Advertisements
jump to navigation

Ethiopia: The T-TPLF’s Corruption Prosecution Con Game August 10, 2017

Posted by OromianEconomist in Uncategorized.
Tags: , , , , , , ,
add a comment
Today, the T-TPLF slicksters are trying to kill three birds with one stone: Rack up some PR credits to demonstrate good governance during the “state of emergency” and drum up popular support.  They also believe they could divert and distract attention from their atrocious human rights record, including the Irreecha Massacres of October 2016, by showcasing their “anti-corruption” campaign.  Last but not least, the cash-strapped T-TPLF bosses are hoping to squeeze American taxpayers for a few billion dollars (fat chance under Trump) by talking the talk of anti-corruption while walking and swimming in corruption.

The T-TPLF’s Corruption Prosecution Con Game

corruption in Ethiopia 2013

Author’s Note: If I assembled all of the commentaries I wrote on the T-TPLF’s corruption, it would comprise of at least two solid volumes. Back in 2013, I commented extensively on the range of T-TPLF corrupt practices in a number of sectors of the Ethiopian economy and society based on the World Bank’s 448-page report, “Diagnosing Corruption in Ethiopia”. (See my commentaries in 2013 at almariam.com.) I even coined a word to discuss T-TPLF corruption. It is “horruption”. Horrible corruption.

Every now and then, the T-TPLF bosses put on corruption show trials to distract the population, panhandle the loaner and donors and draw attention away from their criminality.  They have done it again in July 2017.

Here we go again! The corruption prosecution con game of the T-TPLF

In May 2013, I wrote a commentary entitled, “The Corruption Game” of the T-TPLF.

That commentary dealt with the arrest of some two dozen “high and medium ranking officials of the Ethiopian Revenues & Customs Authority (ERCA) and prominent businessmen”. Among them were ERCA “director general” with the “rank of minister”, his deputies and “chief prosecutor” along with other customs officials. “Ethiopia’s top anti-corruption official” Ali Sulaiman told the Voice of America Amharic “the suspects had been under surveillance for over two years.”

At the time, T-TPLF bosses were in the middle of their recurrent internal power struggles in the aftermath of the passing of their thugmaster Meles Zenawi.

The recent arrests are part of the ongoing “civil war” within the T-TPLF. It is intended to send a message to others who may think about opposing the current faction of the T-TPLF that the sledgehammer of corruption prosecution will also be visited upon their heads if they want to try anything.

Simply stated, the current dominant T-TPLF faction is simply “killing the chicken to warn the monkeys”, to use a Chinese idiom.

Today, the T-TPLF slicksters are trying to kill three birds with one stone: Rack up some PR credits to demonstrate good governance during the “state of emergency” and drum up popular support.  They also believe they could divert and distract attention from their atrocious human rights record, including the Irreecha Massacres of October 2016, by showcasing their “anti-corruption” campaign.  Last but not least, the cash-strapped T-TPLF bosses are hoping to squeeze American taxpayers for a few billion dollars (fat chance under Trump) by talking the talk of anti-corruption while walking and swimming in corruption.

Belatedly, T-TPLF puppet prime minister (PPM) Hailemariam Desalegn is also trying to prove that, despite his repeated public cathartic confessions that he is the handmaiden of Meles, he is Mr. Clean, not Mr. Clone (of Meles). Desalegn is still trying to prove to the loaners and donors that he is a different breed from his thugmaster Meles. He wants to perpetuate an image of Mr. Clean  cleaning the “House of Meles”. Oh! Behold in 2017 the “Dirty 3 Dozen” he bagged!

2017: Sleazy investigating greasy and cheesy for corruption

Over the past couple of weeks, the T-TPLF has been rolling out the rogue’s gallery of alleged corruption suspects. Among them are “high level government officials” and sundry other businessmen.

They even allegedly jailed the “wife” of one of the founders of the T-TPLF, Abay Tsehay.

The “wife” was arrested “while she was attending her son’s wedding family reunion ceremony.” Tsehay was at the wedding but not arrested.

Obviously, the wife was “arrested” to send a clear message to Tsehay.

But if allegations of corruption are to be thrown around, Tsehay should be at the very top of guilty-as-sin suspects.

Tsehay was Board chairman of the “Commercial Bank of Ethiopia”, the largest and oldest bank in the country, even though he had absolutely no financial background whatsoever! During Tsehay’s tenure, the Commercial Bank lost hundreds of millions of dollars.

Shouldn’t Tsehay be held accountable for that loss?

He was replaced by another T-TPLF ignoramus named Bereket Simon in 2011.  Such was the height of T-TPLF nepotism and corruption.

It was clear to me in April that Tsehay was toast. Done. Finished.

