‘Masters of the universe’ tighten stranglehold on world resources

By Emmanuel Nyirenda

…. The poor must stay poor and dependent on them

The conduct of some foreign owned mining companies when returns on their investment fall due to a drop of prices raises questions about the morals of foreign investors that often make huge profits in developing countries.

At the slightest fall in prices or change of operational costs they threaten to, and often, lay off thousands of workers – either to create a commodity shortage in order to push prices up or merely to cut costs.

The chief executives of major resource trading giants, who have come to be known as  “masters of the Universe” in the commodity exchange of  Wall Street and London Metal Exchange are acting in  conformity with the notion that  the world be stratified  between the haves and the have-nots in which the rich decide the fate of the poor and that of the underdeveloped  world that loses even the little they hoped to have by inviting foreign investors.

Concerns arise when mine companies take measures that hurt the economies and well-being of host countries and their people contrary to UN requirement that foreign capital must derive  mutual benefits for the investor as well as the host state and its resolutions on permanent sovereignty over natural resources and human rights.

There is concern that the conduct of  some foreign investors use job losses as blackmail in order to extract more concessions and incentives  that might be detrimental to the national interests for which they were invited to exploit natural resources in the hope that by creating employment the host countries might find a trickledown effect that  speeds up the raising of living standards of their people.

To attract such investors, developing countries sacrifice huge earnings in tax wavers and other incentives,  in spite of  environment  degradation in the form of water and air pollution and huge pits that are of no use to the people around the mines.

Renowned Kenyan thinker, Professor Ali A Mazrui referred to this in his book “Africa’s International Relations – The Diplomacy of Dependency and Change” asserting, “There is an element of race in the global stratification system …”

The foreign investor probably believes that those who have no means to finance the exploitation of their resources should have no say over the pricing of their resources, let alone whether they should shoulder some of the losses to save jobs and the economies of the host countries.

As Mazrui aptly observed, it  should not be a question of “the master can enter the hut of his  slave  at any time … but the slave has no automatic access to the house of the master.”

In the Zambian scenario the situation is a Catch 22 one: nationalisation of the mines failed lamentably and cannot be attempted again; private businessmen have no capacity to fund the mines; regulating the mines or any other foreign owned business with laws barring suspension of operations or closures when commodity prices fall without the approval of the Government would discourage prospective investors in the mines as well as other sectors and attract international condemnation.

Perhaps Zambia and under-developed world might find protection in the UN Covenant on Economic, Social and Cultural Rights whose Article 1 states, “All people may, for their own ends, freely dispose of their natural wealth and resources without prejudice to any obligations arising out of international economic cooperation, based upon the principle of mutual benefit, and international law, “ adding, “In no case may a people be deprived of its means of subsistence.”  The suspensions or closure of operations in which people lose jobs en mass can be viewed as deprivation of means of subsistence

Further, Resolution 1803 (XVII) on Permanent Sovereignty over Natural Resources states, “The right of people and nations to permanent sovereignty over their natural wealth and resources must be exercised in the interest of their national development and of the wellbeing of the people of the state concerned.”

And in cases where foreign capital is imported for the exploitation of such wealth or resources, the resolution adds, “The profits derived must be shared in the proportions freely agreed upon in each case between the investors and the recipient state” adding, “due care being taken to ensure that there is not impairment, for any reason, of that state’s sovereignty over its natural  wealth and resources.”

When Mazrui wrote the book referred to 40 years ago, he might have hoped that the emergence of oil and mineral rich countries in the Middle East and Africa would spur change for economic independence funded by these new riches.

But their wealth is nowhere to be seen, let alone to replace the investment of the rich West and so those who take pleasure in business decisions that affect the lives of millions do so knowing that the financially weak developing nations will still go to them on their bended knees, offering incentives that cost them even the little sovereignty they have over their resources – bonding them even more to the poor and dependence stratum.