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This time it is about resources in exchange for improved infrastructure
As the global recession starts to lift, another international scramble for Africa’s resources is predicted, with China leading the pack. Udo Rypstra believes that as long as deals are done above board, to improve trading links and local infrastructure, they will help the continent leap to higher levels of civilisation.
On 5 June 1873, The Times of London published a letter by English anthropologist, statistician and polymathematician Sir Francis Galton, in which he suggested that Africa be populated with the “Chinaman” to raise the level of civilisation of the continent.
He elaborated on the virtues of the Chinese people by writing: “They are good-tempered, frugal, industrious, saving, commercially inclined, and extraordinarily prolific. They thrive in all countries, the natives of the Southern provinces being perfectly able to labour and multiply in the hottest climates. Of all known varieties or mankind, there is none so appropriate as the Chinaman to become the future occupant of the enormous regions which lie between the tropics, whose extent is far more vast than it appears, from the cramped manner in which those latitudes are pictured in the ordinary maps of the world.”
Galton’s suggestion came at a time when the first big gold and diamond discoveries had just been made in southern Africa. Since then, the world established that Africa has vast lands, abundant resources and cheap labour.
The history of how, for more than 500 years, African shores have been used first by the Portuguese, the Dutch and the English as fresh water supply stations on the spice routes to Asia and the Far East is well documented. So is the establishment of trading posts, the slave trade and the scramble for the continent’s mineral wealth by other European countries – Belgium, France, Germany and Italy – particularly after the discovery of gold, diamonds and other minerals in southern Africa in the mid-1800s.
In recent years, the discovery of oil and southern Africa’s vast iron ore and coal deposits has seen an increase in African trade with the United States, Japan, China, Korea and India.
The question is: what has Africa been getting in return?
Uhuru and resultant decolonisation over the last 70 years have brought some progress for the 53 independent African nations that are represented in the United Nations Assembly today.
Despite internal conflict, mostly over mineral resources they own and ethnic issues, African governments are in the process of forming trading blocks in an attempt to acquire a better trading deal with both the West and the East – more than food handouts and military aid.
Granted, some proper roads and railway lines were built from the diggings and mines, which became towns and cities, but primarily for moving mining machinery and labour on the way in and to remove what we now call “commodities” on the way out, mostly to harbours along the coast. China even rebuilt the TanZam line.
Up till now, little has been done to expand infrastructure deeper inland from the main traffic to boost agriculture and industry and try to uplift the knowledge and skills of the rural poor to improve their living standards.
South Africa, in a way, may be an exception, but it frustrated and angered the poor masses for a long time through its apartheid policies.
Galton’s maps must have looked primitive compared to the latest global maps showing trade links such as shipping lanes, aviation routes and the international communications network.
There is huge connectivity between the East and the West. However, they also reflect that, even today, Africa is still relatively disconnected from the rest of the world.
There is a good deal of maritime and air traffic to and from oil-rich Nigeria and mineral-rich South Africa. However, you are lucky if, as a potential investor in Africa, you can get a direct flight into a central African country more than once a week.
Looking at internal infrastructure, roads are in poor condition or non-existent. Do not rely too much on your cellphone or laptop because in many regions, the network facilities are simply not there. Add power cuts up to 10 times a day in some countries, and you have to stack up with batteries as well.
On the whole, Africa still lies in what seems a backwater on the global map, something foreign investors do not like.
Now, as the global financial crisis is easing and demand for commodities is rising, the continent is experiencing what some critics perceive to be another scramble for Africa, led by a cash-rich country with alleged suspicious motives – China.
“If you believe in the long-term urbanisation success story of China and India, you buy Africa, because that’s where the commodities are going to come from”, Frontier Advisory CEO Dr Martyn Davies told mining investors at a seminar in Johannesburg recently.
Davies had earlier heard McKinsey principal Dr Heinz Pley tell the same Frontier Advisory/JSE Africa Board seminar that there was great potential for Chinese demand to rekindle the commodity super cycle, which came to an abrupt halt in October 2008.
“The capital is coming in from China and India, and not from traditional Western economies,” Martyn Davies reiterated.
In 2008, China-Africa trade reached US$106.8 billion – twice as much as that of 2006 and 10 times the figure for 2000. Of that amount, US$50.8bn was in the form of exports to Africa with US$56bn consisting of imports from Africa.
Xie Yajing, commercial counsellor in the Chinese Ministry of Commerce, Department of Western Asia and African Affairs, told reporters recently: “In the first half of 2009, Chinese foreign direct investment to Africa stood at US$552 billion, up 81% from the same period last year. The direct investment covered areas that included trade, production, processing and resources.”
Today, China is in command of a huge portion of Africa. The red flag of China is flying; from the Cape of Good Hope to the sand dunes of the Sahara, with lucrative deals being struck to finance over 900 projects, with more than 800 Chinese companies operating across Africa.
China claims it is doing so through a policy of non-interference in internal matters, but by exchanging mineral and energy resources for help in the form of building infrastructure in terms of a new global trade concept – aid for trade.
Aid for trade is not a Chinese invention. In 2005 the World Trade Organization, along with international partners, launched the Aid for Trade initiative to mobilise additional resources from the donor community and promote the importance of trade as an engine of growth in developing countries.
The fundamental aim of Aid for Trade is to help low-income countries to overcome structural limitations and weak capacities that undermine their ability to produce, compete and maximise the benefits from trade and investment opportunities.
