OR BUSINESS AS USUAL?
2009 will be mainly remembered for the global financial meltdown, but there is one ongoing crisis ~ with its roots in events that happened that year ~ that could have far greater repercussions. It has the potential to reshape the boundaries between countries in a way never seen before in the modern globalized age. I am talking about food, a commodity that affects us all, both rich and poor.
Earlier in the year we saw widespread anger and riots in countries far-flung as Haiti, Cameroon, Egypt, Yemen and Uzbekistan, over the rapidly rising prices of food staples such as flour and sugar. Caused by a multitude of factors ~ a growing world population, climate change, crop failures, biofuels plantations, the emergence of a wealthy Asian middle class, and the ease of long-distance transport, to name just a few ~ the food crisis, termed a ‘silent tsunami’ in Asia, has risen to prominence and in doing so sparked off intense debate about that most sensitive of topics: land.
Remember that currently, the Zionist Jews quietly abandoning North America ~ although not completely until the continent is a bloodless corpse ~ have been happily moving their wealth to China, the one country they feel incorporated the Communism they wish us all to live under better than any others. As it has been throughout recorded history, where the Jew goes, so goes the wealth and power of their gold. Then, when they have decimated their host, move on to the next victim. Rome, Egypt, France, Britain, now America. Next China.
More ominous still is the fact that many of the agreements seem to be heavily weighted towards the company or country leasing the land. To give one example, Laos has signed away between two and three million hectares ~ up to 15% of its total farmland ~ to China and the UAE, in some cases for up to 70 years. One foreign adviser in the capital Vientiane called the flurry of deals “a fire sale”, adding:
“… the situation is completely out of control … people in power are desperate to get their hands on the money so they don’t miss out. For the companies coming in it’s a massive land grab”.
But is this modern-day land grab comparable to previous stampedes for territory, from the European scramble for Africa at the end of the 19th century to England and Russia’s “Great Game” for the strategic control of Central Asia?
The terms are definitely different. It is no longer empire-building driving expansion into foreign lands, but issues such as food security, mining and bio-fuel plantations, underlined by an impatience with food markets’ ability to turn themselves around.
The “emerging neo-colonial economic powers” (ENEP, as one writer has loosely termed the group) aim to secure an ever-dwindling crop of resources for their own growing populations, regardless of adverse effects on the people or environments of the exploited countries. There are, as David Hallam of the UN Food and Agriculture Organization (FAO) quaintly puts it, “ethical concerns”.
Perhaps most worrying for conservationists is the deal between Daewoo Logistics, a South Korean corporation, and the government of Madagascar for 1 300 000 ha of arable land, on which they plan to grow four million tonnes of corn and half a million tonnes of palm oil.
This is not only a vast area, half the size of Belgium, but half of Madagascar’s farmland.
Daewoo is member and part of the General Motors Company. GM Daewoo now produces vehicles and kits for Chevrolet, Buick, GMC, Opel, Vauxhall, Holden and Suzuki that are offered in more than 150 markets on six continents.
This is a country which has had three failed harvests in the last five years, in which 3.5% of people rely in UN food aid, and which continues to be a net rice importer despite the potential to be “more than self-sufficient”, according to Marco Falcone, FAO emergency coordinator.
Exploitation and starvation of the native populace? Certainly that has the familiar feeling of conquest by population reduction of the masses and seduction of the leaders.
Daewoo are brazenly honest about their motives. A quote from Hong Jong-wan, a company manager, perhaps best sums up their attitude:
“We want to plant corn there to ensure our food security. Food can be a weapon in this world. We can either export the harvests to other countries or ship them back to Korea in case of a food crisis.”
FT hypocrisy and the new wild west
Such attitudes have led to cries of ‘Neo-colonialism’, most notably from the Financial Times, which broke the story, and FAO head Jacques Diouf. In the flurry of activity that followed ~ news reports, press releases, and blogging ~ there was much condemnation of the FT in particular for what many saw as hypocrisy, verging on racism, in labeling the South Korean deal "rapacious” but failing to mention other land deals involving European and North American firms.
Those outraged by the FT and FAO’s stance may have a point. Rio Tinto, the British-Australian mining conglomerate, has a long history of exploitation in Africa and is currently finalizing a $1billion ilmenite mine near Fort Dauphin, on the southern tip of Madagascar.
The project ~ backed by the World Bank ~ has met firm resistance from local fishermen and groups such as Friends of the Earth, who published a report outlining Rio Tinto’s environmental failings, including clearing 6,000 ha of coastal forest and inadequately compensating people for stolen livelihoods.
However the mine, although colossal at 100,000 ha, is still an order of magnitude smaller than the amount of land mooted by Daewoo. Other projects around the country, such as a partnership between Canadian mining group Sherritt and companies from Japan and Korea, are similarly dwarfed in size. Sherritt’s $3.3 billion nickel mine near Ambatovy will bulldoze through 1,700 ha of primary forest, home to nearly 1,400 plant species, 47 of which are endemic.
I have just found an account of political doings recently in this country in which Madagascar is refereed to as "the minerals-rich country". There might be more to this than food as well.
On a visit to the country in late 2007, I witnessed for myself the bizarre Wild West-style mining towns that spring up whenever someone strikes gold (or in this case sapphires), complete with swaggering, gun-toting outlaws. I heard stories of local people being forced out of big projects by their own government in favour of Chinese companies, who subsequently ship in their own workforce and depart as soon as things become unprofitable, leaving the Malagasy to root around in the debris for the odd valuable stone left behind.
