March 1st, 2012
Too often, borrowed monies are salted away from Africa’s most impoverished nations to offshore banks through inflated contracts or kickbacks. The complexities and bank-secrecy laws of the international finance system, combined with a lack of enforcement, assist such transfers, contend James K. Boyce and Léonce Ndikumana, authors of Africa’s Odious Debts: How Foreign Loans and Capital Flight Bled a Continent. They point to a correlation between foreign borrowing and capital flight: “For every dollar of foreign borrowing in sub-Saharan Africa, on average more than 50 cents leaves the borrower country in the same year.” Capital flight from sub-Saharan Africa...
September 14th, 2011
In college we studied the so-called “resource curse:” the tragic observation that countries well-endowed with natural resources tend to have slower economic growth and poorer development than those without. I remember, very clearly, that we studied this concept as though it were a truism—a common and (mostly) irreversible reality that just was. This theory has, in fact, been demonstrated very strongly in quantitative terms. According to an analysis of developing countries by Jeffrey Sachs and Andrew Warner, the more an economy relies on mineral wealth, the lower its growth rate.
Of course, in my classes, we also studied the drivers...
August 15th, 2011
This weekend, The Economist
—building off information discovered by Task Force member Global Witness
—released an extensive feature on the operations of the "Queensway syndicate," a corporate partnership centered around the trade of oil from Angola to China. Through a series of shell companies, family relations, and personal ties dating back to the Cold War, a network of Chinese and Angolan business-people purportedly dominate many African resource markets, generally doing so through illicit means.
In order to gain access to valuable mineral resources across the African continent, the syndicate allegedly promised developmental aid, generally in the form of infrastructure development,...
April 11th, 2011
LISBON - Angola, Africa's second-biggest crude oil producer, has denied a report that it lost almost $6 billion in illicit capital flows in 2009.