As I indicated in my April 30 commentary, “The Good Kops/Bad Kops T-TPLF Con Game (Over) in Ethiopia”, I knew Tsehay was in deep doo-doo when PPT Desalegn dismissed a “study” done by Tsehay and his henchmen. “I don’t know [anything] about the study. It does not concern me. The study does not offer a correct analysis,” said Desalegn offhandedly.

I concluded that Desalegn would not have been emboldened to dismiss a report by a founding member of the T-TPLF unless that founding member was on his way out to pasture or something even worse. Alternatively, I reasoned that there is definitely a gang within the T-TPLF gunning for Tsehay. Either way, it was clear to me that Tsehay was history.

Curiously, Tsehay, a charlatan at best, must have been trying to reinvent himself as some sort of respectable academic or scholarly analyst when he put together a ragtag crew of “researchers” to issue a report. I suspected the T-TPLF gangsters ganging against Tsehay must have been offended by his bold report or considered it an effort by him to ingratiate himself with the public and gain ascendancy and tactically undercut them. After all, Tsehay practically called the T-TPLF “lawmakers” a bunch of morons who sit around rubberstamping whatever is  sent to them by the “executive branch”.

What has happened to Tsehay is a clear indication to me that there is a “creeping civil war” among various T-TPLF factions today. The only reason the “civil war” has not broken out in public is because they are all tangled up in the same web and morass corruption and criminality.

The T-TPLF criminals know all too well that they must hang together or hang separately, to quote Ben Franklin.

Anyway, Tsehay’s cannibalistic T-TPLF friends threw him under the bus, just as he ganged up with them to throw so many others before. That is karmic poetic justice!

It must feel like hell to feel so disposable!

Back to the current corruption prosecution con game.

Just to maintain the suspense, the T-TPLF has been announcing arrests almost daily. Just yesterday, they announced the arrest of  Alemayehu Gujo, T-TPLF  “minister of finance” and the highest-ranking official in the roundup and  Zayed Woldegabriel, Director General of the Ethiopian Roads Authority.

The “anti-corruption” prosecutors have completely avoided  charging any of the top T-TPLF leaders despite mountains of evidence of all types of corruption and criminal wrongdoing. They have gone after the small fish and left the big sharks, the capo di tutti cappi (boss of all bosses) alone.

The fact of the matter is that the whole T-TPLF corruption prosecution is a bunch of horse manure!

For the T-TPLF to accuse its disfavored members, ministers and lackeys of corruption and criminal wrongdoing is exactly like Tweedledee accusing Tweedledum of taking his rattle (toy).

/‘Tweedledum and Tweedledee/ Agreed to have a battle;/For Tweedledum said Tweedledee/ Had spoiled his nice new rattle./Just then flew down a monstrous crow, As black as a tar-barrel;/Which frightened both the heroes so,/They quite forgot their quarrel./

Simply stated, the T-TPLF is just having an internal battle in their corruption nonsense over their 26-year-old rattle. They are quarreling over who should steal, cheat and rob the most.

That is exactly what the T-TPLF corruption prosecution con game we see played out today is all about. One gang of T-TPLFers quarreling with and battling against another gang of T-TPLFers about who should ripoff the most of their 26-year-old rattle (toy) called Ethiopia.

There is nothing new in the current corruption prosecution con game.

The T-TPLF bosses have been playing their corruption prosecution game to knock each other out from day 1.

The T-TPLF canned its first prime minster Tamrat Layne on corruption charges in 1996.

That cunning and ruthless thugmaster Meles Zenawi forced Layne, under threat of penalty of death, to admit corruption and abuse of power before the rubberstamp parliament.

Of course, Layne did nothing that every top T-TPLF leader did not do. If Layne could be convicted for corruption, then each and every T-TPLF member beginning with the thugmaster himself are all guilty as sin of corruption. But the corruption prosecution was a tactic used to neutralize and sideline Layne.

In 2002, Seeye Abraha, T-TPLF defense minister and chairman of the board and CEO of Endowment Fund for the Rehabilitation of Tigray (a T-TPLF rabbit hole of high corruption, money laundering, conspiracy and sundry other criminality) was also jacked up on corruption charges and jailed for six years. Following the Ethio-Eritrean war in the late 1990s, the T-TPLF had split into two groups, one headed by Meles, the other by Seeye. Meles tactically outplayed and outfoxed Seeye and consolidated power. If Abraha could be convicted for corruption, then each and every T-TPLF member beginning with the thugmaster himself are all guilty as sin of corruption. But the corruption prosecution was a tactic used to neutralize and sideline Abraha.

In 2007 when Ethiopia’s auditor general, Lema Aregaw, reported that Birr 600 million of state funds were missing from the regional coffers, Zenawi fired Lema and publicly defended the regional administrations’ “right to burn money.”

In 2009, Meles publicly stated that 10,000 tons of coffee earmarked for exports had simply vanished from the warehouses. He called a meeting of commodities traders and in a videotaped statement told them that he will forgive them this time because “we all have our hands in the disappearance of the coffee”. He threatened to “cut off their hands” if they should steal coffee in the future.

