International Forecaster Weekly

The Mad Scramble for African Resources and Outside Intervention

Corbett discusses the exploitation of African resoureces, which continue to go below the radar, while the world is focused on debt crises and conflict in the middle east, getting Kony, Bob Rinear covers job solutions in a tough economy, with so much pressure on private citezens, the hopes and dreams of our next generation is on the line.

James Corbett | August 4, 2012

While all eyes are focused on the destabilization of Syria and the powder keg potential for violence in the Middle East, the scramble for African resources continues to fly under the radar. Although there is certainly reason to be concerned about the events in the Middle East, events in Africa also merit attention as, in the long term, Africa will continue to represent what it always has: a land of vast, largely untapped resource and mineral wealth. This fact alone will keep the continent squarely in the sights of the world's economic powers, especially America and China, as both sides seek to consolidate their influence in Africa and keep the other out of the equation.

            Observers of African politics will be aware just how well the continent's hotspots map over its mineral deposits and resource wealth. This point is underlined in the headlines every day. This week's big news is Hillary Clinton's African tour, and, not surprisingly, her itinerary is packed with opportunities to promote American-backed “security” in some of the continent's key strategic areas: South Sudan, Uganda, and Kenya among them.

            South Sudan is the newly formed nation that split off from Sudan last year, helped along by a years-long PR campaign over Darfur under the mask of humanitarian concern, a cause that enjoys the active support of Hollywood A-listers (and Council on Foreign Relations members) George Clooney and Angelina Jolie. What the Hollywood jetsetters tend to leave out of their hand-wringing over Sudan are the most relevant facts: Sudan is the third-largest oil producer in sub-Saharan Africa. According to a 2008 BP Statistical Energy Survey, it had proven oil reserves of over 6.6 billion barrels at the end of 2007. Throughout the 1990s, China invested massively in the region’s oil deposits, including the construction of a 1000 kilometer long pipeline to pump Sudanese oil to Chinese ships anchored in the Red Sea. By the time the country was split in two, China was Sudan's largest trading partner, buying 40% of their oil. Now, as much as 75% of those reserves lie in the Republic of South Sudan, which (conveniently for Clinton and her ilk) is more than happy to cozy up with the U.S. and the international bankster system, as opposed to the China-friendly Arab government in Khartoum. Even before gaining its independence in June of last year, South Sudan was already applying for IMF membership. One of the first things that South Sudan did post-separation was to ink a joint venture deal with Glencore, the world's largest commodities trading company, to develop its oil resources. In other words: South Sudan is happy to play ball with the big boys, and they get the Clinton photo op and a cheerleading speech to hang on their wall.

            Or, that's the way it was supposed to be, anyway. Much to the chagrin of the bankster puppets in Washington, South Sudanese president Salva Kiir has been going off script and is putting what had been expected to be a cozy relationship in jeopardy. Kiir's government has been engaging in risky border provocations with Sudan, including sending armed forces into the oil-rich Heglig region without the explicit go-ahead from Washington. Rather than a pep talk and a pat on the back, Clinton arrived with whip in hand to make sure the U.S. client state falls back in line and stops jeopardizing the corporatocracy's share of the nation's oil interests, billions of dollars of which are “disappearing” into local politician's back pockets. Clinton's advice for the people of South Sudan in attempting to reconcile their differences over oil reserves with Sudan? “A percentage of something is better than a percentage of nothing." Is anyone else reading that in Marlon Brando's “Godfather” voice?

            It was a foregone conclusion that Clinton would use her Uganda trip to relive the Two Minutes Hate of this year's strangest viral political video, Kony 2012. She did not disappoint. Speaking at a large military base on Lake Victoria before meeting with Ugandan thug and serviceable U.S. henchman (sorry, “President”) Yoweri Museveni, she fretted over the difficulties in tracking down Joseph Kony, the elusive Ugandan boogeyman: "Now we have to figure out how we can see through thick vegetation to find Joseph Kony," she said before suggesting that U.S.-made drones might be just the thing for the job. What she failed to mention is that Kony hasn't been seen in six years, is likely dead, and (according to one ex-MEP) was “on the CIA's books for years.” Also strangely missing from the official platitudes and pleasantries between the Secretary of State and the Ugandan strongman was the announcement in 2009 of the largest onshore oil find in Africa in the Lake Albert region of Uganda that coincided almost precisely with renewed American interest in the country. Also missing from Clinton's remarks was any mention of the elephant in the room: China. With bilateral trade hitting $400 million last year, China is Uganda's largest trading partner, and just last month Ugandan Foreign Minister Oyrem Okello was celebrating the two country's relationship. This cannot be pleasing to Washington.

