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4. Foreign Investment beyond Compradorism and Primary Commodities: The Role of the Global South

Scott D. Taylor Indiana University Press ePub

4

FOREIGN INVESTMENT BEYOND COMPRADORISM AND PRIMARY COMMODITIES

The Role of the Global South

INTRODUCTION

If Africa had a dollar for every time a scholar, policymaker, journalist, or casual observer noted that “Africa is rich,” the statement might actually be true. Or at least it might have some validity beyond the geologically based wealth to which that expression almost universally refers. Without question, Africa does have stunning natural resource wealth. The continent boasts the world’s highest reserves of platinum and diamonds. Africa is home to approximately 10 percent of the world’s proven oil reserves, 8 percent of its natural gas, and 40 percent of its gold deposits. Uranium, copper, cobalt, columbite tantalum, chromite, coal, asbestos, and gemstones are found in abundance, not to mention plentiful timber, fisheries, and forestry resources. And hydrologic resources in the Congo Basin alone could supply 150,000 megawatts of power, far more than the entire continent’s present consumption. These abundant natural resources have attracted outsiders for millennia, but it was not until the colonial period that the extraction of these resources was truly transformed into a modus vivendi for Africa’s unequal entry into the global economy.

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Appendix

Scott D. Taylor Indiana University Press ePub

APPENDIX

Table 1. Exports of Merchandise and Services

*Measured in USD at current prices and current exchange rates.

Source: UN Conference on Trade and Development Statistical Database, http://unctadstat.unctad.org

Table 2. Net Domestic Credit

*Adjusted for exchange rate fluctuations. Data reported in LCU. Average exchange rate per year used for conversion to USD.

Source: World Bank Development Indicators and Global Development Finance, http://databank.worldbank.org/ddp/home.do

Table 3. Foreign Direct Investment in Reporting Economy (FDI Inward)

*Measured in USD at current prices and current exchange rates.

Source: World Bank Development Indicators and Global Development Finance, http://databank.worldbank.org/ddp/home.do.

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5. From Patrimonialism to Profit? The Transformation of Crony Capitalists and Bureaucratic Bourgeoisies

Scott D. Taylor Indiana University Press ePub

5

FROM PATRIMONIALISM TO PROFIT? THE TRANSFORMATION OF CRONY CAPITALISTS AND BUREAUCRATIC BOURGEOISIES

INTRODUCTION

The prevalence of crony capitalism in sub-Saharan African polities, from neopatrimonial regimes to stable political economies, has formed part of the subtext of each of the preceding chapters. In effect, the pervasive analytical frame of neopatrimonialism suggests that “modern” state institutions in Africa are but a façade, and this extends to thinking about markets as well. Those who consider African politics to be defined by neopatrimonialism assume that African business, at least business as conventionally understood in the West, is a highly dubious proposition because of the endemic corruption found in such environments.1 To them, an autonomous private sector, at least one with any clout or capacity to transform the economy and the state, faces impossible odds; it will be constantly penetrated by neopatrimonial state elites and therefore has no hope of playing a transformative role in the political economy.

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6. Going Continental, Going Global: Africa’s Corporate “Giants”

Scott D. Taylor Indiana University Press ePub

6

GOING CONTINENTAL, GOING GLOBAL

Africa’s Corporate “Giants”

INTRODUCTION

The champions of the view that Africa is “open for business” display an almost unbridled enthusiasm for Africa’s private sector development prospects. Even those who insist that business in Africa is an exercise in intrepidity, such as the producers of the preposterously titled 2009 CNBC series “Dollars and Danger: Africa, the Final Investing Frontier,” wish to convey that there are great opportunities for entrepreneurship in Africa.1 Notwithstanding the enthusiasm of this crowd for business on the continent, their interest is mainly in the potential of small- and medium-scale enterprises, which tends to be the focus of most policy initiatives as well as academic research. Indeed, the principal target of private sector development programs, as described in chapter 3, is expansion of SMEs. Likewise, though their aim is analytical rather than promotional, Ramachandran, Gelb and Shah similarly focus on medium-sized firms, analyzing the constraints faced by entities of this size.

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1. African Business and Capitalism in Historical Perspective

Scott D. Taylor Indiana University Press ePub

1

AFRICAN BUSINESS AND CAPITALISM IN HISTORICAL PERSPECTIVE

INTRODUCTION

Many contemporary observers tend to portray business in Africa as a fairly recent phenomenon or a colonial import. This ahistorical view has advantages for those subscribing to Afropessimist and neopatrimonialist positions, who use it to justify continued skepticism about the prospects for Africa, particularly for black business in Africa, as well as for the enthusiastic globalizationists, for whom it provides evidence of the novelty of business on the continent. This portrayal, of course, is inaccurate, as historians have documented the fact that business in Africa has thrived for centuries and has involved both indigenous African cultures and those from outside the continent. The trans-Saharan trade flourished from about the seventh through the sixteenth centuries and established the economic foundation for numerous African kingdoms and city-states. Later the Atlantic and Indian Ocean slave trades proved lucrative to Europeans, Arabs, and many African middlemen and kings alike. The period of “legitimate trade” that followed saw European coffers further engorged. And finally, during the late nineteenth and twentieth centuries, colonialism and imperialism yielded a tremendous increase in raw material flows to European factories and consumers, as well as the opportunity for European settlement and exploitation—which resulted in the establishment of many enduring commercial enterprises—in various parts of the African continent. Moreover, throughout each of these epochs, Africans continued to engage in commercial activity.

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