The Looting Machine: Warlords, Oligarchs, Corporations, Smugglers and the Theft of Africa's Wealth

welcome to everybody to CSIS I'm gonna quickly turn over to Tony Carroll who's a senior associate of the Africa program here at CSIS but we're really delighted to be hosting Tom Burgess for what we hope will be a new formal and interactive chat about his new book the looting machine Tom thanks so much and Tony thank you for directing Tom our way and for moderating tonight's event I'll just collect the people from outside but I think thanks Jennifer and welcome to CSIS into Washington you've arrived in that brief aperture that we have between winter and summer so we've certainly Washington doesn't get much more splendid than this from a standpoint of physical beauty and here we are in the eve of Earth Day - so we're sort of talking about a topic that actually pertains a great deal to the issue of the global environment and Africa's space therein I want to thank Tom and welcome him for making such a terrific contribution to providing thought leadership on an important topic that we're all mulling over these days and the extent in which Africa's future is tied to the extractive sector and how governance is impacted by extractive industries and the international financial institutions and new actors on the scene and let me just start before I pose a few questions at Tom and we'll leave plenty of room for Q&A because as tom has suggested that tends to be the best way in which we can really cover the waterfront on this on this important topic but I'd like to start with just a very brief read from the last the concluding chapter of the book and if you don't mind it's a very brief passage and I'll read it the empires of colonial Europe and the Cold War superpowers have given way to a new form of dominion over the continent that serves as the mind of the world new empires controlled not by nations but by alliances of unaccountable African rulers governing through shadow States middlemen who connect them the global resources economy and multinational companies from East West and the East that cloak their corruption corporate secrecy we prefer not to think of the mothers of eastern Congo the slum dwellers of Luanda and the miners of merengue as we talk on our phones fill our cars and propose to our lovers as long as we go on choosing to avert our gaze the looting machine will endure the powerful words powerful conclusion to a powerful book I'd like to maybe start on to discuss what you and I would drew you and I together five or six years ago as you were reporting from Lagos and that is the issue of the collapse of the Nigerian textile industry for those of you don't know if follow the history of the Nigerian textile industry at its peak the Nigerian textile industry in the late 70s employed about 300,000 people the product that was most distinctive in Nigerians production was this wonderful whacked wax cloth and the African women adorn themselves throughout West Africa and was not only an industrial complex and vertical and linkages to the agro sector in cotton production and ginning and processing and dyeing but it was also an emblematic of the wonderful culture that Africa had because many of these designs were drawn from the rich traditions of Nigeria they were often worn in symbolic ways to attend weddings and funerals and other family events and that industry of course is a shadow of what it once was but it is a interesting lesson for how this industry has collapsed both from sort of external structural problems in the Nigerian economy but also from internal political problems which I think Tom documents really and maybe the first or second chapter of your book so once you draw a little bit of can we draw a little bit more about that that story you're reporting at that time from Lagos and and give us a little bit of indication a little bit of the color of that story but thanks Danny thanks very much everyone coming along that that story of Nigerian textile started for me when I don't have been in Nigeria for about a week and my editor sent me up to could do no we were trying to do a special on the country and I didn't I had literally no idea what I was doing but I turned up in in Kaduna was introduced through a couple of friends to various people met one Muhammadu Buhari he was made his views known and started to go around some of the churches it was actually in the sort of dilapidated old schools where a lot of these redundant textile workers were were hanging out was a Sunday and they showed me the old the big factories in the middle of Kaduna by the but a walk by the river which were completely shuttered there was one security guard on the inside and just lizards going in and out of the gates and as you say about 300 thousand people not just in Kaduna but across northern Nigeria would have been employed at the peak of the industry and then many more indirectly in cotton farming in the rest of it and pretty quickly I started to realize that the collapse of the textile industry is emblematic the collapse of northern Nigeria's economy and the creation of one of this enormous zone of poverty from what was a couple of decades ago a zone a relative prosperity and actually the first threat I followed up on is wasn't to oil and the distortions it was that these redundant workers who were standing around in an old school explaining to me how they lost their jobs I said to them so why is this happened what's the root of this and they people shuffled and looked around and they just said Mancow and I didn't know this man was at the time but over the years that followed and in the book I tried to piece together the story of this guy el-hadji de human girl who was a big political donor he funded kumaradas governorship campaigns and then presidential campaign he's a big guy in the PDP the until recently the ruling party and he was also he ran the hajj pilgrimage he run an airline and he was also behind all of this one of the preeminent smugglers of northern nigeria he would truck in basically anything that anybody wanted textile imports are illegal and yet they completely dominate the market they have I think about 90% market share compared to the now withered local industry so I tried to piece together Mangal story but what also became clear was that he he doesn't operate and exist in a vacuum he wasn't able to crush the