Develop Economies not Charity

China in Africa: Maybe the West Is Wrong
Posted on July 23, 2010 by Josh
developeconomies.com/?p=1571

For decades, the Western world has viewed Africa as a basket case in need of charity, giving huge amounts of aid to corrupt dictators who steal much of the money and squander the rest. Critics of aid say it creates dependence, undermines the competitiveness of local industries, and keeps cruel dictators in power by giving them the financial wherewithal to secure their position. Aid is a $40 billion a year business in Africa, and there isn’t too much to show for it.

China, on the other hand, has taken a different approach. By investing in Africa to gain access to its rich natural resources, China might be helping Africa in a more dignified and some might say effective way:

Perhaps the most compelling evidence that Africa is now a business destination is China’s new love for it. While the old superpowers still agonize over Africa’s poverty, the new one is captivated by its riches. Trade between Africa and China has grown an average of 30% in the past decade, topping $106 billion last year. Chinese engineers are at work across the continent, mining copper in Zambia and cobalt in the Democratic Republic of Congo and tapping oil in Angola. Nor is this merely exploitative. China bought its access by agreeing to create a new infrastructure for Africa, building roads, railways, hospitals and schools across the continent. The current crisis is not expected to affect China’s march in Africa: on the contrary, with the West’s plans in Africa on hold at best, Beijing views it as an opportunity to extend China’s lead. “We will continue to have a vigorous aid program here, and Chinese companies will continue to invest as much as possible,” Chinese Foreign Minister Yang Jiechi said in South Africa in January. “It is a win-win solution.” Dambisa Moyo, who wrote Dead Aid, says those who need convincing about Africa should ask themselves if they are convinced about China, “because if you back China, you’re backing Africa.” Ecobank CEO Ekpe says part of the explanation for China’s zeal for Africa is a new way of looking at Africans. “[The Chinese] are not setting out to do good,” he says. “They are setting out to do business. It’s actually much less demeaning.”

And that gets to what, for Africans, is the emotional heart of the matter — and why joining the business world means so much. Though it rarely occurs to Westerners who’ve been instructed that Africa needs their help, charity is humiliating. Not emergency charity, of course: when disaster strikes, emergency aid is always welcome, whether in New Orleans or Papua New Guinea. But long-term charity, living life as a beggar, is degrading. Andrew Rugasira, 40, runs Good African Coffee, a Ugandan company he set up in 2004 to supply British supermarkets under the motto “Trade, not aid.” He is emblematic of a new generation of African antiaid, antistate entrepreneurs. For Rugasira, aid not only “undermines the creativity to lift yourself out of poverty” but also “undermines the integrity and dignity of the people. It says, These are people who cannot figure out how to develop.” Aid even manages to silence those it is meant to help. “African governments become accountable to Western donors,” says Rugasira, “and Africa finds itself represented not by Africans but by Bono and Bob Geldof. I mean, how would America react if Amy Winehouse dropped in to advise them on the credit crisis?”

The last sentence is a bit over-the-top and misleading, but salient nonetheless. China manages infrastructure projects from start to finish, avoiding the paralyzing leakage brought on by corruption. It is creating a loyal investment partner for the future and, in doing so, accomplishing more in the way of economic development than all the aid dollars in the world. Of course, there is a downside:

Some African activists worry that Beijing still sometimes props up ancient autocrats like Mugabe. In nations with strong civil societies like South Africa, there is a growing realization that many Western firms train local workers and understand how to operate in a free political environment. Meanwhile, activists in places like Ethiopia and Namibia have condemned Chinese investment practices, including poor wages and importation of Chinese laborers. In one of the worst incidents, Zambia exploded in protest after an accident at a Chinese-owned copper mine there in 2005 killed over 50 Zambians.

Is China exploitative, harmful to the environment, tolerant of oppressive regimes, and concerned with just the bottom line? Maybe. But, in the long run, maybe growth through investment, even if it means further income inequality in the short-term, is a more dignified and effective path than aid. The question was raised in a recent article in the YaleGlobal Magazine titled “China in Africa: Soft Power, Hard Results“:

China assisted African at a time when many in the West scorned the continent. After the end of the Cold War, Africa was abandoned by the West and the 1990s were marked by great suffering and instability. China’s meteoric rise in Africa forced many in the West to re-engage the continent, diminishing its marginalization. Beijing built major infrastructure projects such as mega dams, badly needed roads and telecommunications in the continent that no Western nation was willing to fund. Still, it remains to be seen if in the long run, the benefits will outweigh the many problems caused by the new great power in the African savanna.

Apparently, the jury is still out.