I’m a firm believer that a positive transformation of the African continent will come from increased trade, both between African nations and with other continents. But it’s hard not to have mixed feelings about the news that trade between China and Africa has increased 39% over the last year.
Much of the China/Africa trade involves Sudanese oil. Now the world’s second-largest consumer of petroleum, China has been investing heavily in oil infrastructure around the world. This includes a pipeline that brings oil from Sudanese oilfields to a terminal in the Red Sea, representing 10% of China’s total oil imports. Peter Goodman of the Washington Post reports that Sudanese troops have been given rifles, tanks, helicopters and other weapons by the Chinese government to protect this pipeline, and that Chinese assistance has helped Khartoum build three munitions factories. It’s highly likely that these weapons have been used in the government’s struggles against rebel groups in Darfur. When free trade advocates suggested that African nations trade more widely, they probably weren’t advocating trade that included transfers of arms to a genocidal regime.
While countries like the US have accompanied trade and aid to African nations with economic advice and policy prescriptions, the Chinese government has been content to stick to trade issues in many of their negotiations. From Goodman’s story:
In an interview in Sudan’s capital, Khartoum, Energy and Mining Minister Awad Ahmed Jaz praised his Chinese partners for sticking to trade issues.
“The Chinese are very nice,” he said. “They don’t have anything to do with any politics or problems. Things move smoothly, successfully. They are very hard workers looking for business, not politics.”
As Abe McLaughlin of the Christian Science Monitor has pointed out in his reporting about China’s influence in Africa, this willingness to stick to business issues has made China a popular trading partner with nations like Zimbabwe, which experience strong human rights pressures in other trade relationships.
Chad, Sudan’s neighbor to the west, has also seen its economy transformed by the discovery of oil. Exporting this oil required a pipeline to Cameroon, which the World Bank financed with a loan in 1999. Attempting to ensure that oil revenues would be used for education and health projects, not for military expansion, the World Bank required that 10% of all revenues be put into a fund that could be used only for human development. At the time of the deal, it was hailed a “new model for natural resource development” in Africa.
Now facing increasingly tense border skirmishes with Sudan, the Chadian government has changed its policy and is now allocating some of the reserved money towards “other priorities”, which include defense spending. The World Bank has responded by suspending all lending to Chad, attempting to pressure President Idriss DÃ©by to honor the original agreement. (VOA has a good story on Chadian reactions to the World Bank decision.)
It’s admirable that the World Bank is attempting to ensure their investment has the social impacts it was intented to have… though it’s worth noting that lots of smart people doubted the efforts to sequester oil profits into this account would work. But it’s worth asking this question: What happens when African leaders are faced with the choice between doing business with a partner that asks no questions versus one that uses investment to create pressure for social change? If DÃ©by were building a pipeline now, rather than in 1999, it’s reasonable to speculate that he might have looked to China, not to the World Bank and IMF for funding.
If you’re interested in this topic, please see my earlier post “Haier, Huawei and the new Scramble for Africa”.