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Thursday, September 17, 2009

Neo-liberalism is theft: the case of Cameroon

Shawn Hattingh & Lumumba Chia 3 August 2009

The Empire and its accompanying multinational companies have been running a brutal swindle in Cameroon. Their swindle has revolved around imposing neo-liberal capitalism onto the country so that they could loot it. In true racketeering style, the multinational corporations that have benefited from this scam have been given free reign: they are allowed to buy what they want, sell what they want, fire workers at will, and move their money in and out of the country’s borders. The man that the Empire has chosen as the local face of this racket is Paul Biya, who has been the President of the Cameroon for 27 years. Biya and his cronies - who make up the government - regularly appear in the public arena in jazzy Armani suits, donning broad smiles and using soothing words to sell the Empire’s racket to the people. In doing so, they have often assured the people that capitalism really works and that the multinational companies operating in the country are there to help the poor. Of course, most people don’t buy the garbage that Paul Biya – and his bosses in Washington, Paris, Brussels, the IMF and World Bank – churn out about capitalism being their savour. This is because they know the Empire’s racket is an attack on them – they feel it everyday. In fact, the people of Cameroon are now poorer than at anytime in their history and the environment is on the verge of collapse. As a result, Cameroon has become a site of intense resistance with people defending their interests against the neo-liberal onslaught through strikes, demonstrations and riots.

How the racket works
The sad reality is that Cameroon has a long history of being pillaged. From the 1500s onwards, empires grew rich from exploiting its people and resources through colonialism and slavery. Formal political independence brought little relief: local elites simply emerged and enriched themselves by collaborating with new imperial powers, like the United States (US), to keep the pillaging going. By the 1980s, however, the looting was taken to a new level with the imposition of neo-liberal capitalism.

It was in 1988 that the first of a series of Structural Adjustment Programmes (SAPs) was unleashed on the people of Cameroon by the IMF and World Bank at the behest of the US . Ever since this, the country has been transformed into a complete profit making haven for multinational companies. Through trade liberalisation, they have flooded Cameroon with their products much of which were, and are, subsidised. With financial and investment liberalisation, multinational banks and other financial institutions have swooped into the country and have completely taken over the finance sector. Similarly, almost all of Cameroon’s public enterprises were privatised as part of the SAPs. Everything from its railroads, to agricultural farms, to forests, to mobile telecommunications, to electricity, to water were sold off to multinational corporations . As a result, multinational corporations such as MTN, Suez, Del Monte, Somdiaa, Compagnie Fruitiere, Union Fruitiere Africaine and AES have come to completely dominate the economy and through this rake in massive profits .

Of course, the entire privatisation process in Cameroon (like in every country) has been completely and utterly corrupt. Often public service-providers have been sold off to corporations with the best political connections rather than to even the highest bidder. In many cases the corporations that have purchased the privatised assets have paid prices well below the actual value of these entities. For example, when the national water service provider, SNEC, was privatised the only bidder was the French giant Suez. During the process the manager of SNEC valued the company’s assets at CFA 300 billion; while Suez successful bid was based on the company’s assets being valued at only CFA 500 million . This meant that in the end Suez bought SNEC for an absolute bargain. The example of SNEC, however, is not an isolated incident as there have been many instances where public assets have been sold for less than they were worth; or handed over to the lowest bidder . As a result, through privatisation, the wealth of the Cameroonian people has been systematically looted by local and international elites.

In the most blatant instances of corruption, paper companies have simply been created by local and foreign elites to take advantage of the wholesale privatisation process. For example, when the Cameroon Development Corporation (CDC) was privatising the Tole Tea Estate, the right to buy the Estate was given to a company called Brobon Finex. The owner of Brobon Finex has been identified as the South African businessman, Derrick Garvie. In the privatisation agreement between the Cameroonian state and Brobon Finex, it was claimed that the company was being awarded the tender for Tole Tea because it had capital worth of over R 20 million. Upon investigating, however, activists opposing the privatisation found that Brobon owned nothing and did not even have an office. The only thing that the company seemed to have was a postal box it was using as its main address. Indeed, it turned out that Brobon itself was not even registered as a company in South Africa at the time of Tole Tea’s privatisation. The company number it was using in its agreement with the Cameroonian state was actually that of another South African registered entity called Afritea Investments (Pty) Ltd, which only had a registered capital of R 1000 . The man, however, who brokered the deal between the Cameroonian state and Brobon was the former Minister of Agriculture and head of the CDC, John Ngu. It should perhaps come as no surprise that once the deal was concluded and Tole Tea handed over to Brobon, John Ngu was awarded the position of general manager of Brobon . Clearly, Garvie and Ngu were the main beneficiaries of the privatisation of Tole Tea and for them the neo-liberal scam had paid off.