Nigerian textile industry single-handedly he needed Chinese counterfeiters he needed a porous border but what he needed above all was the weakness of the domestic industry to be able to flourish and that came about through the distortions caused by Nigeria's booming oil production through the 80s and 90s just starts to this process known as Dutch disease first identified in the Netherlands in the 50s when they struck gas of it primarily happens to be the currency I'm sure people know this the currency becomes overvalued exports become uncompetitive and at the same time you get this insidious process in politics when when government starts to become far more reliant on rent income from oil and other natural resources than they do on taxing the people and winning the consent of the people to rule that public spending starts to shift away from infrastructure roads a functioning electricity system the education system and into what nocera we were cause a contract aa cracy pouring that rent money out to win allegiance through patronage and other and spending varieties that benefit the ruling elites and military spending typically goes up enormously and this this distortion in the exchange rate the collapse of infrastructure did for or or certainly started to cause enormous problems for this once flourishing Nigerian textile industry so that's ultimately what I what I was able to piece together and but what saris that others are told but the fascinating thing for me is it was a final point is the extent to which and I think often we missed this the extent to which this kind of curse of natural resources is felt far from the oil slick creeks of the Delta or eastern Congo with its mines it permeates through through the entire state for the entire economy so much so that the northern Nigeria's felt the curse of oil arguably as much as the Delta in some ways indeed let's talk a little bit about some of these networks and how they emerge and out of sort of in the shadows of these business dealings and one remarkable sort of theme or thread that runs through this book is the involvement of the Queensway group they seem to be the universal donor to all the deals in which you talk about in your book and I'd like us to hear a little bit more about sampe allah about the Queensway group which of course isn't their actual name but it's the name that was drawn based on their hong kong address and the fact that many companies sort of resided there and at the end you talk about or not reside there but I talk to like to talk a little bit about how a person like sampe is able to ingratiate himself in so many different areas in ways it's really quite astounding it is I'm the person who came up with the name is here actually it should be acknowledged they are mainly he's done more than anyone to piece together what the Queensway group is and how it works and there's a more coming from JR soon with which forward to which we're greatly looking forward well and we'll have back for another session so what is salmon how is he able to operate a moment of background he as best we understand it he was born either in Hong Kong or on the Chinese mainland and moved to Hong Kong as a young man gradually develops seeming the way I understand it is a formal relationship with the Chinese intelligence services but there also seems to be informal exchange of information and then he's he seems to have been involved in arms dealing in Africa and elsewhere in intelligence work in Cambodia and in cultivating links between arms of the Chinese security and intelligence services and some of the African liberation movements as they were preparing to take power or taking power and then as like many spooks before him he switched from espionage into business there's a long line obviously of British special forces people hopping into the mining game in Africa instead and Sam does this exactly the time that Jiang Zemin decides to go forth into the world and sends out Chinese state-owned companies and entrepreneurs in search of natural resources and markets all over the world but in enormous Li so in Africa and Sam is able to make himself largely by Caprice but partly by being in the right place at the right time he's able to make himself someone who has Tabora Jr's term always the right rolodex he's able to exaggerate connections to some extent both in Africa and China but he's able to forge some of the parallel deals that go behind or underneath this big state-to-state relationship between Beijing and various African countries and he starts in Angola where and this is where the Queensway group is born it's a long story I encourage you to read it in the book but they in it you know in a nutshell Sam with Manuel descent and goal as mr. oil is able to engineer a deal whereby a companies created called China Sun and goal which is Sam and his little group of allies registered at 88 Queensway in Hong Kong and Sun angle the kind of the engine of the other of the shadow state the controls and Golan controls its oil wealth that company ends up with various stakes in some enormous oil fields and Sam goes on to Zimbabwe to cut similar deals involving some garbage secret police in the diamond trade he turns up when daddy sees his power in Guinea believe we have a daughter of the Republic of Guinea here who will be chipping in I hope I know she will if she's early food and and he's popped up or in all manner of places and there are two I think just two points to make one is he operates in he deals with and this is a term I kept hearing on my troubles and postings he deals with shadow States or parallel governments he deals with the power that resides behind the formal institutions of state and which develops again and again when you have a country run on rent on resource rent and goal is in bad way Guinea under the john term they've got it even got a foot into nigeria and various other places beyond africa now increasingly that's one point the other is that these are not the old they're not the old networks they're very much creatures of sam i think is very much a creature of globalization these are business interests and private interests that harness state institutions but don't necessarily represent them so you you if you were to look at it in a sort of cartoonish way you could see Sam as China and China as a monolithic thing coming in doing business African seeing