Attracting foreign direct investment in mining is counter-productive. The bank concedes, “Especially for resource-rich countries, the depletion of natural resources is often not compensated for by other investments. The warnings provided by negative adjusted net savings in many countries and in the region as a whole should not be ignored.”
But warnings such as the 2012 Gaborone Declaration by 10 African leaders are mainly ignored. There is a simple reason, related to power. “The adjusted net savings measure remains very important, especially in resource-rich countries. It helps in advocating for investments toward diversification,” the bank notes, “outside the resource sector.”
Africa desperately needs diversification from mining, but governments remain influenced by trans-national corporations intent on extraction. Even within the World Bank such bias is evident, as the case of Zambia shows.
Zambia’s missing copper
Last year, Zambia became a pilot study within the bank’s wealth accounting and valuation of ecosystem services project. Forests, wetlands, farmland and water resources were considered “priority accounts”. Conspicuously missing was copper, the main component of Zambia’s natural wealth.
Was copper neglected because such accounting would show a substantial net loss? A decade ago, one World Bank estimate of copper’s annual contribution to Zambia’s declining mineral wealth was 20% of GNI. Discussing such data might compel Zambians to rethink their economic strategy.
Bank staff work not in Zambians’ interests, but on behalf of other international banks and trans-national corporations. From 2002-08, Zambia’s president Levy Mwanawasa came under severe privatisation pressure from the World Bank so as to repay older loans, including those taken out by his corrupt predecessor, Frederick Chiluba. That debt should have been repudiated and cancelled.
When privatising Africa’s largest copper mine, Konkola, Mwanawasa should have received $400m for Zambia’s treasury. But the buyer, Vedanta CEO Anil Agarwal, bragged to a 2014 investment conference in Bangalore how he tricked Mwanawasa into accepting only $25m. “It’s been nine years and, since then, every year it is giving us a minimum of $500m to $1bn.”