Pa\u2019s entreaties have been left with little doubt that dealing with Queensway would in fact put them in contact with the highest levels of the Chinese state. Mahmoud Thiam served as the minister of mines in Guinea under President Moussa Dadis Camara, a junta leader who faced international outrage after his forces opened fire on a peaceful opposition rally in September 2009, killing at least 150 and gang-raping many who tried to flee the assault. In 2009, Thiam traveled to China at Queensway\u2019s invitation and later told Burgis about being whisked around Beijing by Pa\u2019s associates. \u201cIf they were not a government entity, they definitely had strong backing and strong ties,\u201d Thiam recalled. \u201cThe level of clearances they had to do things that are difficult in China, the facility they had in getting people to see us [and] the military motorcade gave us the impression that they were strongly connected.\u201d In the case of Guinea and other places, Burgis reports that Queens\u00adway was able to provide tens of millions of dollars to African governments on short notice, with virtually no strings attached, sometimes to help bail out leaders presiding over economic crises and sometimes merely to prove the company\u2019s bona fides.<\/span><\/p>\n<p style=\"padding-left: 30px;\"><strong><span class=\"blockquote--inline-offset\" style=\"color: #000000; font-size: 14pt;\">The hope was that with China directly competing with Africa\u2019s economic partners in the West, African countries would win better terms for themselves. But what has happened more often is a race to the bottom.<\/span><\/strong><\/p>\n<p><span style=\"color: #000000; font-size: 14pt;\">In the hands of a less astute observer, Pa could come off as something like a Bond villain. But Burgis rightly reminds readers that it hardly takes a conniving mastermind to profit off the inequities and shortcomings of African political systems. \u201cIf it weren\u2019t him, it would be someone else,\u201d as a U.S. congressional researcher puts it to Burgis. The researcher adds that even if Pa\u2019s operation were shut down, \u201cthe system is still there: these investors can still form a company without saying who they are, they can still anchor their business in a country that is not concerned about investors\u2019 behavior overseas, and, sadly, there\u2019s no shortage of resource-rich fragile states on which these investors can prey.\u201d<\/span><\/p>\n<p class=\"subhead\"><span style=\"color: #000000; font-size: 14pt;\"><strong>LOSS PREVENTION<\/strong><\/span><\/p>\n<p class=\"subhead\"><span style=\"color: #000000; font-size: 14pt;\">By showing how \u201cthe looting machine\u201d is operated by people and institutions both inside and outside Africa, Burgis transcends the tired binary debate about the root causes of the continent\u2019s misery. But if the problem is as complex as he makes it out to be, with avarice flowing from so many different sources, how can ordinary Africans\u2014and African elites intent on leading more just, prosperous, and equitable societies\u2014improve \u2028their prospects?\u2029<\/span><\/p>\n<p><span style=\"color: #000000; font-size: 14pt;\">For Africans, the answer lies in large part in insisting on more open and accountable government. Although the outside world has taken little notice, democracy has spread significantly around the continent in the last two decades, and although conflicts grab the headlines, evidence suggests that war and other forms of large-scale violence have declined during this same period. Stronger civil societies and regular, free, and fair elections would prevent leaders such as Angola\u2019s dos Santos from perpetuating their rule for decades and might allow more responsive elites to put Africa\u2019s resources in the service of more equitable development strategies.