A typical example of a major aid for trade project in Africa is the North-South Corridor, linking several African cities from Dar es Salaam to Durban, to which the European Commission pledged €115 million in August 2009.
The North-South Corridor project is being driven by three of Africa’s main regional economic communities – the Common Market for Eastern and Southern Africa (Comesa), the East African Community (EAC) and Southern African Development Community (SADC).
It was a year after the launch of Aid for Trade that China hosted a major summit with African leaders, which was attended by 50 African heads of state, where promises of generous financial, commercial, and military assistance were made, and about $1bn in African debts were cancelled.
Since 2006, China has launched many infrastructure projects, some even promoting tourism. It recently announced another 60 projects to be financed through Standard Bank of South Africa, in which it has a 10% shareholding.
However, its motives are being questioned in Africa and by the West: will China replicate in Africa a colonial relationship of the kind that existed under white rule? More than a century after Galton’s suggestion, this is the question that has been asked by many, including former South African president, Thabo Mbeki.
Worried about conflict in Africa, his Department of International Relations commissioned an investigation into and report on the root causes of conflicts in Africa in 2007.The rationale for the internal, confidential report was to enable the South African government to respond in an informed manner to the terror and violence that has afflicted the continent for many years.
Completed and leaked to the Mail & Guardian recently, the report alleged that global greed for the continent’s natural resources and colonialism’s legacy were among the root causes of the conflicts.
The 210-page document was compiled by the department’s Africa Bilateral division after two years of research, and includes material from authoritative books, journal articles, monographs, various African government reports and local and international agency reports.
It concludes that one of the primary drivers of wars in Africa over the years has been foreign intervention in the exploitation of natural resources such as diamonds, oil and timber.
“Vested interests (usually commercial) by foreign actors (states and multinational corporations) in Africa have resulted in them sponsoring conflict to shield their investments,” states the document.
“Pursuant to this, foreign states, domestic politicians, private corporations and mercenaries can form a diverse alliance to pursue commercially motivated interventions.”
Claims that China is foremost in “plundering” Africa of its resources and “dumping” cheap or inferior goods on the continent, have been denied as recently as 17 September by its ambassador to Pretoria, as well as visiting state officials, arguing they are investing in areas long neglected by the West.
Apart from mineral resources, it buys other commodities from Africa, such as tobacco from Zimbabwe, coffee from Uganda, wine from South Africa and olive oil from Tunisia.
China is hungry for land, food, energy and power. While Western economies have been contracting, Chinese gross domestic product grew by 10.4% in 2008 and, despite the global recession, by 7.1% in the first half of this year.
The Chinese economy heavily requires an enormous influx of natural resources, particularly oil and gas. With 1.3 million inhabitants, one-fifth of the world’s population, China consumes about 70% of the world’s oil, steel, copper, aluminum, and food supplies areas long neglected by the West.
According to a report by its Council on Foreign Relations (CFR), Africa provides China with 30% of its energy imports, meeting 5% of China’s energy needs and rivalling the Middle East as a source of Chinese energy.
Economic reports claim that China has about $3bn invested in Nigeria’s oil, $3bn invested in the Sudanese energy sector, and a $3-billion credit line for Angola’s offshore oil fields.
There will be another Sino-African summit later this year. The fourth ministerial meeting of the Forum on China-Africa Cooperation (FOCAC), due to be held in Cairo, Egypt, will be a great gathering for an all-round appraisal of the outcome scored by the Beijing Summit held in 2006, and to make new planning for Sino-Africa co-operation in the next three years.
It is widely believed that the upcoming grand assembly would raise or uplift Sino-African co-operation to a new height.
Food shortages and the quest for fuel and alternative fuel have given rise to a number of shady Chinese, European and Korean deals in central Africa, Angola and Madagascar. But they are inter-company deals, such as the one in which South Africa’s Super Group lost R200m in 112 Powerstar trucks to a defaulting Angolan company.
Some observers say China really does not plan to spread international communism, but seeks global power (economic and political), not military power. As Europe and America prior to the Berlin Conference, China sees Africa as a strategic area of interest.
Perhaps it is the medium through which China wants to seek that non-military power over Africa – through eugenics.
Back to Galton, who was a great believer in eugenics, a word he invented in 1883 and which derives from the Greek word eu (“good” or “well”) and the suffix -genes (“born”). Galton defined eugenics as “the study of all agencies under human control which can improve or impair the racial quality of future generations”.
Eugenics has had big supporters, particularly after Galton’s death in 1911, and by people ranging in stature from Winston Churchill to Adolf Hitler, the latter who took the philosophy to the extreme via Roma and Jewish genocide – a term with which central Africa is not unfamiliar.
This philosophy, which in my opinion is racist in the extreme, has been condemned in the West, with its quest for human rights over the last 50 years or so.
But it still has massive support in China, where more than 1.3 billion people battle it out for a living and people literally find it hard to breathe. That is where social rights prevail over individual rights and laws to curb overpopulation – e.g. one baby per family – and genetic deficiencies, through abortion, have been introduced since 1979 and as late as 1994 respectively.
According to various international and Chinese statistics, there currently are 750 000 Chinese workers in Africa with three million more to come on contract. There are more than 680 million true native Africans living on the continent.
Galton did not have a high regard for the latter and he suggested that many Chinamen be brought in to ‘outbreed’ them.
One does not have to be a polymathematician like Galton to work out that if China aims to dominate Africa this way, its current and future workforces will have to perform on the job in more ways than one. They can try, but I am sure Africa will come out on top.
Udo Rypstr
