New York Times won’t divide by total population

“‘This Is Our Land’: Mineral riches should make Congo prosperous. Instead, they fuel corruption, which has kept the people poor and compromised elections.” (New York Times, Jan 26, 2019):

Between 2010 and 2012, Gécamines and other state companies sold stakes in several of Congo’s most valuable mines for at least $1.36 billion less than their market value, …

Some $750 million due to Gécamines by corporate partners between 2011 and 2014 could not reliably be traced to the company’s accounts, the Carter Center also found. The anticorruption watchdog Global Witness said that more than $750 million in mining revenues paid to Congolese state entities were lost between 2013 and 2015.

The front page lead-in to this story is “Why isn’t Cobalt Making Congo Rich?”

The journalists apparently never considered the question “What if we divide these numbers by 87 million?” (Congo estimated 2019 population, which the CIA says is growing at a rate of 2.3 percent annually)

Suppose that we accept the worst case analysis in the NYT article. A total of $2.1 billion has been stolen from the people of Congo. How “rich” would they have been if not for this theft? That works out to $24 per person.

Readers: What accounts for the reluctance of the media to admit that, even in a perfectly administered situation, a large population cannot get rich off a handful of cobalt mines?

17 thoughts on “New York Times won’t divide by total population

  1. @Philig, the media is full with “opinion” or so called “investigation” articles — this is not news reporting and anytime I see an “opinion” article, I question the motive of the writer.

    This “opinion” article fails to highlight the massive corruption of officials run in Congo [1]. Your example of $24 on the $2.1 billion stolen by cooperation is nothing compared to “Mobutu allegedly stole up to US $4 billion while in office” (from the wiki link of [1]). Even Mobutu’s successor, Laurent Kabila, is corrupted [1].

    [1] https://en.wikipedia.org/wiki/Corruption_in_the_Democratic_Republic_of_the_Congo

  2. Unemployment in the Congo is 46%. Try dividing those numbers by the average salary of a Congolese citizen to see how many jobs could be created if the government invested in its own country.

    If you like dividing, try dividing by the GDP of the Congo.

  3. Your point is that over 150 years of stealing the Congo’s resources, first by the Belgians and for the last 60 years by home grown kleptocrats hasn’t affected the nation’s prosperity — or just that this particular theft hasn’t had an appreciable effect?

    • There’s a liberal bent to these articles that suggest if “the people” ran the mines there would be less corruption and less money stolen. Not so much. There’s corruption in any operation involving a billion or more. I expect there’s probably 500 billion to 1 trillion of corruption in our economy. Yes like 25-33%.

  4. You’re so right, it’s nothing compared to the per student cost of that new school of yours, so how could it possible matter? And it’s in the Congo? Bah. Who cares?

    Or maybe it’s a bit like the Dutch boy and the dike…it’s only a small hole, and a little water, what could possibly go wrong?

    But more likely, these billions are just one of many other unreported instances of graft in the Congo. What if this one were stopped? Which then led to more billions not being stolen? That would seem to be a good thing.

    • If this one small example of a larger pattern, then the reporter should show evedence of that pattern.

      My guess is that the reporter has a naritive in their head: People in this country are poor, it must be corruption, and billions of dollars sounds like a lot! The reporter may be right, but she is not doing her job if she starts with a naritive and fits facts to it. You can’t trust people who behave that way.

  5. Oh yeah. Blame it to those corrupt folks. Now, oh the holy NYT, I forgot, who authorized the killing of Patrice Lumumba and approved the rotten to the core Mugabe?

  6. Folks: Even if this $24-per-citizen theft was preceded by additional thefts, I don’t think theft can account for the Congo being poorer than the U.S. If we consider the 4.5 percent of GDP spent on health care by Singapore (longer life expectancy than the U.S.) to be the minimum required amount, roughly 13 percent of GDP is stolen in the U.S. annually (handed over to cronies in the health care industry). We also have corruption in the form of tariffs that enrich groups that lobby and donate to Congress, e.g., sugar farmers.

    At least from the evidence presented in the NYT, it is not clear that corruption and kleptocracy is a larger percentage of GDP in the Congo compared to the U.S.

