Africans welcome the practical, quick and no-frills Chinese approach on aid

Africa remains one of the poorest aid recipients of the world, enduring challenges of high rates of disease, inadequate infrastructure and power sources, as well as corruption and poor governance. This YaleGlobal series examines diverse approaches on foreign economic aid emerging from the West and China. In the second article of a two-part series, Edward Friedman, political science professor at the University of Wisconsin at Madison, analyzes China’s increasing investment and influence in Africa. Unlike European aid programs, China’s does not impose conditions on human rights or democracy. Some analysts suggest that China exploits African resources, much as European colonizers did during the 20th century. But Beijing, rich with almost $2 trillion in foreign exchange reserves, invests in the continent, organizing economic zones and dispatching Chinese immigrants who arrive with what Friedman calls an “entrepreneurial frenzy.” The view that sees China exploiting Africa and helping to entrench corrupt African elites may turn out to be right, Friedman says, but Africans are willing to give China the chance to replicate in Africa entrepreneurship and trade that made Asia the fastest growing region of the world. – YaleGlobal

 
Underdevelopment and Aid: Search for a Right Balance – Part II
Africans welcome the practical, quick and no-frills Chinese approach on aid
Edward Friedman
YaleGlobal, 29 October 2008


Flag of friendship: China woos African nations with unconditional aid and non-interference in domestic politics
MADISON: That China’s a superpower in Africa was suddenly, painfully apparent to European leaders in 2006.
Once colonized by European nations, Africa garners more attention from Europe than the United States. Europeans provided hundreds of billions of dollars of loans and aid to African governments after nations won their independence. But little growth resulted from that money, no matter what strategy was applied. In the 1990s, the Europeans tried another approach hoping yet again to give Africa a new start.
The Europeans forgave much of African indebtedness, then offering new monies, with good governance conditionalities attached. That is, to receive funds, the governments would have to begin to clean up corruption, respect organized efforts of societal groups and move toward respecting fundamental human rights.


Angola, a major oil exporter, became a test case in 2006. Despite huge oil wealth, Angola suffered financial crisis created by massive corruption and plunder. While the Europeans often conceded to corrupt dictators who faked adherence to the European conditions, in 2006 Angola brushed aside both hypocrisy and the policy of conditionality, instead accepting a multibillion-dollar, no-strings-attached fund from China, thus defeating Europe’s policy aimed at limiting the sources of bad governance, failed states and civil war.
Suddenly, Europeans were aware of a rising authoritarian China in Africa. China had amassed almost $2 trillion dollars in foreign exchange reserves. This foreign exchange reflected trade imbalances, which also upset Europeans. The growing trade deficit with China seemed to cost Europe jobs and undermined the tax basis of social welfare states. Popular European anger intensified anxiety about Chinese policies in Africa fostering bad governance and contributing to an exodus of Africans into Europe.
China’s rapid economic rise and wasteful production inefficiencies brought a hunger for energy and other resources, and Africa could help. Chinese State-Owned Enterprises could outbid Europeans for contracts and leasing rights, aided by interest-free capital from Chinese state banks. Chinese presence and policy spread all over the continent, and Chinese investments swiftly caught up with those from America and Europe. The trend line suggested that China would soon be weightier in Africa than any other nation or region in the world. Authoritarian China’s new superpower clout, which disregarded human rights abuses, had reached Africa, and was largely welcomed, especially by authoritarian regimes.