<\/span><\/p>\n<p style=\"padding-left: 30px;\"><strong><span class=\"blockquote--inline-offset\" style=\"color: #000000; font-size: 14pt;\">Washington should expand its efforts to prevent illicit financial flows, reducing the amount of revenue that African countries lose owing to tax havens.<\/span><\/strong><\/p>\n<p><span style=\"color: #000000; font-size: 14pt;\">For the outside world, the priority should be getting foreign powers, including China, to agree on more stringent measures to combat corrupt business practices. The U.S. Treasury Department is cracking down on foreign banks that enable Americans to evade taxes; Washington should expand its efforts to prevent illicit financial flows involving other countries as well, reducing the amount of revenue that African countries lose owing to tax havens.<\/span><\/p>\n<p><span style=\"color: #000000; font-size: 14pt;\">Finally, as Burgis\u2019 book strongly implies (although does not explicitly argue), international financial institutions such as the World Bank and the IMF must be made much more accountable. In Africa, that would mean publicly measuring their programs\u2019 performance in terms of their impact on economic growth. Over the years, such institutions have demanded rigorous compliance from their poorest clients while never holding their own performance or the soundness of their advice up to public scrutiny. The internal IFC review Burgis cites made the same point more than a decade ago. But its findings were largely ignored as the World Bank continued to promote extractive industries in Africa even when they contributed nothing to development. Today, with Africans seeking to cross the Mediterranean Sea by the thousands to escape misery, a simple recommendation from that review is perhaps more pertinent than ever: World Bank and IFC staff should be rewarded not simply for allocating money to projects but for demonstrably reducing poverty. After all, whatever the causes of African poverty, any efforts to address it will fail if they are blind to their own effects.<\/span><\/p>\n<\/div>\n<\/div>\n<\/div>\n<p>&nbsp;<\/p>\n<p>&gt;via:\u00a0<a href=\"https:\/\/www.foreignaffairs.com\/reviews\/review-essay\/2015-06-16\/plunder-africa\" target=\"_blank\">https:\/\/www.foreignaffairs.com\/reviews\/review-essay\/2015-06-16\/plunder-africa<\/a><\/p>\n<p style=\"text-align: center;\"><span style=\"color: #000000; font-size: 18pt;\"><strong>__________________________<\/strong><\/span><\/p>\n<p>&nbsp;<\/p>\n<p><a href=\"http:\/\/kalamu.com\/neogriot\/wp-content\/uploads\/2015\/06\/african-arguments.jpg\"><img decoding=\"async\" loading=\"lazy\" class=\"alignnone size-full wp-image-176456052\" src=\"http:\/\/kalamu.com\/neogriot\/wp-content\/uploads\/2015\/06\/african-arguments.jpg\" alt=\"african arguments\" width=\"430\" height=\"54\" srcset=\"http:\/\/kalamu.com\/neogriot\/wp-content\/uploads\/2015\/06\/african-arguments.jpg 430w, http:\/\/kalamu.com\/neogriot\/wp-content\/uploads\/2015\/06\/african-arguments-300x38.jpg 300w\" sizes=\"(max-width: 430px) 100vw, 430px\" \/><\/a><\/p>\n<p><a title=\"1:08 pm\" href=\"http:\/\/africanarguments.org\/2015\/03\/19\/the-looting-machine-by-tom-burgis-reviewed-by-desne-masie\/\" rel=\"bookmark\"><time class=\"entry-date\" datetime=\"2015-03-19T13:08:57+00:00\">March 19, 2015<\/time><\/a><\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<h2 class=\"entry-title\"><span style=\"color: #000000; font-size: 36pt;\"><strong>The Looting <\/strong><\/span><\/h2>\n<h2 class=\"entry-title\"><span style=\"color: #000000; font-size: 36pt;\"><strong>Machine <\/strong><\/span><\/h2>\n<h2 class=\"entry-title\"><span style=\"color: #000000; font-size: 36pt;\"><strong>by Tom Burgis <\/strong><\/span><\/h2>\n<h2 class=\"entry-title\"><span style=\"color: #000000; font-size: 14pt;\"><strong>\u2013 reviewed by Desn\u00e9 Masie<\/strong><\/span><\/h2>\n<p>&nbsp;<\/p>\n<p><a href=\"http:\/\/kalamu.com\/neogriot\/wp-content\/uploads\/2015\/06\/looting-machine-02.jpg\"><img