            Indeed, China's shadow lies heavily over Clinton's whole African trip, yet nary a word is mentioned about the dragon in the east. At least not directly. Instead, as is the way in diplomatic circles, the references to the real dynamic driving American diplomacy on the continent are all oblique, and can only be seen by reading between the lines. Thus, Clinton's remarks at the University of Cheikh Anta Diop in Senegal earlier this week read on the surface level like the typical feel-good all-American speech about how Africa can pull itself up by its bootstraps with perseverance, dedication, and the good sense to follow in Uncle Sam's freedom-and-democracy footsteps. Reading between the lines, however, the speech was little more than a veiled warning to African leaders to turn away from Chinese infrastructure investment, tainted as it is by China's human rights abuses and obvious desire to extract Africa's mineral wealth, and rejoin the American “development aid” fold. This, at least, is how the Chinese took it, or more accurately took exception to it.  "Whether Clinton was ignorant of the facts on the ground or chose to disregard them, her implication that China has been extracting Africa's wealth for itself is utterly wide of the truth," said Beijing official news agency Xinhua in its own commentary on Clinton's  Senegal remarks. This veiled game of diplomatic cat and mouse is made interesting because for the first time in as long as anyone can remember, African leaders may just be more tempted by China's carrots than they are afraid of America's stick.

            In 2011, bilateral trade between Africa and China reached $166 billion, or three times what it was just five years previous. The remarkable scale and scope of that investment is everywhere apparent in Africa, with significant investment coming in the form of resource-backed development loans. From roads, railways, hospitals and schools built with Chinese loans backed by Angolan oil to Chinese labor devoted to a Ghana hydropower project underwritten by Ghana's cocoa beans, China is finding innovative ways to help African nations finance their development projects even while securing access to African resources and building working relationships with governments across the continent in the process. Perhaps the single greatest symbol of this budding relationship is the newly-opened African Union headquarters in Addis Ababa, a $200 million gift from the Chinese government to the AU. What makes China so increasingly popular in the region is that, unlike Clinton and the Washington gang, Beijing doesn't arm twist, cajole, persuade, harangue or otherwise attempt to influence the internal politics of the countries they're dealing with. Hence China's close cooperation with Sudan despite America's years-long demonization of the government in Khartoum. To China, it's not about command and control as much as it is about access. It's a business proposition, and as long as both sides are getting something out of the deal, that suits Beijing's aims perfectly.

            This strategy threatens to undermine America's position in Africa, and thus can't be expected to go unchallenged. That challenge began to come together formally in 2006, when then-Defense Secretary Donald Rumsfeld put together a committee to advise on the formation of AFRICOM. Officially established in October 2008, AFRICOM’s mission statement is to “strengthen our security cooperation with Africa and create new opportunities to bolster the capabilities of our partners in Africa.” In reality, just as the Kony boogeyman provides an excuse for Clinton to pimp drones to Museveni's government and send more troops into Africa, AFRICOM's mission provides a convenient excuse for maintaining and expanding a permanent American military presence in the region. AFRICOM has yet to gain a real toehold in Africa, however, with its headquarters located in Stuttgart, Germany, and no plans on the table for establishing an operational base on the continent.

            AFRICOM's first real test of its mettle came in setting up and enforcing the “no-fly zone” (read: bombing campaign) over Libya last year. Although the campaign was quickly subsumed by NATO, AFRICOM executed its duties as well as could be expected of a foreign-led military force that presumes operational jurisdiction over a part of the globe it doesn't even have bases in. The target of that campaign, of course, was to oust Muammar Gaddafi, alternately the vilest human being on the planet or a reformed, cooperative leader, depending on which year's copy of the Pentagon handbook you're reading. In 2007, Gaddafi addressed the Oxford Students' Union, denouncing the American approach to strong-arming the African continent and predicting China's soft sell approach would eventually win out. We are asked to believe that there is no connection between sentiments like these and the AFRICOM-initiated bombing campaign that led to the destabilization of Libya, and, ultimately, Gaddafi's death.

