“The Resource Boom and FDI in Africa”

I moderated a panel on this topic hosted by the Vale Columbia Center on Sustainable International Investment.

Opening remarks: Karl P. Sauvant, Executive Director, Vale Columbia Center on Sustainable International Investment

Keynote Address: Jeffrey D. Sachs, Director, The Earth Institute, Columbia University

Session I: What are the defining and important features of the current resource boom in Africa

The rapid growth of the rising BRICS countries (Brazil, Russia, India, China, South Africa) as well as other emerging markets such as those in the Middle East and the associated demand for raw materials is driving the growth of extractive industries worldwide. In addition to their growing role as consumers, these emerging markets are also increasingly entering the sector as investors. This trend is also true in Africa, where the BRICS will constitute 30% of the new foreign investment coming into Africa over the next decade (the bulk of FDI inflows and stock still comes from OECD countries). The new role of emerging markets in Africa, as both investors and consumers, is arguably impacting the nature of the current resource boom in Africa. For instance, emerging market investors are entering into new partnerships with African governments, including through resource-for-infrastructure contracts and other financing arrangements for infrastructure and energy production. The current resource boom has also brought new countries and resources to the fore; new discoveries have changed the landscape of host governments, and shifting interest in natural resources (for instance, in biofuels, land and agriculture, potash and phosphates, rare earths, etc…) are presenting new opportunities and risks for the stakeholders.

This panel addressed:

– What are the defining features of the current resource boom and how do they differ from earlier booms? Who are the new players, and what are the implications of their increasing role as consumers and investors? How do their corporate strategies and diplomatic relations differ from the traditional investors and diplomatic partners?

– Are there new trends in natural resource investments? Are investments in land, for instance, surging as much as some are reporting? How has the map of host countries been affected? Are related sectors (infrastructure, agro-processing, energy) also attracting these new investors?

– Do these new trends of FDI (in agriculture, infrastructure) present an opportunity for more sustainable and diversified growth than traditional FDI in mineral, oil and gas extraction?

Moderator: Howard French, Author, journalist and associate professor at the Columbia University Graduate School of Journalism

Panelists:

Harry G. Broadman, Leader, Emerging Markets Practice and Chief Economist, PricewaterhouseCoopers LLP
Richard Duffy, Executive Vice President Africa, AngloGold Ashanti
Rohit Malpani, Senior Campaigns Advisor – Private Sector Department, Oxfam America
Alais Ole-Morindat, Chair, Tanzania Natural Resource Forum
Peter Rosenblum, Lieff, Cabraser, Heimann & Bernstein Clinical Professor of Human Rights Law, Columbia Law School

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