Resisting Empire 2.0: why we're protesting the UK-Africa Investment Summit


16 January 2020
Aid

For many, the idea of encouraging more foreign investment in African countries make sense. This is certainly the government's hope as they approach the first UK-Africa Investment Summit, to be held in central London on Monday 20 January. However, it is clear that this Summit is not about tackling global poverty and inequality, but is instead being pitched as an opportunity for British banks and businesses to profit from new trading relationships. 

What's more, the Summit is mostly being paid for using aid money (known as official development assistance or ODA) which has a legal requirement to be spent on poverty reduction. Yet the key goal of this summit is to push a highly financialised, private sector form of development onto the African continent. The government wants to promote the City of London as an international development finance hub, to make the UK the largest investor in Africa (after China) and to lay the groundwork for post-Brexit free trade deals.

But this approach won't reduce poverty or inequality in Africa; instead, it will help to extract wealth from the global south to the global north. Through deregulation, massive and aggressive tax avoidance, unfair trade deals, the erosion of workers' rights, unsustainable levels of debt, and profit repatriation, the rich continue to get richer while the majority get poorer. This approach will significantly exacerbate inequality, conflict and climate change across the global south and the planet as a whole.

That is why we will be protesting outside the Summit with our allies on Monday, calling for an alternative approach to development based on the principles of co-operation, solidarity and justice. 

Economic imperialism

This approach isn't new by any means, but is a strategy that has been accelerated by consecutive Conservative governments since the 2016 EU Referendum. Take, for example, the Cross-Government Prosperity Fund which will use £150m of ODA to remove non-tariff barriers, promote British buisnesses and lay the groundwork for post-Brexit free trade deals with middle-income countries including South Afirca and Nigeria. Despite using ODA, this money is clearly being used to aggressively develop market access for British companies in sectors where they are competitive and have good expertise.

This is nothing short of economic imperialism as the government is supporting efforts to spread libertarian free market ideology to every corner of the globe. The purpose of this is not to foster mutually-beneficial trading relationships between equal partners, but to expand the markets into which British businesses can sell their products and services. Moreover, much of the Fund's work involves the construction of infrastructure corridors and removal of barriers to extractive sectors such as mining, agriculture and fossi fuel production. This means that British businesses, hand in hand with the government, will be charging African nations for the benefit of enabling the accelerated extraction of even more natural resources and wealth from the continent. 

We have seen this happen before. In previous centuries, the British Empire and East India Company used their wealth and power to extract natural resources from the colonies whilst aggressively creating captive markets where British products were the only type on offer. Shashi Tharoor, former under secretary general of the United Nations, has called the railways built in India by the East India Company "a colonial scam...intended principally to transport extracted resources – coal, iron ore, cotton and so on – to ports for the British to ship home to use in their factories". Similarly, Eduardo Galeano's infamous Open Veins of Latin America, which tells the story of centuries of extraction of Latin America's wealth and resources by Europe, highlights the pervasive influence of British commerce over the continent:

The typical gaucho of the pampas was described thus in 1837 by the British consul in La Plata: "Take his whole equipment...what is there not of raw hide that is not British? If his wife has a gown, ten to one it is made in Manchester. The camp-kettle in which he cooks his food, the earthenware he eats from, his knife, his poncho...all are imported from England. Argentina even received the stone for its sidewalks from Britain.

This shows how the British Empire used different methods to take power and proft; while the East India Company and British Army took formal territorial control of large swathes of South Asia, British companies could equally profit from nations without territorial control through free trade and market ideology. It seems that the Prosperity Fund's focus on building new transport infrastructure to facilitate free trade is a reheated form of economic imperialism for the 21st century. The UK-Africa Investment Summit will continue in this vein, which is why we oppose it.

Exacerbating climate crisis?

There is also a very real risk that this approach to development will exacerbate the climate crisis. In our recent briefing on CDC, the UK government's development bank which receives ODA from the Department for International Development, we highlighted that numerous investments have been made in fossil fuel-related infrastructure in Africa in recent years.

For instance, although ministers have claimed several times in 2019 that CDC has not invested in coal-related projects since 2012, CDC invested $16.6m investment in South African port operator Grindrod, to facilitate the export of South African coal to China, in 2014, and $144m in the coal-burning cement producer ARM Cement in 2016. CDC has also invested an undisclosed amount in a highly polluting heavy fuel oil (HFO) power plant and another undisclosed amount in January 2019 in the Maria Gleta HFO power plant in Benin. Other environmentally damaging projects supported by CDC include: an oil & gas transporter in Ivory Coast; a petroleum pipeline in Cameroon; a $12m investment in Owendo Bulk Port, “an export route for locally mined manganese ore and an import and trading route for aggregates and cement constituents” (all 2018); a company which operates two airports in Madagascar (2017); an oil storage and logistics company in Nigeria (2019); and Atlas Bottling Corporation, a “leading bottler of carbonated soft drinks in Algeria…[which] sells its products under the leading PepsiCo international brands".

The government argues that some investments in fossil fuels are necessary to transition away from more polluting forms of energy. However, campaigners have criticised the way in which this has been used to justify continuing natural gas extraction, and CDC is still investing in coal and HFO power. What is really happening is that development policy and investment decisions are being made on the basis of what is profitable for the UK, and not on what is most likely to close global inequalities or significantly reduce carbon emissions. In fact, the building of vast infrastructure corridors and privately owned fossil fuel energy systems will only lock in carbon emissions for generations to come, whilst the private sector continues to siphon the resources and wealth out of Africa. If we are to achieve any level of climate justice this decade, this strategy must be opposed. 

How to join us

To stand with us in demonstrating solidarity with the global south against economic imperialism and climate crisis, join us outside the UK-Africa Investment Summit at 2pm on Monday.

Demo details here.


Photos: UK Secretary of State for International Development, Alok Sharma, in Ethiopia. Source: Flickr.

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