(Figure 1.1) (2013). Chinese, Dragon, Statue [Web Photo]. Retrieved from http://www.globe-walls.com/wallpaper/chinese-dragon-statue.html

THE RISING DRAGON CHINESE VERSUS WESTERN AID AND FOREIGN DIRECT INVESTMENT IN AFRICA: SEEKING A PARTNER IN DEVELOPMENT

Written By: Sara Boucher

February 2014

1 The Rising Dragon

Chinese Versus Western Aid and Foreign Direct Investment in

Africa: Seeking a Partner in Development

By

Sara Boucher

Abstract: This paper is based on a research undertaking to understand China’s presence in

Africa and how this relates to Western relations with the continent. The research

attempts to determine which option, Europe/US or the Chinese, may be the most

suitable partner in development for Africa, as well as discuss what can be done to

maximize the benefits, and mitigate the negative aspects of that relationship. A

comparative analysis approach is used to judge the viability of each partner, and each

is assessed according to a set of criteria, including the following:

1. Equitable and Respectful Relations

2. Maintenance of Sovereignty

3. Ability and Willingness to Finance Sustainable Development in Africa

4. Shared Experience and Understanding

5. Historical Element

Drawing on the collected research presented in this document, the major finding is that

the Chinese have a fundamentally different approach to aid and investment, and harbor

conceptually distinctive ideas regarding development than the West. Based on the

outcome of the comparative study against the above criteria, it is suggested that Africa

may benefit from selecting China as a partner in achieving its own sustainable

development, and suggestions are offered to effectively leverage this partnership.

2

Acknowledgement

I would like to express my deep gratitude to Dr. Lisa Aubrey, my thesis director, and Dr. Wei Li, my 2nd reader, for their patient guidance, enthusiastic encouragement, and invaluable critiques of this research work.

I would also like to thank Mr. Ken Holin, my Barrett Honors Advisor, for his help and guidance throughout the research process.

My grateful thanks are also extended to Barrett, The Honors College at ASU for their gracious funding of my research undertaking.

Finally, I wish to thank my parents for their support and encouragement throughout my study.

3 Introduction: Seeking a Development Partner for Africa

Since colonization came to an end in the early 1950s, Africa has struggled to develop.

Under the watchful eye of the Western world, African countries have implemented hundreds of

policies and accepted billions in aid, all with the end goal of social, political, and economic

development. However, after all the loans and policy changes and economic initiatives, many

African states have little, if anything to show for it in terms of development. According to the

National Bureau of Economic Research, “one half of the African continent now lives below the

poverty line. In 1970, one in ten poor citizens in the world lived in Africa; by 2000, the number

was closer to one in two”. In sub-Saharan Africa, “per capita GDP is now less than it was in

1974, having declined over 11 percent” (Picker, 2004). While there are certainly some success

stories to be found, Africa as a whole has suffered from a chronic cycle of underdevelopment,

a process by which attempts to better life conditions are not only stifled, but also pushed

backwards.

The dismal economic, political, and social realities of many African countries have

caused much of the world to lose hope for Africa, questioning whether sustainable, positive

development is even possible. Fund For Peace’s publishes an annual Failed States Index,

which separates every country into four major designations, ‘Alert’, ‘Warning’, ‘Stable’, and

‘Sustainable’ and ranks them within each category based on economic, social, and political

factors. Unsurprisingly, the Global South, which includes Africa, falls into either the ‘Alert’ or

‘Warning’ category, while the Global North consistently places into either ‘Stable’ or

‘Sustainable’. It is alarming though, that the top ten worst states are almost exclusively African

nations, and that not a single country on the continent is in the ‘Stable’ category ("The failed

states," 2013). Given Africa’s track record in regards to development, it is easy to adopt a

pessimistic outlook. The Economist published an article designating Africa as ‘The Failed

4 Continent’. While obviously controversial, the piece mirrored the sentiments of many. But

perhaps this assessment of ‘failure’ lacks perspective.

As Claude Ake argues in Democracy and Development in Africa, development has not

had the chance to fail, as it has “never been on the agenda in the first place” (Ake,1996, p. 40).

It is no secret that Africa has long struggled with securing true independence from its former

colonizers, and the issue of there being ‘no Africans at the table’ persists when discussing

development. Historically, the West has exclusively dictated the development agenda, with

Europe and the U.S. single-handedly shaping economic and political development policies,

servicing loans to Third World countries, and deciding on loan terms and disbursement

conditions. It is true, by almost any measure that Africa has failed to develop. But this may

largely be due to the fact that up until very recently African voices have been left out of the

conversation. This ensures that economic, political, and social development is never realized.

Africa doesn’t need a development dictator. It needs a development partner, and for the first

time since the Cold War period, there is more than one contender for this position.

While the IMF and World Bank were drafting loan contracts from air-conditioned

boardrooms in the North, a new foreign donor was knocking at Africa’s door. China, building

from its own development success story, approached the continent offering a new path to

development. Over the next several decades, China would commit over $160 billion in aid to

Africa, quickly climbing the ladder to become one of the largest foreign aid donors. Thus began

the rivalry between the West and the Far East.

China’s aid is based on “mutual benefit” and takes the form of grants and non-

conditional, resource-backed loans to finance African development. The Chinese stress

“respect for the sovereignty of the host country” and do not involve themselves in the political

matters of the nations to which they offer aid (Brautigam, 2009, p. 17). The West by

5 comparison is much more hands-on with their aid offerings, providing concessional loans with

attached conditions and plans for achieving development targets. Western aid institutions are

also involved in the political development of the countries they work with, and urge developing

nations to liberalize, pluralize and privatize. There are certainly critics on both sides of the aid

debate, but the fact remains that these two donors are fundamentally different in their aid

motivations and ideologies. Africa is now faced with an alternative option to classic Western

aid models, and nations have the opportunity to decide which path is more favorable for their

development.

This particular research undertaking will attempt to determine which option, the West or

the Chinese, may be the most suitable partner in development for Africa, as well as discuss

what can be done to maximize the benefits, and mitigate the negative aspects of that

relationship. A comparative analysis approach will be used, and each perspective partner will

be assessed according to a set of criteria to be discussed in the first section to follow. This

analysis will be organized into the following sections:

Section 1: Stakeholders, Definitions, and Theoretical Framework

Before the positives and negatives of the China-Africa or Western-Africa can be assessed, it is

essential to establish the key stakeholders involved in the aforementioned relationships, define

some of the concepts which will be discussed, and go through the relevant theoretical

framework to understand what criteria are important when attempting to choose a ‘partner in

development’.

6 Section 2: Historical Perspectives and Ideologies

It is crucial to gain an understanding of Africa’s historical experience, and how both the West

and China have interacted with the continent over the years. Also included in this section is a

brief development history of Europe, The US, and China and an overview of Western and

Chinese development ideologies.

Section 3: Western Development Policies, Projects, and Perceptions

This section will look at modern Western aid and development policies and their impact in

Africa. General public perceptions will also be discussed in relation to the West in Africa.

Section 4: Chinese Development Policies and Projects

This section will look at modern Chinese aid and development policies and their impact in

Africa. General public perceptions will also be discussed in relation to the Chinese in Africa.

Section 5: FDI Facts and Figures

It is helpful to get a quantitative perspective on each side’s involvement in Africa with regards

to foreign direct investment. This section will cover financial contributions of the US, Europe,

and China and discuss which sectors are most active for foreign direct investment (FDI).

Section 6: Private Actors in Africa

Often, when comparing China versus the West, private industry is forgotten. However, private

actors, while regulated by their respective domestic governments are not one in the same, so it

helpful to separate the two. This section will provide an overview of some major private actors

from each side, and discuss their involvement and impact in Africa.

7 Section 7: Selecting and Managing a Partnership in Development

In the final section, an ideal partner in development for Africa will be proposed, with a recap of

the strengths and weaknesses of the previously reviewed partners. The importance of

managing relations will be discussed, as well as ideas to maximize the positive aspects and

minimize the negative aspects of such a relationship.

8 Section 1: Stakeholders, Definitions, and Theoretical Framework

In order to effectively develop an analytical consensus on an ideal development partner

for Africa, it is crucial to discuss the criteria on which these conclusions will be drawn from, as

well as identify the key related stakeholders and define the blanket terms involved. This

section will essentially frame the research and build the foundation for the following

comparative analysis between China and the West.

Stakeholders

Stakeholder #1: Africa

Africa is often thought of as a ‘recipient’ of aid or the ‘host’ of foreign direct investment from the

international community, but every relationship is active for both parties. That is the

assumption made here, that Africa is not passively accepting aid or FDI, but is actively

involved in this exchange.

For the purposes of this analysis, ‘Africa’ will often be referred to as the collection of nations

included on the continent. This is by no means an attempt to suggest that all African countries

are the same, but is rather used for simplicity’s sake as a way to make some broad

comparisons between Chinese and US-EU aid and investment, and its impact on Africa as a

collective. Viewing the situation from a wider lens affords the clearest general perspective

when evaluating development partners.

9 Stakeholder #2: The US

Still a major player in aid and FDI in Africa, the US together with Europe has shaped aid policy,

created multilateral institutions like the International Monetary Fund (IMF) and The World Bank

(WB), and dictated development strategy for decades.

Dollar-wise, the US typically gives the most in aid annually, numbering in the billions. However,

that amount has fluctuated significantly over the years depending on relevant events, for

example the US gave more aid during the Cold War period as it competed with the USSR. The

fact remains that the US has amassed a huge influence in the foreign aid game, although there

are now more countries competing for Africa’s attention.

Stakeholder #3: The EU

Europe has the longest history with Africa. As the colonizers of the continent, European

powers have been heavily involved with Africa for centuries, and this trend continues into the

modern day. The constitutions, governmental structure, and official languages of many African

nations are closely based on their former colonizers. In this study, Europe will be taken in its

collective, and will be dealt with in regards to the EU, its main multi-country institution.

While the US surpasses foreign aid to Africa in terms or total dollars, when measured in the

total percentage of the Gross National Index (%GNI), the EU consistently ranks above the US.

It goes without saying that Europe has historically been the main player in Africa, and this is

largely still true today.

10 Stakeholder #4: China

China has emerged as a major world economic power, and a major influence in Africa. While

the media has just recently turned its attention to Chinese foreign aid an investment in Africa,

China has been significantly involved with the continent since the 1950s, providing aid,

development projects, and concessional loans to African countries.

Many sources have attempted to make estimates on how much China actually given in aid to

Africa annually, and media reports often release huge numbers in the tens of billions per year.

However, due to the fact that China operates on a much stricter governmental structure than

its Western counterparts, the truth is that organizations and media channels making claims

regarding the amount of aid given are operating largely on assumption. China does not release

the figures of how much aid it gives to Africa, so care must be taken not to make comparisons

based on assumption. This study will use some general estimated figures gathered from a

variety of sources to begin to look at what China has been doing in Africa, however since these

numbers will only ever be estimates, no apples-to-apples comparisons will be made in

quantitative terms as a factor in selecting an ideal development partner.

Definitions

Foreign Aid: Defining “aid” is a most essential starting place in comparing foreign donors in

Africa. Aid can be broadly though of as “funding given from governments to promote economic

and social development in less-advantaged countries” (Brautigam, 2009, p. 13). However, this

simple definition is not complete to understand aid in this context, as it leaves out the “how”.

Aid can come in many forms, each with its own benefits and consequences. This research will

focus on systematic aid, which includes aid payments made directly to governments either

through government-to-government transfers (bilateral aid) or transferred through institutions

11 like the World Bank or IMF (multilateral aid). This type of aid can be broken down further into

two basic forms, grants and loans. Grants are funds given to countries that do not have to be

paid back, although this type of aid is usually less common and makes up a smaller

percentage of the overall aid offerings. Loans are the most common type of aid, and may be

structured in the traditional manner with interest paid and over a set term, or may be instead

resource-backed as is common with Chinese loans. Resource-backed loans use a resource,

such as coal or oil as the method of repayment for the loan.

Foreign Direct Investment: FDI was defined by the United Nations Conference on Trade and

Development as “an investment made to acquire a lasting interest in an enterprise operating

outside the economy of the investor” (Moyo, 2009, p. 98). Through FDI, Africa can leverage its

resources to gain investment and promote economic development.

Private Actors: Refers to private industry and its interactions abroad. There are private actors

from both the West and China operating in Africa in huge numbers, and they are often viewed

as a direct extension of their domestic government. While it is true that their respective

domestic governments may place some regulatory guidelines on their operation in Africa,

private actors are not their governments and should not be discussed as such. In this study,

private actors and their actions in Africa will be clearly separated from their governments and

their impact compared as a stand-alone occurrence, rather than an integrated portion of

governmental foreign involvement.

