By Pras Boolaky.
There is a mutual consensus among scholars and political commentators alike, that aid has failed to lift the poorest continent in the world out of poverty. In Africa today life expectancy has decreased, growth has slowed and millions more have fallen into the poverty trap, when compared with 50 years ago. Aid practices adopted as a result of Western colonialism have been too intrusive, ineffective, or exploitive, and often all three. Yet in recent years, international politics has undergone a new trend, proffering an end to the ‘doom and gloom’, in the form of Chinese investment. Despite being engulfed in controversy, international economists such as the Harvard educated Dr. Dambisa Moyo, see Chinese investment as a long awaited solution which will provide the much anticipated prosperity, especially if long term sustainable investment continued. And for the Chinese, Africa is seen as a potential natural resource heaven, possibly providing a commodity rush that could secure their position as a global leader in future decades. This article will consider the equality of this partnership. Do both parties win? Or are the Chinese picking up where the West left off?
Chinese advance into Africa has left the rest of the world somewhat perlexed, especially the West. China is not part of the Development Assistance Committee or OECD, both monitoring and reporting on aid flows and sustainable investment, with Chinese official total aid figures being vague to say the least. Their radical and innovative view of implementing investment has been both worrying and exciting for the rest of the world, who have followed the same Western aid model for over six decades.
The difference between the aid assistance the Chinese offer compared to the West, is the appearance at least of a symbiotic relationship. Offering natural resource commodities for infrastructure projects, employment and other economic benefits understandably makes doing business with China much more attractive for African nations than business with a vast majority of other states in the world. Chinese multi-national firms work flat out to extract whatever minerals they can, and the extractive industries remain the dominant sectors attracting foreign investment, but there is now growing attention to tourism, construction, and financial services.
Firstly, let’s identify the positives of this relationship. The Chinese Department of Foreign Aid in the Ministry of Commerce say that China ‘does not give aid in cash but in kind’ e.g. in the form of hospitals, schools and the development of infrastructure. In fact, large scale funded infrastructure schemes form the biggest chunk of projects. This has had many positive repercussions. For example, the rehabilitation and modernization of Senegalese transport infrastructure in December 2011; the Zambian Mulungushi Textiles company recapitalisation in January 2012 which created job opportunities for local people and the $6m grant to Uganda’s Naguru hospital has started construction, also in January 2012. In Zambia, investment in the past three years has catapulted the country to become one of the world’s top copper exporters, with Chinese state and private firms investing in hospitals, power stations and roads. Investment such as this certainly sounds appealing, but is the picture really so rosy?
Now let us take the example of Sudan. Since the mid 1990’s Sudan has experienced a drop in foreign aid from Western donors, instead securing more development assistance from China. A country notably ravaged by the one of the longest civil wars in Africa, and recently split into two extremely fragile states, the effectiveness of Chinese aid to Sudan is strongly influenced by offering aid that is; (i) tied to trade (ii) associated with the need for Oil (iii) offered with little political conditionality. Measuring effectiveness on the ground is flawed, with an inability of gauging an idea of the distributional impacts in society, the environment and labour practices on local workers. The increase of Chinese aid to Sudan now threatens the maintenance of debt relief through HIPC initiative. These aid projects are deemed unproductive, and this is further reinforced by figures. The Chinese share of Sudan total debt increased from 0.9% in 1999 to 13.45% in 2007. Will this push an already frail Sudan into further economic dependency? And with the Chinese not playing a ‘non inference’ role in domestic affairs, there is increasingly a feeling of ‘us and them’. The problem here lies with the natural resource curse; it is argued that Sudan can facilitate its own economic independence through is natural resource endowment, but unfortunately this is also it’s biggest weakness.
