Foreign Aid

China: Lending Africa a helping hand

Calestous Juma
The Economist
February 15, 2010

China’s involvement in Africa has become a highly emotive debate in international diplomacy. The intensity has been fuelled by the sheer scale of its operation. In November 2009 China pledged to offer African countries $10 billion in low-interest loans over the next three years, set up a $1 billion loan facility for small and medium-size firms, and to forgive debt on some interest-free loans. The pledge is nearly 10% of the total trade between the two blocs.

The suddenness with which the details have come to the fore and general lack of transparency in the relationships have helped to fuel suspicion over its role in Africa. The concerned have been compounded by its close association with African regimes that have been singled out for human rights violation.

There is no doubt that China’s involvement in Africa is driven by its long-term economic objectives, especially in regard to demand for natural resources and export opportunities.

But despite these concerns, China’s involvement in Africa is welcome for a variety of psychological and pragmatic reasons.

The end of the cold war marked a dramatic reduction of interest in Europe and Africa. This shift was also associated with declines in demand for Africa’s basic exports. For example, Africa’s share in the European Union’s foreign trade has fallen 3.2% to about 1.3% between 1989 and 2009. The bulk of the decline occurred in historic partners of Africa like the UK and France. This shift dealt a major blow to Africa’s self-esteem.

China’s rising demand for Africa’s natural resources helped to re-establish Africa as a source of valuable commodities for the global market. But it also helped to focus Africa’s political attention on why, despite its vast resources, the continent still remains poor. This has recently been captured by Malawi’s president, Bingu wa Mutharika, who recently told the African Union, “Africa is not a poor continent; but the people of Africa are poor.”

Growing trade relations between the two regions have forced Africa to start reflecting more deeply about its own economic future. The growing presence of China in Africa has played a key role in inspiring a re-examination of Africa’s economic prospects.

Which brings me to the next important benefit: China’s is an important role model for Africa. There is a lot Africa can learn from the West or how to solve many of its economic challenges. But these lessons are buried in the archives of economic history.

China’s phenomenal economic growth serves as a source of inspiration for much of Africa. It gives the countries renewed hope that they too can start to grow out of poverty and become important players on the global scene.

There are a few key lessons that China is offering Africa today. First, China’s large domestic market has served as a major stimulus for economic growth and innovation. It has played a key role in helping to attract foreign direct investment. African countries are currently focused on promoting regional integration to expand their internal markets.

Second, China’s economic rapid economic growth also offers specific lessons that Africa is learning from. For example, China has in recent decades made massive investments in infrastructure as a foundation for economic renewal. Africa is benefiting from this in two ways. First, it is learning from China about the importance of infrastructure. Second, China is providing infrastructure support to Africa.

It is instructive that most Western countries have for decades shied away from support infrastructure and higher technical training in Africa, two areas that are vital for economic growth. China’s involvement in Africa has helped to restore these two important factors in economic discourse.

Third, China’s economic transformation has been associated with increased investment in science, technology, engineering and math. African leaders, operating mostly under the auspices of the African Union, are starting to focus on higher technical education practical measures. African presidents, for example, have consistently chosen innovation-oriented topics as themes for their annual summits.

China has not only increased its admission of African students in its universities, but it is also focused on strengthening the continent’s scientific infrastructure. More recently, China launched a postdoctoral programme for Africans. The candidates will understudy China’s science parks, but each will also return home with scientific equipment worth $22,000. No other country in the world has offered such support to African scientists and engineers.

In February 2010, China launched the China-Africa Economic and Technology Cooperation Committee of the China Economic and Social Council aimed at helping Africa to learn from China’s development experiences. Speaking at the launch ceremony in Beijing, Ghana’s ambassador to China, Helen Mamle Kofi, said the country’s economics provide Africa with an “example to follow in terms of economic, financial, social, technological and cultural integration”.

Finally, China is also offering Africa additional ways to approach the linkages between economic growth and governance. Over the last two decades Africa has experimented with multi-party democracy. The assumption was that Western-style democracy was a prerequisite for Africa’s economic growth. But the evidence is inconclusive. Democracy fosters growth just as much as growth enables growth. But none of it happens automatically; it takes concerted collective effort.

There are also negative lessons that Africa should be aware of as it learns from China. China’s rapid economic growth has come with immeasurable environmental costs. Africa would be better served to adopt low-carbon growth strategies for its economic transformation. This may also be an area of common interest between Africa, China and the rest of the industrialised. In fact, China’s own investments in clean technologies provide additional lessons for Africa on the feasibility of adopting low-carbon economic strategies.

The involvement of China in Africa should therefore provide new opportunities for the Western industrialised countries to engage with Africa on new terms that recognise Africa’s aspirations. Indeed, countries such as the UK are responding to the challenge by seeking to build new relations with African countries, especially through regional integration bodies. Such smart responses are likely to benefit all the parties involved.

These are issues that go beyond access to natural resources and markets; they are the centre of global security and stability. China’s involvement in Africa would add more to global security if it can set the stage for new global relations guided by greater international understanding rather than crass competition.

To echo the words of Denis Tull at the German Institute for International Security Affairs in Berlin: “Only ill-informed observers would see Africa’s embrace of China as a zero sum game.”

Read the original story here.  [PDFver here]

Categories: Foreign Aid

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