Friday, October 23, 2009
Monday, October 19, 2009
Published: October 15, 2009
Foreign Direct Investment
(Read the original article here)
A corruption case in France against three African leaders has thrown into question the economic relationships between developed countries and their former colonies, reports Michael Deibert.
A court case brought against three west African heads of state by an anti-corruption group has sparked debate in Europe on the economic relationships between European governments and their former colonial possessions.
The case was brought in December 2008 by the French branch of anti-corruption group Transparency International. It alleges that president Denis Sassou Nguesso of the Republic of Congo, president Teodoro Obiang Nguema of Equatorial Guinea and president Omar Bongo Ondimba of Gabon (who died in June 2009) looted public funds to buy luxury homes and cars abroad. Though representatives for the three leaders were unavailable for comment to fDi, they have denied the accusations in their respective local media.
The accusations have set up a tense legal wrangle in France, which claimed both Congo (often referred to as Congo-Brazzaville to distinguish it from the far larger Democratic Republic of Congo) and Gabon as colonies until 1960. Though a French magistrate agreed in May to launch a probe into the leaders’ assets, the Paris prosecutor’s office has appealed in an attempt to have the investigation halted.
“It shows that not all judges in France are willing to abide by governmental or diplomatic interests, and that they are willing to find out how these people were able to buy these assets,” says Jacques Terray, vice-chair of Transparency International France. “We hope that this will be a precedent for other countries.”
A decision regarding attempts by the Paris Public Prosecutor’s office to halt the investigation – arguing that Transparent International does not have the right to file it as the organisation itself was not a victim of wrongdoing – is scheduled to be issued by a board of inquiry on October 29.
The trio of countries at the heart of the case all tell a similar story of a surfeit of natural resources and stunted political development that has kept most of the region’s citizens politically disenfranchised and economically impoverished to the benefit of a select few.
Gabon’s former president, Mr Bongo – who was Africa’s longest-serving ruler – was educated largely in Congo, at the time called French Equatorial Africa. A political chameleon, Mr Bongo shifted from running an authoritarian one-party state to participating in relatively free, if flawed, elections.
Accusations of government corruption in Gabon’s oil industry, which accounts for more than half of the country’s GDP, have long been rife, and a 1999 US congressional investigation into Citibank revealed its personal accounts held more that $130m of Mr Bongo’s money. A 2007 French investigation of real estate owned by the president and his family turned up holdings in France worth an estimated $190m.
For its part, Congo saw a series of coups and assassinations from independence onward, with the country ruled by the Marxist-Leninist Marien Ngouabi from January 1969 until his murder in March 1977, and current president Mr Nguesso finally seizing power in 1979. In 1992 he lost a democratic election to Pascal Lissouba but by 1997 had returned to the presidency with the support of the Angolan army in a civil war estimated to have claimed at least 10,000 lives. A peace agreement signed by the Nguesso government with various rebel factions in 2003 is still considered to be fragile.
Equatorial Guinea, meanwhile, gained independence from Spain in 1968, at which point Francisco Macías Nguema assumed power. In August 1979, Mr Nguema was ousted and executed by his nephew, Teodoro Obiang Nguema, who has ruled the tiny nation ever since, setting about creating a cult of personality to rival anything seen in Africa.
While state radio praises Mr Nguema as being “in permanent contact with the Almighty”, earlier this year gunmen attacked the national presidential palace. A 2004 plot by foreign mercenaries ended in some people, including British nationals, facing jail sentences of more than 30 years.
Though the three nations are all major oil exporters, foreign investment in the region is hardly limited to the oil sector.
The German energy utility Eon and Spain’s Union Fenosa have recently inked agreements to turn Equatorial Guinea’s Bioko island into a centre for gas exports, not only for the country itself but also for neighbouring Nigeria, the seventh largest holder of natural gas reserves in the world.
Because of a facility constructed by Houston’s Marathon Oil in 2007, Equatorial Guinea at present exports nearly 3.7 million tonnes of liquefied natural gas a year. Such substantial foreign investment could be jeopardised if the lawsuit calls into question the legitimacy of trade with Equatorial Guinea.
