Nicely packed

Marshall Plan with Africa is a sham

Diamond found in Koidu, Sierra Leone. (Photo: medico)
Why the German federal government’s Africa policy will not be beneficial for Africa.

The package of baby food from Nestlé with the slightly dusty blue Teddy on the front of it is hoping for customers in this small supermarket on the edge of an informal settlement in Kenya's capital, Nairobi. "I did not sell one single package of that crap," complains the shop owner. This snapshot from spring 2017 shows the hypocrisy of the "Africa policy" of the world's most powerful industrialized nations. Under German presidency, in the summer of 2017, they invited those African states to the negotiating table who are ready to open their markets for a few crumbs. The "Compact with Africa" aims to inspire companies to invest in Africa.

Nestlé is already enthusiastic. Their products and those of other food multinationals are flooding the markets of many African countries. They sell their products in miniature sizes at a huge profit – the companies call them popularly positioned products – and offer predominantly finished products with too much salt, sugar and flavour enhancers:  "Convenience" food as a symbol of the promise of a dreamed modernity, which does not improve the miserable everyday life, but makes it even poorer and sicker.

In Kenya, which continues to be plagued by a dramatic famine, 25 percent of the population are now overweight due to malnutrition. Deadly side effects include diabetes and cardiovascular diseases. Worldwide, 700 million people are affected worldwide, including 100 million children. The trend is rising. The World Health Organization (WHO) always comes to the same conclusion in its studies: "Big Food" bears the essential responsibility for this global epidemic.

Nestlé and Co.'s business model, laid by political decisions, functions according to the proven principle: increase your profits by shifting the risks to the mostly poor resellers. According to the Tupperware principle, traders, such as the shop owner in Nairobi or women from slum areas, must first buy the goods and then resell them. As a result local traders go bankrupt, the supply of healthy local products declines and if the goods, for whatever reason, do not sell very well, then that is not Nestlé’s problem.

Door-to-door marketing marks a new era, in which companies are leaving no square foot unaffected by their growth in developing countries, making them a significant contributor to their sales, explains Barry Popkin, professor of nutrition at the University of North Carolina. Nestlé and Co. fund election campaigns and influence research at universities to eliminate resistance to their disease-causing products. Incidentally, the trader in Nairobi has to throw the Nestlé porridge I mentioned at the beginning into the garbage. The best before date has expired.

This snapshot exemplifies the trade policy framework under which the German Federal Ministry for Economic Cooperation and Development (BMZ) presented the "Marshall Plan with Africa" in the German G20 summer of 2017.

The BMZ surprisingly acknowledges in the paper that "Europe’s policy on Africa was for decades often guided by its own short-term economic and trade interests and proposes a correction. It is necessary to reshape cooperation with African countries. "Africa must be more than the continent of raw materials" it continues. From a trade-related perspective, reorganization should include:

  • building production chains
  • fair trade conditions
  • diversifying the economy
  • stopping harmful exports to Africa
  • promoting agriculture
  • strengthening access to the EU's internal market.

These proposals, as well as the demands outlined in the paper for compliance with international environmental and social standards or the stop of illicit financial flows and aggressive tax avoidance (which has been given a new relevance by the publication of the  "Paradise Papers"), could at first glance appear to be written by social movements or non-governmental organizations.

On closer examination, however, the title, "Marshall Plan with Africa", already turns out to be a deception. In contrast to the Marshall Plan of 1948, which enabled Germany to rebuild after the Second World War (consisting of loans, the supply of raw materials, food and goods) and endowed with a sum that today would equal 130 billion euros, the plan of the same name provides no money for Africa. So zero euros. In addition, the plan contains no concept at all for its implementation and is also in stark contradiction to German policy on Africa which is geared towards economic interests.

The BMZ understands the plan as an "offer to Africa" says Dr. Stefan Oswald from the BMZ. This ignores the fact, that the African countries are not in a position to reject or accept the offer. This becomes clear when you take a closer look at German Africa policy.

For example, the aforementioned "Compact with Africa (CWA) ", which was launched by the G20 finance ministers at the same time as the Marshall Plan in the spring of 2017, aims to boost private investment in Africa.