decoding=\"async\" loading=\"lazy\" class=\"alignnone size-full wp-image-176456053\" src=\"http:\/\/kalamu.com\/neogriot\/wp-content\/uploads\/2015\/06\/looting-machine-02.jpg\" alt=\"looting machine 02\" width=\"421\" height=\"648\" srcset=\"http:\/\/kalamu.com\/neogriot\/wp-content\/uploads\/2015\/06\/looting-machine-02.jpg 421w, http:\/\/kalamu.com\/neogriot\/wp-content\/uploads\/2015\/06\/looting-machine-02-195x300.jpg 195w\" sizes=\"(max-width: 421px) 100vw, 421px\" \/><\/a><\/p>\n<div class=\"entry-content\">\n<p><span style=\"color: #000000; font-size: 14pt;\">Tom Burgis\u2019\u00a0<a style=\"color: #000000;\" href=\"http:\/\/www.convilleandwalsh.com\/index.php\/titles\/title\/the-looting-machine\/\"><em>The Looting Machine<\/em>\u00a0<\/a>is a rollercoaster read. Filled with vignettes on spooks, smugglers and kleptocratic warlords with suitcases of cash, it reads like a crime thriller, while at the same time being a well-researched, accessible account of the extractives industry; the privatisation of power in Africa and its impact on the continent\u2019s people. This portrayal of the intersection of business and politics, and its potentially corrupting influence may also explain the paradox of rising GDP growth coupled with increasing inequality \u2013 a key problem in the era of \u2018Africa Rising\u2019.<\/span><\/p>\n<p><span style=\"color: #000000; font-size: 14pt;\">Each chapter of\u00a0<em>The Looting Machine<\/em>\u00a0deals with a different country and a particular issue in its political economy, but some main unifying themes stick out. For example, the impact of the \u2018resource curse\u2019, hollowing out the economies of developing countries. Burgis also tackles the much-debated role of China in Africa, as globalisation atomises power to new sites of influence and capital. Additionally, he is concerned with the impact of financial secrecy, and potentially inequitable tax practices on developing economies; and how this facilitates rent-seeking.<\/span><\/p>\n<p><span style=\"color: #000000; font-size: 14pt;\">This is all tied together by Burgis\u2019 argument for the pervasiveness of the so-called \u2018Queensway Group\u2019, incorporated in Hong Kong, which is depicted throughout the book as a sort of global corporate mafia with the shadowy middleman\u00a0<a style=\"color: #000000;\" href=\"http:\/\/www.ft.com\/intl\/cms\/s\/2\/308a133a-1db8-11e4-b927-00144feabdc0.html#axzz3UgebOucR\">Sam Pa<\/a>\u00a0as its kingpin. Crucial to Pa\u2019s modus operandi on the continent, according to Burgis, is his leveraging of \u2018guanxi\u2019 (\u5173\u7cfb), the system of social networks and influential relationships that facilitate business and other dealings. The monetisation of such political relationships is also depicted by Burgis in the multi-million-dollar bankrolling of the Kabila dynasty by the businessman Dan Gertler in the Congo, the enrichment of South Africa\u2019s politically-connected black oligarchs, the Futungo in Angola, and the involvement of Beny Steinmetz in Guinea.<\/span><\/p>\n<p><span style=\"color: #000000; font-size: 14pt;\">Having been a financial journalist myself, I am amazed at how far Burgis has gone in untangling the web of corporate structures sometimes used in international financial chicanery. For example, at the Marange diamond fields in Zimbabwe, he assumes the bearing of a diamond trader in order to get through a checkpoint into a mining zone. And indeed, the book begins with a candid foreword about Burgis\u2019 treatment for post-traumatic stress disorder as a result of some of the awful things he had seen on the continent \u2013 most notably a massacre in Jos. It is imagery like this, juxtaposed with private jets and gleaming corporate boardrooms from London to Luanda, that underscore the book\u2019s insights.