Archive for the ‘Chile’ Category

Why Africa won’t be the next Bric

August 27, 2010 5:26pm

Prompted by this week’s application from South Africa for Bric “membership”, the man who coined the acronym – Jim O’Neill of Goldman Sachs – asks in today’s FT whether Africa as a whole could become the next Bric.
On several measures he says the continent has a reasonably strong case, but he notes that its biggest economies would still need to raise their games on many fronts – and he misses some more profound weaknesses in the Africa-as-a-Bric idea.
O’Neill created the Bric acronym in 2001 as a neat way of grouping together four countries that shared the potential for generating rapid growth, attracting foreign investment, and reshaping the global economy.
Ngozi Okonjo-Iweala, managing director at the World Bank, latched onto the idea of Africa joining the group in a speech earlier this year in which she sold it as a “trillion dollar economy”.

It’s high time Africa saw and presented itself as the fifth Bric, an attractive destination for investment, not just aid. This is realistic and within reach. As Nelson Mandela said, “It always seems impossible until it’s done”.

But before you can decide where to squeeze an “a” into the acronym, old Africa hands will jump in to say that it’s nonsense to compare it to a single country: not only is Africa a continent, it’s arguably the most diverse on the planet in terms of economics, politics, culture and the environment.
What’s more, 20 African countries have populations of less than 5m people. O’Neill is alive to that and focuses his discussion on the biggest African economies.

If you … look at the potential of the 11 largest African economies for the next 40 years (by studying their likely demographics, the resulting changes in their working population and their productivity) their combined GDP by 2050 would reach more than $13,000bn, making them bigger than either Brazil or Russia, although not China or India.

But even those 11 are highly diverse – including two of the biggest, Egypt and Nigeria. And due to Africa’s lamentable roads and railways, as well as its internal border restrictions, many of them function as isolated economic islands.
Afro-optimists would say regional trading blocs are changing that, but the reality is that only about 10 to 12 per cent of African trade takes place with other African countries, according to a study from the UN Economic Commission for Africa and others.
For those reasons, it doesn’t make a lot of sense to suppose that Africa’s biggest economies will follow the same development trajectories over the next few years, let alone the next few decades.
Yet it’s worth remembering that the Bric grouping initially attracted flak for not having any coherence either, but its runaway popularity with western businesses and investors has given the four countries more in common than they had before.
Funnily enough, one thing they share is a growing hunger for mineral resources from Africa (notably Nigeria, Angola, the Democratic Republic of Congo, and Sudan).
But it’s doubtful whether any country other than South Africa has the right mix of factors to make it an attractive destination for serious western investment, across a broader range of sectors, which could rival that going to the Brics.
Earlier this year Shanta Devarajan, the World Bank’s chief economist for Africa, responded with a dose of scepticism to Okonjo-Iweala’s call:

The distinguishing feature of the Brics is that they are both middle-income and large. So it’s not clear how any individual African country can aspire to being a Bric. Countries such as Malaysia or Chile may be more appropriate models for most African countries.

To achieve their “2050 potential”, O’Neill says African countries need more macroeconomic stability, less external debt, a stronger rule of law, better education, (even) more mobile telephones, and a purge of corruption.
But it’s worth paying more attention to the parallel trends of population growth (seen as a good thing by many investors in India and Brazil) and job creation (a difficult task that most African governments are failing to manage).
Each of the Bric countries have their own pockets of poverty, and in some parts of Africa poverty is actually falling. But too many countries are producing more people than they can employ. And not only does that limit their potential as new consumer markets. It has ugly consequences in terms of crime, conflict and social unrest that can strangle economic growth.
Related reading:
Building Brics, FT
Is Russia the best Bric after all? beyondbrics
Why Africa won’t be the next Bric | beyondbrics |

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Underground Dreams: Beer, Hugs and Weddings


SAN JOSÉ MINE, Chile—Claudio Yáñez wants beer and a hot dog. Esteban Rojas wants to finally have a real church wedding with his wife of 25 years. Raúl Bustos wants to hug his five-year-old daughter.

For Chileans, these men and their colleagues are known simply as “Los 33″—the 33 miners who have been trapped half a mile below ground since the Aug. 5 collapse of the San José mine. The men have captured the attention of the world by surviving longer underground than all but a handful of mine accident victims.

The Miracle of the San Jose Mine

Zuma Press

Ranging in age from 19 to 63, they include a former professional soccer player, a Bolivian immigrant in his first week at the mine, a salty former seaman who had premonitions about an accident and a man in his 50s who is still waiting to see the grandson born just before the cave-in occurred.

What Chileans are calling the “Miracle of the San José Mine” is the tale of how unthinkable adversity turned this motley collection of miners into a doggedly disciplined unit, how a recently elected billionaire president risked his reputation in spearheading their rescue and how family members never lost hope.

The story isn’t by any means over. It will take three to four months for a 30-ton drill to gouge a 2,200-foot tunnel down to the chamber where the men are holed up. The plan is to hoist the men out one-by-one, a journey that could take about 40 minutes for each miner.

