Foreign Aid

Chinese investment good for Africans? Depends on who you ask.

Lisa Peryman
Probe International
March 1, 2010

Soaring Chinese investment in Africa has placed the international aid community on high alert. While policymakers around the world debate whether China’s no-strings-attached approach to African investment is good for the continent’s economic development, many onlookers have failed to ask: how do Africans feel about it? A recent poll [PDF] , “How do Africans see China after all?” by academic Loro Horta, suggests opinion is strongly divided.

According to Horta’s poll, the public response to China’s increased presence shows a striking contrast between “elite” African opinion, in favour of Chinese investment, and the continent’s “lower classes,” where criticism predominates.

Based on 163 interviews from six different countries, Horta—a Visiting Fellow at Singapore’s Nanyang Technological University, who worked in Africa for humanitarian relief organizations and in law enforcement for several years—found those in favour are welcoming “China’s new found enthusiasm for the continent.” Beyond the appeal of investment in infrastructure, including dams, highways, railways, ports, hospitals, universities, news stadiums and airports, many of the elite Africans Horta interviewed found Beijing’s hands-off, no-strings finance attractive by comparison to western aid.

While donors in the West have long been criticized for their hands-on “we know what’s best for you” style of lending, reminiscent of colonialism, Chinese investment seems generous and relatively free of political conditions.

“Frustrated with decades of instability and corruption, which many African elites tend to blame on the West and its liberal democratic model, the continent’s elites are fast embracing the Chinese model,” says Horta. Adding, “China’s model of a strong government and its focus on economic growth is looked upon by many African despots, and even some democratic leaders, as an example to follow.”

A number of prominent aid critics and economists, such as Dambisa Moyo and Calestous Juma, have pointed to Chinese investment—as opposed to foreign aid—as one way to promote economic growth for Africa.

Ordinary Africans, on the other hand, see things differently. Of the 98 non-government affiliated people Horta interviewed—among them street sellers, teachers, and small business people—73 expressed “highly negative views about China, some bordering on racism.”

According to African workers at the ground level, a Chinese bias has emerged when it comes to hiring for investment projects. They cite examples where influxes of migrant Chinese labour have taken much needed work away from Africans. Some wonder why they should put faith in the might of a lending power that “sends thousands of people to a poor country like ours to sell cakes on the street and take the jobs of our own street sellers who are already so poor.”

Horta says, Chinese companies operating in Angola bring 70 to 80 percent of their workforce from home. Chinese oil companies working in Angola typically employ less than 15 percent of locals on their projects, he says—often with wages at the low end of the pay scale. In stark contrast to the Chinese model is a nearby U.S. oil giant Chevron plant where 90 percent of those employed are Angolan, including specialized personnel such as engineers and managers.

In other countries it’s more of the same, claims Horta. At a construction site in Maputo, Mozambique, a Portuguese-run project employed only 5 Portuguese workers out of 120, while at a nearby Chinese-run site there were 78 Chinese workers and only eight locals, three of which were night watchmen.

Environmental concerns have also plagued Chinese projects in Africa. China has been accused of causing “serious environmental” damage in Mozambique, Southern Sudan, and Equatorial Guinea to mention a few. In Southern Sudan, local villages attacked a Chinese oil team, killing its leader, whom they accused of poisoning their land.

Horta warns China’s reputation for low environmental and labour project standards across the continent could lead to a “growing resentment in the lower sectors of African society [that] may erupt into violent incidents and undermine a relationship that could bring great potential benefits for both sides, provided it’s wisely managed.”

Horta believes the “responsibility lies with African elites” to establish regulations for the management of Chinese investment in ways that are good for Africa. Leaders in a number of African countries, including Cape Verde, Botswana and Namibia, already impose strict conditions on Chinese investment in regards to local labour quotas and environmental standards.

Categories: Foreign Aid

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