The agreement between the World Bank, the International Monetary Fund and the African Development Bank contains principles are tied to the allocation of founds that comes from the dark days of the structural adjustment programs of the IMF and the World Bank. They are in contrast to the ideas of the Marshall Plan, which at least speaks of the rule of law, the fight against corruption and good governance. The recipe is simple, the effect fatal: Mixing the liberalization of the financial markets with the reduction of public spending and the dismantling of protective tariffs and on top of that enforce the privatization of state-owned companies. Indeed, the African countries that have so far been involved in the Compact, including Senegal, Rwanda and Morocco, are promoting the availability of cheap labour and promising free access to their markets as well as far-reaching privatization.

There is not a single example from the past of a poor country where such measures, which ultimately aim at the abolition of the public sector and force African governments to deprive themselves of power, would have improved the living conditions of the majority of the population.

That's not the aim, explains Jane Nalunga, a trade expert at the Southern and Eastern Africa Trade Information and Negotiations Institute (SEATINI). "The Compact is not about helping people in Africa out of poverty. Its purpose is to create investment opportunities for companies from the G20 countries". And she makes an important distinction: "It's all about the rights of investors. The entire African continent should be attractive to them. But where are the rights of citizens? Where is the political regulatory framework, where are the social and environmental risks clarified”?

For many years the Economic Partnership Agreements (EPAs) have been negotiated by the European Union with selected African countries and for example signed by Kenya under great pressure from the EU and seek, according to the Federal Ministry of Economics, to ensure "a smooth integration of these regions into the world market".

What interests is the EU pursuing with the EPA?

  • Deregulation: African signatory states open 80% of their markets for goods from Europe, while only about 10% of goods from African countries are internationally competitive.
  • Elimination of preferential market access: Losses of revenue for African countries are feared because protection will be removed for the poorest countries which have had preferential market access to Europe for some goods.
  • State subsidies are eliminated because they are not tolerated by the EU for local agriculture in African countries.

As a result of the EPA, the reduction of the African continent to the role of a raw material supplier is consolidated:

  • No construction of own production sites
  • Vulnerability in the commodity and agricultural sectors due to price fluctuations
  • Dramatic Loss of arable land
  • The result: growing dependence on development aid.

In addition to these economic effects at the national level, inter-state conflicts are inevitable, as political tensions increase as fragmenting of local trade between signatory countries and non-signatory countries. Given the multitude of armed conflicts in African countries, European trade policy is irresponsible.

From the project practice: Raw material robbery in West Africa: expropriation of social wealth

I would like to show the serious consequences of a trade policy based on deregulation, privatization and cheap labour the situation in the small provincial capital Koidu in the very east of Sierra Leone. Like all the major mineral and agricultural resources of the small West African country - gold, bauxite, rutile, as well as the fertile land and maritime resources along the 400-kilometer-long Atlantic coast - the diamonds mined in Koidu for over 100 years could make a significant contribution to the development of the country. In fact, however, over 70% of Sierra Leone's five million inhabitants live below the poverty line, and in no other country in the world are so many children dying before they reach the age of five.

How comes that wealth making the people in Sierra Leone poor?

During the long civil war in the 1990s, European governments refused to implement effective regulation against conflict diamonds (a totally inadequate regulation - the Kimberley Agreement - entered into force only after the end of the war in 2002). European diamond companies stabilized the war economy with their lucrative businesses with all civil war parties. The end of the war in 2002 made it possible to expand the exploitation of raw materials, conflict diamonds became diamond conflicts.

Today, half of the children and youth in the mining areas are forced to work in the mines to provide financial support for their families. On average, most employees earn less than one US dollar a day. Some are even paid only with a daily meal (rice). This is slave labour in the 21st century. "In recent years, the development of new mines has led to massive displacement and, as a consequence, to forced migration," says Patrick Tongu of Network Movement for Justice and Development (NMJD), a partner organization of medico international in Sierra Leone. Whole village communities are forcibly evicted from their land by mining companies in order to access the precious stones. Very few people receive compensation. The craters caused by blasting operations for the mining of diamonds devour themselves into the centre of the provincial capital Koidu. Agricultural areas are shrinking and increasing the dependence on work in the mines.

The combination of extreme exploitation and social inequality, legal uncertainty and lack of basic services has an impact on all people in the region, and thus goes far beyond the direct consequences of slave-like working conditions.