Africa as a monolithic thing but these are enormous syndicates that stretch crucially through some of the pockets of the final other of the globalized economy when it's easiest to engage in corporate subterfuge the BVI's Cayman Islands places like that it also involves it equally involves business partners from east and west Assam will bring in some of the big the biggest Chinese companies and help them win contracts and advantage own private interests in that way but the the Queensbury group's biggest asset this stake in it in one of the big offshore oil fields and that girl is run by BP in Glen in Guinea they have an off take agreement with with Glencore and they own assets ranging from real estate in Singapore to the JP Morgan building opposite the new stock exchange right wait and that's one of and it just gets more and more bizarre mean some of this stuff you couldn't make up so a Queensway asset was doubled as the Gotham City Stock Exchange in the last Batman film I mean it does start to get fairly bizarre some of this stuff well I urge you to read the book because it's the thread that runs through it all is this a sound yeah is Sam of course taking a page from tiny Roland and perhaps Mark rich and others who were those or used those same strategies to and themselves in two generations before for sure and oddly enough I mark Richards had mentioned but Glencore is and of course tiny Rollem still is I guess the founder of Lonmin going back many years that's a great comparison yeah yeah so I think they knew how to play this game well before let's talk a little bit about you know lost potential and I'd like to draw you a little bit on the c mon dieu project which is a project taking and I were talking about earlier I I first went to Guinea in in the 1980s and they were talking about the promise of c mon dieu back then and we're still talking about the promise of c mon dieu and it's still a very complicated history talk a little bit about why the country of Guinea has not been able to benefit from what is perhaps the most the largest undeveloped iron ore project in the world well yeah that I mean the chapter on the book about this is called is borrows that old so Healy saying of when the elephants fight the grass gets trampled I think that is the that's what has happened that there's that just make two quick points on that really receiving the floor one would be that again someone who has been just tied up in layers of in some cases seemingly corruption and in some cases of the enormous mismatch between multinational multinationals and a resource-rich of a relatively poor African country and the extent to which the strategy of the former can so easily Trump the strategy of the latter Rio Tinto sat on that for a long time they're still sitting on it they they're they are ostensibly moving towards bringing some under into production but we've seen deadlines before zoom past what the latest one is just little again Ryota to control used to control the whole thing now control half of it southern half the northern half was taken off them and give it to you I admitted anything elements BS BSG resources to its time it is formerly only an advisor but he's also it says in court papers ultimately the the main financial beneficiary again through layers of complex corporate ownership and the another long story but basically it was taking a few months ago that Steinmetz his rights psg ours rights were canceled on the grounds that acquire it concluded that bribes were paid and offered to the former dictators wife to secure those rights and it's now tied up in I think seven or eight way legal battle involving a criminal case in Switzerland the criminal case in the u.s. civil cases on three possibly four continents and the prospect of something like that emerging into production is remote and just make two points about that one is the mismatch between and it was Mahmoud Charlie put this to me I think it was the he was Minister about whom people have asked questions but he was the minister under the junta of 2009 former UBS banker he has his critics and he has people accusing all sorts of things but he put it fairly reasonably when he said within when the stock price of Rio Tinto or whoever else commando is reflected it sits nicely in their equity as a future project regardless of how sincere they are about developing it but obviously there's no such benefit for Guinea but this is also one of the situations where you have this kind of catch-22 economics the IMF and others have look at have examined the possibility of if so Mandy went up to full production the amount of money that would flow into the Treasury would be massively destabilizing and this is the problem the prize that people look for is an enormous rush of rent money and yet you look around all of guineas neighbors and an enormous rush rent money has been catastrophically damaging so just to finish I mean that the the analogy I sometimes find useful I thought I thought I made this up myself it turns out there's in Steve Cole's book by excellent first but I'm gonna claim as myself my own anyway is if I said to you Tony look I know you've had a hard time and ain't lost your job and there's a hole in the roof lots of mouths to feed I have a lottery ticket here for you which is worth a million dollars I can pretty much guarantee you based on what we know happens a lot you'll end up in rehab you'll buy a fast car and you'll crush a you'll get divorced everything will go wrong and then you'll be broke and then you'll be broke but you want it anyway don't you and everyone of course takes a lottery ticket and it's fat and that is the equivalent of bringing something unless you're lucky the lesson of hit the history of African resource States is by almost exclusively I would say that if when you have that rush of rent money it's it causes far more harm than good well it's a good segue to my next question or sort of maybe a series of questions is on the issue of okay we've learned a lot of bad lessons but there are some lessons that have been examples of words worked well I think Chile has done well with its natural resources but SWANA certainly has done well Namibia has done well and so you know there are examples of countries that that have done better and perhaps because of the peculiar institutional ethnic or historical context of each of these countries and I