            Whatever the case, we are now being presented with two competing visions for the future of Africa. One is the status quo vision that Hillary Clinton is engaged in promoting even as I write, a vision in which the African nations are somehow built up and made peaceful, functioning, happy societies via more of the “development aid” from Washington that has so signally failed to achieve that peace in the past half century of its implementation. On the other hand, there is the Chinese model of strictly business relations, with both sides getting what they want regardless of whatever is happening internally in the country. Perhaps neither vision will ultimately be the answer to the building of a strong, prosperous, free African continent, relying as they do on the support of outside interests, but for the time being it's hard to believe that there are many leaders who are not at least tempted by the Chinese model. In the meantime, look for Washington to begin wielding its AFRICOM stick a little bit more openly to see if they can keep their African client states in line.


Job Solutions - Bob Rinear

Each and every day you hear the politicians debating back and forth about jobs. Romney says he's got the solution, Obama says his plan is working, Senators bicker back and forth. Yet it is perfectly clear that almost none of them ever hit on the REAL reasons we have no decent paying jobs any more. They talk about all manner of things, but they don't ever get to the root cause. While taxes are an issue, no doubt and Obama care is an albatross of enormous scope, there's deeper issues to deal with. Structural issues.

If you're anything like me at all, you enjoy a good debate. So tonight I'd like to present you with an email I received from a reader, where he has some interesting things to say. I asked him if I could present it in the letter and he agreed.  While portions of this will indeed end up looking like a debate, the fact is we aren't terribly far apart. So let's get to it and you can see "our' point.

Dear Bob,

Your opinion piece as to why there are no jobs is completely daft. The fact is that there are plenty of jobs. Unfortunately, they are all in China, India, Malaysia and many other third world countries. The real question you should have addressed is why there are no AMERICAN jobs. The answer to that is simple. American corporations, beginning with Jack Welch, CEO of GE, simply figured out that it made no sense for GE to pay $7 to make a radio that sells for $10, when the same radio can be made for offshore for .80 cents and still sold for $10. Until this is understood and addressed by governmental policy, nothing else matters.

Now, for the wealthy corporations and the rest of the 1% that own 40% of the wealth this is not a problem at all. Quite the opposite. It's a complete win. The problem the wealthy have is persuading the majority of Americans to work for exactly the same wages as their brothers or sisters in Singapore. Which, of course, means saying goodbye to public schools, decent roads, fire protection, healthcare, and most importantly, their retirement. Unfortunately, no matter how hard you and your tea-bag colleagues try and wrap  increasing poverty as freedom in action, or patriotism, or as Americanism or the fault of the United Nations, gun control, or the Presidents place of birth, I'm afraid it just won't sell.  Persuading the American people that their Constitution is a suicide pact is inherently a hard sell. And convincing them that the rich should have even lower taxes and fewer regulations makes your whole pitch an even rougher swallow.

Now, not to end on a negative note, there is a solution, and it's not a Democratic solution or a Republican solution. It's an American solution, and not even a new one. In fact, the framers of the constitution addressed it explicitly. To quote from the document,  "The. ..federal government (shall have the) authority to lay and collect taxes, duties, imposts and excises, pay the debts and provide for the common defense and general welfare of the United States..........". Yep, you read right. The real solution is a return to tariffs and duties. Sound radical? Hardly. This is how we financed our entire US government for over 150 years! The founders were wise enough to foresee the "Made in China" problem 300 years before it occurred. In fact, only when we abandoned tariffs and levies on imports did an income tax even become necessary!

In this era for "free trade", most Americans now realize they were scammed. To rectify this we must adopt a philosophy that says if you want to sell it here, make it here. Otherwise we will impose a levy on all imports equal to the labor price advantage you gained by making the product overseas. These levies will inure to the general treasury, which will be used to finance the government of the United States. The result? More jobs, lower taxes, higher revenues, more social stability and, most of all, a more just society. Whatever objections you and the Heritage Foundation might marshal against this are far outweighed by the benefits to the majority of Americans

Would this be good for the investor class? Most certainly not. But given how the investor class feels about making good jobs here in the States for us, this seems like the least we can do for them.