The ‘West’: A historical term taken to mean the industrialized, developed nations of Europe

and the US (mainly used during the cold war period)

The Global North: The developed nations of the world, which are economically, socially, and

politically more developed

12 Development: The social, economic, and political betterment of a country.

Theoretical Framework: The Path to Development for Africa

What Does Development Look Like?

Before determining criteria of an ideal partner in development for Africa, it is essential to

expand the definition of development, and gain an understanding of what development would

look like in Africa. Development can be discussed as incorporating three major components—

economic development, political development, and social development. Each piece is

important, and real sustainable development will focus on each of these categories. Let’s take

a look at each piece a bit more closely:

Economic Development:

Economic development is the first piece of the development puzzle, and many would argue the

most important. It is first important to establish the difference between economic growth and

economic development. Economic growth is often confused for economic development, but

just because a country may be experiencing economic growth does not mean that it is also

experiencing economic development.

Economic growth is a quantitative concept which can be defined as “an increase in a country's

real level of national output which can be caused by an increase in the quality of resources, an

increase in the quantity of resources, or an increase in the value of goods and services

produced by every sector of the economy” ("Economic development vs," 2000). Economic

Growth can be measured by an increase in a country's Gross Domestic Product (GDP). While

economic growth is a necessary condition of economic development, it is a better measure for

13 the economic status of developed countries than it is for developing countries. Economic

growth has a much narrower scope than economic development, but is still a useful measure

to see the quantitative changes in a country’s economy over time.

Economic development on the other hand is a normative concept, defined by American

economist and development pioneer Michael Todaro as “an increase in living standards,

improvement in self-esteem needs and freedom from oppression as well as a greater choice”.

Economic development implies changes in “income, savings and investment along with

progressive changes in socio-economic structure of country”. Economic development is much

wider in scope, and looks at not only quantitative, but also qualitative changes in the

economies of developing countries. It is most often measured with the Human Development

Index (HDI), which takes into account relevant factors like the literacy rate and life expectancy,

which affect productivity. Economic development also looks at the “creation of more

opportunities in the sectors of education, healthcare, employment and the conservation of the

environment”("Economic development vs," 2000). Taken as a whole, economic development

contributes significantly to the growth of human capital indexes, a decrease in inequality

figures, and structural changes that improve the general population's quality of life.

Political Development:

A formal definition of political development is less unanimous among scholars than economic

development, including the meaning, content, and nature of the concept. However, the term is

closely tied with institution-building, that is developing the governmental and regulatory

structures in which politic inhabit. There is a tendency when discussing political development

to slip into an ethnocentric bias, where “political development is identified with political

modernization and modernization is taken to mean westernization by most scholars” (Pye,

2012). However, this is a pitfall when thinking about building effective and sustainable political

14 structures in developing countries, especially in Africa. The cultural and ethnic realities in

Africa may not make Western models the most viable, and instead countries should strive to

develop a political structure that takes these all-important ethnic and cultural components into

consideration.

Another crucial distinction to make is that political and governmental stability is not so much a

direct driver of overall development as it is a foundation for said development. There are

numerous countries that have experienced rapid economic growth, and even development, but

due to unstable political structures and resulting violence this development was unsustainable,

and in many cases pushed backwards. So an essential feature of political development must

be sustainability and long-term effectiveness.

With regards to the components of political development, Lucian W. Pye, one of the experts on

political development identified three levels where political development could be observed,

including:

Equality: which signifies mass participation, universal laws, and recruitment on the basis of

merit.

Capacity: which signifies governmental performance, efficiency and effectiveness, and secular

orientation

Differentiation: which signifies diffusion and specialization of structures, division of labor, and

specialization based on integration (Pye, 2012).

Each of the three levels of political development contributes to the system’s overall ability to

provide the sustainable component, which acts to safeguard and promote both economic and

social development.

15 Social Development:

The World Bank has defined social development as “promoting the inclusion of poor,

vulnerable and excluded groups, strengthening social cohesion and the capacity for collective

action towards development, and enhancing the capacities of citizens and civic groups to hold

accountable the institutions that serve them” ("The world bank:," 2008). The end goal here is to

increase and promote the human capital of the country, so that all people have an opportunity

to be involved in the development of the country and experience the benefits of that

development. Social development has many indicators, like the education quality of the

country, average schooling length, literacy rate, healthcare quality, etc. This type of

development is often seen as an afterthought, with economic development being more

important, but social development is an integral piece of successful development overall.

Social development, or the increase of human capital leads to increases in productivity,

leading to economic growth and bolstering economic development.

Other Types of Development:

While this study will focus on economic, political, and social development as it relates to Africa,

those are not the sole three development categories. Both sustainability and human resource

development play a part in overall development, and it should be noted that these areas are

important as well. Sustainability supports the gains in economic, social, and political

development by creating a structure that will stand the test of time, and in the case of

economic development it is crucial to keep a sustainable mindset with regards to natural

resources and how development projects are affecting the environment. Sustainability has

been a focus traditionally in Africa, and it remains the ideal in regards to development. Human

resource development serves a foundational purpose, and works on improving and increasing

16 human capital through education and skills acquisition, something that supports the overall

goal of development (Anshan, 2011).

Conclusion:

Development is not a linear process, and is very much an all-encompassing and multi-faceted

phenomenon. It is important to remember that separately, economic, political, and social

development will not lead to long-term, sustainable development for countries. Each piece is

equally necessary to achieve this goal.

In this way, it is helpful to think of development in terms of a pyramid. Social and political

development occupies the bottom or foundational pieces of the structure, and work to support

and promote economic development. Neglect either of the foundational components, and the

whole pyramid crumbles, as is such with real-life development.

Figure 1.2: The Components of Development

Development Social

Economic

Political

Sustainability

Human Resource

17 Selecting a Partner in Development: Key Criteria

Now that we have discussed the components of development, let’s shift the focus now to

determining what criterion will be considered when choosing a development partner for Africa.

Characteristics of an Ideal Development Partner:

1. Equitable and Respectful Relations

The definition of a partnership is an arrangement in which two parties agree to cooperate to

advance their mutual interests. Therefore, a desirable partner in development needs to

contribute to a mutually beneficial, equitable relationship in which both parties treat each other

with respect. The keystone of this relationship should be cooperative and innovative problem-

solving, which both parties participating equally and on the same plane.

2. Maintenance of Sovereignty

African nations are just that—nations. They are independent, sovereign countries and a proper

development partner must recognize and respect this fact. Certainly both parties can learn

from one another, but in the end African countries should have the final say of what is best for

them and their people.

3. Ability and Willingness to Finance Sustainable Development in Africa

The point of seeking a partner in development is to cooperate to bring about positive,

sustainable development. Africa has rich natural resources and vast human capital. What it

lacks is the proper financing to build infrastructure and harness those resources, and that is

where a partnership can make a difference. But it is important to clarify that ‘financing’ is not

enough. In order for development to be sustainable, Africa has to be able to repay the

financing it secures. A suitable partner will understand this, and work with African countries to

18 come up with a feasible method of financing that will ensure ability to repay on the loans,

adding an element of confidence for both parties.

4. Shared Experience and Understanding

Often the most successful relationships involve parties with common values, motivations,

goals, and perspectives. The more parallels that exist in these areas, the easier it is for the

parties to see ‘eye-to-eye’ in negotiations, and the easier the overall relationship functions.

Shared experience is crucial because it allows open and honest communication, as neither

party feels as though they are inferior to the other. Shared experience is great because there

are numerous opportunities for parties to learn from one another.

5. Historical Element

It has been said that the past is often the best predictor of the future. This translates to

relations as well. While it is true that all relationships have their issues at times, the best

development partner will have had a overall positive relationship with Africa in the past, and

this will lend itself to a partnership will less tension and more cooperation.

Criteria and Comparisons:

The above characteristics will function as the criteria for comparing between the West and

China when attempting to choose a partner in development for Africa. Rather than imposing a

point system and assigning a weight to each category, a more comprehensive approach will be

utilized. The ideal development partner will be the contender who most closely matches the

characteristics important for such a partnership, which again are:

1. Equitable and Respectful Relations

2. Maintenance of Sovereignty

19 3. Ability and Willingness to Finance Sustainable Development in Africa

4. Shared Experience and Understanding

5. Historical Element

The following sections will provide an overview of each candidate’s history, ideologies,

perspectives, policies, and current actions in Africa. This information will then be compared

against the criteria to propose the most suitable partner in development for Africa.

Method:

The social science methodology is grounded in an analytical approach, and contains a

strong observatory component. Most social science literature attempts to understand the

underlying causes of an issue and observes its effect on people, places, and things, but often

makes no attempt to propose solutions to the issues it focuses on. There are certainly benefits

to this method of viewing social problems and phenomenon. It prevents the research from

being biased, and adds creditability to the findings. However, in a practical sense, it also does

nothing to solve the problems it studies. This can be understood as a ‘positivist’ approach.

There is also a more modern ‘post-positivist’ approach that amends the positivist strategy by

beginning to think about the effects or, rather than just the cause of various social science

issues. While positivists believe that “the researcher and the researched person are

independent of each other, post-positivists accept that theories, background, knowledge and

values of the researcher can influence what is observed. However, like positivists, post-

positivists pursue objectivity by recognizing the possible effects of biases” (Postpositivism,

2014). Even this approach, while it does attempt to address possible solutions, falls short in

many respects of creating actionable solutions or imagining how these proposed solutions

might function in real time.

20 In contrast, informed, action-based problem solving is a cornerstone of business

strategy. It rests at the very core of private enterprise in a capitalist system. This is perhaps

where business practices can lend a hand to social science methodology. With this research I

hope to apply crucial business practices such as sensitivity to efficiency, total cost analysis,

and strategic implementation to a social science-focused topic. In this way, a blend of

fundamental business strategy and social science analysis can be achieved. I believe that this

method is truly the most effective when discussing Africa’s development. Simply understanding

and analyzing the problems are not enough. It is crucial to start a dialogue about how we can

solve the problems that exist in the most efficient, cost-effective, and sustainable way.

21 Section 2: Historical Perspectives and Ideologies

Africa has had a vast and varied history, colored with colonialism and shaped by not

only the people that have called this continent home, but also foreigners who have interacted

with it. It is crucial to gain an understanding of Africa’s historical experience, and how both the

West and China have related with the continent and its people over the years. The

development histories of Europe, The US, and China will also be discussed, as well as an

overview of Western and Chinese development ideologies.

The African Historical Experience: Western Influence and Development Ideologies

Most of the scientific research available today designates Africa as the birthplace of

humanity. From the Nile Valley to the kingdoms of West Africa, societies developed and

became hubs of trade, education, innovation, and culture. Africans were segmented into many

complex tribes and communities that were technologically, politically, and socially advanced.

Many African societies with hierarchical government structures traditionally kept slaves, but

they were part of the social structure in a much different context. Slaves “were an indication of

power and wealth and not used for commercial gain” ("BBC: The story," 2013). However, with

the arrival of Europeans, the nature of African slave ownership changed forever.

Western countries have had a long and dark history in Africa. Beginning in the

1870’s, “Africa faced European imperialist aggression, diplomatic pressures, military invasions,

and eventual conquest and colonization” (Iweriebor, 2011). Europe was engaged in a mass

Industrial Revolution, and desperately needed the raw materials and resources that African

countries were rich in. The ‘Scramble for Africa’ culminated with the Berlin Conference of 1884,

when the “Magnificent African Cake” was divided among the European powers, and thus

22 began “100 years of greed, plunder, and terror” (Hochschild, 1998, p. 108). They laid the

groundwork for colonization and drew lines on maps with no regard for ethnic patterns.

Figure 2.1: Colonial Africa and Territory Division

(2010). Colonialism 1914 [Web Graphic]. Retrieved from https://exploringafrica.matrix.msu.edu/students/curriculum/m9/activity4.php

During this time, the continent was ransacked and resources were exploited using slave

labor. By the 1900s, most of Africa had been claimed by “by seven European powers—Britain,

France, Germany, Belgium, Spain, Portugal, and Italy” (Iweriebor, 2011). They set up colonial

administrative systems to organize the indigenous people into societies and “facilitate control

and economic exploitation” (Iweriebor, 2011). In essence, the colonial era left in its wake

massive destruction and cultural erosion that persists today, and Europe was central to these

23 events. The United States, while not a colonizing nation, played an integral role in the

Transatlantic slave trade. This was a phenomenon in which “at least 12 million Africans were

forcibly removed from the continent” ("BBC: The story," 2013). While the U.S. did not claim

colonies, it was the first country to “recognize the sovereignty of the Belgian king Leopold II

over the Congo, and it sent observers to the 1884–1885 Berlin Conference, where it

acquiesced in the partition of Africa” ("BBC: The story," 2013).

