Stealing Africa

2012, Economics  -   35 Comments
Storyline

Zambia's copper resources have not made the country rich. Virtually all Zambia's copper mines are owned by corporations. In the last ten years, they've extracted copper worth $29 billion but Zambia is still ranked one of the twenty poorest countries in the world.

So why hasn't copper wealth reduced poverty in Zambia? Once again it comes down to the issue of tax, or in Zambia's case, tax avoidance and the use of tax havens.

Tax avoidance by corporations costs poor countries and estimated $160 billion a year, almost double what they receive in international aid. That's enough to save the lives of 350,000 children aged five or under every year.

For every $1 given in aid to a poor country, $10 drains out. Vital money that could help a poor country pay for healthcare, schools, pensions and infrastructure. Money that would make them less reliant on aid.

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35 Comments / User Reviews

  1. Starchild

    According to Wikipedia, "Zambia has yet to address issues such as reducing the size of the public sector, which still represents 44% of total formal employment".

    Seems like the makers of this documentary are eager to demonize companies coming to Zambia to invest and make money, which has actually resulted in better economic growth than most other countries in the region, while letting local leaders off the hook for their statist policies such as government overspending and too many government employees, that are keeping the people poor.

    More taxes paid to these governments will not help ordinary people. Zambians will do better if the companies pay fewer taxes, and thus have more business confidence to expand local operations, which will mean hiring more local workers and a more diversified local economy to support them. What company is going to want to invest in local development, hiring, etc., when the threat of nationalization or a sudden massive increase in taxes is hanging over them?

    When the filmmakers talk critically about companies like Glencore employing mostly expatriate workers brought in from abroad, they do not explain this.

  2. Starchild

    A 2015 story in the Lusaka (Zambia) Times presents a rather different perspective. A few excerpts:

    "From the time of nationalizing the mines in 1972, copper production dropped from 750,000 Tonnes to about 250,000 Tonnes at the time of privatization in 2000. By 2001, production was again up and today it is approaching a million Tonnes. How can any rational person argue with these irrefutable facts and claim that privatization of the mines was a disaster and they should have remained in government hands?

    CLAIM: The mines were sold for a song.

    ANSWER: Most commentators tend to use hindsight to pass judgement on past events. How many times have we all made decisions based on the information available and unique circumstances at the time? Just because conditions change after the fact does not mean the decisions made earlier were wrong.

    For example, you may be forced to sell you car cheaply because you have no money and you need quick cash to pay for your child’s hospital bill. If later on your situation improves and you have money, does it mean the decision to sell the car cheaply at the time was wrong? If the person you sold the car to resells it later at a huge profit, would you start complaining that you sold him the car “for a song”?

    Copper prices were at their lowest in 1999 after 20 years of decline. The mines were sold in 2000. Based on 20 year data, it was very difficult to accurately forecast that there would be a commodity boom just a few years later when the price of copper went up significantly. The persistently declining price of copper meant the value of the mines when they were sold in 2000 was low.

    The Zambian government was in a position of huge weakness partly because they had taken too long to sell off the mines. The treasury was bleeding to the tune of one million Dollars per day to keep the Zambia Consolidated Copper Mines (ZCCM) parastatal afloat at the worst point of the Zambian economy in 1999. The foreign mining companies that bought ZCCM most likely used this to push for a better deal for themselves.

    If the Zambian government had refused to sell, the private mining companies would have simply waited for things to get more bad and then make a worse offer. It appears this is what may have happened in 2000 after several earlier failed potential deals.

    An always overlooked point is that because the Zambian government was losing millions of Dollars per year to keep ZCCM afloat, even giving away the mines for free would have instantly saved them money to be channeled into other more important things. Does it make sense for any responsible government to hold onto huge loss-making parastatals and keep wasting tax-payer money on them while citizens are dying in hospital for lack of drugs?

    No government can justify wasting millions on a bottomless pit. The decision to sell off the mines was a perfectly rational one."

  3. DustUp

    From Description: "Virtually all Zambia's copper mines are owned by corporations." Even an individual or Nation state would be silly not to incorporate any business when attorneys are licking their chompers at every opportunity. Even if it was a benevolent corp or nation. Nations are typically corporations as well.

    Any nation that depends on selling just one or two products to feed its people is corrupt. It desires to keep the people weak and those in power, strong, so they can remain in power.

    After this many years on the planet, people should realize they are far better off Not depending on govt for anything, let alone waiting on govt for something.

