Not All Geopolitics Are About Natural Resources BoP Brief #3

This week in the Business of Power, the coup in Niger, the possibilities of a regional war in Western Africa, and technological hypes.

Niger’s coup is not about natural resources.

Source AFP

Geopolitics is about power, not wealth.

Conflict for natural resources and the pursuit of wealth are part of the struggle for power. But that's not all of it; most of the time is not even the core of it.

And that's true for all geopolitics, even if natural resources are in the picture – and in the case of Niger, as I mentioned in last week's newsletter, they are. I can't stress this enough.

There is a cohort of geopolitical experts that are unable to move beyond the 1973 Oil Crisis.

There is always a precious resource that is the key to explaining everything:

Russia is about gas. Taiwan is about semiconductors. Niger is about uranium.

That will give us simple answers and, what is worst, wrong answers. That was the line of thinking that said that Russia's invasion of Ukraine was impossible due to the tremendous economic costs it implied for Moscow.

Economic constraints influence how leaders make decisions, but their costs are not always visible in the short term, limiting their impact on decision-making.

Political actors want two things: maximize their capacity of decision over core elements of sovereign power and survive.

Sometimes that entails making decisions that wouldn't be rational from a purely economic point of view are taken.

The uranium factor

Geoeconomics entails understanding how economic and technological elements interplay with and respond to geopolitical dynamics rather than merely reducing geopolitics to them.

The fact that a political event influences the market doesn't necessarily mean that the factor affecting the market caused it.

And Niger's Junta's decision to halt uranium exports to France, until now, only had a marginal impact on uranium markets:

The spot price of uranium, widely used for nuclear energy and treating cancer, crept up to $56.25 a pound on Monday from $56.15 a week earlier, market research firm and consultancy UxC said on Tuesday.

Niger doesn't have the upper hand in uranium negotiations.

It's considerably more difficult for Niger to secure a buyer like France than for France to find a uranium provider like Niger.

Niger lacks the technology to exploit its own resources. As this brief from Bismarck Analysis points out:

It is important to note that, though linked to the Kremlin, the Wagner Group is not necessarily representative of the motivations or goals of the Russian government, and it is unlikely that Russia is using the Wagner Group to secure resource claims or geopolitical allies. In addition to Russia’s own vast natural resources industry which needs no competition, west and central African states simply lack the infrastructure and expertise to process and export their wealth of natural resources—including oil, gold, diamonds, bauxite, and uranium—at a scale that would make them strategically relevant. All of the states with Russian involvement, moreover, are landlocked.

The spice must flow, but Dune is not about spice.

A military coup is about the army

Taking over uranium production was never the goal of the coup. 

The democratic mirage makes many in the West forget that the authority of civil power lies in their control over armed men. 

In a military coup, an essential factor is the interests of the army and the relations with the civilian government. 

Soldiers do not like to lose wars, and generals do not want to lose their position.

Both of these factors appear to have been at play not only in Niger but also in Burkina Faso and Mali.

The armed forces of these nations have struggled to counter jihadist insurgencies. In the specific case of Niger, it also appears that President Bazoum was on the verge of discharging General Tchiani.

Anti-Imperialism?

Many militaries in Western Africa only relinquished their power over civilian authorities because they needed access to Western aid. 

France is not being pushed out of Western Africa by military juntas, France has been withdrawing from the region due to its own limitations.

Once the French influence began to fade, the incentives for the military to keep obeying a civil authority they deemed incompetent also diminished. 

Lack of success and the perceived limited support from Western allies in anti-jihadist efforts likely played a more significant role in fueling anti-French sentiment within the military juntas than any form of neo-colonial economic practices.

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The path to a regional war?

Source Jules Duhamel

The shift in the balance of power towards a multipolar reality not only welcomes external players like Russia but also empowers regional actors.

In the context of West Africa, this spotlight falls on Nigeria, as the continent's wealthiest and most populous nation.