<\/span><\/p>\n<p><span style=\"color: #000000; font-size: 14pt;\">Due to the continent\u2019s egregious inequality, the rich in Africa can live in an insulated poverty-free bubble. In visiting the slums of Angola and the townships of Johannesburg, Burgis has therefore made a concerted effort to find the truth behind annual financial results and stock prices.<\/span><\/p>\n<p><span style=\"color: #000000; font-size: 14pt;\">Financial journalism is usually one of the cushier parts of the profession, with meetings normally taking place in plush hotels and restaurants or corporate HQs. Working at a premier title, the average day generally consists of a reporter flitting from meeting to meeting with CEOs and their PR minders sprinkled with corporate gifts and briefings with the Finance Ministry and regulators. The capture of financial journalism can therefore be corrupting for all parties involved, and the importance of the support of the\u00a0<em>Financial Times<\/em>\u00a0newsroom for investigative work such as this, and its practice of picking up the bill for lunch, cannot be understated.<\/span><\/p>\n<p><span style=\"color: #000000; font-size: 14pt;\">However, while it is undoubtedly important to expose corporate malfeasance and stamp it out, I do think that journalists also contribute to a particular narrative of sensationalist bad news. I would really like to see more stories and books about what is working, and could be done better in globalised supply chains, such as this, also in the FT,\u00a0<a style=\"color: #000000;\" href=\"http:\/\/www.ft.com\/intl\/cms\/s\/0\/2e97dd50-b739-11e2-a249-00144feabdc0.html?siteedition=intl#axzz3UgebOucR\">about the Dutch company Fairphone<\/a>, which was incubated near London\u2019s Silicon Roundabout in Bethnal Green.<\/span><\/p>\n<p><span style=\"color: #000000; font-size: 14pt;\">Burgis begins his book with the balancing caveat that there are definitely some businesses which have a positive impact on Africa, and later he is at pains to point out that not all financiers or bankers are shady. However,\u00a0<em>The Looting Machine<\/em>\u00a0is by no means a glowing account of the role of business in Africa. An informant laments to Burgis that foreign business people think that in Africa anything goes, and that they therefore do things in Africa that they would not consider back at \u2018home\u2019.<\/span><\/p>\n<p><span style=\"color: #000000; font-size: 14pt;\">Burgis obliged me by answering some questions on the role of business and international finance in economic and human development in Africa.<\/span><\/p>\n<p><span style=\"color: #000000; font-size: 14pt;\"><strong>DM:\u00a0It would seem that you are ambivalent about the altruism and outcomes of Corporate Social Responsibility (CSR), where initiatives such as \u201ccommunity development\u201d and the Kimberley process have (unwittingly) contributed to, and incentivised conflict, malfeasance and money laundering amongst kingmakers and power-brokers. Have I understood correctly?<\/strong><\/span><\/p>\n<p><span style=\"color: #000000; font-size: 14pt;\"><strong>TB:<\/strong>\u00a0Yes I think that\u2019s broadly it. Also that CSR can be used to mask corporate abuses such as trade mispricing and tax evasion.<\/span><\/p>\n<p><span style=\"color: #000000; font-size: 14pt;\"><strong>DM:\u00a0What do you think could be done about financial secrecy and aggressive corporate tax avoidance? How can developing countries in particular fight for their interests in contracting?<\/strong><\/span><\/p>\n<p><span style=\"color: #000000; font-size: 14pt;\"><strong>TB:<\/strong>\u00a0One option would be for governments to decline to do business with companies registered in tax havens.<\/span><\/p>\n<p><span style=\"color: #000000; font-size: 14pt;\"><strong>DM:\u00a0Mineral beneficiation seems to have worked well in Botswana \u2026 What do you think of new mining legislation in South Africa in this regard, and mining legislation such as the Zambian mining tax and the pros and cons of these for developing countries?