Adonis Diaries

Posts Tagged ‘Thailand

The International Monetary Fund (IMF) failed in its mission; (Mar. 27, 2010)

After 30 years of successive wrong decisions, decisions based on ideology and not on economics, that

1. weakened the developing States and reduced them to further poverty and famine;

2. decisions that destabilized world economy and lead to the global financial crash…

This International Monetary Fund (IMF) is still refusing to evaluate its ideological economic policies and account for modern economics theories that have

1. demonstrated the total inadequacy of market mechanisms and

2.  financial forces working independently of State interventions and benefiting the upper classes

3.  failing to come to the rescue of the poorer classes and reducing chronic employment.

The IMF has failed in its objectives.

Its mission was supposed to tackle two global economic problems: first, engaging world economic stability and second, aiding developing countries to healthier transition into economic globalization.

The IMF thought that it was doing the right thing for over 30 years:  It stuck staunchly to an archaic economic theory of market forces taking care of fluctuations and inefficient decisions.

The IMF went further to feeling comfortable in the position that poverty and joblessness are not within its mission: they were the World Bank (WB) mission of carrying these functions toward the less fortunate classes!

In fact, the IMF adopted this slogan: “What is good for the financial community in diagnosing healthy world economy is necessarily an excellent stability factor for globalization.”

This incomprehensible laziness of the IMF economists to studying, evaluating, and analyzing economic structural singularities of developing countries, led to strengthening the notion that world market forces is the best solution for hazardous economic investments.

John Keynes theorized that when market mechanisms are not challenged by States and that market forces work unperturbed, it is inevitable that chronic collective joblessness follow.  Keynes stated that, even singular developed nation economic decisions, affect global economic stability: what one State import in product and services many other States are exporting them.

Keynes reflected that in financial crashes many needy economies will be unable to borrow liquidity to stimulating their solvable economies to either finance spending deficits or compensating for tax income reduction.

Indeed, many solvable States went down for lack of international lending policies.

Thus, Keynes was the economics guru who demanded the establishment of an international monetary fund with mission to extending liquidity to maintain a certain level of full employment that will sustain global economic stability.

The IMF policy makers functioned contrary to Keynes’ economic theory and mission, and the IMF relied on the archaic market dynamics and refused to have any faith on the interventions of States institutions.   This ideology is a blatant irony since the IMF is supposed to be a public institution, but it is acting and behaving as if transparency in decision, management, and administration, is none of its concern or demanded to be submitted to restrictions.

For three decades, the IMF has been pressuring developing states to adopting stringent restrictive economic policies that never suited world economic stability. The successive failures never incited the IMF into revising its economic ideology and make sense of all those incoherent concepts that led to humongous errors and deeper poverty.

For example, during the last three decades, world finance considered exchange rates as one of other commodities, such as product and services.  Thus, exchange rates were to be flexible to accommodate market forces. That was a great wise idea; what the IMF did?

The IMF considered that exchange rate is one commodity that should be maintained at any cost by pumping billions of dollars in pure expenses for no benefit to real economy. Contrary to its market ideology, the IMF excluded exchange rate from market mechanism tool to stabilizing a failing economy.

Usually, it is excessive pessimism after a euphoric phase that drives speculative capitals to be withdrawn in economically solvable States.  Speculative investment is the disease to be treated and an overvalued exchange rate is just one of the symptoms.

The ideology of the IMF did its best to greatly facilitating speculative influx of capitals, and when difficulties arise, to pumping more liquidity in order to maintain the previous exchange rate to the benefit of the multinational financial speculators.

Consequently, the disease is aggravated by this unilateral vision of who should be the prime beneficiary; it has never been the developing States.

For three decades, the developing States have been paying interest on IMF loans simply to enrich multinational speculators by maintaining high exchange rates.  Otherwise, speculators would have desisted if developing States were not pressured to maintaining their exchange rates.

When a private company fails to pay interests on wrong investment decisions, it just declares bankruptcy.  The IMF refuses the developing States to declaring bankruptcy because the multinational financial speculators have to benefit from their faulty loaning decisions.

For example, Russia slapped the IMF in 1998 and defaulted on its external debts; two years later, the multinationals were back investing in Russia.  Thus, liquidity pumped by the IMF at high interest rates into bankrupt States ends up in the pocket of the speculators at the detriment of stringent social conditions of the needy classes.