Barely eight months ago in December 2016, the T-TPLF announced it had arrested 130 unnamed individuals on corruption charges.  An additional 130 were said to be under investigation.

Just yesterday, to add suspense to excitement, the T-TPLF called an “emergency meeting” of its  rubberstamp parliament without a public explanation for the meeting. Apparently, it had partly to do “with lifting the state of emergency order”, but the “parliament” removed “immunity” from two members at the ministerial and high administrative positions and jailed them. (More on that comedic drama in another commentary.)

All the T-TPLF corruption prosecution crap is nothing more than a con game, an attempt to distract and divert attention from the fact that the T-TPLF is on life support, on its last legs.

But the T-TPLF is playing the same old con game. Corruption prosecution is the oldest trick in the book of dictators.

In any power struggle in dictatorships, it is very common for one group of power players to accuse members of an opposing group of corruption and neutralize them. It is less costly and uncertain than conducting coups. Corruption show trials are a powerful weapon in the arsenal of dictators who seek to neutralize their opponents.

Back during the Derg (military rule) days, the favorite charge to neutralize opponents was to accuse them of being a “counter-revolutionary” and jail them or worse.

To be blunt, it is the same _ _ _t, just different flies.

In China, Bo Xilai, once touted to be the successor to President Hu Jintao in China, Liu Zhijun and many other high level Chinese communist party leaders were prosecuted for accepting bribes, corruption and abuses of power. They were all neutralized and sidelined.

Yet in 2016 the campaign against corruption came to a grinding halt as “President Xi Jinping’s high-profile ahead of a period of change for the Chinese Communist party’s leadership.” Jinping became president in 2012 and cleaned house using corruption prosecutions to eliminate his opponents.

Putin jailed Mikhail Khodorkovsky (once considered the “wealthiest man in Russia”) on trumped up charges of “corruption” and gave him a long prison sentence.

In Russia, Vladimir Putin has used corruption prosecutions to neutralize his opposition and unfriendly power contenders. Putin’s favorite tactic to control his opponents is prosecution for  money laundering. A few months ago, Putin arrested his foremost critic and anti-corruption champion Aleksei Navalny during an anti-corruption protest in Moscow and had him barred from a presidential run.

Putin jailed Sergei Magnitsky, a Russian lawyer, who accused Russian officials of massive tax fraud. He was beaten to death in prison. The U.S. passed the Magnitsky Act  barring entry of officials involved in Magnitsky’s murder.

Tip of the T-TPLF iceberg of corruption

Corruption in Africa, and particularly Ethiopia, is a proven means of accessing and clinging to power. It is the grease that lubricates the patronage system where supporters are rewarded with the spoils of controlling power.

The core business of the T-TPLF is corruption.

The T-TPLF warlords who seized political power in Ethiopia in 1991 have always operated in secrecy like a racketeering criminal organization. Their  principal aim for more than a quarter of a century has been the looting of the national treasury which they have accomplished by illicit capital transfers and by plunging the country into a bottomless pit of foreign debt.

Corruption prosecutions in Ethiopia have been driven not by any unusual or extreme corrupt behavior, since all T-TPLF bosses  are deeply mired in corruption, but because of the recurrent divisions and struggles in T-TPLF power circles.

Anyone who believes the T-TPLF is engaged in corruption prosecution to improve good governance is simply delusional. The T-TPLF’s only reason for existence is clinging to power to conduct the business of corruption, not good governance or stamping out corruption. The only reason the T-TPLF is in power is because corruption courses in their bloodstream and the bloodstream of their body politics. Corruption is the hemoglobin that delivers life-sustaining oxygen to their anatomical and organizational nerve centers.

Without corruption, the T-TPLF will simply wither away, or implode.

The anti-corruption organizations and prosecutorial and investigative bodies are created and stage-managed by the top political leaders. The members of these bodies are hand selected by the top leaders. They intervene in corruption investigations when it gets close to them. The whole anti-corruption campaign is set up to make sure that the grandmasters of corruption and their minions at the top are immune from investigation and prosecution.

As I argued in my commentary “Africorruption, Inc.”, corruption under the T-TPLF regime is  widespread and endemic. It includes outright theft and embezzlement of public funds, misuse and misappropriation of state property, nepotism, bribery, abuse of public authority and position to exact corrupt payments. The anecdotal stories of corruption in Ethiopia are shocking to the conscience. Businessmen complain that they are unable to get permits and licenses without paying huge bribes or taking officials as silent partners. They must pay huge bribes or kickbacks to participate in public contracting and procurement.