In a further diversification of the region’s economic role, in 2007 Congo was readmitted to the Kimberley Process, which aims to stem the flow of conflict diamonds, after having been expelled from the then year-old process in 2004 for falsifying certificates of origin and exporting diamonds from its war-wracked neighbour, the Democratic Republic of Congo. The case is politically sensitive in France, as well, given the country’s long and tangled history with sub-Saharan Africa.
During the 1981-95 government of François Mitterrand, France was the main international backer of the ethnic Hutu dictatorship of Juvénal Habyarimana, the Rwandan leader whose assassination in April 1994 served as the opening shot in the genocide that swept through Rwanda that year. Policy towards Africa under Mr Mitterrand’s successor, Jacques Chirac, was also marked by a high degree of French business interests, with only muted calls for economic and political reform.
During a 2007 trip to Senegal, French president Nicolas Sarkozy called for an end to Franco-African diplomacy based on personal relations between leaders and rather for a “partnership between nations equal in their rights and responsibilities”. However, in the five trips Mr Sarkozy has made to Africa in the past three years, his criticism of corruption in regions where French companies have extensive investment has been minimal.
“In a larger context, this case is in a sense an end of the France-Afrique foreign policy which has gone all the way back to the time of DeGaulle,” says Sebastian Spio-Garbrah, west Africa analyst for the Eurasia Group, a political risk research and consulting firm based in New York. “Apart from Guinea, all the countries [in west Africa] more or less agreed to remain within the Francophone zone, and the French government had to protect or have a paternalistic relationship with these people.”
Published: October 15, 2009
Foreign Direct Investment
(Read the original article here)
The violence, poverty and corruption that has blighted Haiti over the past few years has given way to an air of peace, efficiency and optimism. Michael Deibert reports.
Politically aligned gangs warring across the ramshackle capital of shanty towns and gingerbread houses are a thing of the past in Port-au-Prince, the capital city of Haiti, and visitors cannot help but be struck by the feeling of change in the air.
An airport previously staffed by political cronies, where passengers sweated in boiling halls, is now a model of air-conditioned efficiency. Streets once deserted after sunset now teem with life, with upper-class restaurants in the hillside Petionville district and the kerosene-lit roadside stands of the ti machann (vendors) downtown luring customers late into the evening, something unthinkable only a few years ago.
Peace has been brought to this Caribbean country of 9 million people through the work of president René Préval’s government, and the 9000-member United Nations Stabilization Mission in Haiti, known as MINUSTAH.
Haiti was previously ruled by the erratic priest-turned-president Jean-Bertrand Aristide from 2001 until his ousting in February 2004. This was followed by turmoil under an interim government that ruled until President Préval’s inauguration in May 2006.
From a police force of just 3500 at the start of Minustah’s mandate, Haiti now boasts 9200 police officers, a number projected to grow to 10,000 by the year’s end, and to 14,000 by the end of 2011. Recent mid-term parliamentary elections passed largely peacefully – no small feat in a country where ballots often threatened civil order.
In addition, the World Bank, the International Monetary Fund and the Inter-American Development Bank (IADB) collectively cancelled $1.2bn of Haiti’s debt in June, erasing almost two-thirds of the country’s outstanding debt in one stroke. The IADB went even further, approving an additional $120m in grants to help Haiti improve its infrastructure, basic services and disaster prevention plans.
“Haiti has a lot of potential,” says Michèle Pierre-Louis, the country’s prime minster and a respected civil society leader before she joined President Préval’s government. “But we have a very fragile civil society, and we’ve never thought of social mobility and prepared for a middle class.”
Many observers and investors feel a guarded optimism about the country’s political and economic prospects.
“The investment climate in Haiti is far better now than it was during the [interim] period or the days of President Aristide, that can be said without any doubt,” says Lance Durban, a US businessman who first arrived in Haiti in 1979 and now runs Manutech, an electronics manufacturing company employing about 450 people. “You’re close to the US market, you have a lot of people who speak English and you have the lowest wages in the Americas.”
Last year, Haiti boasted modest-though-respectable GDP growth of 2.3%, and at the beginning of 2009, President Préval created the Groupe de Travail sur la Compétitivité, a body designed to increase Haiti’s competitiveness in attracting global businesses.