While the 19th century was the age of imperialism in the third world, the 20th century

marked the age of nationalism and independence. WWII had weakened Europe, both militarily

and monetarily. The rebels of several territories fought back against their colonizing nations,

reclaimed their land, and established new independent nations. Nationalism itself was a

movement toward the resistance of outside rule, pride in one’s identity, and the desire for

political self-determination (Isbister, 2006, p. 97). By the end of the 20th century, the majority

of the Third World had achieved independence from their former colonizing powers. In this

respect, the Nationalism Movement was successful.

As emerging African nations attempted to set up state institutions and spur economic

development, Europe lay in shambles after the war. At the Bretton Woods meeting in 1944,

representatives “from some forty-four countries resolved to establish a framework for a global

system of financial and monetary management” (Moyo, 2009, p. 11). A massive injection of

American funds through The Marshall Plan provided capital for “rebuilding the factories”

(Isbister, 2006, p.32). Comprised of mostly grants, the Marshall Plan “sparked economic

recovery” and bounced Europe back from complete economic ruin (Foner, 1991). Due to this

plan’s overwhelming success, the West adopted it as the new model for developmental aid for

the Third World, believing that the Global South, like Europe, “simply needed to construct

24 capital goods—factories and machines—and their problems would be solved” (Isbister, 2006,

p. 74).

The West’s aid strategies and ideologies are deeply rooted in the Marshall Plan, and

even though it is a very poor model for development in the Third World, they cling to its

success. Unfortunately, the plan’s premise is not one that translates well to Africa. With the

Marshall Plan, the money was “going into already existing physical, legal and social

infrastructures which simply needed fixing” (Moyo, 2009, p. 36). At the point when aid started

flowing to Africa, there were hardly any formal, functioning institutions to speak of, and the

State was weak in those nations that did have systems in place. Another important distinction

was that The Marshall Plan was a deliberately large cash flow (over $100 billion in today’s

dollars) to rebuild and stimulate European economies (Ritschl, 2008). When this development

model was exported to Africa, the money was not there in the same force, “governments of the

rich countries sent foreign aid to the poor, but on the whole, they have not been generous. The

United States and Britain…have reduced their commitment to aid, expressed as a percentage

of GDP” (Isbister, 2006, p. 56). That said, many of the West’s theories on aid over the decades

have stemmed from this plan, including structural adjustment, the neo-liberalism framework,

and the promotion of democracy as a partner to development.

Structural Adjustment Policies (SAPs) are economic initiatives that countries have to

follow to be eligible for loans from the World Bank and IMF, and started in the 1980s. Although

SAPs are supposedly designed for individual countries, they have many commonalities

including “export-led growth, privatization and liberalization, and the efficiency of the free

market”. SAPs generally require countries to “devalue their currencies against the dollar, lift

import and export restrictions, balance their budgets and not overspend, and remove price

controls and state subsidies” ("The whirled bank," 2003).

25 Devaluation essentially makes the country’s products cheaper for foreigners to

purchase, but at the same time it makes foreign imports more expensive. In theory, this

measure should discourage the country from buying foreign products or equipment, but since

the IMF gives the country in question their loan in foreign currency, it actually incentivizes

import purchasing.

Figure 2.2: Debt Increase Relative to Years Implementing Structural Adjustment

Programs

(2010). SAP and Debt [Web Photo}. Retrieved from http://professornerdster.com/synopsis-of-race-against-time-part-ii-3/

26 Another goal of SAPs is to balance the budget, and cut down on the country’s deficit.

There are two main ways of accomplishing this, increasing taxes or cutting government

programs and spending. The IMF pushes cutting spending, and this results in “deep cuts to

programs like education, health and social care, and the removal of subsidies designed to

control the price of basics such as food and milk…so SAPs hurt the poor most, because they

depend heavily on these services and subsidies” ("The whirled bank," 2003). SAPs also

encourage countries to ramp up production and export of primary commodities like cocoa or

raw materials to increase foreign exchange. However, since these commodities are pegged to

the volatility of the global marketplace, they often fluctuate and decrease in price

unpredictably. So by “devaluing the currency and simultaneously removing price controls, the

immediate effect of a SAP is generally to hike prices up three or four times, increasing poverty

to such an extent that riots are a frequent result” ("The whirled bank," 2003). In fact, the name

"Structural Adjustment Program" has garnered such criticism and negative associations that

the World Bank and IMF have since launched a new initiative, “the Poverty Reduction Strategy

Initiative, and makes countries develop Poverty Reduction Strategy Papers (PRSP)” ("The

whirled bank," 2003). However, this is just clever marketing because a change in name does

not equate to a change in policies, and countries are still being forced to adopt the measures

of the SAPs under the new guise of The Poverty Reduction Strategy Initiative.

Another major development ideology of Western countries has been the Neo-liberalism

framework. This is based on the tenants of ‘pluralize, liberalize, privatize’ and pushes countries

to develop multi-party political systems, dramatically liberalize their economies and trade, and

privatize state-owned industries. Essentially, neo-liberalist theory argues that, “the fundamental

factor responsible for the economic crisis in Africa is the excessive state regulation of the

economies of African countries, which among other things distorts the process of economic

27 development and leads to inefficiency in the allocation of resources” (Che, 2005). The effects

of implementing measures in line with neo-liberalist goals have been “African countries and

peoples with an apocalyptic situation in terms of the indices of the quality of life, from falling

longevity, collapse of wages, and increasing illiteracy” (Shah, 2013). The question becomes

then, why haven’t any of the West’s development initiatives and ideologies been successful in

actually developing the Third World, especially Africa? There are hundreds of convincing and

plausible answers to this question. Some would argue that the Global North has no desire to

see Africa develop. This accusation may or may not be true, but let’s put aside intention for a

moment. Perhaps the reason the West’s policies have not worked in Africa is simply because

their development story is too different to provide a suitable model to copy from and

implement.

Europe’s development was largely made possible by taking from abroad, especially

from Africa. While it is often a detail overlooked when discussing development, the fact

remains that “of all the continents in the world, Europe is the most resourceless. There was

some coal, yes; but not much else. Therefore, almost everything that Europe needed, and still

needs, to develop and survive, had to come from abroad” (Boateng, 2005). This explains the

colonial mindset, and the thousands of Europeans who “went out into the world to acquire

land, resources and wealth which were in turn shipped back to develop Europe, and by

extension the USA” (Boateng, 2005). And many of these riches came directly from Africa. As

Professor Ali Mazrui said, “The labor of Africa’s sons and daughters was what the West

needed for its industrial takeoff. The slave ship helped to export millions of Africans to the

Americas to help in the agrarian revolution in the Americas and the industrial revolution in

Europe simultaneously” (Boateng, 2005). Taking the Global North’s development history into

28 account, the West’s methods cannot be replicated to the benefit of Africa, because their

development was made possible through theft and forced labor.

The African Historical Experience: Chinese Influence and Development Ideologies

China, however, has a comparatively different development story. The Chinese first

encountered the African continent during the Ming Dynasty, when a fleet of vessels “sailed to

the coast of East Africa several times between 1418 and 1433” but it should be noted that “the

Chinese did not colonize the lands of Africa…they took not an inch of land, not a slave, but a

giraffe for the emperor to admire” (Brautigam, 2009, p. 23). Spurred on by widespread poverty

and suffering, and tension between the Communists and the Nationalists, in 1949 the Maoists

came to power, “after a bloody civil war between the Communist Party and the Chiang Kai-

Shek lead Nationalist Party” (Berens, 2001). After the Nationalist defeat, Mao set about putting

in place a radical communist regime throughout China. During this period, China had “closed

doors” to the outside world in terms of trade, with leaders stressing self-reliance (Brautigam,

2009, p. 25). It wasn’t until the reformers, lead by Deng Xiaoping, took over rule that China

opened its doors and began its development journey. Xiaoping urged China to experiment and

develop, “but not like Mao, in a great leap…cross the river by feeling the stones” (Brautigam,

2009, p. 52). And feel the stones they did. Change was slow to come as “they had to persuade

a nation that had barely survived the radicalism of the Maoists to embark on a new transition”

(Brautigam, 2009, p.51). China learned some very important lessons concerning both foreign

aid and development as it improved its own economic footing in the world. In the early 1970s,

“China was primarily an agrarian economy with immense reserves of natural resources—oil,

coal, gold, copper—similar in structure to many African countries today” (Brautigam, 2009, p.

46). Before the Cultural Revolution, the nation had been obsessed with self-reliance, but soon

figured out that partnerships were the key to success.

29 The first trading partner to stroll through China’s newly opened gates was Japan.

Concerned with energy security after oil price shocks, Japan was looking to gain new

suppliers, and began importing oil from China’s Daqing fields (Brautigam, 2009, p. 45). It was a

partnership born of mutual benefit. Each nation needed something from the other, and both

saw the benefits of cooperation and trade. The initial deal was that Japan would “finance the

export of $10 billion of its modern plant, industrial technology, and materials” and China would

repay the loan in oil and coal (Brautigam, 2009, p. 47). This gave Japan the access to energy it

needed, and China received the equipment and training necessary to develop. This was a

learning experience for the Chinese, who saw how two trading partners at different stages of

development could help one another. This successful trade relationship with Japan “would

later be repeated in China’s courtship of resource-rich countries in Africa” (Brautigam, 2009, p.

48). In the 1980s, China sought more Japanese investment to further draw upon the rich oil

reserves, and the Japanese provided financing to build infrastructure for “power plants,

railways, urban water supply, telecommunications, and highways…Japanese firms prospered,

and China’s infrastructure expanded to support the demands of the growing economy”

(Brautigam, 2009, p.48). It wasn’t long before Japan had competition for these energy

reserves. In fact, China used its partnership with Japan to instigate an all-out bidding war to

finance oil exploration and build infrastructure in what is referred to as “the scramble for China”

(Brautigam, 2009, p. 49). This competition meant that China got the funds it needed to

continue to develop economically at little-to-no interest, as the several countries vying for

Chinese contracts attempted to out-bid each other. This strategy worked well for China, and in

this way they were able to jumpstart their development. The exportation of oil was a temporary

solution, but it bought them the opportunity to begin industrialization and opened the doors to

new deals with other countries. While not all Chinese were better off despite the economic

surge, it is estimated that approximately 400 million people were lifted out of poverty

30 (Brautigam, 2009, p. 50). It should be noted that income distribution gaps increased due to this

development, and have continued to widen since. Economic development for China did not

equate to income equality for all Chinese, however some Chinese were drastically better off

and the country as a whole did make some real strides towards modernization.

As China began to expand economically, it set out to develop its aid program, first in

Vietnam, and then in Africa. It should be noted that this expansion into relations with African

countries. In 1982, Chinese leader Zhao Ziyang went on a tour of Africa to “advance…on the

path of South-South cooperation” (Brautigam, 2009, p. 53). It is on this trip that he announced

the four principles that would embody a partnership with China, including “equality and mutual

benefit, stress on practical results, diversity in form, and common progress” (Brautigam, 2009,

p. 53). Nowhere in his speech did Zhao mention aid. He instead emphasized the cooperation

that would take place to “build capacity and foster growth in China as well as in Africa”

(Brautigam, 2009, p. 54). This is a very different focus than that of the West. The Chinese

believe instead that aid cannot be one-sided and in this way they “avoid the paternalism that

has come to characterize aid from the West” (Brautigam, 2009, p. 68). The Chinese, coming

from a long history of self-reliance, encourage this trait among their partnerships in Africa. In a

speech about Chinese aid in 1964, Premier Zhou Enlai stated “It is not our intention to make

[Africa] dependent on us…they need to rely mainly on their own efforts…this will free them

from capitalism’s sticky embrace” (Brautigam, 2009, p. 55). As the West changed economic

development policies from year to year, China stuck to promoting those strategies that had

produced real results for them, and “emphasized infrastructure, production, and university

scholarships at a time when Western donors downplayed all of these” (Brautigam, 2009, p.

54). These values of development are present in all Chinese partnerships and projects

undertaken in Africa.

31 While the West condemned the State, China built state-owned factories in Africa. In

Mali, Sudan, Tanzania, and Ghana, they had been exporting raw cotton, but “Chinese-built

textile mills allowed them to produce the lengths of printed cloth favored by African women for

their lapas” (Brautigam, 2009, p. 66). Tanzania and Zambia, two of China’s closest foreign

friends, had long wanted a railway to connect the two countries and push copper products out

through Tanzania to the sea. The project was rejected an infeasible by the World Bank.

