June 2019
98.3%
OF GHANA'S GOLD REMAINS IN THE HANDS OF MULTINATIONAL CORPORATIONS
The
disproportionate focus on corruption of national leaders distracts
from the systemic theft of national wealth by multinational corporations.
By
Celina della Croce
Every year, the vast majority of Ghana’s natural wealth
is stolen. The country is among the largest exporters of gold in the
world, yet — according to a study
by the Bank of Ghana — less than 1.7 percent of global returns from
its gold make their way back to the Ghanaian government. This means
that the remaining 98.3% is managed by outside entities — mainly
multinational corporations, who keep the lion’s share of the profits.
In other words, of the US$5.2
billion of gold produced from 1990 to 2002, the government received
only $87.3 million in corporate income taxes and royalty payments.
The dominant discourse propagated by institutions like
the International Monetary Fund (IMF) that control the levers of global
finance blames the bad governance of local officials for the consequences
of this plunder, citing corruption scandals as the main reason for
a lack of resources. However, the discourse around bad governance
— the idea that corrupt local officials are to blame for endemic poverty,
low health indicators, education, and other measures of national well-being
— focuses on what happens with the 1.7% of the returns that Ghana
receives. Sarah
Bracking points out that “the company would argue that the market
value of output is not synonymous with their surplus, or profits,
as working capital, wages, depreciation of machines and so forth must
be paid from this. However, the figures do act as a good illustration
of the low returns to the sovereign owners of sub-soil resources,
as a proportion of their final market value, which, in Africa, can
be estimated as typically in the region of between three and five
percent, but which in this case is lower (about 1.7%).” Holding officials
accountable for their use of public funds should be a given, but what
about the remaining 98.3% of the returns generated by Ghana’s gold
exports?
Individuals are blamed, fingers angrily pointed at corrupt
governments, while the nations they govern are robbed blind by transnational
corporations. It is these corporations, working with institutions
like the IMF and the World Bank, that define the terms of this conversation.
These international lenders bury borrowing countries with steep interest
rates and terms that grant lending institutions the power to determine
and approve national policies.
National leaders of countries that fall into the debt
trap are forced to forfeit the right to create their own policies
for access to loans. These leaders are then blamed for the consequences
of policies and terms crafted by lending institutions (a key form
of neocolonialism). They are also blamed for the vestiges of hundreds
of years of colonialism that came before.
In some cases, it is true that national leaders are involved
in corruption scandals. In others, corruption scandals are fabricated,
relying on a deeply embedded narrative and lack of faith in national
leadership in the Global South, despite a lack of evidence (seen recently
in Brazil
with the imprisonment of leading presidential candidate Lula da Silva).
Even in cases where the corruption of local governments
does exist, the amount of money pilfered pales in comparison to the
wealth extracted by transnational corporations. In other words, robber
barons are blaming petty thieves for the consequences of their large-scale
robbery schemes. According to the United Nations Conference on Trade
and Development (UNCTAD), multinational corporations’ offshore tax
hubs result in an estimated $100
billion in annual tax revenue losses for developing countries.
Vijay Prashad of Tricontinental: Institute for Social Research calls
this phenomenon “tax
strikes,” or the idea that “those who hold capital, who are the
masters of property, have been — essentially — on strike against regimes
of taxation. They use their vast wealth to either hide their money
or change tax laws to offer them increasing protections.” Rather than
using this money for the social good — to invest in public services,
infrastructure, health, or education — they use it to increase their
own wealth, often by “inflat[ing] the stock market and various asset
bubbles.”
Comparatively, during a 2013 keynote
address, World Bank President Jim Yong Kim cited that corruption
in the form of bribery and theft by government officials costs developing
countries between $20 billion and $40 billion each year. In other
words, by a rough calculation, the amount that corrupt government
officials cost developing countries is anywhere from 40% to 80% less
than half of the amount that these nations lose in offshore tax havens.
The real power, then, remains in the hands of multinational
corporations, which not only make off with vast sums of wealth belonging
to the “darker nations,” but also continue to exercise control over
nations in the Global South, where they use access to finance as a
lever to impose policies that benefit themselves at the expense of
the people who live there.
When local leaders are deemed too much of a threat to
multinational corporations’ interests, they are quickly deposed through
coups, as we saw in Haiti (2004) and Honduras (2009), or destabilization
campaigns, as we see in Venezuela
today. Kwame Nkrumah, a leader in Ghana’s independence struggle and
the country’s first president, referred to this process as neocolonialism.
“The essence of neo-colonialism is that the State which is subject
to it is, in theory, independent and has all the outward trappings
of international sovereignty. In reality its economic system and thus
its political policy is directed from outside,” Nkrumah wrote in his
book Neo-Colonialism, the Last Stage of Imperialism. Through
organizations like the IMF and World Bank, former colonialists would
strive for “the general objective ... to achieve colonialism in fact
while preaching independence.”