think the major actors have changed I think the shell of 75 years ago is a different organization than it is now I think new actors such as cosmos and maybe Tolo are perhaps taking a different look at how they're integrating their activities into a more you know holistic or helpful healthful way and to avoid some of these pitfalls and and resource curse manifestations that we've seen you know the question is what does this pertain in the future do you think any of these initiatives like Aita the Kimberley process which you discuss in your book make a difference do you think that the industry is changing do you think these relationships with the resource-rich countries are evolving to a new chapter lots of pressures ongoing a localization value addition building global value chains integrating infrastructure to benefit larger communities or groups of people what is changing I mean the fact is that Africa has resources the the world now East and West need those resources how can we avoid some of the lessons of pain from the past and and are there any institutional actors such as the iti and the Kimberley process that might make this process better mmm so just nine questions sorry yeah I just make a couple of points one is I'm so it's slightly wary of chilly plus one annum idiot these are also the countries at the top of the Gini coefficient there's some of the most unequal countries in the world but yes much more peaceful for one thing than elsewhere on the things like aita and the Kimberley process I think they have some value I think there's a danger with something like the EITI that its backers become so keen for it to be all-encompassing that the bar to entry sinks a lot I mean it was a big test when they throw out Equatorial Guinea I mean the very idea that Equatorial Guinea at the moment could have a stamp of legitimacy from an organized an international organization seems bizarre to me the Kimberley Process similarly has achieved a lot but I think took a big blow when they accredited Zimbabwean diamonds I mean Jim Zimbabwean diamonds flow onto the market you can you can buy as involving diamonds in Antwerp you can probably buy one in New York and at the same time you can go to a merengue as I did and you can sit and you can hear people tell you how their brothers have been beaten to death you know effectively a torture chamber Rumble and military diamond base the diamond base yeah a tariff of terrifying place so I think possibly what's required is the one thing I should always say is that I don't never think I'm in any position to tell 48 companies what to do or it were so keen to do anything like that but I have tried to listen out to some of what I think it's all the most persuasive ideas and I think one was was repeatedly raised by llama dos Sanusi when he was the central bank governor in Nigeria widely held to be a very impressive man now their mayor of karna of course and the man who exposed the missing billions in Nigeria he often talks about something that's kind of gone out of fashion and has lots of critics but he he basically looks at the Asian Tigers and he sees they used as European countries did to 200-300 years ago they protected their nascent industries and they you they they used as South Africa I think is trying to do they use a beneficiation strategy you just lock those minerals up within your country and you build up the value chain rather as plus wanna has done with the with the value addition and the cutting and sorting and polishing that they have now in country I think that's way because I think fond of it for all these voluntary initiatives fundamentally what needs to happen is that to quote a guy who I mentioned in the book he used to work with tiny Roland yeah extraordinary narrowly affable Nigerian called Richard a Corelli I mean one late night I asked him what is the future of Africa and he said face fell and he said Africa will be a mine and Africans will be the drones and the world with that and this is you know this is not some sort of post-colonial casual racist this is a Nigerian and that's a terrifying prospect for him and for great many other people so the way to break that surely is to move broaden out these economies away from these enclaves of concentrated political and economic power into things like textile manufacturing into things like cutting and porting in Botswana or making catalytic converters out of platinum in Port Elizabeth and the other thing is to enforce the law I mean there are very strong anti-corruption laws in the u.s. they're enforced pretty vigorously there are new ones in the UK there are very strong anti-corruption laws in Nigeria there are new there are in places like Tanzania which is obviously going to be crucial to watch a place that has built some strong institutions and now has the the test of oil and gas to come there are initiatives there such as ones where you have to demonstrate rather than a prosecutor necessarily having to make the case that they can follow a money trail and can demonstrate that you've looted your ministry or taking a kickback you would have to account for your lifestyle effectively so if there's an enormous and obvious difference between your lifestyle and your income you would have to demonstrate where that extra we call the means test yeah but effectively about kind of in Reverse when Tamim says on wealth rather than poverty so initiatives like that I think you're interesting and the one the last one I'd mentioned that is gathering steam is this campaign it's made it into of the Obama administration's mentioned it a kind of soft version experiment at the g7 Global Witness and some other activists activist groups getting behind it and it's in the labor manifesto in the UK there's a stronger version of it is this idea of having a global registry of beneficial ownership of true ownership of a companies of offshore companies effectively because there are already these registries of onshore companies that for me would be an enormous change and would would block off an awful lot of the plumbing of the of the looting machines through these secretive vehicles that again and again and again you see these corrupt schemes function well we have a great audience here so I'd like to take the remaining 25 minutes of our time to open it up for questions from the floor I'd like you to please identify yourselves and make your