Best Wishes,


Well Greg, you've covered a lot of things here, some of which I can wholeheartedly agree with and some I question with all my might. While offshoring started well before Jack Welch, he and those of similar position took it to a new level. Yet I ask, did they do this all on their own? Or did they get a heap-load of help from the slimy bureaucrats right down to the local levels that continued to see any large company as their gravy horse? Let me give you a prime example of what I mean. My dear old dad worked for Hess oil in Perth Amboy, NJ for some 13 years. At the time Hess was growing rapidly, and despite providing the town with huge tax payments and employment for hundreds of men, when Hess tried for years to expand the plant, all they got was resistance. Not in my backyard. What about the environment? What about possible oil spills? What about possible smoke/exhaust? What about the noise? blah blah blah. One day dad went to work and there was a sign up at the guard shack. Report to the cafeteria. It was then that Leon Hess himself told the men he was closing the plant to move offshore. He had tried for 7 years to expand to the point where the plant would be there and valuable for the next 30 years and couldn't pull it off. The plant was to be moved to the Caribbean. 800 men went to the street looking for work. The tax base in Perth Amboy shriveled. The town as a whole started a decline you could argue it never really recovered from.

This was before Welch. This was before offshoring and outsourcing. This was indeed shortly after the EPA was created with the artificial goal of cleaning up the water and air. Dad went to Chevron, another oil company in Perth. But they too couldn't deal with the rules, regulations, the town, etc. Down they went. My dad had no choice, he moved to the gulf coast to keep employed with Chevron.

Perth Amboy was a thriving manufacturing town at one time.  In the 80's Jimmy Carter cut the ribbon on Raritan River Steel Co., the most modern and progressive mini mill ( steel) in America. it hired 650 men at great wages. But from day one it was a battle. Once again the EPA, OSHA, Insurance regulations you name it were up their butt. I know personally, my Brother in law worked there. When the last round of the clean air act was put in place, the bosses called everyone in. Gentlemen, it's impossible for us to meet these new air quality guidelines without bankrupting us. So, we're closing down. In just 15 years, the EPA and the red tape pushing bureaucrats put 600+ men and women on the street. The company stepped up production…in BRAZIL

So, while "some" greedy corps did indeed see more profit by going offshore, let's not forget how many have been forced there. Not only that, but to pull it off, they had to have certain concession from our politicians. The politicians were corrupt and went with it. Don't you find it funny our EPA sets these unrealistic numbers, while China, India, Malaysia, do not? Is it a secret that if you increase the pressures on business to the max, they might leave? I think not. Yet isn't it funny our politicians do nothing about them???  Do you not find it funny that the current head of GE is Jeff Immelt, who sits on the Presidents board for job creation and just sent his Xray unit to China?? Do you find it odd the politicians were complicit with them leaving the country, and GE paid somewhere around "ZERO" in taxes?  The global planners are quite clear about why American business had to be dismantled and sent to foreign Countries for "equality". It didn't start with GE, it started with local pressures on local business and still does to this day.  I'll say it again. The EPA has ruined more jobs, than any other Government entity combined. Yet NOT A PEEP out of our politicians. In fact, Obama supports these lunatics. Can you explain that Greg?

You do confuse me in your letter as in one area, you say "Persuading the American people that their Constitution is a suicide pact is inherently a hard sell" and then later quoting a part of that very Constitution where you suggest it could solve things. I'll try and ignore that and focus on the next interesting statement: Unfortunately, no matter how hard you and your tea-bag colleagues try and wrap increasing poverty as freedom in action, or patriotism, or as Americanism or the fault of the United Nations, gun control, or the Presidents place of birth, I'm afraid it just won't sell.

I'm not sure I really grasp your concept there. Increasing poverty as freedom in action? We have increasing poverty because we're losing our freedoms every day. Not a day goes by where I cannot slap you with an article about how "they" want to control your life. Here's one from today. In that one, some lunatic bureaucrat wants to stop a farmer from selling farm goods on his property. After he had the permit. That THEY changed the ingredients of.  Imagine that.

Every day, it's big brother up our butt. More and more townships are pushing for more and more regulations. In Tuckerton NJ, a small bayside town that's relaxed and blue collar, there's going to be a "town meeting" next week, because someone on the council wants to push ordinances that say a house can only have 1 boat, no commercial vehicles in driveways, no box trailers, no exposed ladders, etc., etc. Sorry Greg, but that's not freedom, that's control freaks. But beyond the loss of doing what you'd like with your property, how does this help local business?  In a bayside town, there's obviously boat dealers, motor dealers, bait shops, etc. If you tell everyone "we think you should only have one boat".. what about the boat dealer in town? What about that little skiff you wanted to buy your son to introduce him to fishing?