Fifty-four years after Nkrumah wrote Neo-Colonialism,
The Last Stage of Imperialism (1965) and 62 years after Ghana’s
independence from Great Britain (1957), Nkrumah’s assessment remains
as clear and relevant as ever. The preferred words of imperialism
have shifted, but the underlying structure remains the same: a system
where an illusion of freedom obscures the power relations and where
monopoly
capital, in the form of transnational corporations and lending
institutions, exercises control over the country’s economic and political
reality.
The narrative of today’s neocolonialists blames “bad governance”
as the obstacle to a better future in which Ghanaians benefit from
their vast mineral wealth, as Gyekye Tanoh of the Third World Network
(Africa) points out in his recent interview
with Tricontinental: Institute for Social Research. According to this
trope, the corruption of local governments is to blame. However, this
narrative leaves out of the picture the pillage of natural resources
and exploitation of labor by colonizers (Great Britain, in the case
of Ghana).
Not only were the systems to process crude forms of minerals
such as oil and gold not developed by colonizers, but the country’s
reliance on foreign capital to buy and process these resources has
kept the country in a position similar to its colonial status pre-1957,
as Nkrumah predicted, where transnational corporations, rather than
the state of Great Britain, keep the vast majority of revenues produced
from Ghanaian gold and other resources. Tanoh explains: “[t]he entire
system that was set in place since the 1980s to force countries to
rely upon raw material exports and to become dependent on foreign
buyers is what leaves countries like Ghana with such a minuscule amount
of the wealth taken from Ghana’s land. ‘Good governance’ is not going
to solve this, unless ‘good governance’ refers as well to the deep
structural dynamics.”
Pointing a proverbial finger at those responsible for
the distribution of 1.7% of wealth generated and framing them as the
main culprits of corruption, poverty, and underdevelopment, is not
just reckless and irresponsible; it is part of a systemic narrative
that deflects attention away from the real thieves: the multinational
corporations that preside over the 98.3% of the remaining wealth.
It is intellectually dishonest to ignore the broader historical context
that is responsible for the low returns of Ghanaian gold to Ghanaian
citizens. True bad governance is the appropriation of 98.3% of wealth
produced by Ghanaian resources that lines the coffers of transnational
corporations instead of being returned to benefit the Ghanaian people.
Of the ten
top multinational firms that operate on the African continent, only
one (Vale, of Brazil) is located in the Global South. Of the remaining
nine, three are United States corporations, three are Canadian, two
are Australian, and one is British. All are private transnational
corporations. In other words, the gold that is extracted from Ghanaian
soil (like the natural wealth extracted from across the African continent
and Global South) is immediately handed over to multinational corporations
— almost entirely based in and controlled by the Global North (or,
at best, by the national elite) — to be processed, refined, and distributed.
Death, rape, and preventable illnesses that plague those who work
in or live near the mines are rampant in the area where these companies
operate (as illustrated by Tricontinental: Institute for Social Research’s
latest briefing).
Though Ghana won its independence in 1957, the vestiges
of colonialism and underdevelopment did not magically leave with it.
Under colonialist rule, resources were extracted from former colonies
— like Ghana — to sustain the wealth of their colonizers. Wealth
produced from gold (further enhanced by enslaved or bonded
labour) quickly left the country, promoting development in England
while leaving Ghana void of the infrastructure to develop or refine
its own resources, and leaving its people without access to basic
services.
To accept the narrative on bad governance is to forfeit
what Fidel Castro called the Battle
of Ideas. It is to let the powerful — transnational corporations,
and the web of institutions that protects their interests,
from the IMF to corporatized non-profits and mainstream media — define
the terms of the conversation on development, sovereignty, and the
lives of the people who inhabit the resource-rich land. It is to forfeit
the control of Ghanaian resources to transnational corporations, the
very thieves of the majority of the country’s wealth, under the
false pretext that they are incapable of managing it themselves. To
quote Gyekye, “the language of ‘good governance’… implies that it
is only the aberrant behaviours of the public officials that should
be seen as corruption. Yet of course the lack of resources available
to accountable public institutions makes it impossible to create or
sustain meaningful domestic anti-corruption mechanisms.”
It is intellectually dishonest to blame local leaders
as the main culprits for bad governance, conveniently leaving multinational
corporations out of the picture. It is the vestiges of colonialism,
and its continued neocolonialist forms, that deprive the Ghanaian
people of the right to process, develop, and manage their natural
wealth and to be the drivers of their own policies — in other words,
their right to national sovereignty. It is transnational corporations,
the stand-ins of yesterday’s British empire — often aided by an enthusiastic
national bourgeoisie — that have robbed the Ghanaian people of sovereignty
over their resources, their wealth, and their future. – Third World
Network Features.
-ends-
About
the author: Celina della Croce is a coordinator
at
Tricontinental: Institute for Social Research as well
as an organizer, activist, and advocate for social justice. Prior
to joining Tricontinental Institute, she worked in the labor movement
with the Service Employees Union and the Fight for 15, organizing
for economic, racial and immigrant justice.
The
above article is reproduced from Globetrotter,
a project of the Independent Media Institute, 19 May 2019.
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