Publicly-owned assets are acquired by regime-supporters or officials through illegal transactions and fraud. Banks loan millions of dollars to front enterprises owned by regime officials or their supporters without sufficient or proper collateral. T-TPLF officials and supporters do not have to repay millions of dollars in “loans” borrowed from the state banks and their debts are overlooked or forgiven. Those involved in the import/export business complain of shakedowns by corrupt customs officials. The judiciary is thoroughly corrupted through political interference and manipulation as evidenced in the various high profile political prosecutions. Even Diaspora Ethiopians on holiday visits driving about town complain of shakedowns by police thugs on the streets. In 2009, the U.S. State Department pledged to investigate allegations that “$850 million in food and anti-poverty aid from the U.S. is being distributed on the basis of political favoritism by the current prime minister’s party.”

The fact of the matter is that the culture of corruption is the modus operandi of the T-TPLF regime.  Former president Dr. Negasso Gidada declared in 2001 that “corruption has riddled state enterprises to the core,” adding that the government would show “an iron fist against corruption and graft as the illicit practices had now become endemic”.

Corruption today is not only endemic in Ethiopia; it is a terminal condition

The “holy cows” and “minnows” (fish bait) of corruption

Corruption in Ethiopia can no longer be viewed as a simple criminal matter of prosecuting a few dozen petty government officials and others for bribery, extortion, fraud and embezzlement,

The so-called “corruption investigations and prosecutions” today are no different from previous ones. They scapegoat the minnows, small fish while leaving the untouchable holy cows untouched.

Tradition has it that on the day of atonement, a goat would be selected by the high priest and loaded with the sins of the community and driven out into the wilderness as an affirmative act of symbolic cleansing. In ancient times, it made the people feel purged of evil and guiltless.

The individuals accused of corruption are low-level bureaucrats, ministers-in-name only and other officials-with-titles-only, suspected disloyal members and handmaidens of the regime. They all humbly and obediently served the T-TPLF bosses for years. Now the T-TPLF bosses want to make them out to be loathsome villains. The sins and crimes of the untouchable T-TPLF holy cows are placed upon their heads and railroaded them to prison.

The T-TPLF high priests want to show the public they have been cleansed and the nation is free from the evil of corruption. In this narrative, the corrupt T-TPLF bosses want to appear as “anti-corruption warriors”, the white knights in shining armor.

Advertisements

Ethiopia listed among the most corrupt Countries in the world according to Transparency International 2016 Report February 7, 2016

Posted by OromianEconomist in Corruption, Ethiopia's Colonizing Structure and the Development Problems of People of Oromia, Illicit financial outflows from Ethiopia, Uncategorized.
Tags: , , , , , ,
add a comment

Odaa OromooThe TPLF Corruption network

The 2015 Corruption Perceptions Index clearly shows that corruption remains a blight around the world. But 2015 was also a year when people again took to the streets to protest corruption. People across the globe sent a strong signal to those in power: it is time to tackle grand corruption.

 José Ugaz,  Chair, Transparency International


 

Ethiopia is listed among the countries in the world where corruption highly prevails. According to Transparency International’s Corruption Perception Index, Ethiopia ranks 103 out of 168 countries and territories included in this year’s index.This doesn’t come as a surprise to many as Ethiopia has been for two decades under the control of a bunch of corrupt officials who are deafening us with the ‘11% economic growth’ mantra while millions of Ethiopians are starving to death.These corrupt officials are killing, torturing and imprisoning citizens in hundreds and thousands because they challenged their corrupt attitudes and their endless greed for wealth and power.


 

Source: Ethiopia listed among the most corrupt Countries in the world according to Transparency International 2016 Report


 

Related:-

TPLF/EPRDF Ethiopian Regime is a Contra to a Developmental State

https://oromianeconomist.wordpress.com/2016/01/12/tplfeprdf-ethiopian-regime-is-a-contra-to-a-developmental-state/

The Conflict between the Ethiopian State and the Oromo People, by Dr. Alemayehu Kumsa

https://oromianeconomist.wordpress.com/2014/08/14/the-conflict-between-the-ethiopian-state-and-the-oromo-people-by-dr-alemayehu-kumsa/


 

The type of corruption that really hampers Nigeria’s economy August 25, 2015

Posted by OromianEconomist in Corruption, Corruption in Africa, Uncategorized.
Tags: , , , ,
add a comment

???????????corruption-in-africa

Africa’s Looting Machine: Warlords, Tycoons, Smugglers and the Systematic Theft of Africa’s Wealth review – ‘the raping of a continent’ June 16, 2015

Posted by OromianEconomist in Africa, Africa and debt, Africa Rising, Illicit financial outflows from Ethiopia.
Tags: , , ,
add a comment

O

Abay Tsehaye TPLF fascist mass killer

The Looting Machine: Warlords, Tycoons, Smugglers and the Systematic Theft of Africa’s Wealth review – ‘the raping of a continent’

Ian Birrell,  The Guardian, 2nd March 2015

 Laurent Kabila, the former president of the Democratic Republic of Congo, who received ‘at least $4m a week in cash-filled suitcases from mining companies’. Photograph: Adil Bradlow/AP

Augustin Katumba Mwanke was a young banker in South Africa when persuaded to return home to help rebuild the Democratic Republic of Congo by the new government of Laurent Kabila. A year later he got a call from the president, a fellow Katangan, and was stunned to be appointed governor of an area the size of France, with control over some of the world’s most valuable mineral seams.