    • The headline states that “mineral riches should make Congo prosperous”, not necessarily as prosperous as the USA. The CIA page that you linked to mentions copper, gold, diamonds, coltan, zinc, tin, tungsten in addition to cobalt. So there’s no problem at all there.

    • Maybe it’s philg who is innumerate (as well as those who swallowed this manufactured “statistic”). The $1.36B theft is 3.6% of Congo’s GDP, which makes it the equivalent of a $698B US theft. Big enough for you now?

    • 24 bucks per capita are clearly nothing, but the point of taxation, in countries that actually function, is not to redistribute the wealth to each and every citizen as a share of the dividends, it is to use the whole sum to do something else of common value, something that citizens could not afford to buy or build using their own share of the resource. So while the per capita share is low, it is not impossible that a properly managed resource could provide a revenue spent for the public good — say a hospital and the staff for said hospital. In fact a well managed resource, and a careful spending of the profits, might in fact provide a disproportionate benefit, over an above the per capita share: for instance setting up a nation-wide 5G WiFi network (free, or easily affordable) using the tax revenue from mining could boost other productive (and taxable) enterprises, for a general social and economic improvement of the whole citizenry.

      Here I use healthcare and WiFi as two possible examples of the many. So Phil is wrong in his evaluation of the article because the article did not mention just dishing out the profits of mining as a direct per capita compensation (and it in facts mentions the use of the revenues as an opportunity for global economic development).

  7. Economic development is tough, it’s like building a company but on much larger scale.

    A corrupt economy (and few if any are worse here than Congo’s) is like a startup filled with people who are a mix of politically-favored incompetents and scheming embezzlers. If you somehow raise some capital, it will be used to hire more bosses’ nephews and siphoned off by the embezzlers. If someone somehow manages to create something of value, it will similarly get co-opted. If you were a very smart and ambitious Congolese who wanted to improve your lot, your choices would be to become an embezzler or emigrate.

    I’m curious to see if the Chinese companies now investing in African resource extraction will find that they can be as rapacious as the Belgian colonialists, or if modern times eventually require somewhat more of a functioning society to return the investment. Probably the former but seeing as the West has given up on imperialism they’re the only ones likely to force any sort of change.

  8. It looks like it’s philg who is innumerate (and the rest of you guys for swallowing his manufactured “statistic”). The GDP of the Congo is $37.24 Billion. The purported theft was $1.36B. That’s 3.6% of GDP. The equivalent theft in the US would $698B. That big enough for you now?

    • $37.24 billion for a population of 87 million is $428 per person per year! Let’s hope that there is some purchasing power parity adjustment.

      There are two questions here… (1) Is the theft of 3.6% of GDP sufficient to prevent the GDP from growing above $428 per person per year, (2) Do government cronies steal more than $698 billion per year in the U.S.?

      Point #2 is simpler to answer. As I noted above, I think that the health care industry, via the miracle of government coziness, is taking roughly an extra 13 percent of GDP more than it would get in a market economy. Some of this simply leaves the U.S., paid out to foreign pharma companies (some of them former U.S. pharma companies that decided the Irish corporate tax rate was preferable). We can also look at military contractors, farmers (sugar tariffs, ethanol fuel subsidies, various other handouts to agriculture), at least part of Wall Street, etc. as cronies of the U.S. government.

      Point #1 seems like an obvious “no”. Everyone in Congo who would work 40 hours per week in a corruption-free economy would have to work 41.4 hours per week to cover a 3.6 percent rake. This isn’t nearly as dramatic as what Americans have to do in order to pay their health care/insurance costs!

  9. The total worldwide cobalt market is about $9 billion (source). If the cost of production were $0 and 100 percent of the revenues were captured by Congo, that would work out to $103 per person per year. So Cobalt couldn’t make people in Congo rich even if they could produce it for free, captured the entire world market, and there was no corruption or even any admin cost to dishing out the money.

    To Federico’s idea of investing the money and getting rich that way… suppose that the $100 per person were invested instead of consumed. Vanguard Total World Stock Index has returned about 4.9 percent per year over the last 10.5 years (see https://investor.vanguard.com/mutual-funds/profile/VTWSX ). So that seems like a reasonable rate of return to assume. After inflation, that’s about 2 percent? Each person in Congo could thus have an extra $2/year in income for every year that the country captured 100 percent of the cobalt market at a $0 cost in a corruption-free environment.

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