Along with privatisation and trade liberalisation, the neo-liberal swindle has also brought tax exemptions for multinational corporations. The state – under the tutelage of their bosses in the IMF and World Bank – has been providing corporations entering into the country with 10 year tax holidays. The state has also handed out various other subsidies to corporations besides 10 year tax breaks. For example, the French owned aluminium producer, Alucam, has been receiving subsidies through being allocated extremely cheap electricity: in 2004 Alucam was paying only 5CFA/Kwh while most other users were being charged well over 50CFA/Kwh . As if these subsidies were not enough, by the 1990s the state had also established export processing zones, somewhat ironically named Industrial Free Zones (IFZs). In order to assist the corporations operating in these zones, they were exempted from the country’s labour laws . By 2002 the state had gone as far as declaring all of Cameroon an IFZ for corporations involved in exporting. This means that these corporations are literally free to do what they like – they don’t have to pay taxes for a decade, they get assets for cheap, and they can hire and fire people at will.

The multinational corporations that have been snapping up privatised assets or that have been operating under the IPZ regime have also received major benefits through the country’s neo-liberal investment code. Under the code, the right to private property and intellectual property rights have been strictly protected. The code has also allowed foreign investors to repatriate all of their earnings back to their countries of origin or a tax haven of their choice . The result has been that under this neo-liberal racket, corporations have been free to whisk away the country’s wealth. Indeed, Cameroon has been systematically drained as money has continuously flowed out of its borders.

Perhaps the Chad-Cameroon pipeline best highlights the double talk that has accompanied the neo-liberal scam. The Chad-Cameroon pipeline was a $ 4.2 billion project that involved developing over 300 oil wells in Chad and creating a pipeline to pump this oil to the Cameroon coast where it could be exported. The main players in the development were Chevron and ExxonMobil. However, the World Bank was an important political backer of the project along with providing financing worth $ 200 million . The World Bank’s public relations department sold the project to an international audience on the basis that the project was going to benefit the people of Chad and Cameroon. Naturally, the World Bank knew this was a lie as never at any point in history has a multinational driven oil project ever benefited the poor. By the time the pipeline became operational in 2003 it was clear that the real beneficiaries were only ExxonMobil and Chevron: in 2008 alone they earned over $ 1.4 billion from the project .

The impact of the neo-liberal scam on people’s lives
While corporations, such as Chevron and ExxonMobil, have raked in billions from neo-liberalism in Cameroon; it has been the poor that have suffered. One of the first measures of neo-liberalism in the country involved an attack on social services. In 1988 as part of the first SAP, the IMF and World Bank informed Biya’s government that it needed to cut its social spending, including spending on healthcare and education. This was supposedly aimed at balancing the overall budget. It soon became evident, however, that the real aim of cutting social spending was to ensure that this money was redirected towards paying back the debts that the state elite had incurred with the IMF, World Bank and Northern private banks – much of which was odious. In the years that have followed, this commitment to transferring vast sums of money to the IMF, World Bank and private banks at the expense of social services has remained firmly in place. Cameroon continues to spend more on servicing its debts than it does on healthcare and education combined . The result for the vast majority of people has been shocking. The educational system, which was once one of the best in Africa, is on the verge of collapse. User fees have been introduced and teacher training colleges have been closed. Along with this, thousands of teachers were dismissed with the result that the average teacher to pupil ratio ballooned well past 1:54 . Similarly, due to neo-liberalism, healthcare centres started charging fees and doctors and nurses were laid off. All of this has had devastating consequences as education and health standards have plummeted.

Under the neo-liberal scam, public sector workers have also come under attack. Most notably in 1993 the government slashed public sector workers’ salaries by as much as 65% . In 2007, the public sector workers were still receiving wages below the 1992 level: which meant that there had been no real increases for 14 years. With the introduction of the IMF’s Poverty Reduction Strategy Paper things went from bad to worse. Under this, many public sector workers – including, teachers, doctors and nurses – have reported that they sometimes were not paid for months . Clearly while multinationals have been allowed to loot the country under the Empire’s neo-liberal scam, public sector workers have been driven deeper and deeper into poverty.