    Anyone who believes taxes are the answer to prosperity is lost. Taxes are taking from one group to give to the taxman who dribbles a little to the peons to buy their votes.

    Any form of Collectivism is inherently corrupt. If you think Capitalism is evil and Corrupt, fine, but that isn't actually Capitalism, it is Corrupt Corporatism, not that different than corrupt Collectivism; just who pockets the dough. However, believing that any form of Collectivism is less corrupt is a insidious collectivist school (which by definition, all govt schools are collectivist) indoctrinated fallacy, supported by the marxist media.

    If you want better govt YOU have to see to it better people are running it. Collectivists are absolutely not better people. Many have no problem killing those that disagree with their historically proven bad ideas. And many more of them would kill if they could get away with it. They believe the ends justifies the means; the philosophy that wiped out over 100 million people in the 20th century. By the way, the same philosophy that causes CEOs and their minions in corporations to wipe out people in their path.

    As far as the copper corps in this docu, their taxes should be in copper bricks set aside for the country, for its future development. Unfortunately it would be stolen or sold to pay debt they never should have borrowed.

    They could pass a law of no raw copper exports, only finished products, like wire or electric bus bars, switches, etc. thereby causing MUCH more worthwhile employment. The big boys still get their copper in whatever form they want. Win Win.

    Alaska does that with their timber. No raw log exports, has to be sawed into lumber at least, thereby employing some locals. Something that many other locations should follow.

    If people are getting sick and Bono truly cares, why not hire a lawyer for them? He might recoup his outlay if they won. Like most liberals, symbolism over substance; if long term results mattered, they would see to a good result ...which by the way would necessarily cause them to be conservative. Conservative merely means to conserve the good. That is far different than the establishment republicans who are in league with the progressives (hell bent Collectivists) of either party.

    Prosperity for the many? That comes from adding value TO the raw materials. In the past America grew a prosperous middle class by adding value to raw materials. China has followed / is following that same path to prosperity. Germany did as well. The big mistake all of them made was allowing polliticians to sink their nations into horrendous debt to buy votes (socialist programs ad infinitum). Will Africans learn not to do that? Unlikely.

  4. Willbur

    This is what the Empire does to keep itself going, take from the vulnerable and poor and load up the 1 %. Been that way since beginning of time!

  5. student

    Can't enjoy this documentary. Lousy closed captions. "Of you andrea boston Mayor puts it the usually calm". I doubt this was what the narrator said. Thank you excluding Deaf students from enjoying your documentary.

  6. beastmode355

    Damn Crooks

  7. Jacek Walker

    The very sight of those greedy, money obsessed, mentally insane people made me feel sick. I stopped watching it after several minutes.

    African leaders? Stock Exchanage operatives? These two pathetic bunches of contemporary zombies fit pefectly into a lunatic asylum. They shoud be thrown in there together to enjoy their own company for ever and be never let out.

  8. sternhead

    14:00 Emmanuel Mutati. Look closely and you can see huge cash bonuses coming out of his eyeballs.

  9. Indian

    In India, during 1970's Indira Gandhi forced all foreign companies to sell a part of their ownership to the Indian Public by capping FDI to 49%. This ensured that transfer pricing could not take place

  10. sar

    best documentary.

  11. Kaz

    The west loves and always makes deal with African "leaders" who like to dress well, drive expensive cars and have villas in Europe. However, they will send in assassins to those who dare to dream in uplifting the population, Lumumba being a case in point. Accuse him of being a communist and justify killing him.

  12. Aaron Goodman

    If you want a more accurate and scholarly account of the problems which have caused a century of poverty throughout Africa, I suggest you read the book "Dead Aid" by Dambisa Moya. Additionally, she gives an interesting argument on how, economically, the colonialization of Africa is providing major breakthroughs for many of the regions.

    This doc. is bull****.

    1. JtothaP

      How much did Glencore pay you to post this? ;)

    2. hernandayoleary

      Simply, untrue, I've lived in Africa and colonization is about paying no taxes, investing in extraction resources that benefit only the colonialist and ruin the nation by demanding things like free electricity. You are a banker jew and you are bull****

    3. Ryan Holden

      Your need to defend your positions by calling people anti semitic names speaks volumes about you as a person.

