Review of African Political Economy No. 117:361-366 © ROAPE Publications Ltd., 2008 Scrambling to the Bottom? Mining, Resources & Underdevelopment Ray Bush The 21st century race for resources and territory has simultaneously induced cries of optimism from donors and the international agencies, but there is despair from critics and many on the continent: that plunder and looting continues in a manner reminiscent of the colonial past (Bond, 2006; Bush, 2007). But is the current scramble similar to the previous looting of African resources? Are there no benefits from the demand for Africa’s resources? Can the current dynamic be characterised as a scramble or, is it simply ‘business as usual’ for the good of civil society? Africa holds 42% of the world’s share of bauxite; 38% of its uranium; 42% of the world’s reserves of gold; 73% of its platinum; 88% of diamonds. The continent also has enormous reserves of non-ferrous metals like chromite (44%), manganese (82%), vanadium (95%) and cobalt (55%). Despite this abundance of resource wealth – and these figures probably underestimate resource availability because of limited surveying – there is little evidence that raw materials are translated into growth with justice and equality. And there is only limited evidence that strategies to convert local resources nationally, or to pool them regionally, will generate real value added for Africans. For while the continent’s average economic growth rates have been high since 2000 compared with previous decades due almost entirely to the unprecedented price of crude oil and metals, African raw material producers do not benefit from the resource scramble. Large scale resource income is limited to a few and largely oil producing countries like Nigeria, Angola and Sudan. And where mining for gold and other minerals continues apace, so too has displacement of communities/migration, increased environmental hazards and poor health and well being. Smaller countries too have hit the recent headlines, like Equatorial Guinea where oil has encouraged an attempted coup and imperialist intervention. Resource rich countries, moreover, consume only a tiny amount of what they produce. This indicates that the path to industrial-based growth remains limited, almost entirely to South Africa and Nigeria. African states seem unable, under present contracts, to access improved value added from the processing of copper, gold and diamonds, bauxite, crude oil and cobalt. Value remains locked in the industrial centres of international capital. Resource abundance accompanied by high levels of poverty and destitution in resource producing countries has led to an inverse relationship between resource availability and economic performance: the ‘curse of resources’. Between 1960 and 1990, for instance, the World Bank indicated that ‘developing countries with few natural resources grew 2-3 times faster than natural resource-abundant countries’ (World Bank, 2003:149); the exception to the rule was diamond rich Botswana. The idea of the resource curse has captured the imagination of many and certainly driven ISSN 0305-6244 Print, 1740-1720 Online/08/030361-06 DOI: 10.1080/03056240802410968 362 Review of African Political Economy contemporary donor prescriptions for Africa.; Here are five main reasons (Ross, 1999; Auty, 1995; Yates, 1996): 1) A fall in terms of trade for primary commodities; 2) The instability of international commodity markets; 3) Weak or non-existent linkages between resource and non-resource areas (both spatial and sectoral); 4) Impoverishment of rural livelihoods; 5) ‘Dutch disease’: an appreciation of a country’s exchange rate following an increase in exports accompanying resource exploration, an effect that is often paralleled by the movement of investment away from non-resource sectors as labour moves to be employed in mining enclaves. The ‘resource curse’ has been a dominant feature in explanations of ‘crisis in Africa’ – used as shorthand to explain poor economic development especially when linked with war and conflict as in Sierra Leone and Liberia, Angola and the DRC. These explanations of crisis, that war and upheaval are driven by ‘greed’ or ‘grievance’, have downplayed shifts in terms of trade and commodity market instability. In the contemporary period, such negative market volatility is absent. Since 2000 sustained high commodity prices mark a new stable era but there are two problems with this idea of stability. First, it has been ideologically convenient for donors to underplay market volatility, shaped after all by demands of consuming countries, major international companies and the power of financial speculation driven by profit taking. Donors blame poor economic performance on poor governance and corruption: it is an inconvenient truth to see the cause of persistent underperformance located in the asymmetry of the world economy. The second problem with the current optimism that high commodity prices will deliver sustained economic growth, is the failure to have an historical context with which to view current raw material demand. Just how unusual and how sustainable is the current spectacular economic growth for Angola, DRC and Zambia? Outside of any historical context, the growth figures for selected resource rich countries imply opportunity for development of infrastructure, employment growth and improved provision of public goods. But it remains unclear just why and how increased windfall income will be directed toward poverty reduction. And it is unclear for just how long current high minerals prices will continue. Periodic high raw material prices are not new but we need to note there has been a secular decline in the industrial commodity price index. In the context of the last 163 years – from 1845 to 2008 – the increased commodity prices around which there is so much optimism reflects more accurately a breakdown in the trading of commodities. This breakdown is characterised by immiseration and abjection for people living in resource rich economies, spoils politics as elites benefit from unproductive rentierism and unprecedented profits for mining companies. It must also be noted that increases in oil and metals prices is not always matched by world market prices for other African commodities like sugar and cotton. Thus, the impact of even the contemporary (short term) high for the commodities price index is not generalised across Africa. Non-oil producers are in particular confronted by the enormous cost of energy. Editorial: Scrambling to the Bottom? Mining, Resources & Underdevelopment? 363 This issue of ROAPE unravels several of the contemporary false dawns that are promised by donors and company rhetoric that imply Africa gains from the current resource boom. The articles here go beyond a ‘stocktaking’ of mining debates to examine issues of the control and regulation of mining capital, the role of transparency and corporate responsibility, implications for development, sovereignty, imperialist intervention and local resistance that influence the political economy of resource rich African states. How to regulate or control mining companies has been a persistent feature of the relations between international capital and the state in Africa. Now is the time to revisit those important debates to ask if the state in Africa is better positioned to exact higher returns from foreign capital – an issue about which the journal would welcome future contributions. The 1960s and the years of nationalisations in the 1970s were marked by an optimism in Africa that mining companies could be controlled: regulation was inappropriate when nationalist rhetoric demanded nothing less than complete control. Very often, however, nationalisation became a relief for foreign capital at a time of tumbling commodity prices. It was also a strategy of last resort or a pragmatic response by African politicians struggling for legitimacy and doing so by promoting spoils politics – the use of the public purse for private gain. Nationalisation was seldom a tool for national development but reflected, instead, the promotion of sectional interests. In 1984 Newsweek had a banner headline, ‘The Death of Mining’ – the international economic downturn took the wind from the sails of African states. Structural adjustment disciplined any state with the temerity to take on the mining houses, or any other international company for that matter. The new optimism about the contempo- rary African scramble for resources requires us to ask, what exactly does the scramble mean? We need to also ask, what impact do actual investments in mining have in Africa and what impact does the repeated mantra about mineral-led growth have on being able to strategise around issues of poverty reduction, the promotion of justice and struggles against imperialism? In this issue John Lungu examines aspects of the historical and contemporary relationship between the government of Zambia and the privatised international mining companies. This is important not only because of increased Chinese involvement but also rumoured Russian interest to invest $2 billion in Zambia’s mining sector. Lungu provides an explanation of Zambia’s enduring dependency on copper revenue to fund national development, and the consequent importance of tax and royalty agreements to Zambia’s political economy. He also notes the importance of struggles within civil society to pressure the state to exact higher returns from mining companies. Ongoing struggles in Africa highlight the need for improved returns from foreign