comments and statements reasonably short so let's open it up Tiggy are you ready or you want to wait alright she's still reading so questions okay Phillip will start with Phillip thank you Phillip you like we got a microphone we're being pen I was react thank you Michaela Rong's reviewing the new of times said that you know this is a challenge to the sort of notion of Africa rising we've got these two sort of like versions of the African economy you've got this which is you know basically bad guys you know making deals with the kleptocrats and then a huge mass of poor people and then you know they Mike my kind of question is really where are the Africans in your book and and the reason why I asked that question is because you know if we were to say what's a political structure let's understand the political structure of Africa that we went to Somalia and people would think my god this is this is awful and I mean I know Steinmetz I know good I know all of these guys you've strung together some really awful characters who are very destructive over all in Africa but I want to know would you agree with Mikayla's observation that this book challenges the notion that there's a new development phase underway in Africa and there and there's two reasons why I say that just very quickly if you just give me the time I think first of all because Africa is not just a resource economy or the Africa rising people you put it aside call it something else that notion is really moving beyond resources that we are seeing a great diversification in African economies even if even in Nigeria where oil is down to 14% of GDP so the real you know kind of notion is one where you actually move beyond the resource curve and the secondly the other thing is is a huge demographic change in Africa where people are moving out of absolute poverty large numbers of people and they're becoming active players they're consumers they people that are of interest so Africa is not just this you know kind of wasteland of poverty this there are people who are politically making a change they're people who are you know interest to investors not only because the Bester's want to come and dig stuff out of the ground and drill for oil so it comes back to that original question do you see this is an alternative narrative or can you incorporate that alternative view into what you and you thought my questions were complicated let's fill up on Newkirk former editor of the melon Guardian in South Africa and one of the more experienced and esteemed commentators on Africa for many many years so sure yes I think I think it is not so much intended as a challenge to the Africa rising arguing ability to turn out like that I it's personally always quite suspicious of the Africa rising argument partly because it does something that I'm probably guilty of although I tried to avoid it of speakings Africa as if it was one big thing and secondly because I thought some of the excitement was overdone yes they do seem to be there does seem to be a growing middle class but it's extremely fragile I always thought and I think that that big test comes now with a big fall in the commodity prices the extent to which that African rising narrative was driven by the by the commodity boom I don't think I'm in a position to call how I will plow but I better be interesting to see what happens on the on Africa rising being a sort of alternative on the diversification of economies that we've seen being an alternative to the resource curse I agreed to some extent in certainly places like Nigeria tasted like Lagos that is sort of managing to disconnect themselves some in some ways from that rentier economy and another pockets of largely coastal Africa there is that development but I think however much we would like those of us who who who who wish Africa as well as we possibly can would would like to see this as a uniform development much of the interior Africa where I spent a lot of time is not rising it's still Riven with warfare and extremely hard living conditions another diversification point the crucial thing for me the most insidious part was not too much the share of resources in GDP but the share of resources in government income because that it was and that doesn't seem to be shifting that much so in Nigeria it's still kind of 70% government income from oil and gas and about 4% from direct taxation and in Sudan the figures like South Sudan it's 98 percent similarly high rate in in Angola but that for me was more troubling really because that it breaks that basic contract between rulers and ruled it means that in many ways the the ruling elite of whatever form it takes doesn't need to appeal for popular consent to rule because it's not funded by the by the people by their I mean I don't know if you wanted to come come back again I mean I think it's a strong point other questions please write later okay he's gonna corner you on the way no please please do good afternoon my name is rosemary sakera I'm a president of a nonprofit organization called hope for tomorrow we focus on conflicts and violence prevention and you talk about looting machine looting machines of cost a lot of havoc not only looting but violence and conflicts in Africa women have tried children have died looking for those minerals oil and everything now that you have written this book what do you think you can make a difference of your book and part of what you are selling this book should go back to those countries and help those women and the children to make a difference so that the looters can know that there is this man really wrote a book of truth now that's a you've written the book so how do you make that change or you will be part of the looter again first of all I'd say there's a there's a there's a there's a slightly mistaken premise at the start of at the center of your point up there which is the idea that the book is gonna make any money but Debbie yeah there are we not but personally I do try and do some terrible stuff but I'm not gonna get into it here but we can talk about artifice we have a question down here and let's take a couple let's do here here there and then we'll come back for one quick last round Deidre I got you and I'm gonna give to you at least one more chance - thank you I'm Jeff Vulcans are benefited from a first run discussion of this book at the Columbia University of Lausanne