    4. Saz

      Not going to call you names but you still talking bull****.
      If colonisation is economically good for Africa, how come the richest continent on the planet is the poorest? You trying to make yourself feel better for the poverty, death and disease that your forefathers and now you bought to Africa and benefit from. Corporations don't even pay taxes in their home countries much less African countries. They get away with it too because most of the leaders in Africa, educated at Oxford and other western universities are blood sucking leeches feeding off their own people, ably assisted by people like you.

    5. MilagrosGV

      Sure it is your white and you benefit on the maltreatment of the orig people? Prove your point, and as an Afrikan I will prove your wrong Bring it!

  13. MegaEasternman

    It´s a well known fact that Switzerland is a country that solicits ill-gotten gains from the entire planet,so this does not come as a surprise to me.After watching this,N.Korea and Iran don´t look that bad anymore...

  14. Faye Chang

    ...and the very same has happened in other countries like the Caribbean and South America. In Jamaica corporations including Glencore have been extracting bauxite for many years, and Jamaica has nothing to show for it except a few rich politicians, exploitative working conditions, environmental pollution, disease, loss of biodiversity, loss of rich farmland, loss of community, soil erosion, deforestation and disease and death - nothing in common with super clean Switzerland. Africa, the Caribbean and other poor countries were stolen a long time ago. Good and informative doc though. Thanks.

  15. buzz2320

    RICH BOYS MAKE THE LAW THIS MUST STOP. THANK YOU FROM BUZZ GETTING OFF TOXIC.

  16. Meera Rangarajan

    The single most tyrannic nation in the world is not any of the countries, you guess. It is Switzerland. With no natural resources of any kind, they invaded all over the world with their sub-terranean policies of banking and speed money. If Marcus Rich could find asylum in Switzerland, is because he believed that she will not deport him, as he will provide billions of dollars for their banking system. Glencore to succeed, Mark Rich, from Switzerland is most appropriate. Who cares, if Zambian land has become polluted or if thousands die in the process. The final part of the Glencore President making billions alone will stand out. Now, move over, Chinese are coming. Even this amount of revelation seen in the video, will not be available to public. Sufferers! Zambians and alike. My only prayer that the Africans should unite and throw out all these commodity traders from the African landscape.
    My heart weeps for you Zambia. Your country's geographical integrity and preservation of natural resources are the paramount needs for the future generations. God be with you

    1. CAMERON SCOTT

      Amen!

  17. manfruss

    Refine the justice system a wee bit as well. Other issues abound, and it would be nice to see the punishments be a bit more severe. Oh you stole 200 mil? We'll fine you 500,000. That sounds like a deal worth making several time over... please fine me... I've been bad, again.

  18. I AM POP SLAG.

    17:44 Mutati of the mining company acknowledges in his own mind how he is killing his own people with the sulphur dioxide emissions- then proceeds to lie through his teeth and squirm out like a snake from under the questioners boot.
    i almost didnt watch this doc because of bono- he doesnt appear anywhere in it yet thank god and im glad i watched it- thats the problem with bono...

  19. I AM POP SLAG.

    bono once flew a hat halfway round the world in its own seat, bono is a giant alright, a giant narcissist who somehow thinks "awareness" somehow fixes problems. tell that one to the tibetan monks who are up to 99 self immolations doing the same thing.
    If people listened and responded to bono in any way- then fine, but they dont and his campaigning is simply inflating his coke addled ego and obfuscating the discussion of issues with discussion of bono.
    if the guy really gave a sh£t he would spend his own money on the problems he cares so much about instead of trying to tell the rest of us what to care about whilst creeping up to and shaking hands with the politicking scum who cause the problems in the first place.
    f@@k bono and his fake concern, just f@@k im.
    A billionaire lecturing folk on poverty and how to stop it...you couldnt make this sh:t up!

  20. dmxi

    ya see,bono can't fix the heart of the problem...just drops on a hot stone to
    ease the conscious of the 'first world countries' do-gooders.a pity that hardly anyone makes the connection.

    1. Trevis Robotie

      Bono is a Giant for what he is doing and all he has done so far,and I believe that when you give this much,it must come from the heart......Bono tries to fix the heart of the problem as to the best of his ability(and learning along the way),if everybody,starting from the africans,could try to fix their end of this prob,Africa and all other poor countries would improve .........and the 1st world dogooders and non do make the connection but,bigger interests are involved......

    2. Christinne Radu

      Bono is a marxist stooge and u are successfully brainwashed

    3. Bogdan Gherghel

      so you think that a world where every human has human rights and basic needs assured, such as health and education, must be an evil one?