As a reminder: "Africa must be more than the continent of raw materials," says the Marshall Plan with Africa. The trade policy causes for the social and economic upheavals are completely ignored. It also goes unnoticed that these are not to be found in the wealth of raw materials themselves, but are the result of political decisions that make this form of economic activity possible. German and European politics are freeing themselves from superfluous ballast with their trade agreements such as

  • the protection of human rights
  • the creation of good labour and social standards
  • Tax payments by large corporations
  • Mandatory reinvestment by corporations.

The so called “resource curse” is the result of political decisions that legally secure the profit motive of corporations and exclude the populations from the most basic human right, namely the right to have rights.

At the same time, the abundance of natural resources in many African countries at least harbors the potential possibility that countries can liberate themselves from their economic dependence and that people have the opportunity to demand a fair distribution of wealth.

The Green Gold: The Global Landgrab

The Marshall plan with Africa aims to promote agricultural production. It’s necessary to undertake a reality check. For several years now, Africa has been at the centre of global agricultural business, in which many German companies are involved. Industrialized countries, agricultural corporations, as well banks and investment funds acquire or lease huge estates to grow biofuel crops or to develop palm oil plantations. Due to land grabbing, shepherds, peasants, fishermen, farm workers and nomads are losing access to land and water, which is important for their nutritional basis, and are plunged into poverty. In repressive countries, where governments are willing to lease or sell their land to investors for a short-term profit and where people can only claim their rights at great risk, investors do business in an unbureaucratic and favourable manner, jeopardizing the food sovereignty of millions of people as well as the security of the people, who defend themselves against the sell-out of their countries.

In Kenya, for example, international corporations lease huge tracts of land for the cultivation of Jatropha for the production of biofuel. The government is promoting these businesses and hopes for short-term profits. In a country in which only about 10 percent of the country's surface can be used for agriculture anyway and the cultivation of land is the basis of life for 80 percent of the population, this is a disaster. Also access to grazing grounds, which is important for survival, and access to water for the cattle herds of approximately seven million nomads from Kenya is severely restricted by land grabbing.

In the film The Green Gold, director Joakim Demmer describes the consequences of land grabs in Ethiopia, which are the displacement, destruction of the environment and the emergence of armed conflicts. Refugee Olema A., expelled from his country in Gambela, describes the consequences for him of Saudi Arabian firm Saudi Star's investment, co-financed by the World Bank and backed by the Ethiopian army:

Starting from our grandfathers,
they all lived in that land.
They were born there,
and they were buried there.
Our deads are important for us,
and they are buried on that land.
Without land, we have nowhere to live.
Without land, it is meaningless to live on this earth.
In my culture land is everything.
Without it, there is no future.
As our land is taken away, our future is empty.
We do not have hope.
How can we live without land?
Can we farm in the air?
No, you can't farm in the empty space.
You can only farm on land.
We need our land for our children,
so they can have a future.
We need our land back.

The Landgrabbing in African Countries by international corporations leads to massive conflicts, displacement and expropriation and also creates new dependencies on external food aid. Politics also plays a significant role in land grabbing. Contrary to the obligations of the EU Member States to create an international environment for the universal realization of human rights, the EU is currently promoting an investment climate that promotes land grabbing. Local, sustainable agricultural production does not fit into the calculus of the global economy.

Declared as development aid, the Federal Ministry for Economic Cooperation and Development (BMZ) participates in the restructuring of African agriculture based on the European model – ostensibly to fight hunger, but in fact to serve the interests of international agribusiness. Instead of supporting self-sufficient techniques, development aid is increasingly being used to introduce a purely export-oriented economy. More than 100 million small farmers and peasants could be deprived of their livelihood in the coming years, according to an estimate by Fian. The right to food is also a long way off for future generations. The lack of rights for those affected is offset by the expansion of legal protection for foreign investors, which is fixed in commercial contracts. The context of inequality has been transformed from colonial power to law, explains the sociologist Stephan Lessenich.

According to the Food and Agriculture Organization of the United Nations (FAO), land grabbing is one of the reasons why the number of starving people in the world has risen again for the first time after a decade. Here the circle is complete: Dependence on imported food increases, which is a gateway for Big Food and leads to a fatal simultaneity of obesity and hunger.

