South Sudan: Unhealthy Global Competition Hurts Underdeveloped Countries
Previously published Jan 26, 2011
After decades of abuse and neglect at the hands of a government as foreign as their former British governors, the South Sudanese people have voted to form their own nation. Many challenges stand in the way of building this new country. Aside from a near total lack of modern civil and social infrastructure, this African state will likely face conflict with North Sudan over, at the very least, oil revenue sharing agreements while it might even see armed conflict. There should, however, be plenty of money, if things go right, for construction thanks to the region's sizable cache of natural resources. Unfortunately, South Sudan may be able to shed the burden of North Sudanese corruption, but development still depends upon making good deals with the international business community.
Under the guise of "business friendly" policies, many underdeveloped countries, especially in Africa, have open their natural resources up to exploitation by transinternational corporations with few taxes paid and a handful of jobs created. Capitalism can, and has done great things in terms of uplifting people out of poverty, yet this is only possible when business deals can be negotiated to the benefit of the impoverished in a significant way relative to the value of their available resources. As such, mining and drilling firms should enter a territory like Sudan to develop infrastructure, extract resources then broker the sale of such commodities for a fee, which covers their costs, ensures a reasonable profit, and provides investors with a modest return, while creating jobs and strengthening the national tax base.
Representing weak governments, even duty bound leaders of many poor countries are not fully capable of maximizing the benefits, which come from the exploitation of their natural resources, while minimizing social costs like pollution. Of course, businesses are not necessarily to blame as they are supposed to maximize profits and minimize liabilities. The plight of poor countries is exasperated by the economic policies of wealthier and more influential nations. Where China has basically built its economy on being the lowest-bidder in the global market, even the US has been far too generous in its attempts to woo business interests. Instead of building a strong economy, which international businesses and investors can access at a fee while following our rules, we strip away corporate taxes and tariffs until we cannot properly enforce healthy regulation or actually punish irresponsible corporate behavior without fearing economic catastrophe.
Investigators of the Deep Horizon oil spilled concluded in January of 2011 the 75 million dollar liability cap on spills was insufficient. Because a large number of competitive nations around the world already have lower caps, oil drillers cannot be legally held sufficiently responsible for any misconduct they may undertake while all nations continually suppress the potential for tax revenue by underbidding each other with far too generous corporate tax benefits. Through such practices, as well as our failure to tariff, we force poorer, underdeveloped nations to accept far greater concessions that leave their Peoples wanting even as their resources are stripped away. The result is a greater potential for abuse by corporations and fewer opportunities for capitalism to help end poverty around the globe.
Not only does the International Community undermine the sovereignty of its member states and their capacity to govern business entities, which can be dissolved rather easily without punitive action against executives, through our lowest-bidder global economy, it supports a capitalist system that facilities the neglect and abuse of its Peoples, thus undermining support for capitalism by impoverishing more of us, instead of ending poverty. What may come from the ashes of a divided Sudan depends greatly upon the economic opportunities that exist for its Peoples. The natural resource rich continent of Africa has plenty, but it is poorly managed. Consequently, the most prohibitive hurdle to South Sudan is the bad business practices of governments charged with building economies for the Peoples of the world. That is a need to cater to corporate whims instead of corporations courting nations for their national resources.