Beyond the manufacturing sector, new avenues in Haiti’s potential for investors are also opening up. The garment industry, once a lynchpin of Haiti’s economy, could help the country’s economic revival, if given the right incentives and support. In the US, the Haitian Hemispheric Opportunity through Partnership Encouragement Act of 2008 (HOPE II) built on a 2007 measure that provided certain Haitian textiles with duty-free status when entering the US. Mining is another area of interest (see In Focus, below).
Also on Haiti’s business landscape is the OTF Group, a competitiveness consulting firm credited with breathing new life into Rwanda’s tourism, coffee and agro-industry sectors following the genocide in the country in 1994. OTF has found encouraging evidence that Haiti might be ripe for a similar renaissance.
“In terms of the business opportunities, I am amazed by what I think is possible,” says OTF director Rob Henning. “And our role is to facilitate a process by which the Haitians, both the public and private sector, take ownership over industries and try to create a prosperous Haiti where poverty is reduced through wealth creation and the creation of businesses.”
Though Haiti currently ranks 154 out of the 180 countries covered by the World Bank’s Doing Business Index, substantial improvement has been made in cutting down the red tape that once made investing in the country an inexplicable maze for foreign capital.
It generally now takes a maximum of 40 days to incorporate a company in Haiti, as opposed to the 202 days that it took as recently as 2003.
However, the challenges the country faces remain substantial. Weak infrastructure, environmental degradation and deforestation contributed to conditions which saw a trio of hurricanes kill at least 600 people in 2008. After Haiti’s Senate passed a measure in May raising the country’s minimum wage to a rate of about $4.90 a day, a 300% increase from its current level, President Préval balked at signing the measure, fearing that it would jeopardise Haiti’s already fragile employment sector.
Despite this, however, Haiti’s business class and its poor majority have learned some hard lessons about working together.
In the once-violent Port-au-Prince neighbourhood of Saint Martin, member’s of Haiti’s private sector and local community leaders have been meeting with the support of the Irish charity Concern Worldwide since 2007. A ‘peace and prosperity’ committee in the district boasts three members from Haiti’s private sector and 12 representatives from the community of Saint Martin. A recent general assembly to address community concerns attracted nearly 150 people.
“You can no longer put a business in a community where it is built against the community,” says Ralph Edmond, the president of Farmatrix, which has manufactured pharmaceutical products in the district since 1994, and who is active in the debate. “If we are to live in this country, then we have to live differently than our fathers did before.”
Population: 9.03 million
Pop. growth rate: 1.84%
Area: 27,560 sq km
Real GDP growth: 1.3%
GDP per capita: $1300
Current account: -$611m
Largest sector (% of GDP): Agriculture 66%
Labour force: 3.64 million
Unemployment rate: na
Source: CIA World Factbook, 2009
MINING INDUSTRY TO STRIKE GOLD?
Eurasian Minerals, a Colorado-based mining company, in association with Newmont Mining Corporation, has initiated exploratory prospecting procedures at several sites in the north of Haiti, where there could be substantial gold and copper deposits.
In the neighbouring Dominican Republic, the Pueblo Viejo gold deposit has proven to be one of the largest in the Western Hemisphere, with proven and probable reserves of 570,000 kilograms of gold, 3.3 million kg of silver and 192 million kg of copper.
“Mining could represent a substantial investment in the country, its economy and its infrastructure,” says Eurasian Minerals CEO David Cole, noting the potential for “very large” gold deposits in Haiti that have never been properly explored.
Sunday, October 11, 2009
Saturday 10 October 2009
By Michael Deibert
Presented to the Applied Research Center and the Latin American and Caribbean Center at Florida International University in Miami, Florida, August 2009
(Read the original article here)
At present, Haiti is passing through a delicate and significant period, one which, while giving hints of hope, also provides ample grounds for caution.
Though there have been significant and laudable improvements in the country’s security situation under the mandate of Haitian President René Préval, inaugurated in May 2006, these gains remain fragile and Haiti’s political situation relatively tenuous, and two stubbornly recurring factors of Haiti’s political life will have to be addressed in order to concretize them.
