OECD calls for more free trade in Africa

September 20 2010

A little light reading matter

The OECD & UN have published their joint 2010 Mutual Review of African Development Effectiveness today, to coincide with the big summit on the MDGs which is taking place in New York. The 88 page report is a mere 4MB download and I’ve had a quick skim, ready to look through properly later.It’s mostly predictable stuff – highlighting successes in Africa and the problems of the economic downturn – but the significance it gives to climate change is perhaps important. One of its calls to action is “To reach agreement on ambitious and binding targets for the reduction of carbon emissions, which is essential to achieving sustainable development in Africa”, which seems fairly unequivocal for an organisation as conservative as the OECD. There’s a call for cash to help Africa deal with the effects of climate change too.

Less surprising is the consistent message throughout the report that African countries need to free up their markets even further. For the OECD, of course, protectionism is a dirty word which must never be spoken of and the free market is all. I quote:

“Trade is already contributing to recovery and is an essential element of sustained growth and development. Continuing to resist protectionist measures is necessary, but it is also insuf cient.
Further market opening is also needed. Africa’s partners need to inject political will and momentum in order to reach an early, ambitious and balanced outcome to the WTO Doha Development Round”

As that quote suggests, African countries may be starting to think for themselves on this one. In Zambia, there’s a big debate about nationalisation in the mining sector (not entirely unlike the nationalisation of some banks in those OECD countries which bang the gong for free trade) following the discovery that many foreign (read Chinese) firms which came in under free trade rules imposed by the IMF/WHO not only fail to invest beyond the basic infrastructure for getting raw materials out of the country, but are actually net negative contributors to the tax coffers. In other words, they don’t employ as many people as they say they will, ship the raw materials like copper overseas to process it and ‘add value’ back home, import Chinese workers to actually do the infrastructure work (like building roads) rather than paying locals to do the same job (and learn the skills) and, on top of all that, claim a tax refund from the Zambian government for doing so.

The free marketeers are laughing all the way to the bank on this one, and it’s not just Zambian money that’s being given away. 27.3% of Zambia’s GDP comes from international aid.

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