> If that is right, then they would be depriving some of the world’s poorest people of desperately needed wealth.
Really silly to see the Economist, of all places, taking this kind of line.
The inhabitants of these countries lack the technological knowhow to drill for oil and mine for minerals. If you're familiar with the area, it's no joke; we're talking about serious physics, math, and computer science to get oil out of the ground and ship it profitably.
For all kinds of reasons the Chinese have these skills and the Angolans do not. The land will remain absolutely barren if foreigners do not bring their knowhow. Moreover, it is not in China's interest to have an African civil war raging over a possible oil supply as well, so they'll quash stuff like that with authority.
Life around a Chinese-Angolan joint venture will not be paradise relative to a US standard of living. But it will mean jobs, food, and relative political stability, which is a far sight beyond what most other nations in sub-Saharan Africa enjoy.
Really silly to see temphn on Hacker News, of all places, disagreeing with a single line early on in a long article and trying to refute the whole thing without having read the rest of it.
FTA:
The situation in Angola is more complicated, though also disappointing. Chinese contractors have built some housing and railway lines and the projects were at first financed by the syndicate. Signs saying “China International Fund” appeared on construction sites. But in recent years they have been replaced by those of other Chinese companies. According to Western diplomats and Chinese businessmen, the syndicate stopped paying bills for more than eight months in 2007. All work stopped, 2,000 Angolan day labourers were fired on the Benguela railway project and only a Chinese cook remained on duty. Western diplomats suspected the syndicate was banking on being bailed out by the Angolan government, which had staked its legitimacy on infrastructure development. Soon enough, the government issued treasury bonds worth $3.5 billion to finance the projects. Subcontractors are now paid directly by the Angolan state.
The Economist is alerting readers to a syndicate extracting wealth from various African countries (apparently) without delivering the promised benefits to those countries. Nowhere in the article does it try and claim that the idea was inherently wrong in the first place, just the execution.
They're not complaining about foreign joint-ventures. The Economist, of all publications, knows that they're essential to do sophisticated drilling in developing countries.
What they're complaining about is that the proceeds are being directed through private hands, as opposed to the actual governments of the developing countries that need to drill their way out of poverty - for example, how the group is dealing with and paying Zimbabwe's secret police directly for access to the country's diamond mines, as opposed to dealing with the actual government (who may be less friendly).
The government of Zimbabwe is run by Robert Mugabe. It's pretty hard for even a secret police force to be worse than him.
Moreover, the governments of many of these countries are extremely rickety and unstable. They are in the main kleptocracies and certainly not capable of running any indigenous drilling operations.
So, it's not necessarily obvious that involving local politicians/warlords to a greater degree would produce better outcomes.
The point of this article is that the "jobs, food, and relative political stability" haven't materialized. Your last sentence pretty much summarizes the Economist's position and then goes into detail explaining why this is happening in this particular case.
1) The Economist is owned by a corporation, as is the New York Times and the Washington Post. Isn't it interesting how they never run exposes on each other, or that Joe Average company can't get access to their internal documents? This article is unsigned and we have no account of the means by which the article was put together...yet they call for more transparency?
The media's agenda is to sensationalize and sell papers. A demotic tone often helps. But truth usually doesn't.
2) Whenever you see a piece in which A is complaining that B is not paying C enough money, the question always arises: why doesn't A jump into the fray himself and make a better offer to C? The answer usually betrays that A really doesn't care enough about C's plight to quit his job or even fork over $1000. Moreover, and more fundamentally, A does not know enough about the industry to know whether it's possible to pay C more and still make a profit.
Put another way, it is not as easy as it looks to run an international oil drilling company operating in China and Angola! Think about the political risk on both sides. You'll only get the derricks and the surveyors and the hydrologists if you can show this to be more profitable than safer bets like drilling in Norway.
The right role model is Ford: he actually showed that you can get higher productivity and profits by paying workers more. Latter day examples include Price Club and Whole Foods.
But until the Economist actually does something -- and they certainly have the resources -- they have no legitimacy to criticize the guys who actually are providing jobs and hard currency to poor people.
It's like you didn't read the article. Your points aren't relevant here. Party A, using your labels, is speaking up, I'm sure, they just are powerless.
It isn't clear to me that the people with technical know-how deserve nearly all of the revenues from a country's indigenous natural resources. If that were the case, the most rational strategy for these countries would be to leave the oil in the ground until they can develop their own expertise -- they are losing hundreds of billions of dollars to China right now in return for some low-quality jobs and "political stability" (which really means brutal suppression of locals it seems.)
The people who a piece of property should own wants under it. And those willing to invest the capital required to remove it, as well as those who know how to remove it deserve something for their efforts.
The problem in these countries is that people really aren't allowed to keep what they earn and buy and keep land with their own resources.
In the US those who ultimately controlled large oil companies had to buy the mineral rights from thousands of individual land owners.
In many African countries, getting control of the oil requires killing your political opponents.
I'd much rather live where people have rights. Its not perfect and people don't always know what their windfalls may be worth, but its vastly superior to the alternative of deciding who owns what through political means.
Really silly to see the Economist, of all places, taking this kind of line.
The inhabitants of these countries lack the technological knowhow to drill for oil and mine for minerals. If you're familiar with the area, it's no joke; we're talking about serious physics, math, and computer science to get oil out of the ground and ship it profitably.
For all kinds of reasons the Chinese have these skills and the Angolans do not. The land will remain absolutely barren if foreigners do not bring their knowhow. Moreover, it is not in China's interest to have an African civil war raging over a possible oil supply as well, so they'll quash stuff like that with authority.
Life around a Chinese-Angolan joint venture will not be paradise relative to a US standard of living. But it will mean jobs, food, and relative political stability, which is a far sight beyond what most other nations in sub-Saharan Africa enjoy.