|
Then There Was China…
By Nicolas Moyer
What is
Ethiopia to China? For that matter, apart from a select few
oil-exporting states, what are any individual African countries to
China?
In the short
term, they are all potential supporters of China’s bid for Taiwan.
In a broader perspective however, very few appear as more than a
blip on the Chinese radar. So as Prime Minister Meles Zenawi returns
from his trip to Beijing, we can wonder what exactly he will be
hoping to have achieved.
Chinese
presence in Africa has been growing fast, particularly in the last
five years. Apart from small nods to concerns such as aid and
investments in infrastructure, China has made no secret of the fact
that it wants Africa’s resource wealth to help fuel its
extraordinary economic growth, averaging nine per cent over the last
10 years. In this light, China’s return to a position of influence
in Africa comes as no surprise. Yet peril lies in the enthusiasm of
African leaderships to embrace such important and diverse trade and
investment partnerships with China.
Some African
leaders may see a model to emulate when they look at the
authoritarian Chinese development model, holding tight the reigns of
the private sector. It may even make some Africa leaders dream grand
visions of their own ‘benevolent’ economic dictatorships. But the
reality that awaits them is likely to be far from any such dreams.
Great
opportunities await closer ties to China. For one, the Chinese are
more inclined to provide assistance in the form of needed
infrastructure works than European or American donors. Throughout
Africa the Chinese are funding massive road works, dams, railways,
port development, and electricity grids. With some careful planning,
Africa may come away from such projects with needed knowledge to
transfer into other applications.
China also
offers a massive and growing market for African products. Most
important of all however, China does not impose all of those
frustrating conditions to its partnerships. It does not have any of
the western obsessions with human rights or financial transparency.
China has
preached a policy that says free trade and investment are enough to
kick-start economic growth in Africa, and has backed up its rhetoric
with massive imports of African oil, cotton, timber and minerals.
All of this must look appealing to any African leader cornered by a
lack of foreign currency and difficulty convincing the international
development community of the quality of their governance model.
From another
perspective however, the modalities of Chinese involvement on the
African continent can appear to hark back to another time; one that
Africa has fought long and hard to escape. Under colonialism,
European governments invested heavily in infrastructure in Africa,
securing natural resources for themselves, and paid little or no
attention to the influence they had either on local politics, the
environment or African livelihoods.
Great
opportunities await closer ties with China. Yet great dangers also
loom, particularly for Africa’s longer term economic health. For
years, Africa has tried to increase its manufacturing sector,
getting away from dependence on agriculture and natural resources,
both too exposed to international price fluctuations.
The large
Chinese demand for commodities has pushed prices up, diverting
investment away from industry and services towards mining and oil
extraction. China’s growing production capacity has only pushed down
the prices of manufactured goods. Though it does offer the benefit
of cheaper goods worldwide, it also bodes ill for economic
diversification in developing African economies.
For a country
like Ethiopia, where 85pc of the population still relies on small
scale agriculture to make a living, the types of investments
available from China are far from offering the best outcomes. They
will leave little behind but the finished products themselves:
roads, bridges and dams. For these investments Ethiopia must offer
something in return, things like commodities.
Looking a
little further into the future, what will happen if Chinese goods
flood Ethiopian markets beyond the ability of Ethiopian producers to
compete. Ethiopia will certainly never have the power to influence
China’s trade patterns and will not have the leverage to negotiate
important trade agreements on its own.
As the host to the African Union (AU) and the Economic Commission
for Africa (ECA), with its historical legitimacy as an independent
state and its demonstrated ability to bring consensus among diverse
ethnic groups, Ethiopia is a logical leader in the push to create a
common African front in important trade negotiations. Failure to do
so is likely to lead to another round of natural resource pillaging
in Africa.
Meles is
clearly interested in finding ways out of the financing dilemma he
now finds himself in, since the donor community has shied away from
supporting his government. China will provide some of the solution.
Yet as
Fortune argues almost weekly, the real solution to his dilemma
is through economic liberalisation. Only with this option will Meles
find the flexibility he needs, where his government can benefit from
growing revenues linked to economic growth. Whatever Ethiopia hopes
to achieve in cooperation with China, it would do best to work on
setting solid foundations for sustained economic growth, instead of
running to easy solutions.
|
