Is Africa still being looted?

• Author: Bond, Patrick

The continent's own elites, together with the West and now China, are still making Africans progressively poorer, thanks to the extraction of raw materials. Reinvestment is negligible and the prices, royalties and taxes paid are inadequate to compensate the wasting away of Africa's natural wealth. Anti-extraction campaigns by (un)civil society are the only hope for a reversal of these neocolonial relations.

Though it's easy to prove, using even the World Bank's main study of natural resource economics, apparently the looting allegation is controversial. When 1 made it during a Canadian Broadcasting Corporation (CBC) interview (http://www.cbc.ca/thecurrent/2010/08/august-10-2010.html), the World Bank's chief economist for Africa, Shanta Devarajan, immediately contradicted me, claiming (twice) that I am not in command of "the facts."

Here's how it went:

Patrick Bond: Africa is suffering neocolonialism, and that means the basic trend of exporting raw materials, and cash crops, minerals, petroleum, has gotten worse. And that's really left Africa poorer per person in much of the continent than even at independence. The idea that there's steady growth in Africa is very misleading, and it really represents the abuse of economic concepts by politicians, by economists, who factor out society and the environment. And it's mainly a myth, because, really, the extraction of non-renewable resources--those resources will never be available for future generations. And there's very little reinvestment, and very little broadening of the economy into an industrial project or even a services economy.

CBC: Mr Devarajan, how would you respond to that view?

Shanta Devarajan: First, I just want to correct one of the facts, which is that the continent is not poorer per person. GDP per capita is not lower today than it was 10 to 15 years ago. In fact, it is considerably higher.

Here, Devarajan abuses the discussion about African poverty by using the Gross Domestic Product (GDP) measure, even though just seconds earlier I had warned against doing so. African economies suffer extreme distortions caused by the export of irreplaceable minerals, petroleum and hardwood timber. Were he honest, Devarajan would confess that GDP calculates such exports as a solely positive process (a credit) without a corresponding debit on the books of a country's natural capital.

Seeking a less biased wealth accounting--i.e., by factoring in society and the environment so as to calculate a...