Geopolitical drivers of foreign investment in African land and water resources

Abstract

Resource grabs, particularly land and water, can be a proxy for geopolitical influence. As such, ‘grabs’ become intertwined in international power relations and the competing collective goals and state priorities of economic development, poverty elimination, ecosystem management, energy, self-sufficiency, and food supply stability. African land has become the most appealing and vulnerable to acquisition. In this article we will analyze external investor actions in Africa by South Africa to explain how regional and global geopolitics are fostering a ‘new’ scramble for natural resources on the African continent. This south–south geopolitical concern examines South Africa's investment in the Democratic Republic of Congo and Lesotho. We argue that ‘grabbing’ is important, but often it is not the foremost factor in south–south relations and, as such, is an inadequate basis for exploring the role of domestic capital and government investment corporations. We contend that grabbing is not only about food, finances, energy, or even water itself, but also about geopolitical influence. Land and water resource acquisition become intertwined in international power relations and the competing goals of state priorities. This article uses an International Relations framework to analyze these complex relationships, spheres of influence, and asymmetries. Its central argument is that countries with limited arable land ‘securitize’ (B. Buzan, O. Waever, & J. de Wilde [Eds.], 1998, Security: A framework for analysis, Hemel Hempstead: Harvester Wheatsheaf) their food supply and seek ways to increase the supply of food and sources of ‘virtual’ water by targeting ‘easy targets’ for resource imperialism, like weak states.

Keywords::

• land-grabs
• resource imperialism
• south–south geopolitics
• water-grabbing
• water-food-state security

Notes

^1. Email: [email protected]

^2. The exploitation of resources and associated power by political leadership at the state level (e.g., Angola, Equatorial Guinea), when accompanied by the select or misdistribution of wealth derived from the exploitation of those resources, like oil, is often characterized as a resource curse. On the resource curse and land grab, see, e.g., Sharife (2009) and Sparks (2011).

^3.http://www.grain.org/article/entries/4227-it-s-time-to-outlaw-land-grabbing-not-to-make-it-responsible.

^4. Nationalization of mining companies is also part of the debate. Despite statements from President Zuma that nationalization of mining companies was ‘not government policy’, many who support such a position, including the Confederation of South African Trade Unions (a key ANC ally) insist that the nationalization of both land and mining companies offers the best solution to South Africa's economic and social problems, high unemployment, persistent poverty, etc. Nationalization of either land or mining companies, or both, could have a chilling effect on FDI.

^5. It would seem that the white farmer exodus from South Africa is motivated by several factors having to do with personal security and safety, land redistribution, existing and future water availability, less inconvenience (uncertainty), lower costs of operation amounts to greater profit margins. Many skilled whites, not just farmers, are leaving South Africa – mostly due to crime but also because of affirmative action, increasing corruption, and possible government nationalization (Johnson, 2009).

^6. Telecom is the leading cell phone provider for service in Nigeria, Uganda, Tanzania, Swaziland, Rwanda, and Cameroon.

^7. LHWP dates to the 1970s when the Joint Technical Committee between Lesotho and South Africa was created to identify options for providing South Africa with bulk quantities of water from the upper reaches of the Orange-Senqu River in Lesotho.

^8. Established in 1923, Eskom is South Africa's electricity public utility. South Africa and DRC signed an MOU that gives South Africa's ESKOM and the DRC's national utility Société nationale d'électricité (SNEL) the lead for implementation and management of the Grand Inga, largest and fourth in a series of dams.

^9.http://www.eskom.co.za/OurCompany/CompanyInformation/Pages/Company_Information.aspx

^10. South Africa's unique approach to global issues has found expression in the concept of Ubuntu. According to the State's White paper, ‘These concepts inform our particular approach to diplomacy and shape our vision of a better world for all. Its evolving international engagement is based on two central tenets: Pan-Africanism and South-South solidarity. South Africa recognizes itself as an integral part of the African continent and therefore understands its national interest as being intrinsically linked to Africa's stability, unity, and prosperity. This philosophy translates into an approach to international relations that recognizes that it is in our [South Africa] national interest to promote and support the positive development of others’ (http://www.info.gov.za/view/DownloadFileAction?id = 149749). Ubuntu diplomacy has been adopted as a central element of South Africa's foreign policy framework. Cilliers and Handy (2011, p. 63) argue, ‘… despite the rhetoric about links between foreign policy and national interests’. They assert further, under President Zuma it has not been adequately defined since the administration has failed to articulate how their realization impacts the conduct of external affairs, its implementation remains unclear, is considered ill-defined and only a vaguely explained term.

^11. A hydro-security complex is defined as those states that are geographically part owners and technically users of the rivers and as a consequence, consider the river as a major security issue (Schultz, 1995).

^12. Basin closure is described as a river with no utilizable outflow of water and when all the available water has been allocated to some productive activity with no more water left to be allocated. See Svendsen, Murray-Rust, Harmancioğlu, & Alpaslan (2001, p. 184), and also see Molle (2006).

