(MENAFN – SomTribune)
If you caught the Breaking news about Russians stealing gold out of Sudan, straight from the mines, you were probably shocked by the blatant theft. The truth is that for years every year nearly $90 billion of African resources are lost to the global North in illicit financial flows, or IFFs. It’s not just the Russians – US-based companies and others across the North are also complicit in this theft.
FFIs drain revenue from the community, which the US government then tries to fill with aid.
But at this point, as far as we can tell, reducing those flows is not on the Biden administration’s agenda for the US-Africa Leaders Summit, which will take place in December. This appears to be at odds with President Biden’s pledge to “strengthen American-African commitment to democracy and human rights”, to “advance peace and security”, to “address the climate crisis” and to “amplify the links of the diaspora”.
IFF activity always involves the trampling of human rights.
According to the Zimbabwe Environmental Law Association, the extractive industry there is fertile ground for IFFs. Human rights violations are manifested in a lack of fair and adequate compensation during involuntary resettlements and a lack of access to remedies for rights violations, as well as harassment, threats and prosecutions against defenders environmental human rights.
The people of these looted communities have no voice. They face damage to local biodiversity, loss of livelihoods and a lack of meaningful benefits. The United States can do a lot to mitigate the damage, and we can start with serious preparation for the next summit.
The first item on the agenda should be our position on the new demand for lithium, cobalt and other strategic minerals needed to power electric cars. We have the opportunity to get ahead of IFF activity in this relatively new industry, including amplifying community voices calling for transparent contracts, substantial community investment, decent wages and working conditions for minors and the annual declaration of tax receipts.
Currently, there are no consequences for US-based companies involved in IFF activities. In other words, they profit from corruption with impunity.
A recent case involves Bain & Company and then South African President Jacob Zuma. They colluded to decimate the country’s ability to collect tax revenue, redirected funds to Mr. Zuma and his cronies, and devised a procurement process designed to benefit the US-based company. Bain later admitted that they did not have the expertise for the project and reimbursed millions of dollars in costs, which did not even begin to repair the harm caused to ordinary South Africans. Those involved in the country are taken to task, with the South African effort to get to the bottom of the scheme well in hand.
It is time for us to do our part.
The financial mechanisms that facilitate IFFs are complex. They typically arise from commercial tax evasion, commercial mis-invoicing, abusive transfer pricing, and criminal activities, including drug trafficking, human trafficking, illegal weapons, smuggling, bribery, and theft by officials.
The impact? Commodities are dumped at the extraction site and then declared at the full market rate upon import. Illegal gold exports from Sudan to South Africa find their way to the Middle Eastern gold markets and then to Russia. Ill-gotten gains are found in tax havens around the world. The losses are breathtaking and heartbreaking, as they represent revenue that should be invested in sustainable development in Africa.
We can do better.
Bain’s example reflects an absurd foreign aid cycle. FFIs drain revenue from the community, which the US government then tries to fill with aid. A more sustainable model would be to help Africa through policies to regulate the IFF-related activity of US corporations, transnational agreements that respect human rights, and support for global rules designed to prevent IFFs from impoverish entire communities.
The Biden/Harris administration could begin in December at the African Leaders Summit.
By IMANI COUNTESS
Foreign policy in brief
Imani Countess is the founder and director of the Bridge Building Project between the United States and Africa. This editorial was distributed by OtherWords.org.
First published in Common Dreams
Legal disclaimer: MENAFN provides the information “as is” without warranty of any kind. We assume no responsibility for the accuracy, content, images, videos, licensing, completeness, legality or reliability of any information in this article. If you have any complaints or copyright issues related to this article, please contact the provider above.