This echoes with Daewoo’s own plans to use South African workers on their cornfields and palm oil plantations. Daewoo make all the right noises regarding investment in Madagascan infrastructure; $6-20 billion over the next 20 years for roads, ports, schools and hospitals, as well as 70,000 new jobs.
But there is reason to believe this is largely hot air.
As the FT says, the “South Korean firm looks set to get the land for a notional amount and mere talk of creating jobs.”
And, of course, there is the issue of biodiversity, always high on the agenda of an island such as Madagascar which relies on its unique wildlife to attract tourism and research investment. According to the Biodiversity Hotspots website there are over 50 endemic species of mammal under threat ~ including many lemurs and the cat-like fossa ~ 57 endemic birds and 61 amphibians, as well as 11,600 endemic plants, many of which could have undiscovered medicinal value.
Both Daewoo and the Malagasy government have stressed that nothing will go ahead until an Environmental Assessment is carried out; in the words of the country’s Environment Office, “there’s no deal without a favourable conclusion”.
Favourable to whom? Who hires the Assessors?
Most worrying is the fact that, according to Daewoo, much of the land is completely undeveloped. Whether this means pristine forest or eroded, poor-quality grassland is unclear, but it is a good guess that rare species will be affected.
Undeveloped can also mean that the land is used by subsistence farmers and it has not been "utilized to its highest potential".
Several other issues muddy the waters. The first is the keenness of the Malagasy government to attract foreign investment, nicely summed up by Eric Beantanana of the Madagascar Economic Development Board when he said, “We are very excited because we are frightened by this food crisis”.
How much benefit the 14 million Malagasy living under the poverty line will actually see, in terms of food production (unlikely), infrastructure (roads and ports perhaps, but schools and hospitals?), or jobs remains to be seen.
Madagascar’s [now ex-] rags-to-riches President Marc Ravalomana has taken huge steps since his election in 2002 to increase protected areas in the country, and this shouldn’t be brushed aside lightly.
However, his prior experience to becoming President was running the country’s largest agribusiness company, Tiko, and he has a reputation for aggressively courting foreign investors. In addition, a crucial investment law was amended in January this year to allow foreign individuals or companies to buy land, given certain provisos (for example, it must be used “for professional purposes” only, and any breach of this will result in the company being turfed off their land).
While this looks on one hand to be an open invitation to foreign companies to farm and mine to their heart’s content, it also seems suffocatingly restrictive, perhaps enough so to discourage abuse of power. Again, this seems to suggest that such deals may be a lose-lose situation for all parties, especially given the hostility shown towards palm oil plantations in Laos which drove out Malaysian investors.
Steve Wiggins, of the Overseas Development Institute, seems to think so:
“If I was a political-risk adviser to [investors] I’d say ‘you are taking a very big risk’. Land is an extremely sensitive thing. This could go horribly wrong if you don’t learn the lessons of history.”
Biofuel plantations have attracted much controversy in recent times, especially given their contribution towards the current food shortages. Now local people are wising up to their detrimental effects one wonders how long the current boom will continue.
Madagascar already has several large foreign-owned jatropha plantations ~ an alternative biodiesel source ~ including British company GEM Biofuels, which signed a £3.5 million deal for 200 000 ha of land by 2010.
Aside from their social ramifications, palm oil plantations have been shown to drastically reduce biodiversity and hasten climate change when replacing tropical rainforest. This may sound like a no-brainer, but much of the world’s politicians still see them as a magic bullet for replacing fossil fuels in spite of growing evidence to the contrary.
Corporate responsibility ~ that’ll be the Daewoo
Lastly, there is the reputation of Daewoo itself. They already invest in Indonesian palm oil plantations and corn farms, but more strangely they have contracts totalling $1.6 billion with a consortium of private companies in Algeria to build two new cities, in order to relieve congestion in Algiers.
Stranger still, and far more insidious, is the revelation that in 2001 Daewoo supplied weapons technology to Burma in a $134 million deal. In exchange, Daewoo got a natural gas deal (the Shwe Gas project) which was expected to make them $86 million a year for up to two decades. In December 2006 fourteen Daewoo officials were charged in Seoul for illegally exporting weapons technology to Burma ~ which is banned under Korean law ~ and were later convicted.
As commentators have pointed out, this is not just corruption but gross hypocrisy, as South Korea has its own history of repressive military dictatorships. On top of this, various NGOs have filed complaints with the Korean government against Daewoo for, among other things,
“failure to conduct an environmental impact assessment [and] to respect human rights in connection to the project”.
All told, while they may not be the worst fish in the sea ~ and there are almost certainly worse in what is often a dirty business ~ Daewoo Logistics have the kind of track record that necessitates careful scrutiny of future actions.
Being a foreign investor brings with it responsibility not to flee when the going gets rough, but also to make good on vague promises to create jobs and improve infrastructure.
Is there a decent future for this little girl in her own country?
Perhaps less pressing for the Malagasy people, but still of paramount importance, is the state of the island’s fragile biota, already on the precipice from the twin evils of slash-and-burn agriculture and land erosion. We all have a stake in preventing the list of Madagascan extinctions since human arrival ~ including elephant birds, giant tortoises, pygmy hippos and seventeen species of lemur ~ from growing any bigger.