ARTICLE: "Fertile Ground: Hedge Funds Travel to Africa: Investing Pools Pour in Money As Nations Get 'Houses in Order,' Other Emerging Markets Fade," by Alistair MacDonald, Wall Street Journal, 6 October 2006, p. C1.You cannot get DC interested in Africa. The Hill doesn't want to hear about it, nor does the intell community nor the foreign policy intellectuals, nor the State Department, nor the White House.
Despite all the celebrity focus, despite all the rising financial focus, despite the Chinese focus, despite this Long War fight inevitably heading south, despite the Pentagon moving toward an AFRICOM command--despite it all, there is scant interest exhibited in political/civilian DC right now.
Bring it up, as I recently have at various USG, think tank and intell community venues, and you get blank stares. Seriously. It's the same old, same old: not "strategic," simply don't care, and yeah, they'll stipulate on all that suffering.
Africa is a violent wasteland, you are told, and there's no anticipated change.
Wall Street sees it differently, and its prep-the-battlefield forces, the hedge funds, naturally lead the way, signalling key data points that seem to go completely unnoticed in DC:
With stocks in more-traditional emerging markets like Brazil and Russia still close to historical highs, some hedge funds are turning to resource-rich sub-Saharan Africa for investments. The push reflects both the uptick in some of the region's economies and the growth of hedge funds--loosely regulated pools of private capital--and their search for new frontiers.How to explain this blindspot in DC?
Events in the Mideast obviously dominate, so terrorism remains hot.
And there's the generational hangover in the analytic world: we're still stuffed with people who grew up on Europe and the Sovs.
But seriously, when you track both radical Islam and the global economy's search for that next great cheap labor pool (What a surprise! These two vectors bump into each other!), you're naturally drawn to Africa, not stuck on navel-gazing Europe.
But, to be most blunt, it's that white-guy (and yeah, we're talking a white-man world in DC and esp the intell community) fixation with Islam's apparent conquering of weak-willed Europe that seems to fascinate so many.
I know, I know, it's not a world war until Paris surrenders (and what about those riots?!?), but really, it's a big world out there, so DC might want start noticing some of the clues.
Addendum:
As you look at political risk map of Africa in WSJ hedge fund story (various local and outside sources), you note that the countries with the least risk are on the edges, the next most risk are a layer in from the coast, and that the greatest risk is found in the deepest interior, essentially making central Africa ground zero of the Gap.
Two points from BFA exemplified:
1) shrinking the Gap is marked by contiguous developments (no real leap-frogging in a real, security-based world), and
2) as we shrink the Gap, we walk the dog backwards in terms of the original spread of humanity outta Africa (as in, that's where the original globalization began, and that's where it will end).
Thus my new pet phrase: We're all going to Africa.
Except Washington, apparently.
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Comments (7)
The US leadership may discount the present value of Sub-Saharan Africa but not the Chinese and Indians. Both of whom are stroking and encouraging their "overseas" communities in Africa to the extent possible. The barn door may have closed already on the US while China and India curry their new steed of Africa. We are being outthought strategically and politically but what is new. After all the British Empire is still on our side for now. By the way that's the same empire that failed to move the king to NY in the 1700's. Oh and by the way strategic minerals and commodities last I heard are still a big deal as far as African resources. But then I guess the next mobilization of 100 mech infantry divisions will be supported by Wal-Mart, since Detroit will be the Mecca of North American not the industrial heart of North America. Is power shared or given-NO! Power is taken!
Posted by William R. Cumming | October 7, 2006 7:52 PM
If central Africa is ground zero of the Gap, then would "fixing" the Congo or the C.A.R. speed up globalizations eventual dominance?
If the answer is yes, then we should be on the look out for the next Rwanda crisis or whatever we can use to be able to drop a couple hundred thousand troops in there and get it over with already.
I'm not being sarcastic. I just hate taking the long way to somewhere that I can get to through a direct route.
Posted by Seth Benge | October 8, 2006 1:13 AM
Great thought Seth. Should have done it three years ago in Darfur,Sudan. The "bird" to the Chinese and Pakistanis. That opportunity lost(who says "cowboys" are quick draw artists?)we have a ton of catching up to do. The details of the where are sketchy for me because I saw this "story" about two years ago BUT a Chinese entrepeneur(on a relatively long leash) got one of the biggest factories on the continent up and running. He's cranking out what 24/7? Concrete utility poles for domestic consumption. 'nough said? Obligatory sports analogy, we're down three TDs and a FG a few minutes into the third quarter in the Africa Bowl. I'd beg to differ with Dr. Barnett, it's less the "white guy" thingy(libthought) and more that pesky "fifth column" thingy(right wing tin foil hat conspiracy theory) we got goin' in this country. Just a thought or call it an opinion and we all know what's said about opinions.
Posted by GLASR | October 8, 2006 8:00 AM
Darfur has already robbed a whole generation in Darfur and Eastern Chad of education and put guns in their hands. Irnoically, more has not been done on Darfur because the US intelligence community is dead set against it. Our "partners" on counter-terrorism in Khartoum are supposedly helping round up jihadists on their way to Iraq and are giving the CIA information on the new regime in Somalia. Whether not that is true (I find it highly unlikely that the Sudanese are giving us anything of value), we should ask ourselves the price we are paying for this intelligence. Darfur, Chad and soon CAR will be burning.
Posted by Asher | October 8, 2006 11:27 AM
If you can't get Africa on the agenda, make it the incidental battleground of a fun perennial, "who's smarter, Wall Street or DC". Why are the Wall Street boys paying attention to Africa and are those DC slowpokes missing something?
Posted by TM Lutas | October 8, 2006 4:10 PM
TM: reminds me of how Tom often says the WSJ beats the NYT/WaPo on intell...
Posted by Sean | October 8, 2006 7:30 PM
Why is it so hard to get anybody in Washington interested in Africa? Because there is not anything there that anybody wants.
Politically, the place is treated as an adjunct to domestic politics but since 90% of the black vote will go for Democrats no matter what the Republicans or Democrats do, there is not a lot of incentive to do the 21st Century equivalent of bagel eating, baby kissing, Tarantella dancing and kielbassa tasting. Besides which, George Bush does not have any ongoing personal sex scandals to hide from by making an extended overseas trip.
Maybe the Wall Street folks will do better in Africa than the folks who invested in the former Soviet Union right after the wall came down. Given the skill that Africans seem to be showing for internet scams, I suspect that due diligence is going to be chalanging.
However, lest I be accused of undue pessimism, let me suggest something that we can do that could lead to people in the Core giving a damn what happens in Africa. Mandate flex fuel for all new gasoline motor vehicles sold in the US. Try to persuade the rest of the Core to do the same thing.
Any part of Africa that can produce sugar can turn that sugar into ethanol and sell it to the core. If the core got even 5% of its motor fuel from Africa, there would be plenty of incentive to prevent gangs of armed teenagers from terrorizing the locals. There would also be somebody who cared it the roads were maintained and if the corruption were kept down to merely onerous levels instead of being so severe that it stops all economic activity.
Energy is one of those things that can cause strong connections. If those connections can be made with the less risky parts of Africa, they will change their neighbors in positive ways, lowering the risk in the whole neighborhood. As the risk goes down, more FDI will go in and more connections will be made.
But the first step to getting people to give a self interested damn about Africa is the seemingly unrelated action of requiring all American cars to be capable of running on E85 like most SUVs can today.
Posted by Mark in Texas | October 11, 2006 12:42 AM