«We should not regret the money, and maximize the use of purchased»: Konstantin Malofeev about working with Africanology link
— Russia summit Africa ended two weeks ago, but the discussion of the so-called Russian return to the Black continent continues unabated. The loudest event was not only debt cancellation to African countries to $20 billion, but the presentation of the International Agency of independent development, Chairman of the Supervisory Board who became Chairman of the Board of Directors of group of companies «Constantinople» Konstantin Malofeev. In an exclusive interview with RT, the businessman told about the Agency and assured that «in Africa is enough for everyone», despite the strong economic expansion of China in the region.
- © RT
«We know what it takes to African countries. First of all they need the money»
On the official website of the Agency says it was created «to help governments of developing countries, especially African countries in the implementation of economic reforms, attraction of investments on international financial markets and unleash the potential of increasing shareholder value of the largest corporations in the region.» The wording is not very specific. You could have more to tell than will deal with the Agency?
— We are sovereign development. The development of any sovereign country in the world begins with economic sovereignty. If the country is in full economic dependence — a colony. African countries, freed from political dependence in 1960-1970-e years, was left in complete economic colonialism, not even under the protectorate, under the direct external control of the former colonizers. What is it expressed? For example, when British colonies «left» state, as if with the granting of independence, left the Corporation in which private property were the main wealth of minerals in these countries.
Thus, African countries remained dependent. They are unable to pursue an independent policy in issue money, they do not belong to the natural wealth. They feed its population, but do not know how to get out of bondage. For example, as soon as you need to invest in the economy and mining, from whom they take money? Those same Western multinationals, because it so happened that they have less money. Corporations have the money can attract a 2-3% per annum, the African countries under 5-9%.
Our Agency has assisted African countries to reach the capital markets on the same terms, where there are Westerners, and thus they are able to break out of this economic vicious circle and to start their own sovereign development that is to carry out the actual decolonization of its economy, politics and future destiny.
- Konstantin Malofeev on the work of the International Agency of independent development
— What exactly is your help? You provide legal, consulting or other services?
— We are consultants to governments and presidents. Accordingly, we advise them how to carry out reforms, to act on the capital markets, how to structure their state Corporation, that they belonged to the people and bring the natural rent. The Agency’s assistance includes legal and economic advice.
In capital markets we act as an investment Bank, because we attract money from global investors. But now in the way of money from private banking in the world $1 trillion, and African countries who would like to take the money, are global investment banks, which are the first Department represented Western intelligence agencies, and that the first Department to restrict the flow of the money.
— Creating an Agency, did you have consultations with representatives of the government — because in working with Africa are now interested in the highest level?
— Of course, we had consulted all. The Agency was created in the eve of the summit and the economic forum Russia — Africa, although the negotiations we had before. Generally for what we do, loud presentation is not necessary, because it is a quiet consulting work with the government. We do not sell children’s toys or sodas. We don’t need advertising. But at the summit in Sochi for the first time brought together 43 heads of States is a huge event for Russian foreign policy. So the summit, we decided to buy an institutionalized form.
In everyday life we would prefer a smaller PR, because consultants don’t need PR. The consultant needs to be word of mouth. If we were able to help one government and the country made an economic breakthrough, they recommend us to others.
We conducted consultations with representatives of the government and the foreign Ministry. We strive to be not just in the mainstream and at the forefront of Russian politics in Africa.
We understand the need for African countries. First of all, they need money, they need economic sovereignty. Therefore, immediately after the money can go other interests that are associated with the «Rosatom» or the «Rosoboronexport», or food supplies. But first they need the money. When African countries get richer, increases in Russian exports.
«We are working with Western investment banks»
— Technically looks like the work of the Agency? You turn to the authorities of the African country, and then what? The consultants will work remotely or on site in a specific country?
— Of course, they come in specific (country. — RT). We work with governments, with ministries.
And with Western investment banks?
— We are working with Western investment banks. We work with the same as we are independent consultants with more than 20 years of experience. We know how to operate these markets. But we are able to operate exclusively in economic terms, not political order of Western intelligence agencies and governments that restrict access to cheap cash resources in Africa, thus multiplying the troubles of Africa, including famine.
— Well, let’s talk about the Russian direction. Is it the intention of the Agency to cooperate with state companies operating in Africa? For example, to act as a mediator to resolve the issue of deliveries SSJ in Zambia? Or maybe, in other policy areas?
We work with those who contacted us. Now we are negotiating with some Russian companies (unless we have agreements, I cannot disclose their names) on separate occasions where they need additional funding because their clients — the governments of African countries have a shortage of Finance in order to pay or go forward with a large infrastructure project. In this case, of course, for us customers are the government, and the Russian contractor.
— Will the Agency help with questions about the restructuring of debts of African countries to Russian companies?