Germany, Britain, and Canada also declined. China, however, signed off on the venture and

together 16,000 Chinese and African builders set the tracks and constructed the railway

(Brautigam, 2009, p. 83). The Chinese have always emphasized trade over aid, and frequently

make dealings with African governments for local products and resources in exchange for

equipment, training, and development projects. China is a rapidly expanding economy, and

they need almost everything Africa can provide including “cotton from Egypt, rubber from Sri

Lanka, coffee from Ghana, copper from Zambia…Tanzania bought spare parts for Chinese

projects by exporting cashew nuts…Sierra Leone exported coffee and cocoa to make some of

its loan payments” (Brautigam, 2009, p. 63). This system of “interweaving trade and aid was

alien to the foreign aid norms of the West” but worked well for African countries who were

resource rich, but cash poor (Brautigam, 2009, p. 60). Chinese aid historically has aimed to

uphold the value of equality. In their African projects, “Chinese experts jumped into the muddy

rice paddies beside local farmers” and encourages African officials to “disregard fixed ideas

about work they considered beneath them” (Brautigam, 2009, p. 45). While the World Bank

and IMF set about recruiting chiefs to run their “integrated agricultural development projects,

the Chinese asked to work only with peasant farmers” (Brautigam, 2009, p. 67). Because

China has never held a ruling position over African countries, it treats them as equals in the

partnership. When working on development projects, Chinese workers would “transfer their

32 expertise fully and live at the standard of local counterparts”, a practice that the West has

never considered important (Brautigam, 2009, p. 68).

China’s simple approach to aid is “an attractive alternative to what is seen as the

endless nit-picking of the IMF and the Paris Club of creditors, which have been quibbling over

terms for years” (Moyo, 2009, p. 108). China has real credibility as a nation that developed

economically in a different fashion than its Western counterparts. The Chinese used mutually

beneficial partnerships to pull its people out of poverty and become an economic powerhouse.

China as a “model for prosperity” has gained the attention and “captured the imagination of

ordinary Africans” (Brautigam, 2009, p. 33). Unlike the West, who conquered Africa “through

the barrel of a gun”, China prefers to use “the muscle of money” to provide discernible benefits

and infrastructure, “there are now roads where there were no roads, and jobs where there

were no jobs” (Moyo, 2009, p. 110).

China’s development path is a success story that is a plausible model for Africa to look

to. China was once resource-rich and cash poor. They were once an undeveloped, agrarian

economy. They once had widespread poverty. But through efficiently leveraging key

partnerships with more developed nations they were able to drastically improve their quality of

life, and rise to become the second largest economy in the world.

Conclusion

From a historical perspective, the West’s development story, interactions with Africa,

and development ideologies are fundamentally different than that of the Chinese. Europe

colonized Africa, and while that period in history is over, it is not forgotten. As former

colonizers, Europe’s development agenda in Africa is questionable, and the relationship

dynamic is still more like that of a ruling authority even though African nations have since

33 become sovereign. The U.S., while not a direct colonizing country has taken a development

policy position mirroring that of European countries, especially in regards to the international

financing institutions like the IMF and World Bank. China, from a purely historical standpoint

has much more credibility as a possible development partner due to the fact that they did not

colonize Africa. Add to that the Chinese development history that has many parallels with the

African experience and their pragmatic approach to development and China is potentially a

suitable fit as a development partner.

34 Section 3: Western Development Policies, Projects, and

Perceptions

Having obtained a historical grasp on Western influence in Africa, let us shift the focus

now to modern development policy, recent projects and initiatives, and some general

perceptions of Western interactions with Africa in the modern day.

Modern Western Development Policy: The United States

The low point for US-Africa relations was arguably at the end of the Clinton era. Under

his administration, the U.S. had failed to intervene during the Rwandan genocide, and

American covered its eyes to what was happening in Africa, both physically and financially.

However, the Bush administration made drastic changes to the country’s foreign policy toward

the continent. During his time in office, an extensive HIV/AIDS program was implemented, and

foreign aid to Africa tripled. Bush reacted strategically to 9/11 and the newfound oil insecurity

in the Middle East after the terrorist attacks. The increasing necessity of African oil to the

American economy “led Washington to worry about its continued flow, not least because of the

perception that Africa’s oil-rich states were among the least stable and poorly governed states

on the continent” (Van de Walle, 2009). Therefore, guaranteeing stability and promoting good

governance incentivized the “increased diplomatic presence and foreign aid in countries like

Equatorial Guinea and Nigeria, as well as occasional US navy tours to the region and

increased technical cooperation to local navies” (Van de Walle, 2009).

35 The Bush policy shifted focus to Africa through linking the concept of development with

security, thereby increasing political support for a more robust aid strategy. In fact, during his

terms,

foreign aid to the region, which grew from $2.5 billion in fiscal year 2000, to $7.5

billion in 2007. In fiscal year 2008, five sub-Saharan African states were among the

15 leading recipients of US foreign aid. They were Kenya ($599 million), South

Africa ($574 million), Nigeria ($486 million), Ethiopia ($455 million) and Sudan

($392 million). By comparison, only Ethiopia had been in this select group ten years

earlier. Africa’s share of total US aid increased from 13.3 to 28.6 percent during this

period, though the US continued to provide a lower percentage of its overall aid to

Africa than the other major donors, who were typically above 40 percent

(Van de Walle, 2009).

That said, numerical changes are not always a sufficient condition for real-world changes. In

some respects, African policy under the Bush administration maintained the weakness of those

administrations before him. The main criticism is that the famed aid increases “were not the

result of some careful strategic thinking about the region” but were used instead as “an end in

themselves, to be touted politically” (Van de Walle, 2009). Bush’s approach to aid was

essentially fueled by the ‘war on terrorism’, rather than economic development or poverty

alleviation for Africa.

When Obama ran in 2008 for office, Africa was barely mentioned. This is especially

odd, given that “he is personally linked [to Africa] through his father…and indicated an abiding

interest and has perhaps more knowledge than any recent president” (Van de Walle, 2009).

His early strategy was ambiguous to say the least. But, in response to a Chinese-lead re-

engagement with Africa, a new policy was drafted and published in June 2012. The policy calls

for “strengthening democratic institutions” and “boosting economic growth” across the

continent (Obama, 2012).

36 As is stated in President Obama’s opening letter at the beginning of the policy, “We will work

with our African partners to build strong institutions, to remove constraints to trade and

investment, and to expand opportunities for African countries to effectively access each other’s

markets and global markets” (Obama, 2012). The document goes on to outline the ‘Four Pillars

of U.S. Strategy” which include the following:

1. Strengthen Democratic Institutions

2. Spur Economic Growth, Trade, and Investment

3. Advance Peace and Security

4. Promote Opportunity and Development

It is clear, that the administration has placed the most emphasis, and dollars, on the

maintenance and improvement of African democratic structures. It has been argued that the

renewed push for democracy “is aimed at compelling African governments to carry out free

market reforms, including privatizations and the abolition of subsidies and import controls”

(Van Auken, 2013). Another central motivation for the democracy focus is “countering Chinese

influence with the charge that Beijing, supposedly unlike Washington, is uninterested in

“democracy” and “human rights” in Africa” (Van Auken, 2013). Pursuant to this charge of a

democratic focus, the administration will seek to attach conditions in line with this end goal. But

even though the ‘hoops to jump through’ for American aid are increasing, the financial

contributions are not. In point of fact, “US aid to Africa has declined under Obama, falling from

$8.24 billion during the last year of the Bush presidency to less than $7 billion today” (Van

Auken, 2013). Despite the decline in aid, there are still ongoing programs that the

administration feels will help with regards to African development and poverty alleviation. The

key initiatives include:

37 Feed the Future Initiative: USAID’s global hunger and food security initiative, which seeks to

increase agricultural production and research new relevant technologies. There is $1.06 billion

allocated for this project.

Global Health Initiative: This program is aimed at overcoming malaria, promoting safe birth,

and addressing the HIV/AIDS epidemic on the continent. A total of $2.65 billion is reserved for

this initiative.

Other Areas of Focus: Increasing access to electricity, supporting democracy, human rights,

and good governance, responding to humanitarian crises, and increasing resilience to climate

shocks. These focus areas represent the remainder of the $7 billion in total USAID to Africa.

While $7 billion sounds quite substantial, when this figure is considered in comparison to other

U.S. aid expenditures it shrinks in the mind quickly. For example, “the size of the Iraq and

Afghanistan programs are $60 billion and $89 billion respectively” (Peter, 2013). Those

gargantuan numbers render the aid commitment to Africa rather miniscule.

While Chinese interest has forced the U.S. to reconsider its strategy in Africa, “policy

towards Africa suggests that the US is not adept at forging a coherent and strategic policy

towards a region perceived to be of secondary importance” (Van de Walle, 2009). The

development of Africa just doesn’t seem to be a priority for the U.S. and this is evident in its

financial strategy relative to other areas in the world, and its lack of interest in visiting and

actively engaging the countries on the continent it does support. When President Obama was

elected, many in Africa were excited to see how he would engage the continent given his

familial and racial connections. Tolu Ogunlesi, a reporter for the Guardian Africa Network

recounted his reaction to Obama’s tour, “ When he was first elected there were celebrations

across the continent, and perhaps unrealistic expectations that he would champion African

38 interests on the world stage…Since then his absence has been keenly felt, sparking

accusations that he has betrayed his roots” (Ogunlesi, 2013). His policy was unclear and

lackluster in the eyes of many, and largely maintained the strategies of the Bush

administration. His 2013 tour in Africa included stops in Senegal, South Africa, and Tanzania,

but oddly he didn’t make the time to visit Kenya, the land of his father. CNN comments that

“Obama was in Africa to promote an increased partnership amid criticism the United States

has, outside of military interests, focused its attention on other areas of the world” (Schwarz &

Yellin, 2013). It may, however, be too late. For in the scramble to do business with Africa,

America is lagging behind. The U.S. is “no longer Africa’s leading trade partner; it lost that

position to China in 2009” (Ogunlesi, 2013). In a new effort to counter Chinese influence,

Obama has announced plans to “invite 47 leaders to a landmark US-Africa summit in August,

seeking to widen US trade, development and security ties” (New Vision). He will send

invitations to “all African nations that are currently in good standing with the United States or

are not suspended from the African Union -- meaning there will be no place for states like

Egypt or Zimbabwe” (New Vision). Whether or not this summit will prove a success for Africa-

US engagement remains to be seen, but it is a much-needed move at this point.

Modern Western Development Policy: Europe

Next, let us look at the development policies, projects, and perceptions of Europe, the

other half of what we define as the ‘West’ for the purposes of this comparative analysis.

Obviously Europe is a collective term for several countries, each having their own ideas and

policies regarding the development agenda in Africa. There are different ways to approach this

discussion. We could look at the top five or so European countries that interact with Africa, for

example, by their amount of aid given to the continent. But then the issue arises of how to

determine this figure. If we go by gross dollar amount, the frontrunners are the UK, France,

39 Germany, the Netherlands, and Spain. But if we use the top donors by % of Gross National

Income (GNI) the list of top countries shifts significantly to Luxembourg, Norway, Sweden,

Denmark, and the Netherlands. Since Europe maintains itself in a collective as the European

Union, it is thus simpler and more representative to talk about Europe’s policies under its

collective identifier. While that may not show the detail and diversity of African policy from

country to country (and this may very well differ significantly), it does offer a birds-eye-view of

the general approach toward Africa for Europe, and for the nature of this study that perspective

should prove adequate.

Prior to discussing detailed projects and perceptions, let us develop a working

knowledge of the EU’s main policy toward Africa. The important thing to note is that the

European Union mainly approaches its Africa policy as part of a larger ACP (Africa, Caribbean,

and Pacific) policy. There are two main frameworks that shape EU policy with regards to

Africa, “the African, Caribbean and Pacific (ACP), enshrined in the 1975 Lomé Convention and

updated in 2000 by the Cotonou Agreement…and more recently, a continental approach has

gained ground, which led to the Joint-EU Africa Strategy (JAES) conceived in the 2007 EU-

Africa summit in Lisbon and reflecting the pan-African dimension” (European Commission,

2011). Let us unpack this collection of policy:

The Contonou Agreement

The Cotonou Agreement establishes three main EU-African, Caribbean and Pacific (ACP)

Joint Institutions:

1. ACP-EU Council of Ministers: meets annually at Ministerial level to discuss matters of

common interest in EU-ACP relations. It gathers representatives from all ACP and EU

40 countries, and the European Commission and, following the Lisbon Treaty, the European

External Action Service (EEAS).

2. ACP-EU Committee of Ambassadors: meets generally to prepare for the Joint Ministerial

Council. It is composed at ambassadorial level by representatives from all EU and ACP

member states, in addition to the European Commission. The EEAS also attends.

