Friday, August 17, 2007

Niger, Poverty, and Uranium

In a previous post on Sarkozy's foreign policy, I argued that his Dakar speech proposed a change in outlook. Rather than extractive exploitation of African resources, France was now proposing a fairer bargain in order to promote African development with an eye to reducing migratory flows.

In a very interesting piece in today's Le Monde, Guy Labertit (pictured left) of the Fondation Jean-Jaurès (and formerly the PS's "Monsieur Afrique"*) convincingly demonstrates that I was far too optimistic, at least as far as France's recent dealings with Niger are concerned. Labertit reports that Areva, the 90-percent state-owned French nuclear firm, just renegotiated its annual uranium contract with Niger. Although it agreed to pay 50 percent more than last year, it is still paying only one-third of the world spot-market price. And the reason for the increase seems to be not a wish to promote African development but a response to the emergence of new competitors for Niger's uranium, most notably China, Australia, Canada, and South Africa. Two French officials were also caught dealing with rebel forces.

So exploitation of African mineral resources continues; submarket prices suggest collusion between local elites and foreign buyers; increased international competition may only be increasing the rents extorted by the colluding elites; and the population--89 percent illiterate--remains untouched by the windfall. In short, business as usual. If Sarkozy wants to demonstrate that critics of his Dakar speech are wrong and that he really does have the welfare of Africans at heart, he should correct the inequity of this arrangement.

*For an unflattering portrait of Labertit, however, see here.

Defacing Wikipedia

Libé reports that the Wikipedia entry on Jean-François Copé was modified to remove information about an apartment of Copé's for which the state was paying in violation of applicable rules. The change was made by someone using a computer at the Ministry of Finance. The change can be viewed in context here. The passage removed was the following:

Ministre délégué au Budget et donc comptable des deniers publics, il est propriétaire d'un logement parisien de 160 m², sis rue Raynouard, dans le XVI{{e}} arrondissement de Paris. Cependant, l'État loue pour lui et sa famille 230 m² près des Invalides (VII{{e}} arrondissement) pour un loyer mensuel de 5 500 euros. Par deux fois, l'entourage du ministre a certifié que l'appartement du XVI{{e}} est vide et bientôt en travaux. En fait il est occupé par son directeur adjoint de cabinet, Bastien Millot. Par ailleurs, M. Copé doit se mettre en conformité avec la circulaire Raffarin, qui limite la prise en charge des loyers par l'État à 80 m² par ministre plus 20 par enfant à charge. Soit 120 m².
A new device, the WikiScanner, has revealed numerous changes to Wikipedia by interested parties, including corporations and political figures. As Wikipedia becomes an increasingly important research tool for many of us, it's important to keep in mind the possibility of self-interested alterations to its content.

Coup de Com

Perhaps you caught Christine Lagarde on France2's news last night. It was the first time I'd seen her "live," and I'll admit I was curious to see how she'd present both herself and the crisis that forced her to cut her vacation short (on Sarkozy's orders; see my comment yesterday). She was crisp, confident, and determined to be reassuring, ending each neatly turned paragraph with a smile whose precise voltage seemed totally under her conscious control. I could see why she had been such a great success as a lawyer.

Still, it was hard to forget that her initial appointment in the first Fillon government had been as agriculture minister, and it was only Borloo's gaffe in speaking about the social VAT and Juppé's failure with the voters that led to the transfer of the former to Environment and Lagarde to Finance. Yesterday, I imagine, Lagarde might have been wishing that she had only the hoof-and-mouth and H5N1 crises to deal with and not the crisis that the French press persists in referring to as la crise du subprime américain (though Françoise Laborde, whose general confusion served only to accentuate Lagarde's buttoned-down air of competence and bonne à tout faire, managed to turn "subprime" into the macaronic "sous-price"--precisely the opposite of the truth, since the root of the problem is that securitized subprime loans were overpriced).

Nevertheless, for all her calm precision, Lagarde is no Henry Paulson. Rather than try to explain the arcana of collateralized debt obligations to the unwashed, she sought to paint a picture of concerned authorities moving swiftly to take control. She praised the world's central banks for their "remarkable coordination" in injecting liquidity into the system. This is rather like praising people fleeing a burning building for their coordination in seeking suitable exits. Even Laborde wasn't buying this, but Lagarde remained on message despite the occasional pesky question. When Laborde asked her if the downward revision of French growth figures didn't upset the government's budgetary plans, which were predicated on a growth rate of 2.5 percent, Lagarde allowed herself momentarily to switch from smile to frown before administering a sharp correction: "2.25 percent," she insisted. For an instant I thought she might put up a PowerPoint with a spreadsheet of projections covering two standard deviations worth of what-ifs, but instead she moved quickly on to blame "political uncertainty" for the slowed growth. This often happens before elections, she said, as businesses hold off on investment decisions because they're not sure which candidate is going to win.

Indeed, but having held off, they're not likely to plunge in now while waiting to see if the ECB will back off its proposed September rate increase in the face of the new crisis, or to discover whether their bankers are willing and able to extend a needed line of credit.

Bottom line: a useless coup de com. It would have been more calming to markets if Lagarde had remained on vacation. But Sarko will be back in town today and will no longer rely on a surrogate. It will be interesting to see how he plays it. Borrowing a time-tested American formula, he might try: Il n'y a rien à craindre que la crainte elle-même ...