Monday, January 08, 2007

South Africa to get its own George W. Bush?

This story about a candidate for the South African presidency somehow reminds me of something.

I don't know why. Could it be the fact that a political movement that was once a standard-bearer in the struggle for racial equality has been reduced to tawdry influence-peddling? Nah.

Let's start with how Tokyo Sexwale (what an unfortunate name!) made his money. In the diamond mining industry. Given his background as first a political activist and then as a provincial governor, I doubt that his diamond mines were successful because of his prospecting skills and geological savvy. What he was able to provide was government goodwill in an industry that is almost completely dependent on it. Now he wants to use the money to buy his way back into politics.

Ah, now I see it. George Bush also made his money in the natural resource industry. He was involved with a series of oil companies, showed no talent at actually finding oil but somehow managed to make money. Then he bought the US Presidency.

Minerals (including oil) come out of the ground with relatively little effort on the part of the mining industry. The difficult part of this business is getting access to the ground with the minerals under it. In a few well-run countries like Norway this just means paying very high taxes. In most of the world, this means that the natural resources industry ends up giving money to well-connected people in non-transparent ways.

In America this is called "paying $2.2 million for Spectrum 7 even though it has only dry wells." In South Africa it is called "Black Economic Empowerment". On Forceful and Moderate it is called "graft".



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