Footage released showing trapped Chilean miners in good spirits, as they come to terms with their months long wait to be freed.
In the meantime, rescuers send food, water and letters to the miners in tubes that whoosh down the four-inch shaft that serves as the miners’ umbilical cord. Doctors are gradually ratcheting up the caloric intake of the men who each lost an average 20 pounds on rations, according to health workers. On Thursday the miners got their closest thing to a full meal in weeks: stewed apples and bread with quince jelly.

In a video released Thursday, the men—shirtless, scrawny, with scraggly beards, but big smiles—showed the world their temporary home. “This is the famous shelter,” said one of the men. They pointed to a makeshift “casino,” where they played dominoes, and demonstrated how they had divided tasks needed to keep the refuge running. One miner was keeping a journal on all that had happened. “Get us out of here soon,” said another, in the spectral lantern-light of the mine.

The men can walk a distance through some unblocked tunnels, but spend most of their time in a couple of shelters that are relatively well ventilated and protected from cave-ins.

Physiologically and psychologically, the miners have entered seldom-explored territory, says Jeff Dyche, a James Madison University psychologist, who studied submariners when he served in the U.S. Navy.

Without sunlight serving as a regulator, the human body clock runs about 24 and a half hours, Mr. Dyche says, which means the miners are “going to be completely disengaged from what time it is in the outside world.” To make sure the miners are alert on the day of the rescue, he says, doctors will have to try and re-sync the men’s body rhythms by putting them on the same sleeping and waking schedule as people above ground.

Rescue planners at the state copper company, Corporacion Nacional del Cobre, have been discussing whether it would be necessary to blindfold the miners during the extraction or or conduct the operation at night, so they aren’t overwhelmed by the light when they come out.

More immediately, government rescuers are grappling with the question of how much control to place on the miners’ communication with loved ones. Earlier this week, family members said government psychologists had asked to review the letters they send down to the miners to make sure they avoided potentially upsetting issues, such as the fact the men may not be getting out of the ground until Christmas. Luciano Reygada, whose father is in the mine, said a psychologist told him, “Don’t say that we hope you come out soon. Just say that we’ll be waiting for you when you come out.” Rescuers have since said they gently told the 33 of their estimated time of departure, and the miners seemed to take it in stride.

Sergio Donoso, the uncle of Raúl Bustos, feels responsible for his nephew’s predicament. Six months ago, after one of the biggest earthquakes in a century along with a roiling tsunami smashed the southern shipyard where Mr. Bustos worked, Mr. Donoso suggested he travel north, to the mines. “He was worried about future catastrophes, so I told him there were stable jobs in mining,” said Mr. Donoso, who has been keeping vigil above the mine.

Miners trapped underground for three weeks in Chile are offered unusual help from the space agency NASA as they prepare to endure further weeks below ground. Video Courtesy of Reuters.

Mr. Bustos’ mother, Rosa Ibañez, came to the mine right away from her home in far-off southern Chile. It was the first time she’d flown on a plane. In Mr. Bustos’ first letter to his family this week, he said that he’d come up with a nickname for the diamond-tipped drill that rescuers had used to locate the men’s underground shelter: He called it “María Paz,” in honor of his five-year-old daughter, who relatives say is a handful.

Gregory Belenky, director of the Sleep and Performance Research Center at Washington State University, says the Israeli military found during the 1973 Yom Kippur war that the wrong kind of communication with family could add to stress. But Mr. Belenky, who served 29 years in the U.S. Army working on combat stress and other issues, thinks he would level with the miners about the rescue strategy “so they can plan, adjust expectations and so everyone is on the same page.”

The plight of the 33 men has been an eye opener for many Chileans. One of Latin America’s most advanced economies, Chile has been a darling on Wall Street for its free-market ethos. Its capital, Santiago, is clean and modern, with a scaled-down version of the Chrysler Building. But despite the emergence of other industries, including finance and construction, mining remains the bedrock of the economy, accounting for the biggest share of exports and output. The accident and rescue have allowed Chileans to get acquainted with people who are responsible for much of the country’s prosperity, but remain largely hidden from view due to the very nature of their work.

When the miners broke out into a ragged chorus of the national anthem after the first telephone contact was made with them on Monday, it was as “as though we couldn’t believe that some countrymen are still that way, of that caliber and that timber,” wrote Daniel Mansuy, a professor of political philosophy, in the Santiago newspaper La Tercera. Family members holding vigil above the mine said it more simply on a message emblazoned in marker on a Chilean flag: “Chile without miners isn’t Chile.”

The miners had no way of knowing what was in store for them when they showed up for their shift that fateful Thursday, Aug. 5. Like many of the miners, Mr. Yañez, who had worked eight months in the mine after leaving a low-paying construction job, “was just desperate for a paycheck” says his half-brother Pablo Lagos.

