Is China
threatening to displace the Europeans from Africa at some point in the second
half of the 21st century, as the mass media in the US has been hinting
since the global recession 0f 2008? Or is EU-Chinese capital so intertwined
that what may be counted as China’s market share in Africa could very well be
yielding profits for French, British and German multinational corporations? If capitalist
China is such a threat to the West, why has the very Western World Bank been
collaborating with China on a number of fronts? Is it merely the fear of the US
that China as the inevitable number one economic power in the world will corner
the most abundant and cheapest markets in Africa?
In 2010, the
Wikileaks organization published the US concern about China helping to develop
the infrastructure strategically in those countries in Africa where it plans to
do business. Two things alarmed the US: a) no strings attached to infrastructural
development, at least no direct strings as the US and EU always impose on the
recipient country; and b) the clever way the Chinese are including the World
Bank and European governments and EU-based multinational corporations. In
short, China’s multilateralism as a strategy of secur5ing market share has been
upsetting to American unilateralists who see a fiendish plan that would entail
Africa transferring its historical dependence from the West to East.
Another issue
regarding China is the scope of its role in Africa in 2015, considering that
the Western media present it as hegemonic and potentially threatening to “US
and Western interests”, thus invoking national and trade bloc capitalism as a
populist tactic. In reality, as we will see below, China currently has a small
role while the Europeans, US and wealthier Gulf Arab states enjoying the lion’s
share of the market.
What has alarmed
the Western capitalists and politicians is the reality that African exports to
China went from a mere 1% of world share in 2000 to 15% in 2012, and likely to
continue rising for the indefinite future. Despite the inevitable cyclical economic
slowdown in China, it is just as inevitable that by the 2030s we can safely
predict much closer trade, investment and overall economic dependency of Africa
on China. This in itself poses not just a threat to Western capitalism but to
Western geopolitical designs on a continent with very rich in natural
resources. Because the US does not compete with China in Africa using the same
tools of economic integration, about the only response the US has is to flex
its military muscle and secure as much as it can for US-based multinational
corporations.
Before we assume
China’s role is benign, the issue of China as the panacea for Africa is one
that many have emphasized, given that European and US economic, military and
political roles throughout Africa have not resulted in improvements as judged
by standards the West has been proclaiming – democracy, freedom, economic
development and higher living standards. Some in and outside of Africa believe
that China’s integration model which starts with infrastructural development
that would help the domestic economy as well as forge greater regional
integration while stimulating the export sector is promising. After all, the
European imperialists had done nothing but pillage Africa from the start of the
trans-Atlantic slave trade in the 15th century when the Portuguese landed
until the more subtle late 20th century policies of assisting
corporate exploitation of natural resources. Moreover, if China is so well
integrated into the global economy and it is helping to forge a new integration
model in Africa, this presents new opportunities for African counties, at least
for those rich in natural resources.
The bottom line
is whether China will help Africa develop or merely perpetuate underdevelopment
as did the Europeans and the US. Underdevelopment is a process just as
development that takes place amid domestic and international political and
economy dynamics. Development is not a matter of a country having a surplus
labor force, or having near self-sufficiency in minerals and raw materials, or
enjoying an infrastructure that can accommodate rapid development to buttress
the capital-intensive export sector mostly of extractive industries. Africa is one of the richest continents on
the planet in natural resources and it certainly has a surplus labor force at
the lowest cost on the planet in comparison with the other continents. Can
Chinese investment do something with these cheap assets to help itself while
also help Africa?
In order to
secure a segment of Africa’s natural resources for its own growth and
development at the lowest possible cost, China has been investing in the
continent and counting on it for rapid export growth in the 21st
century. Despite its rich resources and new investment from China as well as
Gulf Arab countries, Europe and US, the persistence of underdevelopment in
Africa defies logic at least on the surface beyond the GDP growth numbers and
marginal decline in extreme poverty. Why is there reason to believe the Chinese
will change a history of five centuries of colonialism and neo-colonialism?
One could argue
that the structural causes have everything to do with the corrupt and
incompetent political regimes combined with the uneven development complicated
by the periodic famines and droughts in a number of sub-Saharan regions. Another
argument that the apologists of globalization and neoliberal politicians make
is that Africa has not fully integrated into the world capitalist economy,
leaving much of its productive capacities underutilized or outside the domain
of international trade owing to persistence of tribalism. Is Africa’s problem
underutilization of natural resources or uneven terms of trade, chronic
exploitation of low labor values, massive capital concentration in the hand of
very few comprador bourgeoisie linked to foreign capital, and of course corrupt
politicians that foreign corporations bribe to secure contracts.
Another issue
that Western analysts are constantly making is that there is instability owing
to civil conflicts in a number of countries, from Sudan and Nigeria to Central and
East Africa where rebels are an obstacle to stability and development. In the
Islamic countries north of the Sahara, there is the instability caused by
jihadist elements as there is in the East; activities which also impact Africa
more broadly. However, Jihadist conditions, as we will see below, are of fairly
recent origin and even so a reaction to neo-colonial conditions, among other
causes related to tribal and religious differences. If we were to sum up, the
Western analysts conclude that the fault for the absence of development in
Africa rests squarely with internal dynamics and has absolutely nothing to do
with Western imperialism as a chronic presence.
When we examine
the lofty promises of growth and development by the UN, World Bank and Western
governments whose only interest is to assist corporate control of Africa’s
resources and market share the result is that by 1995 25% of the people in the
sub-Sahara region had no job and were homeless. Even more alarming, Africa’s
agricultural growth rates have been declining since 1965. From an annual
average of 2.2% (1965-1973), to 0.6% (1981-85), per capita food production
continued to decline throughout the 1980s and 1990s, necessitating four times
as much food aid. Why is anyone surprised that there is the level of rebel
activity, including Jihadist as of late, when the question really ought to be
why is there not more such activity given these conditions that people in the
West would not tolerate and demand change?
