Thursday , 22 February 2024
A few days after his return from China, Prime Minister Roger Kolo finally announced news which look good indeed, namely the imminent arrival of Chinese investors with various interests in several fields of operation in Madagascar. The government has made the political choice of turning to Asian companies much less caring about ethics of business and desperate to put a grip on business opportunities at any rate. Serge Zafimahova, president of the Development and Ethics Club, subsequently drew attention on the double edge sword which this inflow of Chinese investments is to bring with, and called upon to a larger focus on the stuff of genuine opportunities for the country.

Investments: do we really have to cheer at good will from the Chinese?

The scavenging campaign for investors proved good, first and foremost because none but China was the hunting ground. The Chinese mainstream policy on mineral resources from Africa is no longer a secret to anybody, is it? Madagascar would believe itself to be a privileged recipient for expecting Chinese investments to be poured into several sectors at a time. The country covets widespread large scale building projects, by the way a Chinese specialty in terms of money and know-how. Roads, airports, harbors for instance are expected to emerge from the ground in this way. A substantial advance of 42 billion Ariary in form of development aid package has even been offered to emphasize binding ties with the Malagasy government.
Not really safe expectations for the country
According to Serge Zafimahova, influential member of civil society and author of pioneer works over Madagascar and its natural resources, “Chinese companies have no scruples towards practices widely associated with corruption anywhere else.” He outlined the fact that Western companies were legally bound to the need of transparency since public opinion plays a significant influence over their assets and on the global stock exchange. “If the contracting country appears to be weak, freedom of movement consequently has to be limited, and caution, enhanced. It is not the case to Asian companies. “
Thereupon, the chairman of the CDE drew a grim summary of the situation: “We, Malagasy, are in the process of selling our country out. Chinese companies will definitely not think twice before taking advantage from this greed for easy and mostly personal profits. Still, it would be just as so dangerous to engage in global business with an unprepared, or worse, unreliable leadership at the helm. Every single leader and those of their kind will stack wealth up; it will prove increasingly hard to remove them from leading positions, if ever possible at all; and none but our country will ultimately bite the dust. The danger is real. China will certainly not bother pondering this issue when its strategy seems to prove flawless: “they have enough underground resources to supply us over several years, we have the money it takes to stuff the ones we need over several years, let us make a deal.” In Ghana for instance, the $ 10 billion high transaction to secure targeted mining grounds did not materialize in any other way. “
Serge Zafimahova conceded however that these Chinese investments would also do their part in the development of our country. “It would however be foolish to believe that the Chinese would ever care about what the contracting State does of the trade’s returns. The largest ever embezzlement cases would be not the least of their concern. This is what happens in Africa when several ruling powers give in to temptation. The aforementioned Ghana basically expecting to become the Monaco of Africa, now finds it hard to make both ends meet. The tricky corruption game suddenly escalates. “

The WISCO related trauma

Of all of the major mining exploration projects developing in Madagascar, WISCO is probably the most famed one. The Chinese company turned the advent of an illegal ruling power craving for easy money into a business opportunity it could not let go. This illegal transition traded a share of the iron exploitation ground squares of Soalala for $ 100 million. “WISCO happens to be as much a victim as a culprit in this corruption case. Still, it clearly displays the Chinese will to invest money into their own expansion at any price”, declared a political analyst.
A foreign consultant working in Madagascar, serving investors in mining projects, said that the case became a topic even back to Hong Kong. “The WISCO company boss appeared on air at a radio station interview and argued that $ 140 million would have been donated to the Malagasy government,” he said. Other journalists questioned him on the exact figures on the following day, then he replied: “Did I say 140 millions? It is a mistake. The money actually amounts to 100 millions.” How much credit should be given to this alleged mistake, if at all? In any case, the World Bank’s experts condemned this commercial jaywalking schemed by the transitional ruling power and WISCO, which came up to challenge the mining code and Malagasy legal acts on large scale investments in the end. Paying so much money for a mere exploration phase cannot possibly be rational, considering that the available reserves have by definition not yet been assessed.
Serge Zafimahova, mainly famed for his activism against the MAINLAND project, appears however more lenient towards WISCO. “It is a truly a great investor with a more symmetric approach. WISCO does not compare with what MAINLAND and its hooligans are up to” he said, while highlighting WISCO’s led construction of a processing plant and its job creation effect.  As a remainder, the row of repeated violations of the rules of engagement has led to the suspension of MAINLAND’s activities. This equally Chinese company dared the odds when going for the exploration of ilmenite with a mere authorization from the Head of Region. It shipped thousands of tons of samples abroad as a result which has little to do with an exploration phase.