Unfortunately, workers in the private sector have not fared any better. The privatisation of vast sectors of the economy has led to thousands of people being retrenched. Even workers that managed to retain their jobs in the privatised entities have had their working conditions savaged. For instance, when Tole Tea was privatised the new owners, Brobon, immediately stopped providing social amenities, like electricity and healthcare, to the workers that lived on the estate. Later on, Brobon followed this up by evicting the workers from the estate altogether. It tore down the workers’ village and sold the rubble off to scrap dealers. Added to this, Brobon also reduced the workers wages from CFA 35 per kilogramme of tea harvested to CFA 25 . A similar story of worker abuse also played itself out at the World Bank’s flagship Chad-Cameroon pipeline. Workers on the pipeline were mainly employed on a contract basis and were forced to work under extremely unsafe conditions. Workers who were injured on the job were also dismissed and the companies involved were accused of “abandoning sick workers or victims of industrial or work accidents” . Unfortunately, the harsh treatment of workers at Brobon and on the Chad-Cameroon pipeline have not been once-off incidents. Similar stories about workers being fired for arbitrary reasons, loosing benefits and experiencing wage-cuts have occurred throughout the country. Even worse than this, the state has been involved in hiring out prisoners to corporations as a form of cheap labour. Similarly, as many 600 000 children are working in factories, in domestic service or on plantations in Cameroon .

People have also come under attack from trade liberalisation. As part of the adoption of neo-liberalism, the country’s borders were opened to imports. The consequences have been devastating as many people have been driven off their land because they can’t compete with the cheap subsidised agricultural goods flooding in from the US and Europe. Linked to this, Cameroon has completely lost its food sovereignty. Almost all basic food stuffs such as poultry, rice, and flour are imported. To make matters worse, the food that is produced in the country is mainly done so by giant agricultural corporations who export these foodstuffs to more lucrative markets. The consequences have been that Cameroon has become extremely vulnerable to food shortages. Since the late 1980s, millions of people have been driven into food insecurity and malnutrition .

The multinational corporations that have been swooping into the country have also been involved in forcing people off their land and destroying entire communities. As part of the Chad-Cameroon pipeline project, small-scale farmers and even entire communities were evicted - with little or no compensation - to make way for the project. The impact of this displacement was devastating as children’s education was disrupted, social structures were broken, people lost their livelihoods and many were left homeless. With people loosing their means of survival many women were driven into sex work to survive. As a result of the construction of the pipeline, drinking water and rivers along the route it crossed were also polluted. Indeed, people living near to the pipeline construction sites reported an increase in diarrhoea and skin diseases .

Corporations have also viewed the ecosystem as something to exploit and destroy. The privatisation of the forests has led to massive deforestation with as much as 200 000 hectares being destroyed every year by corporate logging operations . Likewise, as soon as the Chad-Cameroon pipeline was operational, oil spills began to occur . In truth, the environment has been raped due to capitalism and the activities of corporations. The result has been that numerous species are now critically endangered and if the rate of exploitation continues, the prospect of the entire eco-system collapsing will become a reality.

The people have fought back
Fortunately, people have not simply succumbed to the neo-liberal attack. Resistance to the impact of neo-liberalism has been widespread with indigenous groups, students, women, workers and small-scale farmers being at the forefront of this. They have fought back in a bid to reclaim their dignity and create a better world. This has taken place through people staging protests, strikes and even a full-scale uprising.

Students have been one of the most active sectors in resisting neo-liberalism. Indeed, universities have been sites of activism for many years. Most notably, in the early 1990s there was a protracted student revolt against the impact of neo-liberalism. The state, however, attempted to smash the revolt by unleashing the military and establishing pro-government student militia. In the process, numerous student activists were murdered by these forces. Nonetheless, the state has not been able to completely eradicate student resistance . In April 2005, university students once again embarked upon class boycotts in a bid to ensure free education, a reduction in class sizes, and an improvement in facilities. The university authorities and the state once again reacted harshly to the boycott. Police were called onto the campuses. What followed was an intimidation campaign as hostels were raided and numerous students arrested. Initially police used tear gas and water canons against the protests. When these failed to squash the protests, the police began using live ammunition. In the process two students were shot dead by the police – one in the head and the other in the chest . Nonetheless, despite many students being ‘disappeared’ or driven into exile, resistance against neo-liberalism in the education system has continued.