Conclusion

If you look at the hard facts and not just the cloudy promises, the political orientation of Germany and Europe towards Africa is more like the Morgenthauplan of 1944 and not the Marshall Plan. The plan of the then US Secretary of the Treasury, Henry Morgenthau, proposed, as an alternative concept to the Marshall Plan, to de-industrialize Germany and to transform it into an agricultural state to prevent another German war of aggression. The important difference: According to Morgenthau, Germans should be able to nourish themselves with the food they produce. In Africa today, they are forced to export their agricultural products.

It is politics itself, which deliberately curtails the parliamentary principle of publicly controlled political decision-making in favour of private interests of return and deprives itself of its own political options. The deregulation of state control is in fact nothing else than regulation for the benefit of the economy. "Even though there are now some trade agreements that contain human rights clauses, these never have priority over the trade interests of the industrialized nations," summed up trade expert Thomas Fritz. Or as Jane Nalunga of SEATINI Uganda put it: "If you're not at the table, you're on the menu."

As paradoxical as it may seem at first sight, the Marshall Plan for Africa must be read as an attempt to conceal the consequences of the capitalist project in its neo-liberal form, and at the same time as an open admission of the failure of a policy whose deadly consequences can no longer be concealed. This paradox could be an opportunity – if the growing discomfort about globalized capitalism becomes a movement to remind politics of its commitment to the primacy of human rights over corporate interests.

Similarly, the UN's commitment to a legally binding human rights agreement for (transnational) companies is an encouraging development. The initiative from South Africa and Ecuador proposes the liability of corporations along the entire supply chain. States should be obliged to grant international legal protection to those affected by human rights violations. However the implementation of socio-political changes is opposed by colossal power interests. Governments, companies, elitist networks; they all fight them to the utmost. Not surprisingly, the German federal government recently decided not to participate directly in the UN talks.

It is therefore all the more significant that an international coalition of more than 1,000 groups, social movements and non-governmental organizations has formed to put pressure on the governments. After all, the internationally binding agreement on the prohibition of landmines in 1997 was also achieved politically against all resistance thanks to an international campaign co-initiated by medico international.

In the future human rights only seem to have a chance if they are renewed "from below". It remains what the great African-American writer, James Baldwin, in 1960: "The majority who formulates standards for what a human being can be, that majority is who we are."

 

Anne Jung is a political scientist. Since 1998 she works as a campaigner and later as a Health Policy Advicer at the information Department of medico international, a socio-medical development and human rights organization struggling for the human right to the best possible access to health.

Her subjects are global health and the political determinants of health, including international trade relations and trade agreements. On behalf of the information department Anne Jung is responsible for the region of West and Southern Africa. She publishes articles and gives lectures, organizes conferences and teaches at the Goethe University in Frankfurt on political communication.

List of references

1. Andrew Jacobs und Matt Richtchel: How Big Business Got Brazil Hooked on Junk Food New York Times 16.9.2017

2. Elisabeth Bollrich: Von Abkommen und Voneinanderabkommen. Die Handelspartnerschaft der EU mit Afrika. Thesenpapier der Friedrich Ebert Stiftung November 2017

3. www.compactwithafrica.org

4. Joakim Demmer: Das Grüne Gold. Dokumentarfilm 2017

5. Fian International: Landgrabbing und Menschenrechte: Die Rolle von EU-Akteuren im Ausland. Heidelberg 2017

6. Ernst August Ginten und Inga Michler: Rücksichtslose Jagd auf den neuen, alten Bodenschatz. Die Welt 16.01.2016.

7. Robert Kappel und Helmut Reisen: The G20 "Compact with Africa". Unsuitable for African Low-Income Countries. Juni 2017

8. Kenya Human Rights Commission: The ABC of EAC-EU Economic Partnership Agreements (EPA). Nairobi 2017

9. Stephan Lessenich: Neben uns die Sintflut: Die Externalisierungsgesellschaft und ihr Preis. Berlin 2017

10. Treaty Alliance Deutschland: Für eine menschenrechtliche Regulierung der globalen Wirtschaft: Positionspapier zum UN-Treaty-Prozess zu transnationalen Konzernen und anderen Unternehmen. Berlin 2017 www.cora-netz.de/cora/wp-content/uploads/2017/09/TreatyAlliance-D_Positionspapier_2017-09.pdf

11. Marco Zoppi: G20 Compact with Africa in Berlin: Implications for EU-Africa relations. 2017 www.pambazuka.org/democracy-governance/g20-compact-africa-berlin-implications-eu-africa-relations


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