The same problem has occurred in Angola, with $32 billion from the treasury of Angola undeclared for, and since China are imposing few laws concerning rigid control of financial transactions, corruption is another huge problem with no sign of imminent improvement. The IMF has offered aid under the conditions of helping to stop corruption through an increase of transparency through oil revenue figures. The Angolan government however opted for the Chinese way of doing business, through loans with lower interest rates and repayment periods. Angola is heavily dependent on oil, and their multibillion ties with China allow them to be able to break ties with international institutions that promote ethical behaviour and good governance. The impact this has, and will have in the future, on Angolan citizens is detrimental, with poverty alleviation disparities shockingly apparent. Electricity has been expanded to over 60,000 people of Luanda, facilitating commercial activities, but modern reality depicts a much more fragmented picture, with critics saying this does nothing for employment of Angolans, with local work being contracted to Chinese imported labour, who live in separate compounds unable to transfer skills to the Angolan workforce. Secondly, the discrepancy between rural Angolans living under traditions in existence for centuries, and the cultural insensitive of Chinese industrialisation on their lands, means they have yet to see any of the benefits from Chinese projects. Ever more disturbing, is that this trend is all too common, and increasingly so.
Much has been said about the Sino-African relationship, often negative, based on little or false information, and littered with misconceptions. Hillary Clinton’s comments at the Busan conference on aid effectiveness in November 2011 included “be wary of donors who are more interested in extracting your resources than in building your capacity”. The West can all too easily point fingers and shake their heads, but its own atrocious history of belittling international codes of conduct and ethical practices, dilutes their credibility in making such comments.
Another cause for concern is how exactly does Africa deal with this huge investment, whilst trying to move to economic independence and decision making away from the Chinese, and secure future sustainability for its African citizens, especially in relation to huge employment problems. It is most likely that only time will tell.
Africans have constantly expressed concern over practices that verge on neo colonialist, from the physical arrival of the Chinese, to recent direct and audacious business techniques which exert power on African people and livelihoods. But beneath the money grabbing, power politics and dubious ‘no strings attached’ aid, this is a story of people and communities who have been left out and hideously exploited in the last century, creating better lives and aspiring futures for themselves in this one. Good governance, egalitarian partnerships, and most importantly long term sustainability, mean the latter scenario will be successfully achieved, otherwise current trends show Africa is on track for another century of cruel exploitation and injustice.
There is a mutual consensus that aid has failed to lift the poorest continent of the world out of poverty. In Africa today life expectancy has decreased, growth slowed down and millions more have fallen into the poverty trap, when compared with 50 years ago. Aid practices adopted as a result of Western colonialism have been too intrusive, ineffective, or exploitive, and mostly all three. Yet in recent years, international politics has undergone a new trend, proffering an end to the ‘doom and gloom’, in the form of Chinese investment. Despite being engulfed in controversy, international economists such as the Harvard educated Dr. Dambisa Moyo, see Chinese investment as a long awaited solution which will provide the much awaited prosperity, especially if long term sustainable investment continued. And for the Chinese, Africa is seen as a potential natural resource heaven, possibly providing a commodity rush that could secure their position as a global leader in future decades. This article will consider the equality of this partnership. Do both parties win? Or are the Chinese picking up where the West left off?
Chinese advance into Africa has left the rest of the world somewhat perlexed, especially the West. China is not part of the Development Assistance Committee or OECD, both monitoring and reporting on aid flows and sustainable investment, with Chinese official total aid figures being vague to say the least. Their radical and innovative view of implementing investment has been both worrying and exciting for the rest of the world, who have followed the same Western aid model for over six decades.
The difference between the aid assistance the Chinese offer compared to the West, is the appearance at least of a symbiotic relationship. Offering natural resource commodities for infrastructure projects, employment and other economic benefits understandably makes doing business with China much more attractive for African nations than business with a vast majority of other states in the world. Chinese multi-national firms work flat out to extract whatever minerals they can, and the extractive industries remain the dominant sectors attracting foreign investment, but there is now growing attention to tourism, construction, and financial services.