In paying for oil in the Sudan, China provided Sudanese ruling groups the wherewithal to stabilize a government responsible for atrocities in Darfur, shored up corrupt leaders of the Congo, backed Zimbabwe’s bankrupt Mugabe regime against African democratizers and European sanctions, and spent huge amounts for oil in corrupt Nigeria. Sudden influx of Chinese wealth enriched African leaders.
China undercut efforts to promote good governance in Africa, and Europe viewed Chinese policies as a disaster. The Europeans therefore invited China to join with them in fostering needed political and administrative changes in Africa. China, however, brushed aside the invitation to cooperate, refusing even to join the European organization meant to make energy investments transparent so that African peoples could benefit from Africa’s wealth instead of corrupt elites.
Europeans concluded that China hurts Africa. In Africa, civil society groups, labor unions and democratic political parties similarly understood China as but another chapter in exploitative neo-colonialism that would not benefit Africans, instead propping up greedy, corrupt African regimes that ripped off their own nationals.
But many had bristled at the European effort to tell Africans how to run their governments as arrogance, a renewed colonial approach and represented China’s offer of no-strings-attached money as how Africans should be treated, with dignity and as adults. After all, China had never colonized Africa and Europe had failed the continent in the past.
Africans insisted that, as the Chinese had raised themselves from misery to world power in one generation after the death of old-fashioned Stalinist tyrant Mao Zedong in 1976, so China could help raise Africa from stagnation.


Observers in Europe and democrats in Africa tended to disagree, seeing corrupt and useless African rulers grabbing a Chinese lifesaver to avoid a transition to good governance. In this critique, China is ripping-off African resources and propping up African tyrants to the detriment of the African people.
To be sure, there is truth to this critique. Chinese have illegally harvested timber and ripped off resources. But this critique of China in Africa as neo-colonialism is not the total truth and omits that China could trigger an African rise out of poverty. Indeed, World Bank figures already show that Chinese investments have sped Africa’s pace of growth.
As Beijing sees it, China in Africa in the 21st century will be like Japan in East and Southeast Asia in the half century after the end of World War Two. Japan, then, as China today, was uninterested in promoting democracy and human rights. It too acted on economic imperatives. But if one plugs into the economic dynamo, what Japanese called the “lead goose,” one benefits. One learns best practices almost unconsciously. The boon of the dynamic leader spreads and spills over into the nations playing catch-up.
There is a flying goose effect, that is, the lead Asian country keeps moving up the value-added ladder as labor costs increase and the currency rises in value. That prices the country out of lower-end markets. The production is then transferred to follower geese, who then similarly move up economically. Those that don’t join the formation, as the military tyranny in Burma and the Stalinist sultanate in North Korea did not follow Japan, lag. Similarly, those Africans who see China as a savior would in fact benefit from joining China and following its lead.
China is hot-housing this flying-geese development. Beijing is pouring money into Africa for everything from infrastructure to business ties. It builds five special economic zones, which were pioneered in Taiwan, that support business and welcome hard-workers to make life easier for Chinese investors and exporters. From these five spots, economic dynamism will spread as Africans are attracted to the SEZs. Governments will then build infrastructures and compete for successful enterprises.
Finally, Chinese are moving to Africa in unprecedented numbers, carrying entrepreneurial frenzy and ties to lower-end factories that look to move to low-wage Africa to stay competitive. There are already more Chinese in the former UK colony of Nigeria than there were English at the height of the British empire; there are already more Chinese in the former Portuguese colony of Angola than there are Portuguese.


Expect millions more Chinese to relocate, since close to 300 million are still locked in Mao-era style stagnation in China’s countryside. Some millions of these hard-working, ambitious people see Africa as a land of opportunity. Compared to Europeans, Chinese live more poorly and work at a lower income for smaller slices in profits, yet have already found numerous profitable opportunities in Africa where Europeans found none.
Critics of Chinese policy who see China ripping off Africa and helping to entrench corrupt African elites may turn out to be right. But Africans are willing to give China the chance to replicate in Africa wealth-generating processes that have made Asia the fastest growing region of the world since 1945, with no end in sight. Europe, many Africans conclude, failed in Africa, and it’s hard to fault Africans for finding a way ahead by tying in with China. Perhaps the Chinese and Africans are right and, as Japan transformed Asia, so China can transform Africa.
Edward Friedman is a professor of political science at the University of Wisconsin at Madison. His teaching and research interests include democratization, Chinese foreign policy and international political economy. He is the author of many books, the most recent, written with Joseph Wong, is “Political Transitions in Dominant Party Systems,” published by Routledge.
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