The gain amassed by speculators, as a group, basically amount to a State financial and economic loss as a government and society at large.  The IMF has in fact been encouraging financial speculators for over 30 years!

Consequently, the other incoherence in the IMF mission is the lack of viable diagnostic tools.  The economists hired by the IMF get worried with balance of payment deficits but barely care how the money was used and where it ended.

The IMF has been extending funds to developing countries in order to salvage companies of the developed States, which made very bad investment decisions.  Multinationals had not to worry about examining closely their faulty policies or had any incentives to reform since the IMF is established principally to come to their rescue.

When States enjoy surplus export balances it is at the expense of excess import balances in other States.  If imports are of the luxury-kind items then desisting extending financial loans on luxury items should take care of the imbalance.

The IMF ideology states: “Once a State reaches a pessimistic speculative mood, the neighboring States will inevitably suffer by disease contamination.”  The coherent economic theory of Keynes reflected as follow: “A State will reduce imports which will hurt neighboring economies.

How did the IMF interpret that relationship? 

The IMF responds by forcing neighboring States to drastic austerity policies in order to avoid “contagion!”  Thus, an entire region such as South East Asia, had to crumble after Thailand. Oil demands and other basic products were cut down which generated reduction in brute oil demands and prices; the waves of panic spread thousands of miles away.  Russia was affected by reduced oil prices and not by any mysterious links related to investors’ confidence.

So far, after the latest financial crash, the IMF was forced to re-examine its economic ideology and to reform its governance.  The IMF is encouraging developing States to control and manage the flux of speculative investments and discourage any investment that does not benefit real economy.

What is needed is that the IMF funds institutions, particularly in developing countries, can identify, control, and manage external investments and offer developing countries the availability of instant information and intelligence on economic and financial activities to be able to compete with the elite multinationals.

Sex markets and trades; (Mar. 19, 2010)

            Thailand is the prime sex tourist attraction.  About 15 millions flood the Capital Bangkok every year.  Many girls are connected by internet to their favorite regular tourists who visit yearly for a two-week vacation: one week with the girl (who consider this period as vacation time on beaches, all expense paid) and another week for touring Thailand. It is estimated that over 3 millions in Thailand practice sex business, supposedly with the consent of their folks to feed the remaining members of the family. The government enacted laws proclaiming sex business as illegal; it had completely forgotten this law: this particular tourist appeal generates 14% of GNP.

            The American soldiers fighting in Vietnam and Cambodia targeted Bangkok for relaxation breaks and then opened bars and sex businesses. After the war in Vietnam, ex-soldiers resumed their preferred tourist activities to their accustomed destination. Obviously, drug trade was a major catalyst for targeting Bangkok.

            The next destination for the northern Europe and England hard working population is the Capital Riga of Latvia. Every weekend, dozens of charter planes at low cost land in Riga for a relaxing time. Morocco is the favorite destination for southern Europe.

            As for the sources of the human sex pool it is the new Republics of former Soviet Union and Africa. Romania, Bulgaria, and Moldavia are prime sources for the mafias in that trade. For example, Moldavia insures the availability of 10,000 sex slaves a year; the slaves principally land in the city of Antalia in Turkey and then to Europe; Cyprus used to be the first landing location of these girls, who had secured due legitimate papers for other jobs; but the law in Cyprus required medical check up on contagious diseases; thus the mafias shifted the target location to Turkey;  Cyprus has now cancelled this requirement: it cannot afford to lose a large proportion of its 7 millions tourists.

            Sex slave business mafias have reformed their techniques in hiring slave sex to circumvent tighter regulations. Currently, the mafias promise a sex slave freedom, after working several years in abject conditions, by luring and expediting fresh replacements.  At first, the girl is promised freedom for hiring one replacement and then this number is increased gradually for one reason or another. The replacing girls know that the final job is sex but are never aware of the conditions of the work as slaves; they work non-stop and barely have time to feed and sleep. As the fresh slave girl board the plane then the doors are shut on her freedom; when she reaches destination she is gang raped, beaten and humiliated to give her the proper taste of what to expect.