This marked the start of his rapid rise to power beside the president, placed at the core of a network of Congolese officials, foreign businessmen and organised criminals plundering the nation’s immense wealth. First, they transferred $5bn of state assets into the pockets of private firms with no benefit to the state, then after this was exposed, Katumba created a shadow state to steal funds, buy elections and bribe supporters. One witness says Kabila was being handed at least $4m a week in cash-filled suitcases from mining companies.

The victims, of course, are those millions condemned by the “resource curse” to conflict and poverty in a country that remains among the world’s poorest, despite the huge riches beneath their feet. As this timely book shows, similar shadow states are pillaging Africa’s immense wealth, from Angola to Zimbabwe, while corroding its societies. The result is a nation such as Nigeria, one of the world’s major oil producers, generating half as much electricity as North Korea – only enough to power one toaster for every 44 of its citizens.

After nine years reporting on Africa for the Financial Times, Tom Burgis exposes how the extractive industries have turned into a hideous looting machine, the west guilty of complicity in the raping of a continent. As he says, corruption does not end at the borders; kleptocratic regimes use avaricious allies to sell their commodities and stash illicit cash. “Its proponents include some of the world’s biggest companies, among them blue-chip multinationals in which, if you live in the west and have a pension, your money is almost certainly invested.”

Burgis shows how even the World Bank is linked to this looting, although it would have been good to see recognition of the role of aid propping up awful regimes. But the author makes an important case colourfully, convincingly and at times courageously as he confronts some of those involved in the pillaging. He examines countries cursed in similar style, whether by oil in Angola, coltan in the Congo, iron ore in Guinea, uranium in Niger or diamonds in Zimbabwe. There are lots of dodged questions and unanswered emails, but also surprising admissions, such as the Nigerian governor defending his need to “settle” payments for political survival. “If I don’t, I’ve got a big political enemy,” he says.

South Africa is home to the world’s most valuable mineral resources – yet the gap between rich and poor probably widened since the end of apartheid. This fits a pattern of inequality stemming from the resource curse, argues Burgis, pointing out how some leaders fought against racist regimes only to preside over elites that resemble in structure minority rulers they overthrew. “It’s like a virus, transmitted from the colonial regime to the post-independence rulers,” says one Nigerian critic. “And these extractors, they are the opposite of a society that is governed for the public good.”

Then there is the questionable role of China. The author is right to say there is a “distinct whiff of hypocrisy” to western criticism of the nation’s advance into Africa. Yet he grapples with the role played by the secretive Sam Pa. Burgis speculates about links to Chinese intelligence as he details Pa’s steady, lucrative cultivation of top-level contacts. His informative book ends with the words of Nigeria’s impassioned singer Nneka: “Don’t think you’re not involved.”

The Looting Machine is published by Harper Collins. Click here to buy it for £16

http://www.theguardian.com/books/2015/mar/02/looting-machine-warlords-tycoons-smugglers-systematic-theft-africa-wealth-review?utm_content=buffer0a30b&utm_medium=social&utm_source=twitter.com&utm_campaign=buffer

The Plunder of Africa

How Everybody Holds the Continent Back

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’s 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—which, some argue, favored disinvestment in national education, health care, and other vital services.

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’s debility. There’s little wrong with African countries that an end to the corruption and thievery of their leaders wouldn’t 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’s leaders while saying little about the influence of powerful international institutions and corporations. It’s easy to understand why: Africa’s 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’s problems.

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’s problems.

One of the many strengths of Tom Burgis’ The Looting Machine is the way it avoids falling firmly into either camp in this long-running debate. Burgis, who writes about Africa for theFinancial Times, 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’s 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’ emphasis is ultimately on Africa’s exploitation by outsiders, he never loses sight of local culprits.

GIMME THE LOOT

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 “the Futungo,” a shadowy clique of Angolan insiders who he claims control their country’s immense oil wealth, personally profiting from it and also using it to keep a repressive ruling regime in power. The country’s leader, José Eduardo dos Santos, has been president since 1979, and in 2013, Forbes magazine identified his daughter, Isabel, as Africa’s first female billionaire. “When the International Monetary Fund [IMF] examined Angola’s national accounts in 2011,” Burgis writes, it found that between 2007 and 2010, “$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.” 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’ rule—almost 40 percent more than it spends on health and education combined.