3. ACP-EU Joint Parliamentary Assembly: a unique body whose goal is to bring together

elected representatives of EU and ACP countries. The bulk of its activities relate to the

promotion of human rights, democracy and the rule of law. It takes place twice a year, with a

venue rotating between EU and ACP countries.

The Cotonou Agreement essentially broadens the scope of EU-ACP partnership while seeking

to adapt it to the changing international environment and the deriving challenges. Its three

pillars are:

1. Development cooperation (funded by the EDF)

2. Economic and trade cooperation through the EPA's, seeking to make EU-ACP trade regimes WTO-compatible

3. A stronger political dimension. (European Commission, 2011).

The second vehicle for EU-Africa aid and relations is the Joint Africa-EU Strategy (JAES).

Adopted by the heads of state from Africa and Europe at the Lisbon Summit in 2007, JAES

strategy focuses on the following:

• Peace and Security

• Democratic Governance and Human Rights

• Trade, Regional Integration and Infrastructure

41 • Millennium Development Goals (MDGs)

• Energy

• Climate Change and Environment

• Migration, Mobility and Employment

• Science, Information Society and Space

(European Commission, 2011).

The main financial instrument for development cooperation in ACP countries is the

European Development Fund (EDF). The EDF is now at its 10th round (2008-2013) and

includes three financial envelopes: a national envelope covering bilateral cooperation with

individual ACP countries, a regional one covering relations with ACP regions, namely Central

Africa, West Africa, Eastern and Southern Africa and Indian Ocean, the Southern African

Development Community (SADC), the Caribbean and the Pacific; and a third one to address

the common challenges facing ACP States that transcend geographical criteria. Moreover, the

intra-ACP envelope funds the African Peace Facility.

The 10th round (2008-2013) of the European Development Fund includes a total budget of

€22.682 billion, or approximately $30.652 billion dollars allocated in the following ways:

• €21.966 billion ($29.684 billion dollars) directly to ACP countries

• €286 million ($386.5 million dollars) to the OTC (overseas countries and territories of

EU countries)

• €430 million ($581.1 million dollars) to the Commission to support programming and

implementation of the EDF

The European Union makes it clear that while the joint fund is comprised as outlined above,

“The Member States have their own bilateral agreements and implement their own initiatives

42 with developing countries that are not financed by the EDF or any other Community funds”

("European development fund," 2007). Concerning the EU, key programs and initiatives

include:

Aid for Trade: One of the EU’s main programs, aimed at increasing trade and investment with

Europe. Specifically the program and its funds target:

Internal "behind the border" constraints such as a lack of productive capacity and

ability to meet standards in high value export markets, excessive red tape, or poor

infrastructure; all of which make it difficult for developing countries to exports their

products and undermine the potential benefits of increased imports. Targeting

these constraints is what Aid for Trade (AfT) is all about, along with strengthening

countries’ capacity to negotiate and implement trade agreements to their benefit

("Press release: Aid," 2011).

Much of what this program does is to make sure that all African exports meet European

safety standards (especially produce and other food products), and to increase exports

and lift restrictions related thereto. Like with any other aid program through the EU,

“AFT has to go through policy dialogue, needs assessments, inclusion of priorities into

national and regional development strategies and formulation of response strategies”

("Press release: Aid," 2011).

43

Figure 3.1: Aid For Trade

(EU and Member states, in EUR million)

(2013, July 08). Aid For Trade [Web Graphic]. Retrieved from http://europa.eu/rapid/press-release_MEMO-13-649_en.htm

This figure shows the contributions to the Aid for Trade program by the European Union and its member states over time. While contributions by member states have fluctuated from year to year, since 2005 the EU has been quite consistent with its portion of the contributions. The average for the years 2001-2011 was €2.188 billion.

44 Figure 3.2: Aid For Trade by Region

(EU and Member states, in EUR million)

(2013, July 08). Aid For Trade By Region [Web Graphic]. Retrieved from http://europa.eu/rapid/press-release_MEMO-13-649_en.htm

This figure emphasizes the EU’s focus on African countries in relation to the AFT program. The

contributions to Africa are around double what is spent in Asia, the next highest region, and the

expenditures, while decreasing over the period 2008-2011 are still significant in terms of

percentage of total aid budget.

Euro-African Partnership for Infrastructure: Adopted in 2006, this initiative is one of the

EU’s key programs with the aim to aid in the development of large infrastructure networks in

the following areas:

45 • Transport: (road and railway networks, ports, maritime and river routes, air transport), in

order to reduce costs and improve the quality of services

• Water and Sanitation Networks: in order to improve the management of water resources

at local, national and cross-border basin level, and also access to drinking water and

adequate sanitation facilities

• Energy: in order to allow network extension, distribution in rural areas and improvement

of cross-border connections

• Information and Communication Technologies (ICT): to ensure adequate access to

affordable technologies by supporting regulatory reform, capacity building and

broadband infrastructure development

A total of €5.6 billion was allocated to projects related to this program in the 10th round (2008-

2013) of EU budgeting.

ACP-EU Energy Facility: This program allocates €220 million to increase access to modern

energy services for people in Africa, the Caribbean and the Pacific (ACP). The three identified

priority areas include improving access to energy services, creating an enabling environment

for energy services through good governance, and supporting future large-scale investment

programs.

European Water Facility for the ACP Countries: This program operates with a budget of

€500 million to fund two types of activity: improving water management and governance, and

co-financing drinking water and sanitation infrastructure.

This is not an exhaustive list, but it covers the largest programs and initiatives. The EU

does attempt to cover a wide range of issues related to development, but the effectiveness of

this aid varies from project to project. Also, the EU is notoriously slow to implement, because it

46 requires the signing off of so many heads of State and the synchronizing of many different aid

cycles along with the recipient country. The EU is testing a new method called ‘Joint

Programming’ which is meant to streamline the implementation process, "to give the EU

leverage to impose conditionalities more effectively…the EU is piloting joint programming in

Ethiopia, Ghana, Guatemala, Laos, Mali and Rwanda for 2014-20” (Tran, 2012). Whether this

will actually improve the process remains to be seen.

As Mirjam Gehrke discusses in Africa: A New Era Possible in EU Development Aid,

“More than half of global development aid comes from the EU and its member states.

However, developing countries only receive European aid if they meet a set of criteria…on the

political level, there is an agreement in Europe on certain standards like the demand for a

democratic system and the respect for human rights in the receiving country” (Gehrke, 2014).

This is a tenant generally attributed to aid from the West. Europe, along with the U.S. hold fast

to the idea that imposing good governance conditions increases the effectiveness of their aid.

This may be true in some cases, but the West is not the only actor competing for Africa’s

attention. The EU, as well as the U.S. will have to evaluate how its aid schemes will function as

China, India, and other rising nations enter the donor pool.

47 Section 4: Chinese Development Policies, Projects, and

Perceptions

Having obtained a historical grasp on Chinese influence in Africa, let us shift the focus

now to modern development policy, recent projects and initiatives, and some general

perceptions of Chinese governmental interactions with Africa in the modern day.

Modern Development Policy: China

As a starting point to understanding Chinese aid today, it is important to know how the

government system is structured in China, that is, who is deciding which countries receive aid,

at what time, for how much, and at what cost. While the West operates using varying degrees

of democracy, China’s governmental system is different on a foundational level. As a single-

party socialist state, China just doesn’t have to jump through the same hoops or get approvals

from as many departments as the U.S. or European governments do. That’s not to say that the

aid system is without a defined structure, but it is comparatively simpler. Like most high-level,

high-budget decisions in China, aid is managed directly from the State Council, which includes

China’s premier and vice premiers and the rest of the cabinet. Its main tasks are to “approve

the annual aid budget, any grants of cash above $1.5 million, all aid projects above $12.5

million, aid to ‘politically sensitive countries’ and any requests to exceed the annual plan for

foreign aid” (Brautigam, 2009, p.107). Under the executive government, there are four

departments that manage all other aid-related tasks: The Ministry of Finance, Ministry of

Commerce, Ministry of Foreign Affairs, and China Eximbank.

48 Figure 4.1: China’s Aid Institutions

Brautigam, D. (Designer). (2009). China's system of aid and economic cooperation [Print Photo].

The Ministry of Finance: Responsible for allocating donations to multilateral organizations

(UN agencies, World Bank’s International Development Association, ect), managing the

cancellation of foreign aid debt owed to China, and signing off on the annual aid proposals.

The Ministry of Commerce: Housed in the larger Ministry of Commerce is the Department of

Foreign Aid. This small department of around 100 (comparatively, USAID has 2,200

employees) is the heart of China’s aid system and “programs all the zero-interest loans and

grants, drafts the aid budget and aid regulations, manages the Foreign Aid Joint Venture and

Cooperation Fund, and coordinates with China’s Eximbank on concessional loans.

49 The Ministry of Foreign Affairs: These diplomats are on the ‘front line’ in advising the

leadership in China on how much aid to give to particular African countries. They also draft the

annual plan for aid with the Ministry of Commerce and signs off on any changes in the aid

plan.

The China Eximbank: The bank manages the disbursement and maintenance of export

seller’s credits (preferential loans for Chinese companies operating abroad), export buyer’s

credits (for foreigners importing Chinese goods or services), and the foreign aid program.

Now that we understand how the Chinese aid system operates, let us turn now to what

policies and principles guide it. In Ghana on January 15th, 1964, Premier Zhou Enlai

announced the Eight Principles for China’s Aid to Foreign Countries. They are as follows:

1. The Chinese Government always bases itself on the principle of equality and mutual

benefit in providing aid to other countries. It never regards such aid as a kind of

unilateral alms but as something mutual.

2. In providing aid to other countries, the Chinese Government strictly respect the

sovereignty of the recipient countries, and never attaches any conditions or asks for any

privileges.

3. China provides economic aid in the form of interest-free or low-interest loans and

extends the time limit for repayment when necessary so as to lighten the burden of the

recipient countries as far as possible.

4. In providing aid to other countries, the purpose of the Chinese Government is not to

make the recipient countries dependent on China but to help them embark step by step

on the road of self-reliance and independent economic development.

50 5. The Chinese Government tries its best to help the recipient countries build projects

which require less investment while yielding quicker results, so that the recipient

countries may increase their income and accumulate capital.

6. The Chinese Government provides the best-quality equipment and material of its own

manufacture at international market prices. If the equipment and material provided by

the Chinese Government are not up to the agreed specifications and quality, the

Chinese Government undertakes to replace them.

7. In providing technical assistance, the Chinese Government will see to it that the

personnel of the recipient country fully master such technique.

8. The experts dispatched by China to help in construction in the recipient countries will

have the same standard of living as the experts of the recipient country. The Chinese

experts are not allowed to make any special demands or enjoy any special amenities.

(Source: Speech by Chinese premier Zhou Enlai, Accra, Ghana, January 15th, 1964.)

These principles have been the center of much debate and controversy. Many have praised

these tenants while others have condemned them. But, like it or not, these principles are the

backbone of the Chinese aid engine, and are still in policy to this day.

Why Does China Give Aid?

There is a prominent myth prevalent in Western media and echoed by Western

governments that China’s only motivation for giving aid in Africa is to secure as many natural

resources as possible for itself, in essence, a land grab. It’s not hard to guess why this has

become popular opinion. The Chinese are very active in the areas of Africa that contain the

rich oil and mineral resources, and it would be incorrect to say that this isn’t important to them.

But they aren’t just interested in countries with the most natural resources. It’s important to

consider two facts:

51 • China gives aid to every single country in sub-saharan Africa that recognizes the Chinese

government.

• China doesn’t seem to give more official development aid to countries with more

resources. Grants and zero-interest loans from the Ministry of Commerce are distributed

fairly evenly across countries (Brautigam, 2009, p.279).

Figure 4.2: African Countries Receiving Chinese Aid

Brautigam, D. (Designer). (2009). China’s Aid Agreements in Sub-Saharan Africa [Print Photo].

52 So, if China isn’t reenacting a colonial resource-grab, then why do the Chinese give aid? The

Chinese tend to think big-picture about aid and foreign relations. While “resources matter,

China’s mutual benefit approach is about generating business” (Brautigam, 2009, p. 279). And

China doesn’t discriminate on sectors. Yes, oil could be one area they would engage in, but

anything that has the potential of generating a decent return is attractive to the Chinese. As a

Nigerian diplomat commented on the Chinese in Africa, “The Chinese are trying to get involved

in every sector of our economy. If you look at the West, it’s oil, oil, oil and nothing else”

(Brautigam, 2009, p. 279).

How Does China Give Aid?