conference on Africa laws that I where I met Tom being South African I've caused but I well been for 40 years so I I but I looked recently in Cape Town and grew up in Johannesburg and I have some knowledge of this African economy and the question that has struck my mind is South African mining companies have been through the same world down shocks and the collapse of oil commodity prices yet some of the companies don't seem to have been subject to state capture either by say the military wing are they and see when it came to power or by Chinese investment it just doesn't seem that way they've got many other problems in South Africa but not the same as what you described in your book am i deluding myself on that and and if I'm right or partly right couldn't reproduce that there's better corporate law and transparency there and internationally owned companies that are quoted on the international stock exchanges such as AngloGold Ashanti and these big companies that they've got social problems but they don't seem to have the state capture rental issue that you described so eloquently in the book yeah just quickly there's no great deal of thought after a book but I would say obviously they were subject to state cuts or under apartheid and me which is the obviously the biggest sweep of the bigger period I'm trying to cover in modern South African history and in the book and they're going going going back through the the numbers they the extent to which the international gold market was the bank robber of apartheid it's just astounding if you go back through the numbers I think it was the late late 70s early 80s when when Zurich was producing two-thirds of world gold production and that's what kept apartheid afloat and now there are obviously there were tensions between the kind of Afrikaans political side and the more english-speaking mining execs generally but they they made their tacit arrangement that one would support the other are so the question is asked our South African companies are big selling and money but he's today's subject less state capture I think broadly so yeah I think the JSC is a pretty strong institution salaries have broader a broader economy my one point would be this the sort of in equality indicators haven't really changed have a since 1994 I for me part of that is a model that's obviously next to impossible to in such a short period of time to make redress on the scale that's required but part of the problem I think is especially the early stage of black economic empowerment was just basically transferring sources of rent so keeping the pyramid that was shaped by as a resource economy even though it is not broader and just changing the color of some of the bricks at the top rather than trying to widen out the it's a good book to read on that topic of Steve Lewis's the economics of apartheid and the reason that Botswana left Iran monetary union in 1976 was in part because they felt that the diamond sales were in effect accruing to the benefit of the Reserve Bank of South Africa and so Steve Lewis's recommendation to quit Missouri at that time it was the Minister of Finance was less exit the ran monetary union and that way will be well we won't be subsidizing apartheid and in a way you know but SWANA did that and did that successfully we got a question back there and then we'll come over to Jennifer and then Tiggy hi Wenzel robertson calories and rice China Africa consulting stuff I'm really curious about the prospects of dismantling the looting machine and I tracked Chinese finance in Africa and I don't particularly blame Chinese money in Africa doing what any other foreign country doesn't Africa but I want to know you know what the prospects are for the looting machine to stop the incentive structures that might change and whether you have a brilliant ten-point plan to stop it in the concluding chapter of your book my brilliant ten-point plan I'll release you no no I have no such thing I think we touched on some earlier I think there are things that the I think it was more in the UK actually when I was doing events like this the number of people who would he would steer the conversation back to aid and the the extent to which in the British Central and right-wing press aid dominates the discussions of Africa i I wonder whether an interesting thing would be to switch more to the scale of wealth that is filched from Africa and bleeds out either through straight-up corruptions we transfer mispricing or you could argue just just through raw exports as opposed to more value of additional manufacturing within the continent the big resource producers I think it's shift in the debate like that would be would be helpful I think sometimes the debate especially especially I think you find it in Europe is obsessed with aid which is a fraction of this of the sums were talking about an often terribly paternalistic and new colonial and it seems to me often that the debate is it's the equivalent of head-butting someone standing on their neck and then saying I'll call you an ambulance I mean the the structures of the looting machine are overwhelmingly the plumbing is overwhelming the outside Africa and it's in it falls under the regulation rate falls beyond the regulatory power of African institutions and the other thing yeah the beneficial ownership thing I think would be one concrete step but I know I don't have some big cities that's that's one Tony that's what people like you to work out Jennifer Cook would see us iesson thanks for the talk it was actually following on that the question of the the g7 initiative on tax transparency and beneficial ownership and Kofi Annan had his the Africa progress panel very good report a couple years ago I cookie and interactive but I just wonder what kind of what kind of traction is that initiative getting and what is the venue in which to push into to push that and what kind of traction is it getting in Africa kind of global or regional or Staunton standards for beneficial ownership mean but what will get that done kind of thing where is the place to push on that one answer to that is to say read jail's report when it comes out soon - I'm not sure about traction in Africa I mean it's not real African probably sorry an African problem right well you do yes I think Thabo Mbeki's report on trade mispricing is linked into that because it's the same vehicles that