Firstly, let’s identify the positives from this relationship. The Chinese Department of Foreign Aid in the Ministry of Commerce say that China ‘do not give aid in cash but in kind’ e.g. in the form of hospitals, schools and the development of infrastructure. In fact, large scale funded infrastructure schemes form the biggest chunk of projects. This has had many positive repercussions. For example, the rehabilitation and modernization of Senegalese transport infrastructure in December 2011; the Zambian Mulungushi Textiles company recapitalisation in January 2012 which created job opportunities for local people and the $6m grant to Uganda’s Naguru hospital had started construction also in January 2012. In Zambia, investment in the past three years has catapulted the country to become one of the world’s top copper exporters, with Chinese state and private firms investing in hospitals, power stations and roads. Investment such as this certainly sounds appealing, but is the picture really so rosy?
Now let us take the example of Sudan. Since the mid 1990’s Sudan has experienced a drop in foreign aid from Western donors, instead securing more development assistance from China. A country notably ravaged by the one of the longest civil wars in Africa, and recently split into two extremely fragile states, the effectiveness of Chinese aid to Sudan is strongly influenced by offering aid that is; (i) tied to trade (ii) associated with the need for Oil (iii) offered with little political conditionality. Measuring effectiveness on the ground is flawed, with an inability of gauging an idea of the distributional impacts in society, the environment and labour practices on local workers. The increase of Chinese aid to Sudan now threatens the maintenance of debt relief through HIPC initiative. These aid projects are deemed unproductive, and this is further reinforced by figures. The Chinese share of Sudan total debt increased from 0.9% in 1999 to 13.45% in 2007. Will this push an already frail Sudan into further economic dependency? And with Chinese not playing a ‘non inference’ role in domestic affairs, there is increasingly a feeling of ‘us and them’. The problem here lies with the natural resource curse; it is argued that Sudan can facilitate its own economic independence through is natural resource endowment, but unfortunately this is also it’s biggest weakness.
The same problem has occurred in Angola, with $32 billion from the treasury of Angola undeclared for, and since China are imposing few laws concerning rigid control of financial transactions, corruption is another huge problem with no sign of imminent improvement. The IMF has offered aid under the conditions of helping to stop corruption through an increase of transparency through oil revenue figures. The Angolan government however opted for Chinese way of doing business, through loans with lower interest rates and repayment periods. Angola is heavily dependent on oil, and their multibillion ties with China allow them to be able to break ties with international institutions that promote ethical behaviour and good governance. The impact this has, and will have in the future, on Angolan citizens is detrimental, with poverty alleviation disparities shockingly apparent. Electricity has been expanded to over 60,000 people of Luanda, facilitating commercial activities, but modern reality depicts a much more fragmented picture, with critics saying this does nothing for employment of Angolans, with local work being contracted to Chinese imported labour, who live in separate compounds unable to transfer skills to the Angolan workforce. Secondly, the discrepancy between rural Angolans living under traditions in existence for centuries, and the cultural insensitive of Chinese industrialisation on their lands, means they have yet to see any of the benefits from Chinese projects. Ever more disturbing, is that this trend is all too common, and increasingly so.
Much has been said about the Sino-African relationship, often negative, based on little or false information, littered with misconceptions. Hillary Clinton’s comments at the Busan conference on aid effectiveness in November 2011 included “be wary of donors who are more interested in extracting your resources than in building your capacity”. The West can all too easily point fingers, shake their heads, but its own atrocious history of belittling international codes of conduct and ethical practices, dilutes their credibility in making such comments.
Another cause for concern is how exactly does Africa deal with this huge investment, whilst trying to move to economic independence and decision making away from the Chinese, and secure future sustainability for its African citizens, especially in relation to huge employment problems. It is most likely that only time will tell.
Africans have constantly expressed concern over practices that verge on neo colonialist, from the physical arrival of the Chinese, to recent direct and audacious business techniques which exert power on African people and livelihoods. But beneath the money grabbing, power politics and dubious ‘no strings attached’ aid, this is a story of people and communities who have been left out and hideously exploited in the last century, creating better lives and aspiring futures for themselves in this one. Good governance, egalitarian partnerships, and most importantly long term sustainability, mean the latter scenario will be successfully achieved, otherwise current trends show Africa is on track for another century of cruel exploitation and injustice.