China uses a variety of different aid instruments as vehicles to deliver aid. These include

resource-backed infrastructure loans, debt relief or loan forgiveness, education, and turn-key

projects. Let’s take a closer look at each of these types of aid:

Resource-back Infrastructure Loans:

Unlike the Bretton Woods institutions that have notoriously condition-ridden loans that

require months or years of negotiation, the Chinese take a more simplified and direct

approach. Borrowing from their own development experience with Japan, they work with

African states to guarantee the loan with whatever resources are available. This is a huge

benefit for African nations, because they get the infrastructure they need, and which many

Western institutions are unwilling to provide. Case in point is the DRC’s loans for infrastructure

in 2008. China’s Eximbank “agreed to finance more than $6 billion in infrastructure, using just a

single copper and cobalt mining joint venture as guarantee” (Brautigam, 2009, p.146). As the

CEO of Congo’s state-owned mining company commented, “Congo doesn’t have to wait for its

infrastructure until it has the money. Building starts immediately with the natural resources as

53 guarantee. Except in oil-rich states, I know of no other deal quite like this. The Chinese

approach side-steps all the conditionality and just gets right to the point” (Brautigam, 2009, p.

146).

The other unique feature of Chinese loans is the absence of conditionality. Conditionality

is taken here to include imposed economic policies or governance reforms that are tied to the

aid. Unlike the West, China doesn’t incorporate these conditions into its aid. This has been a

highly criticized feature, especially by the Bretton Woods institutions that are increasingly

losing loans to China. The fact is that Chinese aid is based on an equal, mutually-beneficial

relationship. It views African states as sovereign, and doesn’t concern itself with the internal

governmental affairs of nations. African leaders view this policy as an opportunity to self-

govern in a way that is denied them by the West. A Ugandan official commented on Chinese

aid: “The fact that a country gives you aid makes them think that they have a license to tell you

how to run your affairs. These conditions are probably well-intentioned, but they are

humiliating” (Brautigam, 2009, p.149). Jose Cerqueria, an Angolan economist provides his

opinion of Chinese financing: “China’s straightforward approach is an attractive alternative to

what is seen as the endless nit-picking of the IMF and the Paris Club of creditors, which have

been quibbling over terms for years…China is welcome because it eschews the IMF’s

ideological and condescending attitude” (Moyo, 2009, p.108).

Some have made the argument that a lack of conditions to encourage good governance

and appropriate economic procedures leads to the opposite and props up corrupt

governments. Certainly there is some truth to this claim, as China does engage economically

with Sudan and the corrupt government regimes of Zimbabwe’s Robert Mugabe and Mobutu in

Zaire. However, the West, with it’s trade embargoes to governments it deems corrupt may be

‘too little, too late’ as it were. It is, after all, “under the auspices of Western aid, goodwill and

54 transparency that Africa’s most notorious plunderers and despots have risen and thrived”

(Moyo, 2009, p.108). For better or worse, China just has no interest in assuming a managerial

role in another nation’s affairs. As a Chinese official commented, “We don’t believe in

embargoes…that just means that the people suffer. From a practical consideration, embargoes

and sanctions can’t solve problems” (Brautigam, 2009, p.285). So while the Chinese choose to

not get involved in these areas, the West obsesses over them. However, this focus on ‘good

governance’ has produced little in the way of tangible results. As Serge Mombouli,

ambassador from Congo-Brazzaville suggests, “We cannot be talking just about democracy,

transparency, good governance. At the end of the day the population does not have anything

to eat, does not have water to drink, no electricity at night, no industry to provide work…people

do not eat democracy. China provided tangible things, while the West pushed for something

less tangible” (Brautigam, 2009, p. 287). China’s position comes from its own history, and in

the Chinese experience the simplest and most effective way to improve governance issues is

to get rid of poverty and develop economically. Just decades ago China was in a similarly

bleak political situation, but tensions were eased dramatically when people were lifted from

poverty. Violence decreased, government structure became more stable. The Chinese believe

this could be Africa’s solution as well.

Loan Forgiveness

Another form of official development assistance (ODA) is loan forgiveness, and China

uses this frequently. The West was the first to employ a debt relief program in 1996, called the

Highly Indebted Poor Countries (HIPC) program. The HIPC program began canceling debts of

countries that qualified, by in Western form, “only after countries successfully followed a

complicated steeplechase with hurdles that could take years to jump” (Brautigam, 2009,

p.127). China launched its own loan forgiveness program in 2000, but unlike the West,

55 “Chinese debt cancellation was unconditional…they did not require governments to prove their

ability to manage their economies or to develop strategies to use the cancelled debt for poverty

reduction” (Brautigam, 2009, p.129). China uses this in tandem with other types of aid, and by

2008, “Premier Wen Jiabo announced that China had canceled a total of 24.7 billion yuan, or

about $3.6 billion” (Brautigam, 2009, p.130). Since then, there have been more pledges to

cancel debt, but this is still quite modest compared with the IMF/World Bank debt cancellations

under HIPC, which to date “have been approved for 36 countries, 30 of them in Africa,

providing US$75 billion in debt-service relief over time” ("Debt relief under," 2013).

Education/Training

This type of aid is commonly used by the Chinese government in Africa. China’s

dedication, and some would say obsession, with education helped to fuel an economic revival

in their economy and they believe in the power of education for Africa as well. In fact, “Chinese

officials estimate that they have provided scholarships to 18,000 African students from 50

countries and sent 700 teachers to 33 countries since 1949. Since 2009, the Chinese

government has offered 4,000 scholarships to African students every year” (Nesbitt, 2011).

This is dramatically higher that in Western countries, such as the U.S., which has largely

abandoned the education scheme it took up in the 1990s, “in 1990, USAID programs funded

9,128 university students, but only 1,212 in 2000” (Brautigam, 2009, p.121).

China, in it’s goal of providing infrastructure in Africa, has also undertaken the building of

schools and vocational centers. In Ethiopia, “a large training and vocational education center

financed by Chinese aid and jointly operated by the two countries opened in early 2009. The

school will enroll 3,000 students, with courses taught by Chinese and Ethiopian teachers in

construction skills, architecture, engineering, electronics, electrical engineering, computer,

textiles, and apparel. China also built a vocational training center in Uganda, and the Chinese

56 are building two centers in Angola” (Brautigam, 2009, p.158).

Turn-Key Projects

The Chinese focus on building industry and infrastructure makes grants for projects a

significant portion of an aid package from China. Whether it’s a power plant in Ghana, a metal

processing plant in Zimbabwe or a textile factory in Kenya, the Chinese see the value-added

for Africa and themselves through investment in industry and infrastructure. When undertaking

these types of projects, the Chinese use a modified version of the model the Japanese used

with them during their development, the ‘Request-Based System’. This usually involves

Chinese companies identifying possible projects and pitching them to the recipient country’s

government for their opinion and approval. The recipient country then ‘requests’ that the

Chinese government fund the project. In the China-Japanese development partnership, “the

system helped Japan expand exports, and its focus on raw materials like cotton or timber,

energy, industry, and mining was designed for mutual benefit” (Brautigam, 2009, p. 141).

China’s model incorporates suggested projects by Chinese companies, but also allows African

countries to propose projects that it deems important. Then a competitive bidding process

ensues to identify the company or entity that will manage and complete the project. This

process is an improved form of the Japanese model, because in the case of Japan at that

time, they were the only ones bidding so there was a much greater risk of corruption. Today,

the Chinese are usually one of many bidders, among the West, India, Japan, and South

America. This mix of countries creates a check on the system, and “is intended to ensure that

a project’s costs are realistic and fair” (Brautigam, 2009, p. 141). Some recent notable projects

include:

• China has built over 100 schools, 30 hospitals, 30 anti-malaria centers and 20 agricultural

technology demonstration centers in Africa.

57 • On November 28th, 2013, the contract was signed for a $13.8 billion standard gauge rail

line that is expected to link five East African countries and replace the line built by the

British.

• $232.4 million for the Kariba South hydropower expansion project in Zimbabwe

• $3 billion interest-free loan from China Development Bank for oil and road projects in

Ghana

• $1.4 billion for the construction of a railway from Khartoum to Port Sudan in Sudan

• $2.2 billion for dam construction in Ethiopia

• $672.9 million for a light rail network in Nigeria

• $464.8 million for rebuilding roads in Angola

• $138 million for updates to the Kenyan urban power grid

• $304.2 million for construction of the Central Zongo II Hydroelectric Dam in the DRC

• $732.1 million for the Kafue Gorge Lower Power Plant in Zambia

(Provost & Harris, 2013).

The above are just a select few of the thousands of projects completed in Africa with the

Chinese. According to research conducted by AidData, “China has committed around $75

billion to over 1,700 different projects across Africa in the past decade” (Provost & Harris,

2013).

Final Notes on Chinese Aid

Concerning infrastructure projects, it is worthwhile to note that there is a priority system

built-in. The Chinese first prefer to repair or revive infrastructure that’s already in place where

applicable. It’s more efficient, and makes loan funds go further. Second, the Chinese will

generally agree to an African-proposed project before suggesting other options. This goes

along with their pledge of non-interference. Wherever possible, they encourage African States

to ‘speak for themselves’ in respect to projects within the country.

58 There has been much debate over the mix of workers dispatched to complete these

projects. Many have alleged that China sends an overwhelming majority of Chinese workers to

construction projects and that they don’t hire Africans. This is a myth that fortunately is largely

just that.

Figure 4.3: Chinese Projects and Investment

(2012, August 15). Chinese Investment Offers in Africa Since 2010 [Web Photo]. Retrieved from http://www.stratfor.com/image/chinese-investment-offers-africa

59

The fact of the matter is that the ratio of Chinese to African workers varies wildly

depending on the recipient country’s policy, the timeline demanded for completion, the ability

to find skilled workers, and how long the Chinese company has been in that particular area.

For example, “in Sudan, where Chinese companies have been working in the oil industry for

over a decade, 93% of workers in China’s oil operations were Sudanese” (Brautigam, 2009,

p.156). Similarly, in Tanzania, “Chinese companies employed Tanzanians at a ratio of eight or

nine for every Chinese” (Brautigam, 2009, p.156). China will also respect local governmental

policy, so countries that have these in place are successful in employing more local workers. In

the case of Angola, the “require all employers to have at least 70% Angolan staff” and similarly

in the DRC “at least 80% of the workers in China’s multibillion dollar infrastructure and mining

venture must be Congolese” (Brautigam, 2009, p.157).

Another interesting point of difference between West and East is the cost for experts to

manage implemented projects. The fact is, the Chinese are cheaper. The export of expertise

from the West comes at a cost, due to “the scores of relief workers who make triple digits in

salaries for ‘working in dangerous zones’” (Brautigam, 2009, p.157). As an official in the

President’s office in Sierra Leone notes, “Chinese interventions are not tied to a lot of experts

who get half or three-quarters of whatever aid is coming to the country” (Brautigam, 2009, p.

157). The Chinese pay a fair market rate for what the same position would command in China

(usually far less in salary than the West) and this rate is used for dispatching Chinese to Africa.

Also, in keeping with their 8 Principles of Aid, Chinese workers don’t get bonuses or kickbacks

for ‘working in a dangerous zone’ like is common with those being dispatched from the West.

The result is tangible savings for African nations.

60 The Chinese aid strategy in Africa is aimed at mutual benefit for each party involved, and

attempts to follow the model that worked for China personally, and helped them to lift millions

of people out of poverty. Their focus is infrastructure and industry; to both make business

function more easily through upgraded electricity systems or road revival projects, and also to

generate a steady and stable return for economic growth. There are some discernible benefits

of Chinese aid when compared with the West, but China’s policies aren’t perfect. While the

West tends to focus on the intangible goals of democracy and good governance to the

detriment of tangible and much-needed infrastructure, China doesn’t really bother at all with

political or environmental concerns. However, when we look at from an impact or value-added

perspective, the Chinese have done more to help Africa develop in the last decade than the

West has managed in the last half-century. There are roads and railways where there used to

be grass and dirt. There is electricity where there used to be darkness. There are schools,

hospitals, and stadiums where nothing stood just five or ten years ago. Due to new raw

material processing plants and construction projects, Africans that used to be jobless are now

employed. While the West was arguing over ideologies, China came to Africa with the ‘muscle

of money’ and the promise of a partnership.

61 Section 5: Foreign Direct Investment Facts and Figures

While not considered Official Development Assistance (ODA), FDI is still beneficial, both

to the host country and the originating country. FDI, defined by the United Nations Conference

on Trade and Development as ‘an investment made to acquire a lasting interest in an

enterprise operating outside the economy of the investor’ reached a record $1.4 trillion

worldwide in 2006. Of that, Africa attracted only $17 billion of that total (Moyo, 2009, p.103).

