Many parallels can be drawn between Venezuela and Zimbabwe. The flattering may suggest two supposedly esteemed icons of anti-imperialist revolution and continentalists, Hugo Chavez and Robert Mugabe. But, that in itself is increasingly becoming a narrative only held by very few of seemingly low expectations for what bona fide revolution could truly be. While Hugo Chavez’s successor, Nicolas Maduro, sent military units to enforce a blockade of foreign aid headed to desperate Venezuelans over the weekend, less eventful was Robert Mugabe’s birthday celebrations, assuming the latter was meant to be a festive of national interest? Some confusion has settled on what extent the February 21st public holiday has to do with honoring Mugabe’s reign. In spheres akin to youthful discourse such as social media platforms, the holiday was vacuous of celebrating Mugabe’s legacy. Similarly in Venezuela, Chavez’s revolution also supposedly meant to resemble socialist fairness in welfare, finds lesser quarters of believing youth, albeit it may be hard to tell their convictions as larger numbers find themselves pre-occupied staying ahead of hyperinflation and sourcing basic commodities increasingly hard to come by if one is of humble background, or outside partisan power structures.
The most harm identifiable in the legacy of both Mugabe and Chavez is that they left an empowerment ideology that is materially fleeting, unattractive to physical rationale, and therefore, pragmatically questionable in global commerce. That is not much of an inheritance for next generations. Somewhere between local ownership and fair dividends, future generations do deserve a better inheritance from the abundant resources within their lands. It is still salvageable. Maybe lessons can be derived from the stresses of developed economies today.
As more developed economy governments are begrudgingly shifting away from globalism, mercantilism is finding traction yet again. Developing economies hoping to increase ownership or dividends from their resources should resist similar temptation. Mercantilism does not work, particularly for smaller size economies. Indeed if capital is a means to efficiently and competitively enhance productivity and yields, smaller sized economies will always lose out as long as capital funds do not have regional perceptions of developing economies. Presently, capital funds use categorical groupings such as “emerging markets funds”, which only include better off developing countries like South Africa, and compare it to economies like Turkey, Brazil, India and other far more scalable favored economies. This leaves the large majority of Sub-Saharan African economies marginalized from capital funds. It would be strategic for these economies to create synergies and complementary value chains that can substantially resemble mutually functional economies, which can then be categorized at less disparate comparability to global emerging economies. For instance, an East African stratum is more compelling than singling out Rwanda, Ethiopia, and others alone. This construction should come from a conception where developing economies can be functionally integrated; in many facets such as connectivity, infrastructure, to human capital. Such integration should have real intent, not the posturing of many regional and continental forums where multilateral agreements are signed without any substantive will and subsequent action.
Interestingly, it is specifically in the resources and extractives sectors where developing economies function on lone discretion, further distancing future generations from potential ownership or fair dividends from the resources within their lands. It is commonplace for respective jurisdictions to have instances such as in Guinea, where one of the world’s richest mining deposits, under the Simandou iron ore project, are negotiated and structured in solitary dealing. A dragged out dispute between Guinean President Alpha Conde and BSG Resources Ltd. was recently resolved in terms undisclosed to outside parties. This continues a long history were mega deals on the continent to do with resources and extractives are negotiated on the pretext of national interest, but concealed to the discretion of ruling classes and foreign enterprise. Just one case in Guinea, but how many other resource and extractives deals are settled outside of judicial systems that follow clearly outlines legal frameworks enforceable by representation for future generations, ideally parliaments or institutions of electoral conception?
A result of such single administration discretion, developing economies are exposed to game theory dynamics, where individual economies have diminished negotiating leverage as they supposedly compete to attract investment with their peers. Rather, by creating transparent parity in resource and extractives standards, a mutually beneficial leverage to negotiate is created. Moreover, having complementary value chains in resources and extractives retains a balanced awareness of how to develop the sector at a competitive level to other regions. For instance, Ivory Coast and Ghana account for about three-fifths of global cocoa output. The industry regulators of both countries are in talks to study a minimum price per metric ton for the commodity. This is leveraging on the scale that the two economies contribute to the world market, thus, a greater negotiating power is achieved by mutual standardization. The same came be achieved in resources and extractives.
Indeed the notion of ownership and fair dividends from local resources is not impractical, and does not warrant the defeatist perception that is growing within younger demographics in developing economies. An ideology does not belong to revered entities such as regimes in Venezuela and Zimbabwe may have implied to their youth. Future demographics can be empowered, and it is exactly within global commerce where that ideology can be achieved. There is strength in numbers.