<\/strong><\/span><\/p>\n<p><span style=\"color: #000000; font-size: 14pt;\"><strong>TB:<\/strong>\u00a0Focussing on beneficiation makes a lot of sense. Why should that value accrue elsewhere? SA-made catalytic converters would be a success story. Protectionism is a dirty word but without tariffs how do you protect nascent domestic industries? On Zambia, the tax take has been so minimal in the past (circa 2-3 per cent) that no one could in good faith object to an increase, I would say. The difficulty is managing that added revenue to stop it causing havoc as resource rent often does.<\/span><\/p>\n<p><span style=\"color: #000000; font-size: 14pt;\"><strong>DM:\u00a0You say that the corporatisation of politics has replaced ideology, and the politicisation of corporate life through the accumulation of \u2018guanxi\u2019 is expressed through the monetisation of networks, parallel states and rent-seeking. What in your opinion can be done?<\/strong><\/span><\/p>\n<p><span style=\"color: #000000; font-size: 14pt;\"><strong>TB:<\/strong>\u00a0The hardest question of all. These are transnational networks that float beyond the reach of national institutions that might call them to account \u2013 judiciaries, parliament etc. It\u2019s part of the simultaneous globalisation and privatisation of power. No simple answer. But somehow the balance of power has to become more local again.<\/span><\/p>\n<p><span style=\"color: #000000; font-size: 14pt;\"><strong>DM:\u00a0Who is this book aimed at and what do you wish them to take away from it?<\/strong><\/span><\/p>\n<p><span style=\"color: #000000; font-size: 14pt;\"><strong>TB:<\/strong>\u00a0A general, engaged reader. No prior expertise of Africa required. Thriller fans and politicos equally welcome! The idea is to prompt debate, not prescribe lots of (far-fetched) solutions.<\/span><\/p>\n<p><span style=\"color: #000000; font-size: 14pt;\"><strong>DM:\u00a0I am amazed at the personal toll and obvious risk to your life that came with this book, the quality of which makes the amount of work, the information you have accumulated and the quality of the research quite obvious \u2026 Why? What did you wish to achieve by writing this book?<\/strong><\/span><\/p>\n<p><span style=\"color: #000000; font-size: 14pt;\"><strong>TB:<\/strong>\u00a0The point of journalism is to call power to account, and I hope the book does that in some small way. The personal toll you mention is real, but far smaller than that endured by many of the people I wrote about.<\/span><\/p>\n<p><span style=\"color: #000000; font-size: 14pt;\"><strong>DM:\u00a0I think it was really important to highlight the complicity of both westerners and Africans as regards the human and environmental cost of these issues. The insatiable need for cheaper and faster smart-phones has made us turn a blind eye to human rights abuses both in Africa and China. How could we encourage businesses, politicians and consumers to understand the long-range positive impact of sustainable business and addressing inequality meaningfully? Why do you think there is so much apathy about this? Is the problem too big to tackle, or is there no turning back as one of your protagonists says?<\/strong><\/span><\/p>\n<p><span style=\"color: #000000; font-size: 14pt;\"><strong>TB:<\/strong>\u00a0It\u2019s odd that western consumers insist on knowing the origin of their coffee but not of their copper. There\u2019s been some progress on tagging minerals from eastern DRC, though that process also creates new trouble.<\/span><\/p>\n<p><span style=\"color: #000000; font-size: 14pt;\"><strong>DM:\u00a0You talk about China in Africa and have been criticised for comparing China\u2019s rise in Africa to neo-imperialism \u2013 although in the book you do critique Western imperialism \u2013 what would you say to these critics? Do you wish to clarify your opinion on China\u2019s role in Africa?