While Nigeria and the ECOWAS maintain close ties with the West, dismissing them as mere "Western puppets" totally underplay their agency.

Nigeria has its own reasons to be unhappy with the emergence of unfriendly juntas, as they obstruct its aspirations to become the regional hegemon.

This explains ECOWAS's robust response against Niger's junta, imposing sanctions and threatening military action.

Engaging in a potential regional war is dangerous for Nigeria and its allies. Nigeria and ECOWAS could face an increased risk of becoming targets of jihadist violence.

However, as Alexander Clarkson points out in World Politics Review:

But in a world where other great powers are being pulled toward crises closer to home, it looks inevitable that ECOWAS states will have no choice but to invest in the military and civilian institutions needed to sustain a stable order in their own region without relying on support from external actors. In the long term, an approach based on West African self-reliance is by far the most desirable outcome for both the ECOWAS states themselves and their counterparts in the EU.

The problem here is that once the ECOWAS issued an ultimatum, failing to follow through with action after presenting such a clear stance creates a bad precedent.

As I write these lines, we stand on the brink of the ECOWAS ultimatum's deadline for Tchiani to surrender his control over civilian authorities.

The demand for help to Wagner by Niger’s junta shows Tchiani's reluctance to yield power.

We will find out soon if a regional war in West Africa becomes a reality.

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Superconductors, the new Holy Grail?

Please don’t take me wrong with my first note.

Developments in technology, commodities, natural resources, and money are essential to understanding which direction humanity is taking.

And this week, there have been some announcements of important developments in the field of superconductors.

A superconductor is a material that can conduct electricity with zero resistance, but traditional superconductors only function in high-pressure, low-temperature environments.

Room-temperature superconductors are a crucial development that allows them to operate at temperatures you typically find in your everyday environment.

Carlos Roa analyses for National Interest what could be the impact of superconductors on international security.

But perhaps the greatest impact lies in the realm of national security, defense, and foreign policy.

Military systems depend heavily on electricity, from aircraft carriers down to the individual soldier’s gear. Room-temperature superconductors could mean more efficient and compact power systems, lighter and longer-lasting batteries, and more powerful radar and sonar systems. The U.S. military’s ability to project power around the globe would be significantly enhanced, as would its ability to sustain operations in remote areas.

I am not going to pretend that I am familiar with the science behind superconductors. But this can be a game changer if they are as good as the hype indicates.

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This week’s long-read: You Can’t Trust the AI Hype

However, we must be cautious with tech hypes because there might be interested parts behind them. 

For this week’s long read, I find Ash Milton’s article for Palladium, very timely: 

Day-to-day ideological promotion tends to happen at the hands of VC funds, startup CEOs, and the like. Recently, a16z cofounder Marc Andreessen and YCombinator president Garry Tan have both pushed “e/acc” (effective accelerationism) to hype young entrepreneurs into entering the AI world and VC term sheets, playing on a defanged iteration of the “accelerationist” ideas of philosopher Nick Land. A few years ago, a16z benefited from the boosting of “web3,” a meme with a similar hyping function for cryptocurrency.

Players like this receive the direct payoffs of tech ideology, both in AI and other fields. They directly benefit by shifting attention to their preferred problems and their preferred solutions for them. VC funds hype young entrepreneurs into creating startups that they become good at evaluating for potential success. If an industry is successful, they end up with stakes and influence over its leading firms. Those who run and own the startups themselves, meanwhile, benefit from later-stage investors operating on the same hype and from convincing clients of the necessity of adopting their product. A startup that taps effectively into society-wide hype is a startup that can rapidly increase its valuation and then pass the bag to less sophisticated investors. The tech ideology gets skin in the game.

Now more than ever is important to be wary of hypes, whether generated around technological developments or the impacts of geopolitical events on commodity markets.

This is all for this week. As always, I would love to know your opinions, so don’t hesitate to reach out or leave a comment.

Enjoy the rest of your weekend!

Miquel