Harvard and Other Large US Universities, Pensions Accused of African Land-Grabbing
Originally published by Asset International
Thursday, June 09, 2011 4:13:53 PM
US university endowments and other institutional investors are investing heavily in African land as they foresee high returns on deals that have encountered scrutiny and opposition, a new report states.
Harvard, Vanderbilt, Spellman, and Iowa universities, along with other major colleges in the United States, have been criticized for buying African farmland.
According to a recent report by The Oakland Institute, a California-based think tank, titled “Understanding Land Investment Deals in Africa,” American universities are taking part in or providing funds for land purchases in Africa that "is resulting in the displacement of small farmers, environmental devastation, water loss and further political instability such as the food riots that preceded the Tunisian and Egyptian revolutions."
Pensions and hedge funds are also taking part in "largely unregulated land purchases" within the continent, the report states, lured by high returns while turning a blind eye to theft of land and displacement of people.
According to the Institute, whose mission is to promote debate on social, economic, and environmental issues, much of the money is reportedly funneled through Emergent Asset Management, a London-based firm. A spokesman for Emergent defended its involvement, telling The Guardian: "Yes, university endowment funds and pension funds are long-term investors. We are investing in African agriculture and setting up businesses and employing people. We are doing it in a responsible way…The amounts are large. They can be hundreds of millions of dollars. This is not landgrabbing. We want to make the land more valuable. Being big makes an impact, economies of scale can be more productive."
Meanwhile, Anuradha Mittal, executive director of the Oakland Institute, said in a statement: “The same financial firms that drove us into a global recession by inflating the real estate bubble through risky financial maneuvers are now doing the same with the world’s food supply. In Africa this is resulting in the displacement of small farmers, environmental devastation, water loss and further political instability such as the food riots that preceded the Tunisian and Egyptian revolutions.”
Mittal added: “The research exposed investors who said it’s easy to make a land deal – that they could usually get what they want in exchange for giving a poor, tribal chief a bottle of Johnny Walker. When these investors promise progress and jobs to local chiefs, it sounds great – but they don’t deliver, which means no progress and relocating people from their homes.”
To contact the aiCIO editor of this story: Paula Vasan at [email protected]; 646-308-2742.
Follow on Twitter at @ai_CIO