At times, lecturers and teachers have also joined the students in resisting the attack on public education. In fact, teacher strikes have been a regular occurrence . Comparable strike actions have also occurred in other sectors of the public service, such as healthcare . One of the biggest and most prolonged strikes in the public sector, however, occurred over a period of three months in 1993/1994. The action took place in a desperate bid to halt the salary cuts that formed part of SAP measures. Even though this was not successful in terms of reversing the wage-cuts, many public sector workers were radicalised in the process . Indeed, the continuing militancy of many workers has played a key role in at least blunting some aspects of the neo-liberal onslaught.

Since the neo-liberal scam was introduced, there have also been numerous strikes in the private sector. Workers on projects such as the Chad-Cameroon pipeline were involved in various strikes to ensure higher wages and safer working conditions . Strikes have also occurred throughout the privatised industries due to working conditions declining. For instance, workers at the Tole Tea estate have held strikes against the deplorable conditions that they have been forced to work under. During one such strike, workers blockaded a road to a school that was attended by the children of government officials in order to highlight the abuses that were taking place at Tole Tea. Far from sympathising with the workers, the government sent military troops to break up the blockade .

Communities have also been involved in resisting neo-liberalism and the projects that have accompanied it. Various communities in the south Cameroon, including the indigenous peoples such as the Baka, have fiercely resisted the privatisation of the forests as well as the building of the Chad-Cameroon pipeline. This has seen communities regularly staging protests against logging corporations as well as blockading roads to prevent the transportation of timber . Similar instances of resistance have accompanied the privatisation of the agricultural sector. This has often taken the form of communities – who have been dispossessed of their resources and land - invading privatised plantations . It has become clear that people are not standing by while the wealth of their country is stolen.

Perhaps the fiercest resistance so far to neo-liberal swindle occurred in 2008. During that year, Cameroon experienced massive riots that verged on a full-scale uprising. The trigger for these riots was an announcement by the government that - under IMF and World Bank tutelage - it planned to raise the prices of basic foodstuffs and petrol. At the same time, President Paul Biya also announced that he planned to stay in office for a further term. People were furious at these measures. Initially, protests started when taxi drivers went on a wildcat strike against the planned fuel price hikes. This was then followed by thousands of people taking to the streets in a massive demonstration against the high cost of living. The state, however, responded with its usual viciousness as the military and police were unleashed upon the protests. In the days that followed people battled against this repression by erecting barricades . In the state sanctioned mayhem that followed, the government admitted that its forces killed 24 people. However, activists believe that hundreds of people were actually killed by the police and military. Over 1 600 people also received lengthily prison sentences that were handed out during secret trials. Nonetheless, the actions of the people were not completely in vain. The state, under the intense pressure, rolled out a 15% rise in public sector wages and dropped fuel prices.

It has become clear that the community protests and strikes that have taken place in Cameroon have unmasked the true colours of Paul Biya and the Cameroonian state. Behind the Armani suits and smiles, they are the local hitman of the Empire. They ensure that the looting of the country by multinational corporations takes place through brutally suppressing uprisings and, indeed, any form of dissent. Likewise, corporations can abuse and fire workers because they have the support of the state and its military might.

Of course, the Empire – in the form of the regimes in Washington, Paris and Brussels – back the local state and their man, Biya, to the hilt. The French state trains the Cameroonian military and police to maintain ‘law and order’, ‘uphold’ the right to private property and enforce the interests of multinationals. Likewise the US has provided military aid to Cameroon to ensure that it, and corporations like Chevron and ExxonMobil, can loot the regions’ oil. Thus, the real power of the state, and Biya, rests upon the fact that they are the local arm of the Empire.

Nonetheless, despite the best efforts of the Cameroonian state (and their bosses in the US and EU), the people have continued to fight. This is because state repression has not been able to kill peoples’ desire for true freedom. Indeed, the people of Cameroon clearly want a better world: a world where their country is not looted and where they are not shot for opposing this theft. Hopefully, people’s actions will lead to this better world. With any luck that world will be defined by an end to all bosses, an end parasitical Empires, an end to all hierarchies, and an end to capitalism and the market system it is based on. Indeed, hopefully the people of Cameroon - through their own actions - can create a better society that is defined by community and worker self-management, that is classless, and that has participatory economy through which everyone can own, share and benefit from the country’s vast wealth.

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