            Nigeria and Cameroon are the main African sources of sex slaves.  In Nigeria, mafias organize witch ceremonies for the hired girls called “Djudju” where the girl promises complete secrecy on the bosses and organization.  Many mafias set up faked “Queen Beauty contests” and then photos are taken in bikini and brochures are sent to select rich elite customers; first the girls are sent to work in hotels and bars and then are coerced to upgrade into sex business.

            There are 400,000 whores in Germany and as many in Spain; 85,000 in England and as many in Italy; 20,000 in Holland and as many in France. Over 80% of the whores are foreigners from Romania, Bulgaria, and Africa.  Sex slave charges between 300 and 400 in developed European States while it cost between 30 to 50 in their home States.

            Many European States have tried alternative approaches to cut down on sex trades.  Holland enacted laws to legalize this business as long as the sex provider applies legally. Unfortunately, only 4% opted to formally legalize their trade.  Sweden has proven to have the most efficacious method: apprehending the customers for illegal activities.

 

Food baskets for year 2050; (Nov. 14, 2009)

I decided to combine and edit 4 posts into a comprehensive essay that might forecast the world’s agricultural state in the year 2050, as it will be inhabited by 10 billion people. The posts are: The long-term “Revenge of Geography”; “Food BANG, not the Big One”; “The world’s food basket: Africa is heaven for agro-business investments”; and “Africa is targeted to be exclusively the world’s food basket”

We are barely feeding the current world population and millions are dying of famine related malnutrition.

In 1960, many developed nations had surpluses of food stuff; this is no longer the case.  Funny Mark Twain said “Buy lands; we are no more manufacturing those kinds of things“.

The UN branch for Food and Agriculture Organization predicted that agricultural products will witness increases in prices over 50% by the year 2017 and predicted that famine will be the lot of 70 impoverished States harming 1.2 billion human.

Global problems for water shortages

We are witnessing the era of “Anthropocene” which means man is doing more damages to the environment than nature can stabilize; the main reality to account for is acute shortages in sources of water. “It is man who has the power to create; it is nature that commands to a large extent” said Harold Mackinder in 1904.

The main problems cannot be summarized in population explosion.  Modern problems are exacerbating the conditions.

First, just in China and India the number of middle class “well off people” are 4 times the combined numbers in the USA, Europe, and Japan. These newly created classes in the last two decades demand equal standards of living that the developed nations have been enjoying for a century. Consequently, water has to be diverted from agriculture to urban centers that are fast increasing in numbers and in size.  Huge investments are being spent to building dams, diverting rivers, and constructing thousands of miles of water canals.

Second, most rivers are heavily polluted from mass industrializations, a process that has been going on for many decades. Fertile lands are deteriorating as they are irrigated with toxic and highly saline water.

Third, climatic changes are affecting rain delivery in sufficient amount. Deserts are expanding and sub-terrene water sources are dwindling in numbers and quantities.

Fourth, the USA and Europe are planting agro-energy products that are transformed into non-fossils sources for energy. The EU is shooting for a 10% sufficiency by the year 2010 from these agro sources.  Thus, vast fields of wheat and corn are being converted to agro products rich in sugar contents. This policy might resolve EU internal problems in the short run in several ways: first, instead of subsidizing agriculture for competitive exportation the EU could invest in land development in the large States of Poland and Ukraine; this alternative might enhance the internal food trade with adequate return for the poorer EU member Sates; second, the constant stream of law suits against infringements on Global Free Trade will be reduced; and third, experiments on alternative energy substitutes will be encouraged.

Fifth, the USA and the EU are leasing fertile lands overseas not to produce edible condiments for the famished population but products for their energy substitutes.

Political end games

The main power in the coming decades will reside in the States who control the sources of the major rivers.  China has conquered Tibet because three main rivers take their sources from the Himalaya mountain chains; mainly the Mekong (that flow into the South East), the Indus (that flow in Pakistan), and the Brahmapoutre that flow in India and join the Ganges River.

Thus, if China decided to use water as weapon it can disturb all the States from Pakistan, India, Burma, Thailand, Cambodia, Laos, and Viet Nam. China has already built 86,000 dams along the Blue and Yellow Rivers that take sources on the western plateaus. And China has not consulted with the South East countries and has already built four mega dams on the Mekong, including two huge lakes that will take about 10 years to fill in order to generate hydraulic power.