^13. NWRS specifically includes desalination, but gives a higher priority to importing water from the Zambezi River, augmenting rainfall through cloud seeding, shipping water from large rivers, and towed icebergs. Many other countries have desalination plants and plans as part of water resources plans and security – Saudi Arabia has over 30 plants, which supply 70% of its water.

^14. See note 9.

^15. Eskom is wholly owned by the South African government, as is PetroSA, South Africa's national oil company. Parastatals, a common term of use in South Africa, to characterize companies wholly owned or controlled by the government. Another frequently used term is state-owned entities.

^16. In July 2012, by road, Eskom sent a replacement reactor to Cahora Bassa for HCB, the dam operating company, to assure repair and continued capacity to send full power to South Africa.

^17. Rand refers to South Africa's currency (ZAR).

^18. See Sturman (2011). Kathryn Sturman, Head of the Governance of Africa's Resources Programme, South African Institute of International Affairs. See also Landsberg and van Wyk (2012, p. 500).

^19. AgriSA was formed in 1904 as the South African Agricultural Union (SAAU) when it represented only white farmers. In 1999, a newly deracialized association of farmers was formed. The chief negotiator for AgriSA is Theo de Jager, Deputy President. There is another group, the Transvaal Agricultural Union (TAU) of South Africa whose members are white farmers only, and allegedly, represent an agenda that seeks to ‘escape black rule’. TAU has sought land acquisition through negotiations with the government of Georgia (former USSR) as a ‘new’ location for white farmers who want to leave South Africa altogether. Hall (2011) argues, importantly, that the ‘trek’ of TAU members from South Africa is complex, and ‘should not be interpreted narrowly’ (author's emphasis) in terms of disaffected Afrikaner farmers ‘fleeing’ one regime to establish a new order elsewhere.

^20. While 13% of South Africa's land can be used for crop production, only 22% of this is high-potential arable land. The other areas are limited by the availability of water, uneven rainfall, and drought. Half of South Africa's water is used for agriculture (http://www.southafrica.info/business/economy/sectors/agricultural-sector.htm#ixzz1gC9NnAA7).

^21. Multiple studies highlight the various ‘incentives’ made to attract investors, including, among other things, no taxation; land cost considerably less than US$ 1.00 or the equivalent of $0.50 per hectare; and no infrastructure requirements, other than those necessary for crop production. In many instances, even the hiring of local labor is not a requirement. Many deals negotiated with China involve imported Chinese labor.

^22. Of the 26 land deals in Ethiopia, 15 were for biofuels, and in Madagascar, of the 24 deals, 16 were for biofuels and 3 industrial productions (Friis & Reemberg, 2010, p. 13).

^23. See note 21. At the time of publication (2010), the South Africa had confirmed six major deals with DRC involving approximately 8 million hectares (Friis & Reemberg, 2010).

^24. South Africa Foreign Policy Initiative (SAFPI) 11 September 2013, online report, “DRC: RSA investment and trade initiative” at http://www.safpi.org/news/article/2013/drc-rsa-investment-and-trade-initiative.

^25. South Africa: National Assembly signs Cooperation Agreement with Mozambique's Legislature, 2013 (AllAfrica News Stories at http://allafrica.com/stories/201309111059.html).

^26. Government subsidized and supported both South African corporate and state-owned economic involvement extends to over 22 countries as far north as Egypt, in small neighboring states of Swaziland, Zambia, and Lesotho, and as strategically important as Nigeria (Daniel et al., 2003).

^27. European nations first established farming plantations in their colonies, and then again in their ex-colonies, sometimes referred to as ‘banana republics’. In the 1990s, English, French, and US water utilities aggressively sought access to markets in the global South, where a privatization wave was in full swing. Supported by export credits, the Western companies built dams, and distribution infrastructures and offering services where the receiving countries' state companies were perceived as underperforming. However, the flurry of direct investment was accompanied by corruption scandals. Other scandals include the privatization of Jakarta's water, and Cochabamba (the US-Bolivian joint venture Aguas de Tunari in the famous 'Cochabamba water war' of 2000, see, e.g., Bakker, 2008) and conflict over Coca Cola's water grab in India.

^28. Achille Mbembe is a senior researcher at the Witwatersrand Institute for Social and Economic Research (WISER) and professor at the University of Witwatersrand, Johannesburg, South Africa.

Additional information

Notes on contributors

Antoinette G. Sebastian

Antoinette G. Sebastian, PhD, is an independent researcher who works on international (transboundary) water politics, conflict and cooperation, and land use and water issues. She lectures at the University of Maryland and has extensive professional experience in environmental policy and analysis, and urban development.Jeroen F. Warner, PhD, is an Assistant Professor of Disaster Studies, Wageningen University, the Netherlands. He has written extensively on the politics of flooding, water resources, and is editor of Multi-Stakeholder Platforms for Integrated Catchment Management and co-editor of The Politics of Water.