Click here to go to the Home Page Foreigners Invest in African Land As Famine Continues - Solidarity America - By John Funiciello - Columnist

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The African “land grab” continues, even as the United Nations this week called an emergency meeting to deal with the crisis of famine and death in Somalia and elsewhere in the Horn of Africa.

BC Question: What will it take to bring Obama home?Foreign governments have been criticized by advocacy groups for investing in land in South American and African countries, which purportedly would be used to feed their own people, rather than feeding those who live on the purchased or leased land.

Countries said to have leased hundreds of thousands or millions of acres of land on both continents include Saudi Arabia, China, and Belgium. Although it is not clear what they intend to do with the food they raise on the land these countries have taken over, it may be that they will bring the food back home for their own people’s consumption or perhaps they will simply put it up for sale on the world market.

Recently, however, it was reported that American educational institutions have been investing in land. Harvard University and Vanderbilt University, both well endowed, are singled out in reports by the British newspaper, The Guardian, and by the Oakland Institute, an advocacy group based in San Francisco.

They say that the universities are investing through British hedge funds, particularly through the London-based Emergent Asset Management Ltd., an investment firm. Emergent’s proprietary “Geo-Political Model”, the firm asserts, “is deployed by our managers to identify thematic trends in the global political economy.”

Emergent has six sub-themes in its model, including: the evolution of a multi-polar world; scarcity of commodities; polarization of culture and religion, for example, East to West, Christianity to Islam; weapons technology and proliferation; disease and, finally, global warming and the implications of climate change.

In Somalia, it would seem that some of the firm’s sub-themes come together to make for a perfect investment opportunity. Those would be, at the least, scarcity of commodities, polarization of culture and religion, and climate change. For Emergent investors, unrest and natural disasters are opportunities for profit. In some places, when most of the sub-themes are present, they are the opportunity of a lifetime for freewheeling global investors.

Oakland researchers say that Emergent’s U.S. clients may have invested as much as $500 million in the most fertile land and expect to get a 25 percent return on their investments. Compare that with the average passbook holder in an American bank, which is doling out just one-half of one percent on hard-earned savings. Former JP Morgan and Goldman Sachs currency dealers are said to be running Emergent’s African land acquisition fund.

Nowhere can any small investor expect to receive a 25 percent return, except for the random Ponzi scheme. Yet, some of the biggest and richest U.S. universities are planning to rake in that kind of money from an area that is being devastated by continuing political and social collapse, a long drought, crop failure, and famine that has endangered the lives of as many as 11 million people.

They do claim, however, that they are not “land grabbing,” but that they are investing to improve the land and make it more productive and “more valuable.” Probably, the key is their definition of “productive,” because, for the most part, it depends on what’s on the land that is purchased or leased, sometimes for as long as 99 years at very low rates.

Here’s how puts it:

“The largest land deal in South Sudan, where as much as 9 percent of the land is said by Norwegian analysts to have been bought in the last few years, was negotiated between a Texas-based firm, Nile Trading and Development and a local co-operative run by absent chiefs. The 49-year lease of 400,000 hectares of central Equatoria for around $25,000 (£15,000) allows the company to exploit all natural resources including oil and timber. The company, headed by former U.S. Ambassador Howard Eugene Douglas, says it intends to apply for UN-backed carbon credits that could provide it with millions of pounds a year in revenues. In Mozambique, where up to 7,000,000 hectares of land is potentially available for investors, western hedge funds are said in the report to be working with South African businesses to buy vast tracts of forest and farmland for investors in Europe and the U.S. The contracts show the government will waive taxes for up to 25 years, but few jobs will be created.”

One of the reasons that few jobs will be created is that for both oil exploitation and forest clear cutting, expert workers from developed countries would be the main workers hired and, after the devastation, there would be little left to “improve.” The 400,000 hectares in Equatoria of which they speak is about 988,400 acres. At the rate of $25,000 for a 49-year lease, the land is being leased for about 2.5 cents an acre. (One hectare is the equivalent of about 2.471 acres.)

“No one should believe that these investors are there to feed starving Africans, create jobs or improve food security,” said Obang Metho of Solidarity Movement for New Ethiopia (SMNE). “These agreements, many of which could be in place for 99 years, do not mean progress for local people and will not lead to food in their stomachs. These deals lead only to dollars in the pockets of corrupt leaders and foreign investors.” SMNE describes itself as a non-political and non-violent social justice movement of diverse Ethiopians.

And the assessment of Obang Metho reiterates one of the persistent problems of indigenous peoples around the world. When the developers or foreign investors come in to accomplish their goals, the people are left with little or nothing after the foreigners leave. It has happened time and again. In previous times, it was colonial powers that conquered by the power of the gun and bomb.

Today, in the milieu of the global economy, with its International Monetary Fund, the World Bank, and the various “international aid” groups, conquest can be achieved through economic and political means. According to the World Bank’s own research and that of others estimates that nearly 60 million hectares (the area of France is about 67 million hectares) has been bought or leased by foreign companies in Africa just in the past three years.

The famine devastating countries in the Horn of Africa and countries adjacent to it could go on for six months, according to UN estimates. The likelihood that it will go on longer, however, is very high. In Somalia, Al-Shabab, an al Qaeda-connected group that has held sway in much of the country, reportedly has announced that it will allow aid to come in, to keep desperate people alive. The refugee problem is mounting, as people flee their homes looking for food, water, and medicine.

The international “investors” are engaging in activities that are antithetical to the policies of a modern democratic society, which espouses principles that include freedom, equality, and opportunity for its own citizens. They are, in fact, engaging in activities that are more successful than an invading army and they are carrying out enterprises that would make a successful colonial empire proud.

Overall, what Harvard and Vanderbilt are doing in Africa is little different from what other institutions and governments are doing in what are essentially defenseless countries filled with people who are powerless against the policies of their own governments. In the past, a government with integrity would have intervened in these very real cases of foreign policy initiatives (private trade that has the effect of diplomacy) by private corporations. What the hedge funds, other corporations, and governments are doing in developing countries should not be allowed to occur out of sight of the world’s people. And, for whatever reason, that’s what is happening. Except for papers like The Guardian, very little is exposed to the light and that paper has very little circulation in the U.S.

The plunder of the land of peoples who are in desperate need should not be happening. No country should be giving long-term leases to hedge funds and other entities for 2 ½ cents per acre, while the people go hungry and have few prospects for the future, because the resources of their land have been taken from them. There is a role for international agreements, other international bodies, and the United Nation in these instances. At the least, these “investments” should be exposed to the light of day on a regular basis.

It is an obscenity that there are 11 million human beings who are in danger of dying from what could be a long period of famine, while in the same region of the world, private institutions and asset management companies are making investments of hundreds of millions of dollars and expecting a return of 25 percent. Columnist, John Funiciello, is a labor organizer and former union organizer. His union work started when he became a local president of The Newspaper Guild in the early 1970s. He was a reporter for 14 years for newspapers in New York State. In addition to labor work, he is organizing family farmers as they struggle to stay on the land under enormous pressure from factory food producers and land developers. Click here to contact Mr. Funiciello.

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July 28, 2011 - Issue 437
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