Turkey controls two huge rivers: the Euphrates and the Tiger that flow in Syria and Iraq.  Turkey has been building dams on these rivers without consulting with the southern neighboring States.  Ethiopia is in control of the Nile if it wishes to.  The US has been building dams along rivers that flow into Mexico.

China, Turkey, Russia, USA, and Brazil control sources of major rivers.

Latin America has enough water, except Argentina. The main struggle in the medium-term is who will control the Nile, the Niger, and the Congo Rivers in Africa.

There are 4 basic alternatives for securing water that can be used concomitantly.

First, desalination of Oceans and the towing of icebergs will do for a while but cannot resolve a long-term problem in water shortages.

Second, genetically modified seeds that can withstand many kinds of “natural enemies” may diminish the need for pesticides and herbicides and increase production.

Third, leasing or acquiring vast “fertile” lands by foreign agro-businesses in the under-developed States that have shortages in trained manpower for land development, or lacking the technological investment capabilities, or suffering from outdated modern institutions.

Four, enacting policies for large displacement of people from mega-polis to near water sources; that alternative will save on huge investment of supplying water to big urban cities and in order to recover sub-terrain naps and natural ecosystems.  This essay will focus on the second and third alternatives.

Genetically modified seeds

Antitrust laws are so far not being applied to the six industries for organically modified seeds that share scientific discoveries and have sole monopoly of 90% of organic seeds.  Monsanto, Dow Agrosciences, BASF, Syngena, Bayer, and DuPont have deposited more than 500 patents on genes “adapting to climatic changes”: they are figuring out how to profit from degradation of the environment.

In 2008, Monsanto has increased by 35% the prices on organically modified seeds that it has exclusive rights to produce and distribute.  Monsanto and Dow Agrosciences are associated to produce in genetically modified wheat seeds that can withstand 8 kinds of “natural enemies” of mainly herbicides and insecticides in year 2010.  Thus, 87% of modified seeds used around the world bear the label Monsanto.

The multinational oil companies of BP, Shell, Chevron, and Cargill are linking up with companies of nano-sciences of agro-technologies to transform biological matters such as (agricultural harvest, forests, algae…) into industrial sugar. Sugar is then converting into chemical products and nano-products with high added values. Chemistry linked to oil products could now be adapted to vegetable carbon.

Entire countries such as Madagascar and Angola are now being leased to cultivate modified breeds of harvests.

The scientific counselor to Barak Obama, John Holdren, is encouraging the application of geo-engineering to fighting atmospheric changes.  Among such engineering techniques is sprinkling the atmosphere with nano-particles of sulfates to veil the sunrays.  Monster farms of phytoplankton are created to absorb or capture CO2.

The UN views these geo-engineering projects as purely speculative in nature with unknown risks for collateral damages. A joint Indo-German oceanographic Institute discarded the decision of the Conference of the UN and carried on its project: it “fertilized” a large zone in the Antarctic Ocean by dumping tons of iron sulfates; the microscopic unicellular algae were meant to grow in abundance and capture CO2.

The zooplankton ate the algae and the experiment was not conclusive; this temporary failure is encouraging other multinationals such as Climos Inc. or (Planktos Science) to resume these kinds of projects under the name of “eco-restoration” for substantial financial returns.

Leasing or acquiring vast “fertile” lands by foreign agro-businesses

If you have lands with no water, if you have water and no fertile land, if you have accumulated enough in your Sovereign Fund then the way to go is to invest in foreign fertile lands for agricultural “self-sufficiency”, which means import food at much lower prices.

Japan, South Korea, China, India, and Saudi Arabia are leading these kinds of joint ventures. Many under-developed States with vast “fertile” lands are leased or acquired by foreign agro-businesses.  So far, 30 millions hectares (the size of 30 Lebanon or the size of the Philippines) are already in use for mass agricultural production. China, rich in water and fertile lands, is leading this policy of “getting out of the borders” since 2004.

Africa is the prime target continent because it has 4 large and long rivers such as the Nile, the Congo, and the Niger Rivers and the lands are barely worked.  The Sudan, Mozambique, and the Democratic Congo are prime targets in the medium-term.