Though he has been criticized in some quarters for ineffectiveness, I believe that it is hard to overstate the impact the restoration of relative peace around the country since Mr. Préval took office has had on the life or ordinary Haitians. Whereas only a few years ago the authority of the state extended little even in the capital, Port-au-Prince, where entire neighborhoods were held in the sway of various politically-affiliated armed gangs, citizens of the capital, including those in poorer quarters, can now largely go about their business without the ever-present fear of being kidnapped or being caught in an exchange of fire between the gangs, Haitian police and forces of the 9,000 member Mission des Nations Unies pour la stabilisation en Haïti, known by its acronym MINUSTAH. Haiti’s long-crumbling road system is being gradually rehabilitated, especially in the country’s south, and its ever-erratic electricity situation has also improved somewhat. The appointment of Michèle Pierre-Louis, a respected and independent-minded civil society leader who formerly directed the Fondasyon Konesans Ak Libète (Knowledge and Freedom Foundation or FOKAL), as Prime Minister in September 2008, should also be viewed as a positive sign in a country where the Prime Minister’s office, technically the head of government according to Haiti’s 1987 constitution, has often meant little more than a rubber stamp for the presidency.
On the economic front, there has also been some good news, with the June announcement by the World Bank, the International Monetary Fund and the the Inter-American Development Bank collectively canceling $1.2 billion of Haiti’s debt, in one broad stroke erasing almost two-thirds of the country’s outstanding debt. The latter institution went even further, approving an additional $120 million in grants to aid Haiti in improving sectors such as infrastructure, basic services and disaster prevention.
Also, in the United States, the Haitian Hemispheric Opportunity through Partnership Encouragement Act of 2008 (HOPE II), with strong support in the U.S. congress, built yet further on a 2007 measure that provided certain Haitian textiles with duty-free status when entering the United States, perhaps a boon for Haiti’s long near-moribund textile industry.
The amelioration of Haiti’s security situation is, in my view, due to several factors, not the least of which has been the steady and principled leadership of Mario Andresol at the head of the Police Nationale d’Haiti (PNH), bringing back competence and accountability to an institution that, during the 2001 to 2004 rule of Jean-Bertrand Aristide and to a lesser extent the 2004 to 2006 interim government that ruled Haiti before Mr. Préval’s election, was viewed chiefly as a highly politicized bludgeon used by Haiti’s executive branch against its enemies, real or perceived.
A projected five year UN-supported police reform program is now in its third year of implementation, currently providing Haiti with 9,200 police officers, with that number projected to grow to 10,000 by year’s end. For a police force that numbered only 3,500 at the start of the UN mission (of whom over 1,500 had to be dismissed), the target of 14,000 police officers by the end of 2011 would not seem overly optimistic. This surge in police recruits is a far cry from the situation between September 2004 and June 2005, during which a PNH officer was being murdered every five days in Haiti. On the judicial side of law enforcement, Haiti has recently re-opened its school for magistrates after being shuttered for many years.
However, there are some structural problems to Haiti’s political culture that need to be addressed if the calm that we have seen in Haiti over the least few years is to be anything but cosmetic, and if a longer process of both political and economic development can occur.
By now everyone is no doubt familiar with the litany of woeful statistics that so often get repeated about Haiti in gatherings like this: The fact that over 4 million of Haiti’s nearly 9 million people live on less than US$1 a day, that only the people of Somalia and Afghanistan suffer from higher rates of hunger, that 90 percent of Haiti’s tree cover has been destroyed for charcoal and to make room for farming, resulting in erosion that has destroyed two-thirds of the country’s arable farmland and leaves it vulnerable to torrential floods such as those caused by a trio of hurricanes that killed at least 600 people last year.
As already noted, some steps are being taken at an international level to address Haiti’s economic woes and, though far from adequate, small steps to try and address Haiti’s environmental disaster are being taken by such indigenous groups as Tèt kole ti peyizan Ayisyen and the Mouvman Peyizan Nasyonal Kongre Papay.
Despite this, though, I believe that the two hard grains in Haiti’s political culture that must be addressed, both by the Haitian government and by the international community, if the changes I have outlined are to be anything more than temporary. These grains are those of impunity and corruption, the continuing presence of which have the ability to undermine all of the progress that we have so far seen.
The guilty pleas this past May of two Miami telecommunications executives, Juan Diaz and Antonio Perez. in connection with their roles in a conspiracy to pay and conceal more than $1 million in bribes to former Haitian officials during the Aristide’s government’s tenure is a step in the right direction, but it unfortunately has yet to be see reciprocal prosecutions on the Haitian side for those who accepted the bribes.
