Guinea, which is next to Guinea-Bissau (which itself has been known simply as Guinea at times, just to keep us all confused), is a former French colony with a population of 11 million people who have a per-capita GDP of $1100. Obviously, it’s a very poor country, but it sits on what may be phenomenal mineral wealth. In July 2013, The New Yorker published a detailed account of how contracts to exploit Guinea’s iron ore have been handled. Apparently, the contracts have been handled quite well from the standpoint of a few mining companies but not well at all from the standpoint of transparency or the economic well-being of the average Guinean.
Patrick Radden Keefe traveled around the world and showed remarkable persistence in trying to track down the details of how Rio Tinto lost the rights to iron in the Simandou range, Beny Steinmetz Group Resources (BSRG) picked them up, and then Vale purchased rights from BSRG. A lot of money has changed hands, but the mine has not been developed, nor has the infrastructure been built to get the iron to processors and customers. Somehow, it would seem that many people have become rich from Guinea’s natural wealth, but they aren’t the 11 million people living on an average of $1100 per year.
This is the tragedy of the resource curse. Guinea could be wealthy. There could be good jobs for her people, good tax revenues for its government, good infrastructure to help other businesses get started. Instead, the money has allegedly gone to a few people in the government and to a few already wealthy people outside of the country.
It was nice to read something short after the academic texts that I read to learn about The Gambia and Guinea-Bissau, but at this point, I want to read about a country that is developing its human capital, managing its wealth for its own citizens, and creating sustainable opportunities for international investors. It may be a while; next up on the list is Sierra Leone.