Vast fertile lands are left unproductive for lack of investment and manpower.

Theoretically, we should have win-win situations, but the facts are that the contracts of the multinational agro-businesses are not transparent; there are no clauses on specificities that might benefit the population either in technology or land development.

Most of the contracts are barely three pages long and contain no precisions on investors’ obligations toward investing in infrastructures, durable management of the natural resources, or the training of the local peasants for developing small parcels of land and applying the technology.  The President of Earth Policy Institute, Lester Brown, “Essentially, the technologies used by these agro-investments are meant for massive commercial production and not adaptable to the concerned small local farmers.  There is basically no transfer of technology or training. Thus, what the foreign investors are acquiring in lands is not going to feed the local population as we might hope.

Let us consider the case of the oil rich Arab Gulf States: rice is their main staple and it has to be imported in totality.

These States imported a third from India and then India had to curtail its exportation of rice due to climatic problems in order to feed its citizens.  These States imported 10% from Thailand (the first exporter of rice in the world) but then Thailand doubled the price of its rice to $1,000 the ton.  How the Arab Gulf States were to counter this difficulty?  Their Sovereign Funds could be invested in rice fields in Thailand and that what they started to do. You could have a win-win situation: there are vast lands in Thailand that are not cultivated; increasing rice production should not hurt Thailand since rice prices are increasing and Thailand needs to secure oil provision.

Instead of purchasing 10% of its need in rice from Thailand, then the Arab Gulf States might increase it to 40%.

One happier story: Thailand needs to establish a rice warehouse in the Arab Gulf to distribute rice at affordable prices.  Things should look pretty promising.  Joint-ventures in agro-businesses where Sovereign Funds invest the money and the Thai peasants got to work in jobs they are proficient in should not raise so much fuss: should it? The problem is that internal politics in Thailand want a scapegoat: Arabs buying lands in Thailand; or rice production is a strictly national occupation and should be 100% reserved for citizens (as if the Arab is going to relocate to plant rice in Thailand!); or Thailand is not Africa and we are a developed nation.

Another case is Madagascar, a vast Island in East Africa.  The standard of living has fallen below the one in 1960.  Why Independence pride has to be highly correlated with miseries in the former colonial States?  Major deforestation is the norm in Madagascar: people need to cook their meals! The South Korean Daewoo wanted to lease 1.3 million hectares for 99 years. What it is with this taboo of 99 years lease of lands? Does every investor has in the back of his head to let his grand child witness his greatness and pray for his great spirit?

The deal fell apart after the President of Madagascar, Marc Ravalomanana, fell out of power. Apparently, not much transparency and communication were accompanied to that deal. In the meanwhile cattle thieves “dahalo” are on rampage. Even the tiny Maurice Island acquired lands (10,000 ha) in Mozambique for the island food sufficiency.

Ramakrishna Karuturi (the king of rose production, grown on 4 millions hectares) is leasing the hectare for two dollars a year in Ethiopia! Now, there can be no doubt that the Ethiopian government had received a fat bribe for such a lousy deal.

The Congo with Capital Brazzaville is half the size of France with barely 4 million citizens concentrated in the capital and the other city Pointe-Noire on the coast. This African States was a French colony and is rich in minerals and uranium.  It cultivates potatoes.  South Afrikaners who lost 30% of their agricultural lands for redistribution programs to the black citizens want to acquire or lease lands in this Congo; the Agri SA (South Africa) has 1,700 agro-businesses interested in producing soja, sugar cane, and corn.

Ten million hectares were literally offered to the Afrikaners (a land stretching 500 by 200 km, twice the size of Switzerland) and its location is not yet decided upon; maybe entire virgin forests might be burned for agriculture. The Agri SA is promising to build agro villages with ready made houses contracted to Israeli firms.  What if the deal demanded that thousands of Congolese be trained to develop and grow lands after two years of working in the Afrikaners’ lands?  This deal is a striking political and ecological scandal because the terms of the deal are fishy and not communicated to the citizens.

Kazakhstan is practically a continent in size and barely 1% of the land is privately owned.  This rich and newly independent State imports 40% of milk, 30% of meat, and 45% of fruits and vegetables. The population is mostly rural. The States lease lands for 49 years.