There are those
who argue that China’s presence actually helps to tame the sociopolitical mood
throughout the continent. China is investing in everything - Hydro-power, dams,
water and sanitation, ports, railroads, roads, mining, timber, fisheries and
agriculture. At the same time, France and the rest of Europe as well as the US
and the rich Arab countries have been competing with China and want to maintain
market share. What exactly this entails for the people of Africa and the
development model that would eventually lift the majority of the people from
abject poverty is another story.
The Chinese are
not in Africa to lift living standards for the population but to strengthen
their global competitive position. China will need Africa’s raw materials,
everything from foodstuffs to minerals in order to remain a global economic
power in the 21st century.
China accounts for about one-fifth of the planet’s population, but it
only has 6 percent of the planet’s water and 9 percent arable land, forcing its
government to look outside its borders to sustain its growth and development.
Just as Africa provided cheap raw materials and cheap labor for Europe and the
US from the era of colonialism until the rise of China as a global economic
power, in the 21st century it will play a similar role with China
competing for Africa’s cheap raw materials and labor. Investment has risen from
a mere 210 million in 2000 to 3.17 billion 2011 and it is expected to
skyrocket.
Africa is the
world’s fastest growing continent for Foreign Direct Investment (FDI), but it
starts out at such low levels that it can only go higher. While historically
FDI went primarily to the extractive industries, there is new emphasis on
manufacturing with energy as a key industry where revolutionary methods could
make a difference in bringing electricity to more people than ever and make
manufacturing even cheaper. The
continent’s global share of FDI rose from around 3% in 2007 to 5% in 2012, a
period of global recession. Among the top 25 countries in the world with the
highest incoming FDI, Africa is nowhere to be found; and if it were not for
South Africa, the continent as a whole would be at the very bottom along with
some of the Eurasian countries. As miraculous as it may appear, China’s share
of overseas direct investment in Africa is a mere $26 billion, while France and
UK continue to lead in this category. On the other hand, few would argue that
China is poised to impose economic hegemony of some type over Africa under an
integration model presumably better than what the French and the British had
imposed after decolonization.
By extending
concessional loans – more generous terms and longer term – to the tune of $10
billion amid the global recession of 2009 to 2012, China bought itself enormous
influence without literally dictating terms down to the minute detail as do the
IMF and World Bank. Chinese President Xi Jinping doubled the concessional loan
commitment to Africa from $10 billion to $20 billion in the 2013-2015 period,
and the Chinese EXPORT-Import Bank announced an ambitious financing program of
one trillion dollars by 2025; something that could be scaled back owing to the
slowing Chinese economy in 2015.
Although Africa
accounts for such a small percentage of Chinese global investment, Africa has
been a top foreign aid recipient. Aid donors have always used it as a policy
instrument and leverage in every respect to influence not only investment and
trade policy of the aid recipient but defense and foreign policy as well. In
providing various types of aid to Africa, from medical and humanitarian to debt
relief and development, China is investing in fact investing in good will
diplomatically as well as economically for the future market share that it
wants in Africa.
Can we expect
from China what we have seen on the part of the European and US companies in
Africa since the 1960s? From the early 1960s to the present, large foreign
companies secure public financing for privately-operated projects that have
been uneconomic across Africa. However, the foreign firms risk no capital of
their own because their loans to finance their operation are guaranteed by
their governments or developments banks, as are interest and profits. Because most of the investment is invariably
in mining and commercial agriculture, involving multinational companies like Monsanto,
the Carlyle Group, Shell, and other Wall Street and EU giants, the goal is to
strengthen the export sector by taking advantage of cheap labor without much
benefit for the broader economic diversification in a continent desperate for
greater self-sufficiency.
Although China
has followed this pattern, its focus on developing the infrastructure in a
number of African countries has the potential of laying the foundations for a
sustainable diversified inward oriented economy. After all, China has provided assistance for
schools and some textile factories, but it often labels loans as “aid”, and
most of its investments go to those countries rich in natural resources.
Foreign
investment in Africa, under terms no developed country would permit is
virtually unregulated, thus constituting a drain of natural resource wealth.
Suffering the lowest labor values on the planet, Africa attracts foreign
capital investment because it is the next frontier to realize high profits.
Moreover, foreign capital flows because foreign businesses demand that African
countries provide local financing under government-guaranteed loans and very
generous terms that include profit repatriation, liberal terms on the
environment, and minimal labor protection.
According to the
World Bank that has partnered with China on many projects, the goals in Africa
include (i)
accelerating industrialization and manufacturing; (ii) making special economic
zones (SEZs) and industrial parks work; (iii) infrastructure and trade
logistics, including regional integration; (iv) creating the conditions to
accelerate responsible private sector investment, (v) skills development for
competitiveness and job creation, and vi) improving agricultural productivity
and expanding agribusiness opportunities.
These are indeed
lofty goals, and one could argue that all countries undergoing industrialization
had to suffer, so must Africa, despite its unique relationship with
industrialized nations. If we analyze each of the above points that the World
Bank has outlined, we conclude that the goal in Africa is to create a climate
conducive to foreign corporate investment under the best possible terms. There
is nothing about protecting workers rights, collective bargaining, livable
wages, appropriate affordable housing, hospitals and schools, and above all
under a political regime that respects human rights and civil rights pursuant
to principles of social justice. The only concern of the investors,
governments, and international organizations assisting them in Africa is the
investment itself not the social, cultural, economic and political welfare of
the people.
(PART III will
follow, dealing with narcotics and human trafficking, among other issues )
No comments:
Post a Comment