Max Witt Anthro 183 Marianne Ferme 4-30-10

AQCI 8
The privatization of the gold mines in [Ghana], combined with generous tax incentives, has done just what it was supposed to do: bring in large amounts of private investment a recent World Bank report voices doubt about what the true net benefits of this Development might be. As the report points out, capital intensive mining by foreign firms has a high import content and produces only modest amounts of net foreign exchange after accounting for all its outflows. (World Bank 2003:23 (Fergeson Year?:36) This quote illustrates the key argument, that being that foreign investment and the Liberalization of the economy is more for the benefit of foreign interests than for the benefit of the people of a country. When private industry is brought into the countrys mining sector, much of the profit from the mining is siphoned off, leaving the country empty handed. Ferguson cites a World Bank report stating that there is no real benefit to this liberalization. One question must be raised, however. Liberalization and privatization gives access to new technologies, increasing mining yields. Because of this, more money can be extracted. Ferguson does make a good argument, but I feel that a question remains about whether to place some blame on the countries leadership, who failed to place a sufficient tax burden on the companies, generating revenue for the state, as well as the companies. If there is more profit from private mines, there very well could be a sufficient tax on the profit, which would provide for the people, while opening the market. In context to other class materials, I would like to compare this to the video about Zambia, which dealt with Salaula and mining. Creditors will use their position to force change on their debtors. In the case of Zambia, this was to liberalize the economy, and allow foreign firms to take over the government run mines. However, the liberalization of the economy and the sale of the government mines reduced the countrys precarious income, and forced massive cuts to social services, causing a spiral into poverty which would not have been a problem otherwise. This is important because it explains many of the problems with poverty in countries with enormous natural resources. It seems unacceptable that a people should suffer while there is fabulous wealth beneath their feet, yet in the end, that wealth is sometimes literally stolen from them. Ideally, we should see past the surface of the issue, and not fall victim to political and economic idealism put forth by powerful interests in the world community.