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How the Swiss get Rich at Zambia’s Expense

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HOW THE SWISS GET RICH AT ZAMBIA’S EXPENSEDecember 11, 2012 — Zambia sits on Africa’s largest reserves of copper and a single Swiss Company is making billions from mining this resource. Zambians, however, see nothing of this wealth, and most live on less than a dollar a day. How is that possible?

How is it that Africa is so rich in resources and yet so poor? The question is often asked as much by Africans interested in altering the continent’s fortunes as by those intent on blaming Africans alone for the paradox.

the IMF and World Bank were involved in the sale of the mines.

We write about this ‘blame Africans’ issue from time to time, either directly or indirectly, as do many others. It’s simply easier for people to blame it all on Africans because that absolves everyone else of any responsibility. 

The question of how Africa can be so rich in resources yet so poor – relative to the other continents – is also central to the impressive documentary Stealing Africa by Danish film-maker Christoffer Guldbrandsen.

In the documentary, Christoffer Guldbrandsen reveals how one Swiss company, Glencore, is making billions from copper mining in Zambia while the country remains one of the poorest in the world. You won’t be surprised to learn that the IMF and World Bank were involved in the sale of the mines that led to this situation.

So much money
When are African nations going to stop taking advice from these organisations? The neoliberal policies they “recommend” have been disastrous for Africa and for developing nations around the world, resulting in the continuous transfer of wealth from the south to the north.

“the village’s residents voted against handing anything back to Africa” 

HOW THE SWISS GET RICH AT ZAMBIA’S EXPENSE 2Glencore makes so much money from copper mining in Zambia that the mayor of the village in which the company is registered can’t spend all the money the company contributes to the public coffers. Meanwhile 60% of Zambia’s population live on less than $1 a day and 80% are unemployed.

Greed and selfishness
When Glencore went public, the windfall tax earned by the Swiss village of Ruschlikon was so large that the mayor proposed a lowering of the tax rate by 7%. But one local resident had a different idea. He suggested the tax rate be reduced by 5%, and that the difference between the two rates of tax reduction should go to the African communities affected by Glencore’s operations. A public meeting was called, but the village’s residents voted against handing anything back to Zambia. They wanted to keep all the money for themselves.

This is far from an isolated case; wherever you are from in Africa, you can be sure that some of that country’s resources are making less for the country than for the Western multinationals involved in extracting those resources.

Aid misconception
The popular perception is that Africa receives so much money in aid and it just wastes the money, and that Western countries are very generous in providing any aid in the first place. But as pointed out in the documentary, the amount of money flowing out of Africa is ten times the amount of aid the continent receives.

Even those familiar with some of the ways in which Africa continues to be sucked dry by these multinationals will despair by what they will learn from Stealing Africa. The next time you hear someone blaming it all on Africa or complaining about how much aid the continent receives, send them a link to the documentary.

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