If the town was built like that from scratch, and you bought there because you enjoy being a little robot where the town tells you what you can do, what you can have... well that's fine. But it wasn't built that way. More than half the residents have two boats, many of the locals are carpenters and roofers, electricians, etc. What are they supposed to do, park there vehicles in a storage lot? This benefits.... just whom exactly? Some whack job from better homes and gardens that feels everyone should have the same exact house and sit inside and talk on Facebook all day about last nights American Idol?  Loss of freedom, NEVER a good thing Greg.  Oh and if you don't think that crap like this comes from way up the UN food chain, then I feel sorry for you. It is exactly in their playbook. Please, just spend 1 night watching what agenda 21 is really about and I guarantee you'll find examples of their push in your hometown.

I guess you were beating up the rich people, talking about the 1% that own so much wealth. While you might despise that, I find it quite fine. I don't much like it if it was inherited, that's slimy, but anyone that started with nothing and became fabulously rich is a hero to me. It is what America's promise was. Work hard and get ahead. Now it seems to be, lay around, get an EBT card, and the rich will support you, it's their duty. Just the thought of that disgusts me. I don't like socialism. If you don't like your station in life, do something about it. Don' t whine that it's not fair. Life isn't fair. Why is it okay for Peyton manning to make 90 million?? I like football. I can toss it. I think he should give it all to us because it's not fair he gets it. How ridiculous.

Where we do agree, and quite whole heartedly is about Tariffs. I don't know how long you've been a reader but I've explained my position about "fair trade" long long ago and many times. Fair trade is simple. I have oranges and you have apples. Let's trade openly in the marketplace. It has NOTHING to do with like items. If you make steel and they make steel, but they can make it for so much less it's impossible to compete, a labor adjustment tariff, is warranted. That way they both have the ability to use their skills, and quality to outdo each other instead of price alone. So I'll ask you, who perverted the original meaning of free trade, to mean this mess in which we find ourselves? Bankers, politicians and business. All working together.

Naturally this will get me some spinner head telling me that we tried that with Smoot Hawley in the 30's and it was a disaster and helped aid the depression. Please, spare me. That act had nothing to do with leveling an uneven field, it was a revenue raising grab, and a move to really stop imports. There were two ways tariffs were calculated, neither based on the inequality of labor/energy costs, merely a "tax". On page 888 in the series U207-212, the first measure is the "dutiable tariff rate" which is the tariff revenue divided by the dollar value of dutiable imports. The second measure is the "free and dutiable tariff rate" which is the tariff revenue divided by the dollar sum of both dutiable and non-dutiable imports. The "dutiable tariff rate" peak of 1932 was 59.1% Second highest in history. Of course our neighbors fought back with their own taxes. How silly.

So to sum up my "rebuttal" if you will, I will NOT waver on this. If you want business and jobs, a strong middle class and the chance to really get ahead, we need the Government OUT of our businesses.  That has to be job 1. Until we can go from 7 years of red tape, environmental impact studies, 500 layers of baloney paperwork etc. to open a lousy Walmart, to something that makes sense, like 6 months, we're doomed.

Until the EPA is put back in a box, and delegated to common sense approaches to clean air and water, there can be no massive expansion of jobs. Until the idiots with their agenda driven "carbon taxes" are sent packing there can be no massive expansion of jobs. You say that there are plenty of jobs in China and Asia. Sure there are, because you can open a plant without 9 years of red tape. If we could do that here, we'd have jobs.

 Until we stop the picayune baloney of layering more and more garbage on the small businessman, we're doomed. Until reason and sanity rules again when it comes to OSHA and all the safety baloney we have, we're doomed. Do you realize 30 percent of the cost of a lousy lawnmower is safety crap so some idiot doesn't put his hand in the spinning blade? 50 years ago, no gas mower had all this junk on them, because folks were educated in common sense and figured that putting their hand in front of something spinning 3K RPMs wasn't a good idea. But today, common sense is gone. We need nanny.  If it doesn't operate on an iPhone, they're clueless. 

Finally, we need to stop the idiots from squashing the hopes and dreams of our kids. When townships go nuts and shut down lemonade stands, when kids can’t sell their home cooked cakes and cookies at school fund raisers, when any ambition to create their first little home based business is crushed like a bug, we are clearly on the wrong path. There are a lot of youngsters that have the ambition and drive to get out there and try something. To dream big. But instantly big brother comes in and shows them who’s really boss. I find that disgusting.

Okay, my rant is over.

Bob Rinear