Those who tend to blame Africa’s woes on elite thievery seize on such examples with relish. But Burgis tells a much fuller story. Angola’s leaders may seem more clever and perhaps possess more agency than other African regimes—and 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—and the willful ignorance of many others—to 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’s 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’s 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’s dubious economic programs.

Angolan President Jose Eduardo dos Santos leaves a meeting at the Elysee Palace in Paris, France, April 2014.

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’s resource wealth, Burgis has a ready rejoinder. “In 2010,” he writes, “fuel and mineral exports from Africa were worth $333 billion, more than seven times the value of the aid that went in the opposite direction.” 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 “resource nationalists” and shunned by foreign investors. “The result,” Burgis writes, “is like an inverted auction, in which poor countries compete to sell the family silver at the lowest price.”

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’s top copper producers, major mining companies pay lower tax rates than the country’s poor miners themselves. Partly as a result, he reports, in 2011, “only 2.4 percent of the $10 billion of revenues from exports of Zambian copper accrued to the government.” Ghana, a major gold producer, fared slightly better, with foreign mining companies paying seven percent of the revenue they earned in taxes—still a tiny amount, Burgis points out, “compared with the 45 to 65 percent that the IMF estimates to be the global average effective tax rate in mining.”

A RACE TO THE BOTTOM

African countries’ unequal relationships with powerful international financial organizations and large multinational firms help explain the “resource curse” so frequently lamented in discussions of the continent’s 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—and its effects are undeniable. Burgis quotes a 2004 internal IFC review that found that between 1960 and 2000, “poor countries that were rich in natural resources grew two to three times more slowly than those that were not.” Without exception, the IFC found, “every country that borrowed from the World Bank did worse the more it depended on extractive industries.”

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’s uranium—an estimated 5.5 percent of its market value. And the details of the company’s contracts with Niger’s government are not publicly disclosed. Reflecting on this situation during an interview with Burgis, China’s ambassador to Niger adopts a posture of moral outrage, proclaiming that Niger’s “direct receipts from uranium are more or less equivalent to those from the export of onions.”

Rather than issuing from some mysterious invisible force, the “resource curse” is to a large degree the product of greed and the disparities in leverage between rich and poor.

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—especially the leaders of states whose economies depend heavily on minerals. China’s 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 
the continent.

The hope was that with China directly competing with Africa’s 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’état 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. “Access 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,” Burgis writes, but, “like a credit card issued with no credit check, it also removed a source of pressure for sensible economic management.” 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.

 

Some of Burgis’ strongest work follows the dealmaking of a shadowy Hong Kong–based 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’s 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’s push into Africa.

In Burgis’ telling, one mission of Pa’s 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’s most corrupt and violent regimes. But some African elites at the receiving end of Pa’s 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’s invitation and later told Burgis about being whisked around Beijing by Pa’s associates. “If they were not a government entity, they definitely had strong backing and strong ties,” Thiam recalled. “The 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.” In the case of Guinea and other places, Burgis reports that Queens­way 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’s bona fides.

The hope was that with China directly competing with Africa’s 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.

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. “If it weren’t him, it would be someone else,” as a U.S. congressional researcher puts it to Burgis. The researcher adds that even if Pa’s operation were shut down, “the 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’ behavior overseas, and, sadly, there’s no shortage of resource-rich fragile states on which these investors can prey.”

LOSS PREVENTION

By showing how “the looting machine” is operated by people and institutions both inside and outside Africa, Burgis transcends the tired binary debate about the root causes of the continent’s 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—and African elites intent on leading more just, prosperous, and equitable societies—improve 
their prospects?

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’s dos Santos from perpetuating their rule for decades and might allow more responsive elites to put Africa’s resources in the service of more equitable development strategies.

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.

Finally, as Burgis’ 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’ 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.

https://www.foreignaffairs.com/reviews/review-essay/2015-06-16/plunder-africa

Africa, resource curse and weakest institutions: International mining companies contrive with local African elites to strip the continent of its resources. April 13, 2015

Posted by OromianEconomist in Africa, Africa Rising, Illicit financial outflows from Ethiopia, Land Grabs in Africa, Land Grabs in Oromia.
Tags: , , , , ,
add a comment

OA shocking investigative journey into the way the resource trade wreaks havoc on Africa, ‘The Looting Machine’ explores the dark underbelly of the global economy.

The Looting Machine

AFRICANS ask many questions about what ails a continent that abounds with natural riches yet suffers, too, from greedy rulers, bad government and entrenched poverty. The replies they get range from the outright racist to the climatic (countries in the tropics suffer from more parasites and disease than in more temperate latitudes) to the political, with many blaming colonialism or so-called neo-colonialism for the continent’s woes.

For Tom Burgis, a journalist with the Financial Times, the problem is, paradoxically, Africa’s wealth of natural resources. He is not the first to write about countries with the “resource curse”. Nor does his book add to the copious academic literature on the subject. But Mr Burgis sees Africa—with a third of the Earth’s mineral deposits and some of its weakest institutions—as being particularly vulnerable to the predations that arise from the combination of mineral wealth and poor governance.

