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9. Privatization of natural resources: Countries are not the beneficiaries
Industrial use of water increases with country income, going from 10 percent for low- and middle- income countries to 59 percent for high-income countries. Globally, roughly 15-35 percent of current water use for irrigation is estimated to be unsustainable.
Increases in water use have resulted in high environmental costs. This includes loss of biodiversity as well the deterioration of natural water systems such as rivers and aquifers. Half of the world’s wetlands have disappeared over the last century, with some rivers now no longer reaching the sea. Over 20 percent of the estimated 10,000 freshwater fish species are now endangered or extinct. In 60 percent of European cities with more than 100,000 people, groundwater is being used at a faster rate than it can be replenished.
The U.S. National Intelligence Council predicts that by the year 2025, 600 million people across 21 countries will experience cropland or freshwater scarcity.[26] In addition to the currently projected shortages of freshwater and cropland, the U.K. Treasury-commissioned Stern Report estimates that by the middle of the century 200 million people may be permanently displaced “climate migrants”—representing a ten-fold increase over today’s entire documented refugee and internally displaced populations. The social tensions and conflict generated by large-scale migration is going to get worse.
Nowhere is the competition to exploit the natural resources of independent states more acute than in Sub-Saharan Africa. With oil, gas, timber, diamonds, gold, coltan and bauxite, Africa is home to some of the largest deposits of natural resources in the world. Revenues from their extraction should provide funds for badly needed development, but instead have fuelled state corruption, environmental degradation, poverty and violence. Rather than being a blessing, Africa’s natural resources have largely been a curse. Salil Tripathi, senior policy adviser at NGO International Alert, says: “Unless properly managed, the windfall gains from resource extraction cause more problems. It reduces a state’s incentive to impose a free and just taxation system, and encourages corruption and acquisition of weaponry.”[27]
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According to the UN World Investment Report, inflows of foreign direct investment were concentrated in a few extractive industries (mainly oil, gas and mining). Notably, nearly half of the continent’s investment inflows targeted six oil-producing countries: Algeria, Chad, Egypt, Equatorial Guinea, Nigeria and Sudan.[28] Such an onslaught of funding fuels corruption, as these six countries were all ranked in the bottom half of Transparency Internationals Corruption Perceptions Index for 2010 – and three of them were classified in the bottom 10 percent.[29]
The new entrant to the scramble is industrializing China. Despite its large land area, China is a resource-poor country and Africa offers the natural resources vital to fuel its rapidly growing economy. China looks to the Democratic Republic of Congo (DRC) and Zambia for copper and cobalt, to South Africa for iron ore and platinum, and to Gabon, Cameroon and the Republic of the Congo (Congo-Brazzaville) for timber. For oil, it has been wooing Nigeria, Angola, Sudan and Equatorial Guinea. China is now the second largest consumer of crude oil after the US, and was responsible for 40 percent of the global increase in demand between 2001 and 2005.
Where capacities for national protective enforcement are weak or non-existent, asset-stripping can be widespread. For example, the American Forest and Paper Association estimates that in Cameroon, Equatorial Guinea, Gabon, Ghana and Liberia, 30 percent of timber export is of “suspicious” origin.[30] The World Bank estimates that governments worldwide may lose $5 billion in revenues annually to illegal timbering.[31]
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