<\/strong><\/span><\/p>\n<p><span style=\"color: #000000; font-size: 14pt;\"><strong>TB:<\/strong>\u00a0Both true in different countries. There\u2019s certainly a neo-colonial approach (as\u00a0<a style=\"color: #000000;\" href=\"http:\/\/www.ft.com\/intl\/cms\/s\/562692b0-898c-11e2-ad3f-00144feabdc0,Authorised=false.html?_i_location=http%3A%2F%2Fwww.ft.com%2Fcms%2Fs%2F0%2F562692b0-898c-11e2-ad3f-00144feabdc0.html%3Fsiteedition%3Duk&amp;siteedition=uk&amp;_i_referer=#axzz2WlJlxHzx\">encapsulated by Sanusi<\/a>) but it\u2019s also understandable that China\u2019s largesse is understandable compared with centuries of exploitation.<\/span><\/p>\n<p><span style=\"color: #000000; font-size: 14pt;\"><strong>DM:\u00a0I was astonished to read about the alleged pervasiveness of the business interests of Sam Pa via the Queensway group, and it is a theme that runs through most of the book. Is he the only such mega-player from China or are there are other corporations and groups of which you are aware of operating on the continent, and that you can talk about?<\/strong><\/span><\/p>\n<p><span style=\"color: #000000; font-size: 14pt;\"><strong>TB:<\/strong> There are lots of other middlemen but he looks like the biggest.<\/span><\/p>\n<p><span style=\"color: #000000; font-size: 14pt;\"><strong>DM:\u00a0Any closing thoughts on globalisation?<\/strong><\/span><\/p>\n<p><span style=\"color: #000000; font-size: 14pt;\"><strong>TB:<\/strong>\u00a0Was the pope perhaps right \u2013 globalisation as a way to enslave nations?<\/span><\/p>\n<p><span style=\"color: #000000; font-size: 14pt;\">\u00a0<\/span><\/p>\n<p><span style=\"color: #000000; font-size: 14pt;\"><strong>Dr Desn\u00e9 Masie <\/strong>is a former Senior Editor for the Financial Mail and was the Corporate Relationship Manager for the Royal African Society. Her doctoral thesis evaluated the effects of news media in financial markets and on corporate reputation.<\/span><\/p>\n<\/div>\n<p><span style=\"color: #000000; font-size: 14pt;\">\u00a0<\/span><\/p>\n<p>&gt;via:\u00a0<a href=\"http:\/\/africanarguments.org\/2015\/03\/19\/the-looting-machine-by-tom-burgis-reviewed-by-desne-masie\/\" target=\"_blank\">http:\/\/africanarguments.org\/2015\/03\/19\/the-looting-machine-by-tom-burgis-reviewed-by-desne-masie\/<\/a><\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>July\/August 2015 Issue &nbsp; &nbsp; The Plunder of Africa How Everybody Holds the Continent Back &nbsp; By\u00a0Howard W. French Discussions about the fate of Africa have long had a cyclical quality. That is especially the case when it comes to the question of how to explain the region\u2019s persistent underdevelopment. At times, the dominant view [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","_s2mail":"yes"},"categories":[6],"tags":[4,12,11],"_links":{"self":[{"href":"http:\/\/kalamu.com\/neogriot\/wp-json\/wp\/v2\/posts\/176456047"}],"collection":[{"href":"http:\/\/kalamu.com\/neogriot\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/kalamu.com\/neogriot\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"http:\/\/kalamu.com\/neogriot\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"http:\/\/kalamu.com\/neogriot\/wp-json\/wp\/v2\/comments?post=176456047"}],"version-history":[{"count":3,"href":"http:\/\/kalamu.com\/neogriot\/wp-json\/wp\/v2\/posts\/176456047\/revisions"}],"predecessor-version":[{"id":176456110,"href":"http:\/\/kalamu.com\/neogriot\/wp-json\/wp\/v2\/posts\/176456047\/revisions\/176456110"}],"wp:attachment":[{"href":"http:\/\/kalamu.com\/neogriot\/wp-json\/wp\/v2\/media?parent=176456047"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/kalamu.com\/neogriot\/wp-json\/wp\/v2\/categories?post=176456047"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/kalamu.com\/neogriot\/wp-json\/wp\/v2\/tags?post=176456047"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}