ryan1234

The Next Crisis: Africa



The recent drop in oil and other commodity prices makes it almost a certainty that some unstable commodity-exporting nations will reach a crisis stage in the next few months. The only question is, which countries are likely to erupt first?
The Middle East is always a safe bet for an explosion, but there is a very good chance the next eruption will be in Africa, with the most likely location being Congo, followed by Sudan. In Latin America, Argentina is headed for another debt default and financial meltdown, and Venezuela continues to rapidly deteriorate. And there is Russia, which is likely to react poorly as its once booming economy goes into to a sharp recession. Pressures will mount on the United States to become involved, particularly in Africa, as mass killings beginagain.
The high price of oil and other major commodities over the last few years acted as a protective blanket over increased tensions within major commodity-exporting nations. Now, as the high revenues from these exports sharply drop, the fights over the shares of a smaller and smaller pie will accelerate.
As the price of oil dropped in inflation-adjusted terms from almost $100 per barrel in 1980 to only $16 per barrel in 1997, the United States and most other oil-importing nations enjoyed rapid economic growth. But as the real price of oil rose, it began to take its toll on U.S. and European economic growth, particularly in the last year when oil roughly doubled in price. The rapid oil price rise pricked the property price bubble in the United States and Europe sooner than it would have occurred with more stable oil prices.
The end of property-price bubble led to the financial crisis because too many individuals and institutions were over-leveraged based on the foolish belief that property prices would only increase. But the big rise in oil prices and other commodities produced windfall revenues for the producing states. Unlike Norway and many of the Middle Eastern oil producers, most of the African producers of oil and other commodities, plus countries such as Venezuela, spent almost every penny they received and then some.
The old Belgian Congo, now the Democratic Republic of the Congo, has been unstable for years. It had a civil war in 1996-97 and another one in 1998-2003. The violence never totally stopped despite having large numbers of U.N. "peacekeepers." Congo suffers from many - perhaps 60 - different regional and local rebel groups, and much of the country is not effectively governed. Recently, there has been a major upsurge in violence in the eastern provinces, and an increasing number of conflicts with neighboring Rwandan units.
Legal and illegal mining accounts for a substantial portion of Congo's income. As this income decreases due to the worldwide fall in commodity prices, the incentives to steal from others will grow even greater. Given both the increasing economic stresses and the various ethnic and tribal hatreds, there is a real and immediate danger that the accelerating violence could escalate into a cross-border regional war with massive losses of life...........
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High oil and commodity prices enabled not only real economic growth in Africa over the last decade, but also allowed many different political and militia groups to acquire and store arms, knowing that the peace was unlikely to be permanent. Now with the prospect of greatly reduced total oil and other commodity revenue for the continent, many are likely to seek to maintain their own income by taking it away from some other group. Renewed mass killings are likely. The Western nations will be pressured to intervene, but trying to find real white hats when most of the hats are various shades of gray or black will be a challenge when trying to decide which faction to support. Those who come to do good, like other well-meaning interventions, may well find the goal becomes more and more costly and elusive.

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If money can't buy happiness, you'll just have to rent it.

atpwannabe

I would agree with you to a certain point. As long as the foreign policy of the United States doen't perpetuate the "colonialism" mindset and the African elite do not buy into it and then subject the masses to it, then I believe that difinitive progress can be made. Treaties can be signed and indigenious minerals can be cultivated that would benefit our economy, military and other markets of the US. Hopefully, America will tap its resources of "like minded people" that it already has an abundance of. Initially, it would only make sense.

The United States can ill afford the ADM philosophy...."supermarket to the world". Having developing countries mine the raw material/minerals, ship the raw material/minerals to Europe and America where "value is added" then we turn right around and sell that country the finished product. The difference between what the raw materials/minerials sold for and what the purchase price of the value added product was will either cause a deficit or a surplus. We all know that it's a deficit. Thus, these countries are always in a developing state.

For example, the US military gets cobalt from the African countries of Zambia, Zaire and Zimbawae. This colbalt prevents the engines of our military a/c from literally melting from the high temperatures that these engines produce. Without it, we'd have to come up with something else. The fact is, there is nothing else. However, with such a precious commodity that the US needs to maintain its superiority in terms of air power, these countries are disproportionately poor. Why is that? These countries should have busling economies and a strong market.

Wrongs such as these must me righted.

JMO.



atp

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...Adversity truly introduces us to ourselves.

jungle

African economies boomed during the 1950s as growth and international trade multiplied beyond their pre-war levels. The insatiable demand for raw materials in the rebuilding economies of Asia and Europe and the strong growth in North America inflated the price of raw materials. By the end of the colonial era in the 1960s, there was great hope for African self-sufficience and prosperity. However, sporadic growth continued as the newly independent nations borrowed heavily from abroad.

The world economic decline of the 1970s, rising oil prices, corruption, and political instability hit Africa hard. In subsequent decades Africa has steadily become poorer compared to the rest of the world; South America experienced solid growth, and East Asia spectacular growth, during that same period. According to the World Economic Forum, ten percent of the world's poor were African in 1970; by 2000, that figure had risen to 50 percent. Between 1974 and 2000 the average income declined by $200. Beginning in 1976, the Lomé Convention and Cotonou Agreement between the European Union and ACP countries, including Sub-Saharan Africa, have structured economic relations between the two regions.
WIKI

Internal corruption and civil wars have played a far greater role in modern African economic history than the end of European colonialism. There was never any US colonialism.
An independent country must right it's own wrongs to move forward.

Another view of the causes of crisis: http://www.opendemocracy.net/democra...story_2701.jsp

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Just another slave on the Marxist plantation. With the "joint Reptilian-Bavarian Illuminati" crew.

atpwannabe

Lomé has provided entry of agricultural and mineral exports into European markets duty free, however, when these minerals have "value added" to them and the finished product is then exported back to these countries, my question still remains...what's the bottom line in terms of GDP? Is there growth or decline?

For example, the Africa continent and the Middle East yield more yellowcake, in terms of metric tons than any other place on earth. As we know, yellowcake is used in the production of pure uranium. US involvement in the Middle East is more than just about oil. We go in, establish these trading agreements that can be lopsided that can perpetuate the "developing country" syndrome. How long will be these countries be designated as such? Why not go in and ensure (again the US using all it's human capital to achieve a much desired end) that sound fiscal and monetary policies would benefit all that are involved? We would have to look at making some changes in the fiscal, financial and monetary policies (soft window loans) that are now in place at the World Bank, IMF and IBRD.

You are 100% correct when you mention the fact that corruption has run rampant within some of the governments of the nations in Africa. The list is long and distinguished , however, the people of each nation will have to hold themselves accountable and responsible not only for the content of the treaties that are agreed upon and consumated with the EU and America, but also those whom they have elected to negoiate these treaties and run the government of their respective countries.



atp

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...Adversity truly introduces us to ourselves.