The State of Kazakhstan has set aside 35,000 square-kilometers to lease to foreign investors but only China is interested. The main States vying for foreign fertile lands are:

South Korea has acquired a total of 3 millions hectares (three times the superficies of the State of Lebanon); it is growing fields in Russia (500,000 ha), Sudan (700,000 ha), Madagascar (1.3 million ha), Mongolia (300,000 ha), Philippines (100,000 ha), and Indonesia (25, 000 ha).  The Korean agency for international cooperation (State owned) is creating private and public enterprises to invest into agro-businesses by loans or direct governmental investments. Leases of fertile lands are for 60 years and an extension of another 40 years. In return, Korea will extend technologies and development planning.  It appears that South Korea is projecting unification with North Korea and the flooding of North Korean refugees soon. South Korea is interested in the “krai of Primorie” in Russia with 2.5 millions of arable land.

China has invested for a total of 2 millions hectares.  It has 1.25 millions in South East Asia (Thailand, Malaysia, Cambodia, and Laos), in Mozambique (800,000 ha), in Australia (45,000), and in Cuba (5,000 ha). China acquired (80,000 ha) in Russia for just $22 millions.

Japan has acquired a total of one million hectares in Philippines (600,000 ha), USA (225,000 ha), and Brazil (100,000 ha).

India has acquired a total of 1.7 millions hectares in Argentina (600,000 ha), Ethiopia (370,000 ha), Malaysia (300,000 ha), Madagascar (250,000 ha), Indonesia (70,000 ha), and in Laos (50,000 ha).  The Indian government has extended loans to 80 agro-businesses to purchase 350,000 ha in Africa.

Saudi Arabia has invested in Indonesia (one million ha), Senegal (500,000 ha), and in Mali (200,000 ha).  The Arab Emirates has invested in Pakistan (325,000 ha), and in Sudan (400,000 ha). Egypt has invested in Uganda (850,000 ha).  Libya has invested in Ukraine (250,000 ha), and Liberia (5,000 ha).  Qatar invested in the Philippines (100,000 ha).

Global Resolutions

Africa is the remaining poorest continent with vast fertile lands and plenty of manpower to exploit for agro-business enterprises. Africa is targeted to be exclusively the world’s food basket in this century. The UN, the EU, economic superpower States, and private institutions and organizations need to step in to plan, organize, administer, inspect, and enforce appropriate deals for the best management and control of food and water resources.

Since the citizens of independent States that have experienced colonialism are weary of camouflaged colonialism in other forms then their governments are circumventing land laws by enacting laws of mixed private enterprises with lease or acquisition contracts that are not transparent to the public. The UN has to step in and write standard contracts leases that preserve peoples rights to training, sustainable resources, technology know-how, human dignity, right to work, right to share in the management and decisions at community levels, and that these contracts supersede what any other two parties agree on that lack the standard rights and responsibilities.

It is unconscionable that “privatization version” to colonizing Africa infiltrate from the windows. The fact is State funds are loaning money to their own agro-businesses to invading African fertile lands. This neo-colonial pact among State and agro-businesses has to be made clear and restrictions be implemented by world communities.  Territories are changing hands and are no longer under the control of the people and peasants.

The UN has to set up a special fund to purchasing organically modified seeds that have proven not to constitute health hazard; it has to limit the exclusive life duration for exploitation by multinationals that are escaping antitrust laws.

The UN is burdened by countless military conflicts that are interrelated with people seeking better life conditions for survival. An independent branch in the UN needs to be established that would link the causative factors that are generating constant conflicts among neighboring States.  Fair share for water resources is a right that supercede which country control the sources of the rivers.

We hope that the world community will pressure these investors to grow food slowly: resuming the old practices of mass production techniques will ruin the remaining land with fertilizers and pesticides.

The world’s food basket: Africa is heaven for agribusiness investments.

( Part 2, Nov. 12, 2009)

You may read part 1: https://adonis49.wordpress.com/2009/11/11/africa-is-targeted-to-be-exclusively-the-worlds-food-basket/

Let us plan for the year 2050; most probably earth will be inhabited by 10 billions humans.  We are barely feeding the current world population and millions are dying of famine related malnutrition.  Many under-developed States with vast “fertile” lands are leased or acquired by foreign agribusinesses. 

