Cape Town — A South African businessman whose name is synonymous with the international diamond trade has told an African Union (AU) audience that the global economic crisis was caused by "greed and recklessness" but that it offered Africa the opportunity to create "an African way of doing business" based on "fairness, integrity and sustainable development."
Nicholas Oppenheimer, chairman of the De Beers international diamond mining and trading group, was addressing the Africa Day celebrations at the AU Commission's headquarters in Addis Ababa on Monday.
In his speech, Oppenheimer issued a strong defence of globalization and argued that improving economic competitiveness was the most important lesson to be drawn from the world economic crisis.
Citing with approval the approaches of Presidents Paul Kagame of Rwanda, Armando Guebuza of Mozambique and Ellen Johnson-Sirleaf of Liberia, he said that "by improving competitiveness and deepening our integration with global markets, we can simultaneously reduce our economic vulnerability and increase growth."
Oppenheimer is not a name most South Africans would expect to see on the guest list of an Africa Day celebration in Addis Ababa. While the family does not promote a high profile, its members have historically been seen by people on the street as the country's pre-eminent mining magnates. Oppenheimer's grandfather, Ernest, and father, Harry, founded and built the gold-mining group, the Anglo American Corporation, and the family has played the leading role in De Beers – which for many years promoted a diamond-marketing cartel – for nearly a century.
Oppenheimer's appearance in Addis Ababa was a result of the relationship between the AU Commission and the Brenthurst Foundation, an initiative which the family proclaims as reflecting its commitment to Africa and to the spirit of the New Partnership for Africa's Development (NEPAD).
Oppenheimer said the election of President Barack Obama in the United States offered a "genuinely historic opportunity" for the world. Obama's popularity at home and abroad showed a world "hungry for a change of direction, and a new agenda."
Identifying what he called key lessons to be drawn from the global financial crisis, he said:
• International trade and investment flows have helped reduce the impact of the crisis, not contributed to it
• Africans have continuously to engage and lead in the world;
• Commodity inflows have to be properly used ("Botswana remains a remarkable example of how to invest a commodity windfall wisely," he argued);
• The banking sector had to "build a reputation for fair play and fair returns rather than excess and profligacy"; and
• There is an urgent need to strengthen and improve African competitiveness.
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Oppenheimer said a drop in external aid "may not be bad news over the long term since few countries have historically developed through aid," but it would put pressure on countries which depended on aid for government spending in the short term.
"And the lack of liquidity in global markets will hit cash-strapped African markets hardest, especially where we need private equity to invest in infrastructure and other essential projects."
He added: "In the short-term, governments will have to manage the economic and political fall-out of lower revenues from natural resources, trade and tax, as well as smaller aid transfers. Most African leaders will have less scope than Western nations to buttress domestic demand through stimulus spending programmes, given the rudimentary nature of their capital markets…
"Trade reforms should not be reversed for small countries, and key health, education and infrastructure programmes and expenditures need to be maintained. By doing so, we will assist not only in creating the conditions for long-term and positive economic growth, but also increase the size of formal employment, reduce the vulnerability of certain groups including women and children, give them access to banking and other credit institutions, and help deal with corruption."