are used for tax dodges I think though they're also people and that this is all just anecdotal really from me on this stuff for now but a lot of people in that in the various talks along the road have pointed to that recent New Yorker New York Times piece called the towers of secrecy all about them real estate development in Manhattan and how nice I think it was something about 90% of new construction in Manhattan is owned by offshore companies and I suspect the people who start to twig to this kind of stuff much more if they think if they can combine a sense of empathy with fire of countries that are being looted with the fact that their children can't afford to buy a house because a lot of looted Russian money or doing money or whatever maybe is massively inflating the real estate market they might own Rockefeller Center but they can't get a house right yeah right yeah I think that's where maybe some of it will come from this a woman I speak to Ilya at Global Witness they're doing some somewhere it's trying to raise the profile of it the UK election if it goes live as well would be interesting to see how that plays out i think i think the main division is between those who say we must have a registry it must be global and it must be public and those who say yeah well we'll try and have a registry country of our country but it'll be private which rather defeats the point if it would be it would be available to kind of law enforcement agencies and maybe one or two others but it has to be has to be the stop stand show me if it's done any chance we're gonna have two more questions I got okay j.r you want to make a comment and on that go ahead and then I'm gonna do with Deirdre and I'm gonna leave the last word to my good friend Tiki sure yeah first just a compliment to the book Tom I just finished it and you know del lugar Joe jr. Meili Africa Center for Strategic Studies you know in addition to kind of mapping out the elite level networks and the john lecarre a type storylines you know what i was struck by was the ability for you to convey this sort of on the ground level storyline a particular passage i'm thinking of is the it's forget forbidden to piss in the park chapter where you discuss stopping to relieve yourself on the side of the road and turn that into an eloquent discussion of how patronage network work you know and what that struck me was you know getting down to the ground level if you were a reformer if you were someone in civil society if you were you know someone who really wanted to make a difference in a resource-rich african country like Angola or like eastern Congo you know we talked about how the plumbing is outside of the continent what would you do if you were in one of those countries and you wanted to make a difference I mean the trial of Rafael Marx do mirages this week I mean he's one of the most renowned anti-corruption campaigners on the continent and he's facing something like 16 libel charges you know so what pathways are there for folks in Africa in resource-rich states to sort of make a difference and where you know where can people start if they want to get move the needle a little bit while we take a couple deirdre you go next and then I'll leave the last minute Iggy Tom my name is Deirdre lepen and I've been a correspondent of Tom's for quite a long time on Nigeria and Africa in general and it's such a pleasure to see him today yeah lovely I must confess I haven't read the book yet but I very proudly own now an autographed copy so I'm delighted my question is a very hard and naive question all at the same time in your investigations of Nigeria have you come to any conclusions about why no one will tackle or is willing and able to tackle the massive oil theft in the Niger Delta okay can we take one more why don't work out oh yeah that's too gay I'm afraid we're glad you see them later go ahead Tiggy did it take you two hours to get here well yeah hope it doesn't take you two hours to go home alright I'll give you I'll give you a last word but it's gonna have to be short okay for me it would be above a comment and a question when you tell us who you are oh my name is chicky Kamara I am the founder and CEO of TT mining group so this book actually hits right back home regarding the mining sector in Guinea so the sea men do case has had like good and bad impact on the mining sector in Guinea good one that the government has finally taken steps about trying to face people that I think are not doing things the right way people that are looting like you said Africa or you know our economy in exactly but the other part is is not just putting it out there it's not just attacking one particular company because I'm sure there are many other companies in Africa specifically in Guinea they have acquired licenses major companies or major licenses but not doing nothing you know just sitting on there and then making money but the impact that it has the negative impact for like someone like me in the junior mining company he has made it like very very difficult for us for example to find the right type of partners because all the sudden they think oh the government now is not really they're not protecting interest they have big companies like you know valet and then bhp and so forth all the sudden now they could take their license so what will they do to us little investors you know so the most important thing was to to find a way to sending out the message and I think it was the way the message was sent that's not right because if we go a little bit deeper somewhere they was saying this was not only about looting Ginny's economy somewhere they was saying that it was something that was between veiny statements and mr. Soros or whoever his name is you know so it was something it was like a personal vendetta and then poor Guinea is caught in the middle of it in an end with that all the different companies that really want to develop the economy so having done so many research what type of advice would you give African governments in about how now to remedy to this to this kind of a looting program what can what can they be done they will let you go ahead with those yeah so obviously the BSG ours approach from the beginning when it realized it was under review has been to try to push a completely alternative narrative which is a conspiracy between Alba Conde George Soros assorted other