Yet such appeals were not. We still talk about the new debt. Perhaps if some country we have developed a special relationship due to the fact that we deeply understand their debt position, then we will be able to offer. At the moment there is no such proposal, and with Russian companies, we are only talking about new projects.
«In Africa, enough work for everyone»
— What projects now the Agency is working in Africa? What States do you now support contact?
— We signed a contract with the Democratic Republic of the Congo, Guinea and Niger. With these countries we are talking about investment in infrastructure projects by attracting funding from international capital markets. In Niger we are talking about the construction of the pipeline. In Guinea and Congo — the construction of Railways.
Thus our proposal is an alternative to the Chinese, which implies a very cheap financing, but once selected a Chinese contractor in the rate of profit which laid all returns. This creates the impression that the cheap duty — 1-1,5%, but it has proposed concrete contractor and it is not known how much he earns.
Our proposal concerns the fact that the contractor does not have to be deterministic, we leave the government to choose the best contractor. That is how we operate in countries which come. Of course, everywhere there are suggestions of Western and Chinese companies. We are the most flexible. Unlike the American proposals, and the IMF, we do not demand political reforms. In turn, Chinese companies always come with their contractors. We are better because we do not give the contractor and we have no political demands.
- Konstantin Malofeev: «African Countries are the most stable borrowers»
— What about hedging? In many African countries, including those that you have listed, the political and economic situation is very unstable.
Over the past 30 years, sovereign defaults in Africa has not happened, except for pre-bankruptcy situation in Zambia. In General, the ratio of defaults in Africa is lower than in Europe and generally lower than the world average. A wave of bankruptcies on the continent swept in the 1970-ies and was associated with left by the colonialists of debt and the actual hit countries in the debt trap. After that, we see that the country is now Africa’s most stable borrowers.
— You started to talk about the work of China in Africa, I would like to continue this topic. Trade turnover of China with the countries of the continent is estimated at $204 billion, Russia — ten times less. Obviously, we now not afford competition with the Chinese in this direction.
I would say it’s not about competition, but cooperation, for example on the BRICS platform. Last year at the Johannesburg summit was considered a legendary project of construction of TRANS-African railway from Cape town to Cairo. This is very important because this construction could affect the unification of Africa as it was in the XIX century in Europe during the unification of Italy that occurred due to the construction of Railways.
A railroad separately will not pull neither China nor Russia. But BRICS could, so to help Africa as a whole to become an independent player and do to rectify global injustice, when so many people live on the brink of starvation.
So I don’t think we have competition. Africa is enough for everyone: there is no end — very hard infrastructure, transport and electricity.
But in some States of the continent China is almost a monopolist, for example in the DRC, where almost all world’s reserves of cobalt, the most precious metal in the world.
— In the DRC is 65% of the world reserves of cobalt in Russia up 5%. Cobalt is the oil of the XXI century and the DRC it is very rich. But there are not working alone Chinese. As I understand it, the Chinese buying only about a third of cobalt, but they are strategic buyers, as China is a worldwide manufacturer of gadgets. At the same time working in the country and Western corporations, and the largest traders Glencore, Trafigura. They buy a cobalt in the DRC and dictate the prices — that is, buyers dictate prices is almost exclusive to the manufacturer. This, of course, sooner or later must come to an end. The Congo is still ahead. Accordingly, how all will develop further, depends on the President félix tshisekedi, following his. We hope that it will lead Congo on the path of sovereign development.
- Konstantin Malofeev on the causes of debt relief in Africa
— On the issue of sovereign development. The loudest event of the Sochi forum was the announcement of the cancellation of Africa’s debt by $20 billion. How do you think this decision is economically justified? This news excited the public and the media. Earlier, when Russia wrote off the debts of the DPRK, Cuba and other States, such noise was not. But it’s understandable: incomes fall for the fifth consecutive year, industry recorded a stagnation. Some experts believe that this was a political rather than an economic decision. Do you agree with this assessment?
— If you carefully analyze the news, these $20 billion was written off in the last 20 years. Not Russia gave the money to Africa, and the Soviet Union. The debts of the USSR by its nature was in the form of food supplies or weapons in the framework of assistance to countries that have embarked on the socialist path. I doubt that they were going to extinguish these debts. This we now know that the debtor countries on a quarterly basis pay the debts.
Therefore, Russia could not write-off these debts, although technically could not do this. Many African countries appreciated and welcomed «the return» of Russia to the continent. They remember how the country was helping them to free themselves from colonial rule. Therefore, it is necessary to understand that the money (written off debts. — RT) in no way could be launched in Russia, for example, for payments to pensioners. The money was already written off long ago.
What we need to do is not to regret about the money, because they will not return, and maximize the use of what was bought. And bought was the love and friendship of the Africans to us. But we have not used, because in 1990-e years have gone from Africa. We bought a ticket, but they did not go. These relations with Africa, which cost 20 billion, we just missed. And now we’re rebuilding them.