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Sunday, Dec. 19, 2010

Pernicious 'rogue' offers of aid


Special to The Japan Times

HONG KONG — China found itself in the unwelcome WikiLeaks spotlight the week before last with sweeping claims against its "aggressive" policies in giving aid to Africa. Johnnie Carson, the U.S. assistant secretary of state for Africa, called China "a pernicious economic competitor with no morals" about propping up rogue regimes.

"China is not in Africa for altruistic reasons," he said. "China is in Africa primarily for China. A secondary reason for China's presence is to secure votes in the United Nations from African countries," he claimed.

Other leaked cables allege bribery by China to win a contract to supply phone- monitoring equipment to Kenya, a country where Beijing's influence has grown rapidly, especially in infrastructure, security and intelligence projects.

At first reading, the leaked information is powerful stuff. But if you go through it again, a number of critical questions and comments arise. The immediate one is cynical and rhetorical: Are Washington, London, Paris and Tokyo in Africa for the good of Africa?

Much of what passes for American "aid," especially to a country like Egypt is military assistance. Western aid historically was often used as an opportunity for providing contracts to their national companies.

Aid from the West and Japan to Africa amounts to crumbs from their well-stocked tables. This was so even before the recent economic recession gave the excuse for belt-tightening. Japan has been belt-tightening on aid for more than a decade. At the Gleneagles (Scotland) Group of Eight summit in 2005, leaders made fine promises of an extra $25 billion a year in assistance to Africa, but only $11 billion was provided, and the pledge was quietly forgotten.

Britain — recently — has been an important exception and has raised the quantity and quality of its own aid, as well as urging other rich countries to understand that the world as a whole cannot live safely while there are more than a billion people a day in poor countries who have no jobs and few economic prospects.

WikiLeaks also claims Nigeria rebuffed China because its offers were not good enough. The source of the information was the Anglo-Dutch oil company Shell, which, according to the U.S. ambassador to Nigeria, "had seconded people to all the relevant ministries and Shell consequently had access to everything that was being done in those ministries."

Shell thoroughly penetrated the Nigerian government, and shared intelligence information with the U.S. about the troubled, oil-rich Nigerian delta and about disgruntled local activists who claim that their environment has been damaged without them being able to share the rich resources.

These leaks should be a salutary reminder that whatever the economic textbooks say about the value of private enterprise, free markets and foreign investment, it is often a cutthroat business where good behavior and normal ethical rules or fair play and open bidding are quickly junked, whether the practitioners are American, British or China.

Chinese involvement in Africa is not new. I remember walking in the Kenyan capital Nairobi back in the 1970s and being surprised when a Chinese bobbed up from an open manhole where he was working as part of a Chinese project to improve the telephone lines.

Back in 1956, China gave 20 million Swiss francs in cash to Egypt to help its fight over Suez Canal ownership. In 1960, Beijing agreed to help Guinea build a match and cigarette plant, its first "development" project in Sub-Saharan Africa.

China's involvement in Africa has been growing and widespread because of rich natural resources, according to critics, or because of the possibility of mutual economic development for the good of both sides, if you listen to Beijing.

Investment in Africa last year alone was $1.44 billion, and China's total investment in the continent will have topped $10 billion this year, according to figures from the China-Africa Trade and Economic Relationship Annual Report.

It is hard to get exact figures for China's aid to Africa because of the unreliability of official statistics, which cross the normal OECD definitions of aid as "flows of official financing to developing countries provided by official agencies which have a clear development of anti-poverty purpose and are at least partially concessional in nature" with at least a 25 percent grant element.

A U.S. congressional report last year quoted research showing that total Chinese aid in 2007 was $25 billion. Aid to Africa in the 2002-2007 period was more than $33 billion. Countries that have received Chinese aid are spread far and wide beyond the usually cited "rogue states" of Sudan and Zimbabwe, which led to Moises Naim in the New York Times calling China a "rogue aid" regime. Beijing gives aid to almost every country in Sub-Saharan Africa.

This year, Beijing agreed to invest $1 billion in a coal project in Mozambique, including an 8 percent stake in Riversdale, an Australia-listed company. China Railway Group in August said it was in "early stage contacts" with South African companies about rail projects there, with a $30 billion high-speed rail link between Johannesburg and Durban in prospect.

Chinese aid offers are often made quickly without the political, economic, social and environmental conditions or bureaucratic red tape that Western donors insist on. In addition, China has promoted schemes in countries, areas and sectors that Western donors have avoided as too arduous or infeasible.

Zambia sang the praises of China for its help in building, and (this year) in bailing out, the Tan-Zam railway. Beijing has built highly visible projects like highways, stadiums and cultural centers, which have its name attached, and to highlight its achievements in bilateral summits where Beijing is lauded with great fanfare.

Of course, there is also a dark side to China's aid, including the abetting of genocide in Sudan, and of corruption in Sudan and Zimbabwe and elsewhere, and deliberate ignoring of environmental, safety and labor standards in projects throughout Africa.

Beijing, which is elsewhere careful to take a long-term view, would be advised to reconsider and revise its involvement with rogue states, not least because they will damage economic development and China's reputation.

In her book "The Dragon's Gift: the Real Story of China in Africa," Deborah Brautigam argues that there are a lot of myths based on ignorance about China's involvement in Africa. Her first myth is that China targets aid to bad governments. The second is that China does not hire African workers if African governments don't press hard enough and that Chinese workers and managers, unlike cosseted Western ones, generally live simple lifestyles in Africa. Brautigam says the third myth — flouting social and environmental standards — is true but that the standards are "evolving" as China is "on a steep learning curve," struggling at home and abroad with these issues.

The lesson of WikiLeaks could be that Western countries and companies might look again at cooperation and mutual learning with and from China before the competition takes on a military aspect.

Have the Chinese signed military base agreements? Have they developed intelligence operations? As Carson says, once these start developing, we should all start worrying.

Kevin Rafferty, formerly in charge of the Financial Times' coverage of Asia, is editor in chief of PlainWords Media.


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