people for which from what I've seen I don't believe is the case there doesn't have seem to have been a significant body of evidence to show that that is what really happened it's they did what appears to have happened I think is what you're arguing is that they conned a to a greater or lesser extent made a genuine attempt to have an independent or at least an arm's length review of past mining contracts exactly the kind of thing that any sort of policy adviser I think would with would advise in that situation when you've had half a century of dictatorship there were flaws and how it was done it seems that in lots of critics but they seem to have made a pretty good effort of it especially when he compared to something like congolese mining with you which did seem to be an exercise in asset snatching so I think it's a tricky one for me to comment on because we've done so much reporting on it but when we try them you know we try to try to keep that balance all the way through but I think a lot of people would say they're Conde deserves some credit for that for that process whatever other criticisms there may be of the way he's ruled but it just shows that I completely agree just shows the the terrible bind that if you like if you if you haven't done anything like that it would have been encouraging impunity and and if you go ahead with something like that you're an asset snatcher and what-have-you it's a yeah I'm not sure that's just an injustice and I'm not entirely sure than if you have an idea but I'm not sure how that would be how better to address that they have their PR people they tried to get a message across they had some pretty heavy weigh advisors trying to hel them I think by enlarge the message has got across that's certainly compared to the junta that went immediately before things things are better in Kimi but it has been it has been ensnared in this big legal battle yeah well in an environment of declining commodity prices - so it's like an Ebola yeah I'm an Ebola simply unlucky cards as well without their but - beyond anyone's control well I think the two of you can continue this I just jump on the interior and Jr's pieces and I think unfortunately gonna have to clear the room this I think this comes but something was mentioned earlier about where are the Africans in this book there are quite a lot of them and but I think the the question was more to do with where are they kind of the Africans who aren't the finance minister right although the people you might bump into at a roadblock in eastern Congo and that's something I did try to grapple with of of what it's like to live under this kind of a sort of political economy that's distorted by by rent and it's again and again I did you just see you could see this tension almost physically in people especially when I was living in Lagos with an on the Niger Delta of people who would like that guy on that roadblock with his ak-47 who would clearly be aware that their their actions their their their their in position in that case of a kind of basically bogus roadblock to tax a little piece of the road were were part of a broader malaise and so on like Congo or the Delta that that is perpetuating the curse for their children ultimately but you're faced with this terrible dilemma of do you make your peace with the system or stay locked outside and stay locked outside the one kind of take a point not across Africa but in many of these resource areas the one real pocket of of wealth for on what to do hip-hop I would say so Raphael you mentioned in Angola he's written about experimental and other rappers in Angola this kind of vanguard of resistance there are some LD and other very interesting Nigerian rappers and musicians who's starting to articulate in a fascinating way the at least the anger with the with the the kind of oil trap that they found himself stuck in there's links between the the uprising in that the coup basically and Burkina Faso and hippo and Sierra Leone and at the anti-corruption movement in Senegal and the protection of the democratic process so I would say if you want to make a distant difference learn to rap and I think the Nigerians invented that approach a few years ago finally well anyway it works here and why is oil still stolen in the Niger Delta because you keep running the racket de jure because in a sentence I think the worrying thing is that there's really an alignment of interests it's suits the I'm not sure it's necessary always conscious but it suits the interests of the multinationals operate and increasingly the local Nigerian companies operating entre in the Delta for some chunk of that oil to be stolen it's an informal version for me of like a formal local content policy everybody says that they're losing but actually that all those there's key interests formal informal violent non violent are their interests are aligned look there's a lot of things in this book that we haven't reached including the personal toll that this took on your on your own life and how you had to recover from an extraordinarily intense period of time but I'd like to welcome you back another time wish you much success continued success with this book I know that you're a young man on to great things and hope that we'll cross paths again so will you join me in giving Tom a round of applause

Channel: Center for Strategic & International Studies

Views: 20,283

Rating: 4.8228784 out of 5

Keywords: Looting, Africa

Id: N8QUgu2KrM8

Length: 56min 21sec (3381 seconds)

Published: Wed Apr 22 2015

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In this video, FT's Tom Burgis discusses his book The Looting Machine, which both reaffirms and documents an ugly truth – multinational corporations, banks, traders, and political elites in Africa are all busy enriching themselves while also depriving ordinary Africans of the economic benefits of their countries' natural resources. Burgis also looks at the dubious implications of this phenomenon for democratic and economic development in Africa.

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This post might not seem directly related to Europeans. However, a prosperous Africa means more economic opportunities for people seeking a better life in Europe, with many of them dying in the Mediterranean.

Also read: Anger over EU's 'slave trade' rhetoric as naval operations begin in Mediterranean