“The Looting Machine” is the fruit of Mr Burgis’s many travels through Africa, from bars in Port Harcourt to gleaming new office towers in Luanda, as well as his work as an investigative journalist. He presents a lively portrait of the rapacious “looting machine” in which international mining companies contrive with local African elites to strip the continent of its resources. In doing so he is not short of anecdotes (nor copious footnotes). In Angola he points to a small group that controls the state and has amassed great wealth. In parts of Nigeria these resource rents are shared between an elite that controls the state and armed warlords who held it to ransom through blowing up pipelines and kidnapping oil workers.

“In the place of the old empires are hidden networks of multinationals, middlemen and African potentates,” Mr Burgis says. “These networks fuse state and corporate power. They are aligned to no nation and belong instead to the transnational elites that have flourished in the era of globalisation.”

Yet for all the rhetorical flourish, Mr Burgis fails to explain why some states with bountiful natural resources manage them in ways that deepen democratic institutions and benefit the poor. One need not look as far as Norway for this. Botswana gets a mention for its economic dependence on diamonds (it is a major producer), but less so for its democratic traditions, excellent health and education systems and stability.

“The Looting Machine” reads partly like a mystery thriller and partly like a court submission, with its detailed descriptions of the corporate connections between Chinese companies with interests across the continent. Mr Burgis offers a rich collage of examples showing the links between corrupt companies and African elites. But he fails to argue convincingly that natural resources are the primary, or even a major, source of Africa’s troubles.  http://www.economist.com/news/books-and-arts/21647954-huge-natural-resources-and-poor-governance-are-dreadful-combination-blood-earth?fsrc=scn/tw/te/pe/ed/LootingMachine

The Four Types of Africa’s Corrupt Power Elites: How to be Corrupt in Africa October 10, 2014

Posted by OromianEconomist in Africa, Africa Rising, Colonizing Structure, Corruption in Africa, Illicit financial outflows from Ethiopia, Land and Water Grabs in Oromia, Land Grabs in Africa, The 2014 Ibrahim Index of African Governance, The Colonizing Structure & The Development Problems of Oromia, The Tyranny of Ethiopia, Undemocratic governance in Africa, US-Africa Summit, Youth Unemployment.
Tags: ,
add a comment

O

 

 

 

 

 

 

 

 (picture: TPLF/Ethiopia’s corruption Empire)

 

 

 

 

 

SHAPE OF THE CONTINENT: How to be, or not to be, corrupt in Africa where one size does not fit all

Christin Mungai, Mail & Guardian Africa

 

 

 

 

SOUTH Africa is awash with stories of corruption scandals touching on key public figures; from President Jacob Zuma on one end, to opposition leader Julius Malema on the other.

All is not well in Africa’s richest economy. However, recent reports paint an even bleaker picture for the continent in general. One noted that “acording to most of the available indicators, the war on corruption is at a standstill. In fact, these indicators show that corruption is actually increasing in countries where its impact is likely to be most harsh”.

How bad is it and, most importantly, WHY does it happen? We think a large part of it is down to the nature of the various states in Africa.

We took the scores of African countries in two indicators from the latest Fragile States index compiled by Foreign Policy: factionalised elites and state legitimacy. The former measures conflict and competition among local and national leaders, while the latter measures corruption and other measures of government performance and electoral process.

We plotted each country’s deviation from the mean on the two indicators, and the resulting scatter diagram suggests intriguing things about African states; especially how much is “up for grabs”, but more importantly, how the corrupt are corrupt – the strategies which would work if you were looking to loot public coffers.

 

 

See infographics @ https://magic.piktochart.com/embed/3030773-untitled-infographic

 

The Ones who Share Nicely

In the top right quadrant are the “democracy star-performers” – Mauritius, Botswana and Namibia are the far outliers, as well as countries like Ghana, South Africa, Lesotho, Tanzania, Benin and Senegal (mouse over the coloured dots to see specific countries). The countries in this have low competition among elites, and a high level of state legitimacy: citizens feel they have a stake in the country, their votes matter and they can hold leaders accountable.

On the surface, it seems that these countries have mature democratic processes and are committed to the rule of law. But it might also suggest something else – that where corruption exists, there is an “elite consensus” on graft, which means that leaders do not fight for the pie today because they know their turn will come with the next (democratic) election when they win power. Ghana is a good example here – there isn’t that overt looting of state coffers that you might see in other African countries, but you can still benefit illegally from public funds – if you play nicely.