That’s interesting, given that Africa is a prime location for FDI—its labor costs are low, and

investment opportunities are high. China, among others, has begun to take notice in a major

way, and have finally started to come to Africa to do business, sparking a global race to African

markets. FDI flows to African countries “increased by 5 per cent to US$50 billion in 2012 even

as global FDI fell by 18 per cent”, UNCTAD’s annual survey of investment trends reports”

("Foreign direct investment," 2013). This section will explore this relatively new phenomenon,

comparing and contrasting FDI flows from China and the West, and adding a quantitative

perspective to this subject.

Chinese FDI: Facts and Figures

Like many aspects of its involvement on the continent, the Chinese have been very active

in FDI. They have invested all over, and have really been integral in sparking competition and

general interest in Africa as a business destination. China does everything it can to encourage

FDI, both directly through the government, and “by encouraging private Chinese enterprises to

invest in Africa, usually through preferential loans and buyer credits” (Moyo, 2009, p. 105). The

amount of FDI China has amassed in the last decade is staggering, “As of mid-2007, the stock

of China’s FDI to Africa was US $100 billion” (Moyo, 2009, p. 105).

62 Figure 4.4: Countries Ranked By FDI Flows

(2014). Foreign Direct Investments (FDI) to Emerging Markets Doubles Over Past Decade [Web Photo]. Retrieved from http://www.weareallglobal.com/change/

While the U.S. has continued to engage most actively in FDI, China’s jump from 9th to 2nd in

approximately ten years time is remarkable. While not all Chinese FDI is directed specifically at

Africa, “Foreign Direct Investment in Africa has grown at an average of 146% annually over the

last 22 years to reach US$36 billion in 2007 alone, while trade between Africa and the rest of

the world (particularly Asia) has been steadily increasing” (Al, 2014).

The diversity of investments is also something to note. It is a common misconception that

Chinese FDI is overwhelmingly aimed at mining and other natural resources, but in reality this

is not the case. As an Economist article suggested, “Africa is now more often seen by Chinese

firms as a place to do business other than digging stuff out of the ground” and in an IMF study

conducted in 2011 it was discovered that “only 29% of Chinese foreign direct investment in

63 Africa was in mining.

Figure 4.5: Top Countries in FDI Over Time

(2011). China's total OFDI flow to Africa has risen dramatically since 2003, with investments well diversified across a number of sectors [Web Graphic]. Retrieved from http://www.britishchamber.cn/content/african-tiger-africa’s-evolving-investment-landscape

If anything, official figures understate the extent of Chinese non-commodity investment, as

they rarely include smaller firms in wholesale trading, retail, catering and textiles” ("Little to

fear," 2013). One thing is for sure: China is using the ‘muscle of money’ to expand its FDI

pretense in Africa.

64 U.S. and European FDI: Facts and Figures

While Asian countries have certainly lead the way in increases to FDI in Africa over the

last decade or so, the West has steadily invested in African markets over a longer period of

time. As African Economic Outlook points out, “OECD countries – including traditional partners

still account for about 80% of FDI flows to Africa. However, the share of non-OECD countries

including Brazil, India and China – has risen from an average of 18% in 1995-99 to 21% for

2000-08” ("Traditional partners remain," 2013).

Figure 4.6: Africa FDI Flows

(2014). African FDI inflows 1995-2008 [Web Graphic]. Retrieved from http://dx.doi.org/10.1787/888932403610

65 For the EU specifically, FDI flows to Africa while they total a significant dollar amount are

actually quite sparse when considered as a percentage of their total FDI worldwide.

Figure 4.7: EU FDI Flows to Africa (%)

(2014). African FDI inflows % [Web Graphic]. Retrieved from http://dx.doi.org/10.1787/888932403610

In 2010, FDI to Africa accounted for only 5% of the EU’s total FDI flows, while 33% when to

North America and 13% was directed at Asia. As far as where the EU invests in Africa, they

target FDI almost exclusively in Egypt and South Africa. In 2011, FDI to Africa accounted for

2% of total FDI for the EU, and this 2% was split between only Egypt and South Africa

("Foreign direct investment," 2013). The U.S. also tends to invest more heavily in areas

containing oil and other natural resources, and their biggest areas of FDI include South Africa,

Nigeria, and Ghana.

The Chinese tend to take a more comprehensive approach, and while they too invest

significantly in resource-rich areas, their FDI covers the entire continent and spans several

66 sectors. The West invests much less in industries unrelated to natural resources.

Figure 4.8: Chinese FDI By Country (2011)

(2013, June ). Outward stocks of FDI, EU-27, end 2011 [Web Graphic]. Retrieved from http://epp.eurostat.ec.europa.eu/statistics_explained/index.php/Foreign_direct_investment_statistics

While the West currently dominates FDI in Africa, these figures are shifting rapidly. In a report

published by the United Nations Conference on Trade and Development, the data shows that

“for the first time, FDI inflows from developing economies into Africa, outstripped those from

developed economies”(Sulaiman, 2012). As James Zhan, director of UNCTAD's investment

and enterprise division commented, “In terms of green field (new) projects, which account for

over 90 percent of total FDI, the largest developing-economy investors in 2011 were India,

South Africa, China, Korea and Mauritius” (Sulaiman, 2012).

67 Section 6: Private Actors in Africa

Often, when comparing China versus the West, private industry is forgotten. However,

private actors, while regulated by their respective domestic governments are not one in the

same, so it helpful to separate the two. Private actors can have an enormous impact, for better

or worse, on the economies they interact with. Although they may not be directly involved with

the interests and actions of their national government, public opinion can be significantly

swayed by their actions in the eyes of the citizens that live in the affected countries. This

section will provide an overview of some major private actors from each side, and discuss their

involvement and impact in Africa.

Private Actors: Multinationals and Mega Corps

Multinationals and other private corporations based in the West have been active in

Africa for decades. The West is oil-obsessed, and private actors from Europe and the U.S. are

heavily tied to the oil exploration and extraction that happens in Africa. While some private

actors from these areas are also active in the Telecommunications industry or the extraction

and processing of other natural resources, oil is really the main focus. Of all of the oil

companies doing business in Africa (more than 120), 57 were European corporations and 23

were American. When you compare these figures alongside the number of African companies

involved in oil production (just 13 across the entire continent) it’s easy to see that the West has

quite a firm grip on African oil. Even China maintains just 7 companies dedicated to this sector.

That said, these companies bring benefits to Africans. The big multinationals come with money

to develop pipelines and spur exploration, and they provide numerous jobs to Africans.

However, regulation is a huge issue with regards to these private actors, and this is a theme

68 that spans every industry and every country on the continent. It is when private business goes

unregulated, unmaintained, and unchecked by the host governments that the country’s

resources and people get taken advantage of. In the case of Western oil companies, there are

constant examples of tax evasion, negative environmental impact, and human rights concerns

that African governments are either unable or unwilling to address. In Tanzania, “The EU and

other Western multinationals…use tax havens and other illicit schemes to scam the countries

of the continent out of around $50 billion every year” (Nielsen, 2013). Zitto Kwabe, a

Tanzanian Public Accounts Chairman, attributes part of the blame to the policies implemented

under the direction of the IMF and World Bank, which “advised African states to design policies

and laws which multinational corporations are abusing to avoid paying taxes in our countries”

(Nielsen, 2013). The result is that Tanzania is unable to collect the tax revenue on the oil

operations that would help the country wean itself off foreign aid. The conditionality of the

IMF/WB loans has relaxed tariffs and taxes to the detriment of African economies in some

cases, and this is one such example.

The Chinese are also getting more involved in oil and the like, although they don’t have

as many holdings as the West. The major Chinese companies in oil, unlike in the West, are

state-owned and financed. They do however operate like a private corporation in every other

aspect, and follow their own interests and goals.

Figure 5.1: Role Of Chinese Government in National Oil Companies

69 Zhao, S. (Designer). (2011, May 03). National oil companies – Arms of the state or independent entities? [Print Photo]. Retrieved from http://www.china-briefing.com/news/2011/05/03/chinas-energy-strategy-and-the-role-of-govt-oil-in-africa.html

In this case, the Chinese government does little in relation to general business operation, but

instead maintains a light advisory role. The main role of government in the NOCs is to provide

tax incentives and financing to help them penetrate new markets.

Figure 5.2: China’s Notional Oil Companies (NOCs)

Zhao, S. (Designer). (2011, May 03). China's Main National Oil Companies [Web Graphic]. Retrieved from http://www.china-briefing.com/news/2011/05/03/chinas-energy-strategy-and-the-role-of-govt-oil-in-africa.html

In oil, because the Chinese are newer to the game, and because African governments have

learned some expensive lessons from the West regarding taxation and other regulatory

70 measures, we don’t see the same abuses from private Chinese companies as exist with the

U.S. or Europe. As Kwabe notes about the Chinese, “Chinese companies working in Africa, by

comparison he said, are more transparent on taxes and pay their dues” (Nielsen, 2013). As is

discussed in A Trilateral Dialogue on the United States, Africa and China, “While some are

critical of China for seeking exclusive access to oil and gas supplies in Africa, others applaud

Beijing's willingness to take risks in markets where some Western energy firms can't—or

won't—go for a variety of reasons, arguably adding to world energy supplies, lowering prices,

and benefiting consumers” (Zhenxing, 2013). Their oil exploration has lead to new findings and

again, their efforts create African jobs. However, the issue of regulation will rear its ugly head

in the case of China soon enough, especially as Chinese NOCs gain more influence within

Africa.

In telecommunications, the West has largely pulled out of Africa after the telecom crash

of 2001. This sector is, more than any other, an African-held portion of the economy. MTN of

South Africa, Orascom of Egypt, and Vodacom (British-South African joint venture) are all

among the top five in the telecommunications industry on the continent. As for Europe, “only

Millicom of Luxembourg and Vodacom, a joint-venture between Vodafone of Britain and

Telkom of South Africa, have much of a presence” ("Mobile telecoms: Out," 2006). The Middle

East has also penetrated the market, and is now more active than Europe in this sector. China

is rapidly gaining influence in this sector, both with official governmental intervention to build

infrastructure in Africa to support electricity and telecom operations, and with private Chinese

companies moving in to provide telecom services. As Zhang Zhongxiang, a researcher at the

Shanghai Institute for International Studies says regarding China’s involvement:

The two major Chinese players in this field are equipment manufacturers Huawei

Technologies and ZTE (Zhongxing Telecommunications Equipment Corporation).

71 In 2010, they were active in 50 African countries, providing communications

services for over 300 million African users. The two Chinese firms have

established more than 40 third-generation telecom networks in more than 30

African countries and built national fiber-optic communications networks and e-

government networks for more than 20 African countries (Marshall, 2011).

Chinese companies have also ramped up their involvement in construction, winning more and

more contracts all over the continent. It is now a dominant force in construction in Africa.

However, like most sectors, there are positives and negatives. For example, “A Chinese

company built an eight-lane 30km road stretching from capital Nairobi to Thika, an industrial

district” and as a Kenyan told Xinhua News, "All the public knows about China in Kenya is

good quality roads. The image that Kenyans held about fake mobile phones and cheap clothes

is fast fading. The roads have become a huge selling point for the Chinese” (Li, 2013). In

contrast, there are also examples of not-so-stellar private sector involvement from China. In

Zambia, “A Chinese private company built the road from Lusaka, Zambia’s capital, to

Chirundu, 130km to the southeast. It was quickly swept away by heavy rains” (Li, 2013).

When it comes to big business in Africa, the West and China are scrambling for

resources and influence. Both sides bring money, jobs, and revenue to Africa, but lack of

regulation and governmental oversight have muted the benefits of foreign investment

considerably. On the positive side, the Chinese are perhaps more transparent about their

interests in Africa, and in doing business with China African leaders can skip the political

lecture. One African businessman in Angola commented candidly on foreign business to

American researchers:

[The Chinese] are here for the oil. But why are you here? The Americans and

the French think they can give us lessons in ethics and transparency, but all

72 you’ve done is sneak our oil out from underneath us for forty years. You

corrupted everybody. You prolonged the war—especially the Americans. The

Westerners swagger about preaching ‘family values,’ and then pile in here to

Luanda, stuff their faces, and screw hookers. But the Chinese are

disciplined. They’re modest and respectful. Whilst the West wastes its time

lecturing us on democracy, human rights, and accountability, the Chinese

are hard at work (Michel & Beuret, 2009).

While this is just one person’s opinion of Chinese versus Western involvement, it does give

rise to a debate that is happening all over Africa.

