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Tuesday, 31 July 2007

When corruption and minerals collide....

The Economist Magazine has an interesting piece on DRC - well worth the read. Its difficult to remain optimistic about the DRC. We know that countries of this size, virtually land locked and full of mineral resources are probably destined for perpetual underdevelopment - but the mining companies and the politicians appear not to be helping :

Some good initiatives have been launched. The government has persuaded some opposition politicians who boycotted political institutions after the post-election fighting to return. Legislators promise to keep spending in check by reviewing it every three months. Those who want to run state bodies will now be tested by officials on some basic skills, not just their political connections. Logging and mining contracts worth billions of dollars will apparently be reviewed.

But there is no sign that the country's vast mineral resources will benefit more than a lucky handful. Few of the taxes that are paid actually go into the state coffers. A Western diplomat estimates that direct benefits to the state from mining totalled a paltry $32m last year, though Congo-based copper-mining companies alone have made hundreds of millions on stock markets in recent months.

Parliament has adopted a budget for 2007, albeit more than six months into the year. But the government may struggle to lure back donors after mismanagement led to the suspension of many lending programmes agreed on last year. The budget this year, for a country of 60m-odd people, is a meagre $2.4 billion.

3 comments:

  1. i find us africans very naive. the resources we have are nothing until they have been finished into products that can be used.

    we are trying to value our raw materials so highly as if they have so much value when in the ground.

    how much does it cost to turn the dust of copper into a circuit/conductors?

    how much does it take to turn a tree into a fine chair?

    why we are at it can we also answer who has got the money to buy the finished goods?

    lets get the real value of what we deserve from these so called resources that most people believe are solutions to our problems of poverty.

    our biggest problem is regeneration of buying power.

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  2. In diamond rich places like the DRC, extraction costs are very cheap. This is why even a local warlord can become very cheap.

    Its quite ironic that DRC suffering is because it is too rich.

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  3. why is their war in rich mineral countries.

    it's amazing you mention that its cheap to extract minerals in these countries. have you ever asked yourself why coffee/maids are expensive to get.

    why should i pay international fees to mine in a country with low wages and am doing them a favour by investing in their country?

    the reason i have is that the gov.of these countries can't come up with a profitable tax for the investors to get mining operations started.

    let look at the oil countries,they want to use the oil as leverage to get what they want amd reality is they ask for out of this world demands and the cost to these economies is so high that the only way is to create a bit of chaos just to sustain their hard earned ecnonomies.

    so when you look at the DRC what is their demand for the minerals?

    is it cheaper to have chaos or pay up crazy demands?

    ReplyDelete

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