The strong state in these countries also suggests that in order to be steal public money in this countries, you have to “formalise corruption”. In other words, because the state is strong, you have to use formal channels to enrich yourself – lobbying Parliament to make rules in your favour would work here. South Africa is the classic case here – Black Economic Empowerment (BEE), for example, was intended to reduce the economic disparity between racial groups entrenched during apartheid, but it has morphed into a vehicle for a few well-connected black businessmen to enrich themselves – this class of nouveau riche beneficiaries is disparagingly called “tender-preneurs”. But even that name suggests that to benefit from state largesse, you have to have a modicum of formality – you have to register a company, fill and submit tender forms, etc. In these countries, you can’t just ride roughshod into the Treasury.

How to win: Be literate, learn how to write a proposal, and know how to do cocktail chit-chat.

The Ones who Only Share among Themselves

In the top left quadrant are a number of countries that have a high level of state legitimacy – they score high in governance and fighting corruption – but they also have high competition between elites. Rwanda and Ethiopia show up here, two countries which have a military-turned-civilian regime in power. In Rwanda’s case it is the Rwanda Patriotic Front (RPF), while in Ethiopia’s case it is Ethiopian Peoples’ Revolutionary Democratic Front. In these countries, elections are not fiercely fought for across the board (the Parliamentary contest might be hot, but not that for president or prime minister) as it is almost taken for granted that the ruling party and/or its candidate will win.

So something else plays out here: internal competition within the party is intense, but you have to be “one of us” to be a legitimate player in the game. So we see these regimes coming down hard on “dissidents” because the game can only be played within the boundaries and uniformity of the ruling party. In Rwanda, for example, perhaps the reason openly gorging yourself from the public coffers is frowned upon here is because “everyone can’t do it” and it would make certain individuals stand out, not necessarily because it’s wrong. Liberia and Mauritania also feature here, but for different reasons: Liberia has a long history of a “ruling class”: Americo-Liberians, descendants of freed slaves, ruled the country exclusively since independence in 1847 until 1980, so to be in the game, you just had to be “one of them”. Mauritania also has a ruling class called the “white Moors”. So the elite can fight among themselves – Mauritania, for example, has  had a dozen coups or attempted coups since independence from France in 1960—but they firmly shut the door to outsiders.

How to win: Join the party, but always watch your back.

The Ones who Don’t Share

In the lower right quadrant are countries like Angola, Burkina Faso, Gabon, Republic of the Congo and Swaziland. They score low on competition among elites, but high on corruption. Why aren’t the elite fighting among themselves? Here, the reason for this disparity might be simple: the elite has entrenched themselves firmly into power, they have sunk their roots deep into the state system, and aren’t going anywhere. But there’s a difference between them and The Ones who Only Share among Themselves –the ruling class is small enough to keep “eating”, so there isn’t any need for competition within that small group. Swaziland is an absolute monarchy, so it perfectly embodies this “total exclusivity”.

Ruling elites here have a steady income supply, like oil (or royal tributes), to provide an endless bonanza – and it explains why most of them have had long regimes in power, twenty years or more: Jose Eduardo dos Santos in Angola, Blaise Compaore in Burkina Faso, the Bongo dynasty in Gabon, Denis Sassou-Nguesso (with a short interruption) in the Congo and King Mswati in Swaziland have all been in power for more than 20 years). There just isn’t any real competition; and luckily, the money is enough to keep everyone who matters happy. In Angola, for example, President Jose Eduardo dos Santos family controls practically all the major sectors of the economy: his daughter Isabel is famously Africa’s first female billionaire, with assets in telecoms, banking and diamonds; daughter Tchize runs a television and communications network; son Coreon Dú is a music producer and singer; and son José Filomeno heads the country’s sovereign wealth fund.

How to win: Marry into the family and live quietly.

The Free for All: “Democratically Corrupt”

In the lower left quadrant are the conflict-plagued states: Somalia, Sudan, South Sudan, others with widespread civil strife – such as Zimbabwe, Libya and Eritrea – as well as others which, on the surface, aren’t “quite so failed”- Kenya, Uganda, Cameroon and Nigeria. These countries have the bad scores, both in the level of corruption and in the factionalisation of elites. Corruption here isn’t exclusive to some long-established ruling elite, or to any formal party structure. Outsiders do have a chance of getting in, but there isn’t enough to go around – the elite is too large, and there are too many vested interests.

It means that elections tend to be a “winner-take-all” scenario, fiercely fought on the ground. Still, there’s a silver lining here: the fact that politicians are fighting for citizen’s votes suggests that votes actually count. But here, there isn’t really an expectation to play nicely, or share with others, so we see lots of rogue behaviour, elites tend to thrive on chaos and unpredictability. The weakness of the state gives rise to strong lawless groups – such as Boko Haram or al-Shabab – and the country is vulnerable to civil strife.

How to win: Be a bully, and never, ever show any weakness.

 

http://mgafrica.com/article/2014-10-09-the-four-africas

 

http://mgafrica.com/article/2014-10-09-the-four-africas/