So far, 30 millions hectares (the size of 30 Lebanon or the size of the Philippines) are already in use for mass agricultural production.  Even China, rich in water and fertile lands, is leading this policy of “getting out of the borders”. 

There are two main reasons for China investing in agriculture overseas:

First, more water is diverted to the thousands of giga-urban centers;

Second, water is so heavily polluted by heavy industrialization that agriculture is suffering,

Third, climatic changes are transforming main wheat fields in the north into semi-desert lands,

Fourth, while the US and Britain are fighting their preemptive wars in Iraq and Afghanistan, China takes the great opportunity to sureptitiously invest in infrastructures in Africa that lead to the raw material fields

Africa is the target continent because it has four large and long rivers such as the Nile, the Congo, and the Niger Rivers.  The Sudan, Mozambique, and the Democratic Congo are prime targets in the medium-term. Vast fertile lands are left unproductive for lack of investment and manpower.

  Theoretically, we should have win-win situations, but the facts are that the contracts of the multinational agribusinesses are not transparent:

1. There are no clauses on specificities that might benefit the population either in technology or land development.

2. Most of the contracts are barely three pages long and contain no precisions on investors’ obligations toward investing in infrastructures, durable management of the natural resources, or the training of the local peasants for developing small parcels of land and applying the technology. 

The President of Earth Policy Institute, Lester Brown,  said:

“Essentially, the technologies used by these agro-investments are meant for massive commercial production and not adaptable to the concerned small local farmers.  There is basically no transfer of technology or training. Thus, what the foreign investors are acquiring in lands is not going to feed the local population as we might hope.”

Let us consider the case of the oil rich Arab Gulf States: rice is their main staple and it has to be imported in totality. These States imported a third from India and then India had to curtail its exportation of rice due to climatic problems in order to feed its citizens.  These Emirate Gulf States imported 10% from Thailand (the first exporter of rice in the world) but then Thailand doubled the price of its rice to $1,000 the ton. 

How the Arab Gulf States were to counter this difficulty?  Their Sovereign Funds could be invested in rice fields in Thailand and that what they started to do. You could have a win-win situation: there are vast lands in Thailand that are not cultivated; increasing rice production should not hurt Thailand since rice prices are increasing and Thailand needs to secure oil provision. 

Instead of purchasing 10% of its need in rice from Thailand, the Arab Gulf States might increase it to 40%. One happier story: Thailand needs to establish a rice warehouse in the Arab Gulf to distribute rice at affordable prices.  Things should look pretty promising.  Joint-ventures in agribusinesses where Sovereign Funds invest the money and the Thai peasants got to work in jobs they are proficient in should not raise so much fuss: should it?

The problem is that internal politics in Thailand want a scapegoat: Arabs buying lands in Thailand; or rice production is a strictly national occupation and should be 100% reserved for citizens (as if the Arab is going to relocate to plant rice in Thailand!); or Thailand is not Africa and we are a developed nation.

Another case is Madagascar, a vast Island in East Africa. 

The standard of living in Madagascar has fallen below the one in 1960.  Why Independence pride has to be highly correlated with miseries in the former colonial States?  Major deforestation is the norm in Madagascar: people need to cook their meals! The South Korean Daewoo wanted to lease 1.3 million hectares for 99 years.

What it is with this taboo of 99 years lease of lands? Does every investor has in the back of his head to let his grand child witness his greatness and pray for his great spirit? The deal fell apart after the President of Madagascar, Marc Ravalomanana, fell out of power.

Apparently, not much transparency and communication were accompanied to that deal. In the meanwhile cattle thieves “dahalo” are on rampage. Even the tiny Maurice Island acquired lands (10,000 ha) in Mozambique for the island food sufficiency. Ramakrishna Karuturi (the king of rose production in 4 millions hectares) is leasing the hectare for two dollars a year in Ethiopia! Now, there can be no doubt that the Ethiopian government had received a fat bribe for such a lousy deal.

The Congo with Capital Brazzaville is half the size of France with barely 4 million citizens concentrated in the Capital and the other city Pointe-Noire on the coast. This African States was a French colony and is rich in minerals and uranium.  It cultivates potatoes.  