Private Actors: Retail and Local Merchants

Nowhere are private actors more influential, and potentially damaging, than in small

business. This is where more Africans are able to observe, and form opinions, about the

Chinese. And opportunities to interact with Chinese small business have multiplied alarmingly

fast over the last decade. Chinese merchants have moved into local African markets, and

“Chinese consumer products are sold at rock-bottom prices all over Africa…and all of these

items sell at a fourth or a fifth of the price the people have been used to paying” (Michel &

Beuret, 2009, p. 115). This is troublesome for African merchants, who just can’t compete.

Some Chinese have even stepped in to compete with traditional African goods. For

example, in Cameroon there is a popular doughnut called the ‘Ca va se savoir’ and is sold by

Cameroonian merchants. The Chinese, however, made their own version which “sells for 10

CFA francs less than the real thing and is made with highly questionable flour” (Michel &

Beuret, 2009, p. 116). This type of unfair and unwanted competition has fueled African dislike,

and in some cases hatred, of the Chinese. Some governments in Africa are responding to this

73 Chinese flooding of the market by restricting visas and trying to control how many Chinese are

allowed to operate businesses. All in all, “it seems that every country in Africa is facing the

same dilemma: how to satisfy the people’s demand for cheap Chinese goods without being

overrun by the Chinese themselves” (Michel & Beuret, 2009, p. 119).

With regards to the West, they are largely absent from this small-business discussion.

There are certainly Western shop and restaurant owners scattered across Africa, but they

haven’t come in the numbers and with the fervor in which the Chinese have. The West is much

more present in big business than in small.

From a regulatory perspective, African governments have to become actively involved

with protecting African business owners in local markets from outside domination. This

Chinese flooding of African markets is a real issue, and it is negatively affecting the African

opinion on China. This is true even though Chinese private actors are a comparatively small,

and separate entity from the Chinese government and China’s overall activity on the continent.

Conclusion

Private actors have a real and growing presence in Africa. China is making more of an

impact business-wise on the continent. The West, while once the only players in the game, are

now being outbid by the Chinese, who “operate with less bureaucracy, are faster and cheaper

and, as a rule, provide financing for projects with low-interest loans from state-owned banks”

(Grill, 2013). This can be a positive thing, lowering prices, increasing employment

opportunities, and building much-needed infrastructure. There is enormous opportunity with

engaging Chinese business, but left unregulated, Eastern involvement could spell disaster for

Africa.

74 Section 7: Selecting and Managing a Partnership in

Development

It is no question that Africa has the ability to develop and prosper economically. While

some are quick to write Africa off as ‘the failed continent’, there is a remarkable amount of

knowledge, ingenuity, and ambition among Africans. Through the increased transnational

interest and competition on the continent, Africans are beginning to reconnect with their own

power to shape development and drive economic prosperity. Of the world’s ten fastest growing

economies, seven are in Africa. There is a momentum that has been picking up speed over the

last several years, and it can translate into economic, social, and political development for

Africa, if used strategically, and managed carefully. It is true Africa is ready to develop. But the

continent cannot hope to undertake such a large task alone, however desirable that option

may be. Let us return once more to the central question guiding this East-West comparative

analysis. Who is a better partner in development for Africa? The answer to this question spans

many economic, social, and political topics and seemingly shifts by the second. It is an answer

that may not be the same in a year, a month, or even a week from now. With that time-

sensitivity in mind, I will propose an answer.

The Ideal Partner In Development: Criteria Review

In the introductory section, we defined the qualities an ideal development partner would

possess. They include the following:

1. Equitable and Respectful Relations

2. Maintenance of Sovereignty

3. Ability and Willingness to Finance Sustainable Development in Africa

75 4. Shared Experience and Understanding

5. Historical Element

Bearing in mind the information discussed previously, let’s zoom in and determine how the

West and China held up to these standards.

Equitable and Respectful Relations:

The definition of a partnership is an arrangement in which two parties agree to

cooperate to advance their mutual interests. Therefore, a desirable partner in development

needs to contribute to a mutually beneficial, equitable relationship in which both parties treat

each other with respect. There are always exceptions to these guidelines in any relationship,

and no partnership is perfect, but a partnership should function as a two-way street.

The West began its relations with Africa on the basis of a master-slave power structure,

and since independence this has largely remained intact. The West views Africa as a patient,

not a partner. Through Western-based, multilateral organizations like the IMF and World Bank,

they dictate to Africa what it should do regarding every economic, political, and social issue.

They have imposed conditions and development policies for decades that have done

absolutely nothing to bring about economic development. Moreover, they do not listen to the

voices of Africans and seem intent to make sure there are never any ‘Africans at the table’.

China doesn’t have the colonial hangover that the West has, and because the country

went from a similarly bleak developmental situation to the economic powerhouse that it is

today, the Chinese development model is both believable and inspiring. The Chinese treat

African leaders with respect, and don’t dictate policy or impose conditions tied to aid or

investment. As demonstrated through countless visits form the Executive government across

the continent, the Chinese really care about cultivating a relationship through South-South

76 cooperation. When Chinese workers or experts go to work on projects in Africa, they lives as

the locals do and provide a better value for Africa. When financing development projects, the

Chinese listen to the recipient governments and follow their lead. They are able to connect with

the African experience in ways that the West could never hope to, because just decades ago

they were not much different than Africa is today.

Maintenance of Sovereignty:

African countries are just that—countries. They are independent, sovereign countries

and a proper development partner must recognize and respect this fact. Certainly both parties

can learn from one another, but in the end African countries should have the final say of what

is best for them and their people.

In the West’s interactions and involvement with Africa it is clear to see that neither the

U.S. nor the EU view African nations as independent. Europe is still involved in the African

financial and legal systems to an extent that would be unheard of anywhere else. The U.S. is

determined to create a carbon copy of the American liberal democracy in Africa, with little care

or regard to the African opinion of what an ideal governmental structure should look like. The

West maintains a very patriarchal relationship with Africa, and certainly does not respect the

sovereignty of individual African countries.

China, on the other hand, recognizes and respects sovereignty. They look to African

leaders to make their own decisions and expect the same respect and consideration in return.

China had a brush with Western control in the past, and while they were quick to prevent

Western colonization in their own territory, they did not fail to notice the effect it has had on

other parts of the world. They view Africa as an attractive business destination, but realize that

it is privilege to conduct business there, not a right.

77 Ability and Willingness to Finance Sustainable Development in Africa:

The point of seeking a partner in development is to cooperate to bring about positive,

sustainable development. Africa has rich natural resources and vast human capital. What it

lacks is the proper financing to build infrastructure and harness those resources, and that is

where a partnership can make a difference. But it is important to clarify that ‘financing’ is not

enough. In order for development to be sustainable, Africa has to be able to repay the

financing it secures. A suitable partner will understand this, and work with African countries to

come up with a feasible method of financing that will ensure ability to repay on the loans,

adding an element of confidence for both parties.

The West has provided Africa with billions of dollars in loans and other forms of aid. It is

almost unbelievable that all that money didn’t, if only by chance, bring about development. But,

unfortunately, a pile of money put towards the wrong problem is little help. The West has

targeted governance, economic restructuring, trade reforms, and health issues, but these

topics matter little when the people have no education, no electricity, no opportunity for

employment. The West is willing to provide financing, but only for those projects and aims that

it deems necessary and important. Europe and American aid focused on infrastructure and

education for a brief time, but then moved on to the next ‘aid fad’ and left Africa struggling to

build the basics in order to have a functioning society. The West also helped Africa accumulate

vast amounts of debt, of which it cannot pay back. This has lead to and perpetuated the

underdevelopment of Africa, in which the end goal of development has not just halted, but has

been pushed back.

China recognized Africa’s need for infrastructure and industry in Africa, and came ready

to help build it. Using the financing strategies that Japan had used with China only decades

earlier, it offered resource-backed loans to trade buildings and roads for natural resources.

78 And while the IMF and World Bank argued over loan terms, the Chinese build stadiums,

hospitals, schools, housing, parks, and railroads. China is in a good economic position to

finance African development, and Africa has the resources to exchange. The Chinese are

hardworking, and value-oriented which allows Africa to get more for its money. The Chinese do

not expect as high of a return on investment as the West, and they do not send expensive

experts and officials that make triple-digit salaries and cut into the aid budget.

Shared Experience and Understanding:

Often the most successful relationships involve parties with common values,

motivations, goals, and perspectives. The more parallels that exist in these areas, the easier it

is for the parties to see ‘eye-to-eye’ in negotiations, and the easier the overall relationship

functions. Shared experience is crucial because it allows open and honest communication, as

neither party feels as though they are inferior to the other. Shared experience is great because

there are numerous opportunities for parties to learn from one another.

The West owes a large amount of its wealth to Africa. Colonialism spurred an economic

boom in Europe, and slavery propped up the American economy for years. While it is true that

the West has been engaging with Africa for a longer period of time, much of this was spent as

a ruler. They stole things from Africans that can never be replaced. And they have done little

since to restore or repair the damage they caused.

As far as colonization, China did not experience it in the same manner and to the same

extent that Africa did, but that’s not to say that China avoided foreign pressures entirely. In the

nineteenth and early twentieth centuries, “Chinese foreign relations with most major world

powers devolved into semi-colonialism as Britain, France, Germany, Russia, Japan, and the

US coerced trade and territorial concessions in a series of so-called unequal treaties” (Larson,

79 2011). The Chinese also suffered through the Mao regime, where widespread poverty and

oppression were commonplace. Through a strong focus on industrialization and economic

development, and with financing from the Japanese, FDI from members of the Chinese

diaspora, and other sources, China lifted itself from poverty to become the world’s second

largest economy. The Chinese believe that their model of development can work in Africa, and

offer a powerful alternative to Western development models.

Historical Element:

It has been said that the past is often the best predictor of the future. This translates to

relations as well. While it is true that all relationships have their issues at times, the best

development partner will have had a overall positive relationship with Africa in the past, and

this will lend itself to a partnership will less tension and more cooperation.

The West has unfortunately had a consistently negative historical relationship with

Africa. The opposite is true with China. China is self-interested but respectful. Yes, they are

here for business, but they are quite clear in that respect. The West operates under a guise of

altruism that is both misleading and unhelpful. With Chinese involvement, Africa and the world

have begun to view the continent for all its possibilities instead of its failures. Perhaps the most

powerful thing the Chinese have done is to make Africa attractive to investment and important

on the international agenda again. China has forced the West and the World to take a second

look at Africa.

Managing a Development Partnership: Mutual Benefit Realized

Deciding to partner with China is not the end of a development strategy for Africa, but

the beginning. Working with the West is safe, in that Africa knows by now what to expect, but a

relationship with the Chinese is high-risk, high-reward. China has the potential to be a real part

80 of the solution for Africa, but African leaders must not be fooled. The Chinese are not there just

to help Africa grow and develop. They may not be actively suppressing development as has

been the case with the West, but they aren’t going to put African interests before their own. For

a Chinese partnership to be effective, Africa will have to step up and be its own advocate.

Leaders have to strategize to maximize the benefits, and minimize the negative affects of

China in Africa. The most important area to focus on is private industry. Africa has to be quick

to act and put measures in place to protect small business, and regulate big business. This will

ensure that Africans are truly benefiting from the relationship. A passive role will not work with

the Chinese. As Professor Chris Alden said in his 2005 essay, Leveraging the Dragon, “Africa

should learn to say no to China, and if it cannot do that, then it should at least start negotiating

conditions favorable to its own development, just as China has done to the Western

companies that want to build factories in its special economic zones” (Michel & Beuret, 2009,

p.257). Africa must be business savvy to take advantage of China’s interest.

A Way Forward: The Age of Africa

China has built something in Africa that is more important than roads, and more

valuable than gold. They have built confidence—a renewed confidence in Africa that is felt by

leaders and citizens alike. A confidence in the belief that they are not doomed to perpetual

stagnation, a confidence that Africa has the ability to develop and the potential to succeed. The

Chinese have also built competition—competition for Africa’s attention. The United States and

Europe have never been more interested in Africa as they are now that the Chinese have

pursued African business. India has begun to invest more heavily, and South America is even

moving in. The world has begun to think, “if China has bothered to invest so much time,

money, and energy in Africa, then there must be an opportunity there that’s been overlooked

by the West” (Michel & Beuret, 2009, p.259). From a business standpoint, being desired and

81 sought after is an incredibly advantageous position to be in. If African countries really exploit

this competition, they can get the infrastructure they need for much less than they would have

paid even five years ago. This will make the money they do spend go farther, and make

development more affordable. Real, lasting development has never been so well within Africa’s

grasp, but leaders must be wise in negotiation and selfless in pursuit of this goal. For it is

leadership that will ultimately make or break development in Africa. With China’s involvement,

Africans have been presented with an alternative path, and an alternative future. The question

is, will they seize it?

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