Despite the ratification of the UN Convention against corruption by Haiti’s parliament in 2007 and a vigorous speech about the problem of corruption in Haiti by Préval in May of that year, as a Haitian friend of mine recently told me, corruption is a low-risk, high-return initiative in Haiti, one has every chance of becoming very rich, and very little chance of being punished.
Going hand-in-hand with a culture of corruption and impunity, historically in Haiti, armed government loyalists with no formal law enforcement role have essentially became contractors of the state, a phenomenon that held true with the Tontons Macoutes of the 1957-1986 Duvalier family dictatorship, the attaché of the 1991-1994 defacto era and the chimere of Aristide’s 2001-2004 mandate. Under the aegis of the state, such affiliated members, rewarded irregularly through various forms of government largess, were allowed to exist as a competing armed group to the official security forces, and given free reign to commit some sickening crimes, such as the April 1994 killing of Aristide supporters in the northern city of Gonaives and the February 2004 massacre of Aristide opponents and civilians in the central Haitian town of St. Marc, the latter a crime for which no one has as yet been tried.
Though this phenomenon, as far I can tell, is no longer present at the heart of Haiti’s government today as it has been in the past, the aba/a-vie option of mob politics remains an attractive one to many of Haiti’s political and extra-political actors, as we saw with the riots of May 2008 and recent chaotic protests in favour of raising the country’s minimum wage. Legitimate grievances can quickly be manipulated by those seeking instability in Haiti for criminal or political gain.
Though there is a palpable difference now from the years of the second Aristide government and the interim government, when police and security services were objects of fear and distrust in the country and brazen corruption existed at the very pinnacles of power, the Haitian public now needs to feel that the police and judiciary are responsive institutions, not simply commodities that, like so much in Haiti, are for sale to the highest bidder and out of reach of the ordinary citizens.
By my count, there have been 7 UN missions in Haiti over the last 17 years, all of which had been requested by the Haitian government in power at the time. There can be 7 more over the next 17 years, but I believe if these two core issues are not aggressively and substantively addressed, the international community risks only solidifying the already deep and decidedly deserved skepticism that many Haitians have for the political process as it currently exists in the country, as evidenced by recent feeble electoral participation, and the institutions propped up by it, both local and foreign.
The people of Haiti, and by this I mean the poor majority, need to feel that they have some sort of stake in the kind of society that Haiti’s politicians, business elite and the international community are trying to create, because without the reality of a power structure that is responsive to the needs of its citizens and transparent in its governance, the window of opportunity that we are currently provided with will shut rapidly, and those hoping for its closure, and along with that continued drift and anarchy in Haiti’s political system, will once again step into the void, to the detriment of Haiti and its people.
Michael Deibert is the author of Notes from the Last Testament: The Struggle for Haiti. His blog can be read at www.michaeldeibert.blogspot.com.
Friday, October 09, 2009
(Read the original Nobel committee citation here)
The Norwegian Nobel committee has decided that the Nobel peace prize for 2009 is to be awarded to President Barack Obama for his extraordinary efforts to strengthen international diplomacy and cooperation between peoples. The committee has attached special importance to Obama's vision of and work for a world without nuclear weapons.
Obama has as president created a new climate in international politics. Multilateral diplomacy has regained a central position, with emphasis on the role that the United Nations and other international institutions can play. Dialogue and negotiations are preferred as instruments for resolving even the most difficult international conflicts. The vision of a world free from nuclear arms has powerfully stimulated disarmament and arms control negotiations. Thanks to Obama's initiative, the USA is now playing a more constructive role in meeting the great climatic challenges the world is confronting. Democracy and human rights are to be strengthened.
Only very rarely has a person to the same extent as Obama captured the world's attention and given its people hope for a better future. His diplomacy is founded in the concept that those who are to lead the world must do so on the basis of values and attitudes that are shared by the majority of the world's population.
For 108 years, the Norwegian Nobel committee has sought to stimulate precisely that international policy and those attitudes for which Obama is now the world's leading spokesman. The committee endorses Obama's appeal that 'Now is the time for all of us to take our share of responsibility for a global response to global challenges'.
Oslo, 9 October, 2009