In a television interview Monday in the
Democratic Republic of the Congo (DRC),
Secretary of State Hillary Clinton suggested that
it would be a good thing for the government
to take an ownership interest in industry.
"How can you help this country?"
Christian Lusakueno of
the Congolese television station Raga TV asked Clinton.
"The future of this country is up t
o the Congolese people," said Clinton. "
The choices as to what direction you go
are truly yours to make.
"For example, the country has an extremely
rich reservoir of natural resources," she continued.
"Right now, the benefits from those resources
are not ending up broadly developing the country.
They are either being taken out of the country or
they are ending up in the hands of a very few people.
There are models for what has worked elsewhere.
The model that Botswana used when it discovered
diamonds–it made sure there was a trust fund created
for the country so that all of the money didn't leave the country.
In order to let a company like De Beers exploit their diamonds,
they said we want to own 20 percent of the company.
And as a result, if you go to Botswana, you see good roads,
you see clean water, because the people and their leaders
said we're not going to be exploited and we're not
going to let the benefits end up in a very few hands."
Brett Schaefer, a fellow in International Regulatory Affairs
at the conservative Heritage Foundation,
Clinton's statement: "Her phrasing was extremely clumsy."
"I think it's probably a mistake to urge the government
to have a control, or a controlling stake,
in these types of industries because
government historically, especially in Africa,
has been particularly prone to
corruption and mismanagement," said Schaefer.
Botswana has indeed been successful in
the diamond industry, said Karol Boudreaux,
a senior research fellow at the Mercatus Center at
George Mason University and the head of
that organization's Enterprise Africa project.
Boudreaux noted, however, that while Botswana has
had success in the diamond industry,
it history and political culture also makes its
distinct from other African nations.
"I think we should be really careful about
recommendations like that because
we're assuming that that government will be a
good manager and a transparent manager,
and an accountable manager–the way
the Botswanan government has been,"
"The way it works there is that the government
is actually in a 50 percent-50 percent partnership
with the De Beers company, and so they jointly
control this company called Debswana,"
said Boudreaux. "
Originally the government had a 15 percent share
in that company, when diamonds were first
discovered back in the late 60s,
and the government has increased its
ownership share over time."
Boudreaux also said that while
the Botswanan government owns half
it does not own any shares of the De Beers Group.
According to Boudreaux, Botswana is
also unique for the strict spending
controls that the government places on itself.
"One thing that's really unique about
Botswana's national development plans is that,
once they're passed by the parliament …
they cannot be amended," she said.
"They cannot go back and adjust the plan,
even if their diamond revenues increase substantially.
So, putting that kind of constitutional
constraint on yourself is a very
unusual thing to do in Africa."
Asked to contrast Botswana with
the Democratic Republic of the Congo,
where Secretary Clinton made her remark,
Boudreaux said: "There's just no comparison."
The Democratic Republic of the Congo,
she said, has a "history of just incredible corruption,
tyranny, et cetera."
While noting that the Congolese government is
making efforts to "get a handle" on
mineral production in the nation's war-torn East,
Boudreaux said it is also "benefiting substantially"
from illegal mining in the area.
As for a Botswana-style venture, she said,
"How should I put this?
It's not clear that there'll be an initiative
to extract minerals in a transparent fashion
in East Congo any time soon."
Schaefer concurred that most African nations are
not like Botswana.
"What you see in African countries," he said,
"is a pattern of corruption, a pattern of
poor governance, a pattern of countries not
using the resources that they have for
the long term interest of the people. And so,
while Botswana is an exception,
I don't know if it can be applied as a rule
to follow for countries unless you address
this critical lack of good governance."
Boudreaux said Botswana had an advantage in that
it had avoided diverting significant resources
to a military establishment.
"They had no standing army until very recently,"
she said, "so the monies that they were
generating through the diamond sector
wasn't really going to support an army,
like it would be, say, in Nigeria or Angola."
"I think, in fact, it's very difficult to use
the Botswana example and suggest that countries
that have very different historical experiences
can basically do easily what Botswana's done,
because I don't think that they can," said Boudreaux.
"One thing that's kind of unique about Botswana
that you'll hear when you visit–that I've certainly
heard when I visited there–is that people talk about
their founding fathers just the same way that
Americans talk about our founding fathers,"
she said. "And so they are very aware that they
had a unique group of people who set up
their government, who placed limits on
the powers of government, and then
who themselves abided by those limitations."
"That's not a story that you hear in many
other African countries," she said.
Calls to the State Department were not returned.
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