South Afrikaners who lost 30% of their agricultural lands for redistribution programs to the black citizens want to acquire or lease lands in this Congo; the Agri SA (South Africa) has 1,700 agribusinesses interested in producing soja, sugar cane, and corn. Ten million hectares were literally offered to the Afrikaners (a land stretching 500 by 200 km, twice the size of Switzerland) and its location is not yet decided upon; maybe entire virgin forests might be burned for agriculture. The Agri SA is promising to build agro-villages with ready-made houses contracted to Israeli firms.  What if the deal demanded that thousands of Congolese be trained to develop and grow lands after two years of working in the Afrikaners’ lands?  This deal is a striking political and ecological scandal because the terms of the deal are fishy and not communicated to the citizens.

Kazakhstan is practically a continent in size and barely 1% of the land is privately owned.  This rich and newly independent State imports 40% of milk, 30% of meat, and 45% of fruits and vegetables. The population is mostly rural. The States lease lands for 49 years. 

The State of Kazakhstan has set aside 35,000 square-kilometers to lease to foreign investors but only China is interested. Europe is not interested in leasing lands in Kazakhstan but China is.  China has already leased 40,000 hectares and planning on increasing its agribusinesses.

Africa is targeted to be exclusively the world’s food basket; (Nov. 11, 2009)

If you have lands with no water,

If you have water and no fertile land,

If you have accumulated enough in your Sovereign Fund…

The way to go for States is to invest in foreign fertile lands for agricultural “self-sufficiency”, which means import food at much lower prices. 

Japan, South Korea, China, India, and Saudi Arabia are leading these kinds of joint ventures. For example:

South Korea has acquired a total of 3 millions hectares (three times the superficies of the State of Lebanon); it is growing fields in Russia (500,000 ha), Sudan (700,000 ha), Madagascar (1.3 million ha), Mongolia (300,000 ha), Philippines (100,000 ha), and Indonesia (25, 000 ha).  The Korean agency for international cooperation (State owned) is creating private and public enterprises to invest into agribusinesses by loans or direct governmental investments. Leases of fertile lands are for 60 years and an extension of another 40 years. In return, Korea will extend technologies and development planning.  It appears that South Korea is projecting unification with North Korea and the flooding of North Korean refugees soon.

China has invested for a total of 2 millions hectares.  It has 1.25 millions in South East Asia (Thailand, Malaysia, Cambodia, and Laos), in Mozambique (800,000 ha), in Russia (80,000 ha), in Australia (45,000), and in Cuba (5,000 ha).

Japan has acquired a total of one million hectares in Philippines (600,000 ha), USA (225,000 ha), and Brazil (100,000 ha).

India has acquired a total of 1.7 millions hectares in Argentina (600,000 ha), Ethiopia (370,000 ha), Malaysia (300,000 ha), Madagascar (250,000 ha), Indonesia (70,000 ha), and in Laos (50,000 ha). 

The Indian government has extended loans to 80 agribusinesses to purchase 350,000 ha in Africa.  Ramakrishna Karuturi (the king of rose production in 4 millions hectares) is leasing the hectare for two dollars a year in Ethiopia!

Saudi Arabia has invested in Indonesia (one million ha), Senegal (500,000 ha), and in Mali (200,000 ha). 

The Arab Gulf Emirates has invested in Pakistan (325,000 ha), and in Sudan (400,000 ha).

Egypt has invested in Uganda (850,000 ha). 

Libya has invested in Ukraine (250,000 ha), and Liberia (5,000 ha). 

Qatar invested in the Philippines (100,000 ha).

Africa is the remaining poorest continent with vast fertile lands and plenty of manpower to exploit for agribusiness enterprises. Africa is targeted to be exclusively the world’s food basket in this century.

We hope that the world community will pressure these investors to grow food slowly and not ruin the remaining land with fertilizers and pesticides.

We hope that the African can enjoy what the lands are producing for their daily staples…

We hope the African people get first cut at the distribution of food produced and receive first priority to ward off recurring famine…

Note: You may read the follow-up post https://adonis49.wordpress.com/2009/11/12/the-worlds-food-basket-africa-is-heaven-for-agro-business-investments-part-2/


adonis49

adonis49

adonis49

April 2020
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