Twenty-four-year-old Bolivian Carlos Mamani, who emigrated to Chile to find work, was only in his first week at the mine, his brother Cesar Mamani told Chilean television.
While Chile on the whole has a good mining safety record, smaller to mid-sized mines like San José often escaped scrutiny by the understaffed mine regulator, according to unions and workplace-safety experts. After the accident, Chile President Sebastián Piñera cleaned house at the regulatory agency and announced the government would take a tougher line in the future.

The 121-year-old mine, operated by Chile’s Compañia Minera San Esteban Primera, had been shut down for about a year by regulators in 2007 after an explosion killed a miner. Mario Gomez, a former sailor who at 63 is the oldest of the trapped San José miners, had a nephew who lost a leg in an accident at the mine several years before that. Mr. Gomez’s wife, Lilian Ramirez, said her husband told her he was afraid of going to work not long before the collapse.

The collapse occurred at around at around 2 p.m., sending up a massive dust cloud. “We felt like the mountain was coming down on top of us and without knowing what was happening,” Luis Urzua, one of the leaders of the trapped men, would later say in a phone hookup with Mr. Piñera. “Then came the dust cloud, like four or five hours in which we couldn’t see anything.” The men lost a chance to escape through a ventilation duct in the first days of the crisis because mine managers hadn’t installed an emergency ladder, as required by law, Chile’s mining minister, Laurence Golborne said.
Firemen weren’t alerted of the accident by the mine managers until about six hours after it had occurred. The delay in reporting the collapse is part of a wide-ranging investigation into the mine by regulators and Chile’s Congress. Minera San Esteban Primera’s owners have said they tried to run a safe operation. They didn’t respond to requests for comment for this story.
The day after the cave-in, civil defense officials had mustered a 40-man rescue crew to go in after the missing miners. But the mission nearly wrought another tragedy, as the rescuers confronted a cascade of falling rock and buckling walls. “Rocks, dust, darkness, heat,” said fire captain Rafael Gonzalez Perez. “It was impossible.”
The mine collapse presented a challenge for President Piñera, a billionaire airline and television mogul, who took office in March. Chile’s first conservative president in two decades, Mr. Piñera has promised to run Chile as efficiently as he had his businesses. In a gamble that might have backfired if the rescue had failed, he cut short a trip to Colombia to go to the mine and has made three follow-up trips since. “It was a big bet but also a very important one at the core of his political message” of competence, said political scientist Patricio Navia.
Unable to send in rescuers to fetch the miners, the government shifted to Plan B: Drilling down from the surface after the trapped men.
But after a couple of days, the effort was looking like a geological shot in the dark. Engineers were finding the maps of mine weren’t accurate. “The situation is very complex,” President Piñera said at the time. “The mine continues collapsing. It has a geologic fault. The mine is alive and that enormously obstructs rescue work.”

Families at the site started hunkering down for a long haul, putting up tents or crude lean-tos made of garbage bags stretched above poles. Dubbed Campamento Esperanza, Camp Hope, the place took on a somewhat surreal air. The government started trucking in water and food, as well as sending counselors, cooks and kindergarten teachers. Shrines with votive candles and statues of baby-faced Saint Lorenzo, the patron saint of miners who is often decked out in a hard hat, sprang up alongside television satellite trucks and portalets. Other iconic figures were called on for luck. Relatives of 34-year old Edison Pena put the miner’s picture on a placard along with Elvis Presley, assuring him that “you will be bigger than Elvis” after emerging from the mine.
Below ground the 33 miners were also getting organized. Mr. Urzúa, a soccer coach in his spare time, was one of the leaders. He oversaw the rationing of their food stores, so that miners could have a couple of mouthfuls of tuna, along with a canned peach and some milk every 48 hours. But after two weeks the miners had almost exhausted their provisions, Mr. Urzúa said.

Worry also spread through the camp full of families. Ana Funes, a social worker from a nearby town, organized art classes for children as a diversion. But some kids’ anxieties consumed them, says Ms. Funes. On a bulletin board, along with crayon drawings of Spiderman and a fairy princess, was a self-portrait of a pig-tailed girl with tears streaming down her cheeks. “I love you, cousin,” was the caption.

By the end of last week, a number of the families were losing faith in the government drilling strategy. They pressed Mr. Piñera’s rescue team to let 10 volunteers into the bowels of the mine to bring out their loved ones. Government officials said that was foolhardy.

“We have done and will continue doing what’s humanly possible,” President Piñera said. “But not everything is in the hands of our engineers and technicians. It’s also in the hands of God.”

A little after 6 a.m. last Sunday the probe broke through an underground chamber, a short distance from the miners’ main shelter. The 28-year-old drill operator, Eduardo Guerra, thought he felt some vibrations coming from below. Some engineers came over with stethoscopes and said they heard something, too. When Mr. Guerra pulled the probe out of the ground, a plastic bag had been attached to the drill tip with cable and rubber bands.

Inside the bag was a note painted in red: “We are well in the shelter the 33.”

Write to Matthew Moffett at matthew.moffett@wsj.comCopyright 2009 Dow Jones & Company, Inc. All Rights Reserved

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In Chile, Trapped Miners Dig in for the Long Haul –

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