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Thread: The role of non-African powers in Africa: a discussion

  1. #41
    Council Member M-A Lagrange's Avatar
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    Really you need an understanding of Africa. African leaders do not want outsiders starting to push for human rights or linking aid to good governance. They have a very nice little thing going.

    The best thing for Africa is for the world to walk away and leave it to its own devices. This will never happen because of Africa's natural and mineral resources. China has become the biggest player and the US and the rest will be lucky to get the crumbs.

    To accept the reality of the situation is the most sensible course of action.
    Hello JMA

    The aid against good governance dispute is not the one I am looking at. If most African leaders do not want to have to comply with good governance, on the otherhand, donors as European powers are tired to borrow money to them.
    But the question of divorce (can we call it that way) between "european powers" and Africa is deeper. Africa leaders are too quick to claim West to abuse them.
    And by the way, as far as I can see, Africa Leaders do not want to be in charge of the business. They were not that quick to provide troops and equipment for Darfur or DRC...

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    Talking The Power we don't take about...YOUR SAVINGS

    Call me "futurist" but:

    With the Electronic Herd, thousands investors use their savings (billions US$ every day), economies and countries have to compete each other to attract investments if they want to keep the pace of the economy or get left dead along the road economically (like North Korea, Iran,...).

    These thousands and other hedge funds are attracted by high returns on investment and FAST. African countries whatever their political system will have to plug to Globalization if they want to survive. You can have the best gold mine in the world, if you are constantly in a state of civil war or corruption, investors won't come and your big mine won't produce a lot to feed your civil war or corruption. You are basically feeding on your own blood.

    If you provide a safe, corrupt free environment, most African countries have untapped ressources that can attract these investors.

    These thousand investors, much more than China or EU or US are for me, the biggest geoplotical game changers in Africa. Kabila, Kagame,...understand it.
    These thousands investors require stability, transparency, good governance and if you don't provide, one click of the mouse on any trade website and their money is GONE. It's like an international/every minute referendum on how good/bad your country and its economy is.


    The influence of China, US or EU over Africa looks pale in camparaison to the much defuse but HUGE influence of the electronic herd. 8 Billions US$ in 2008 came from the electronic herd as investment (not loans), while CHINA came with about 14 Billions in loans mostly.

    As an African President, i would rather go to Wall Street and convince them to invest than beg Beijing for a loan i have to repay later even if it means cleaning corruption, improve education,...

    FYI:
    http://seekingalpha.com/article/3424...at-opportunity

    http://www.africaneconomicoutlook.or...ct-investment/

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    Quote Originally Posted by M-A Lagrange View Post
    Hello JMA

    The aid against good governance dispute is not the one I am looking at. If most African leaders do not want to have to comply with good governance, on the otherhand, donors as European powers are tired to borrow money to them.
    But the question of divorce (can we call it that way) between "european powers" and Africa is deeper. Africa leaders are too quick to claim West to abuse them.
    And by the way, as far as I can see, Africa Leaders do not want to be in charge of the business. They were not that quick to provide troops and equipment for Darfur or DRC...
    This 'divorce' will not happen as Africa is sitting on natural resources and China is more than willing to fill the gap if western countries pull out. Western countries will try to remain engaged with Africa, will compete with China and finally lose out to China as the dominant player. China needs the natural resources to fuel its economy and is growing in confidence and is already shouldering the US out of the way, so what chance have the UK and France?

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    Quote Originally Posted by Michael F View Post
    As an African President, i would rather go to Wall Street and convince them to invest than beg Beijing for a loan i have to repay later even if it means cleaning corruption, improve education,...
    Well you are not an African President.

    A loan from Beijeng can be directly diverted into a a Swiss bank account and the only thing the Chinese want is a lock onto the particular natural resources they have a strategic interest in. The Chinese are not interested in all that human rights and 'good governance' stuff.

    So your African President signs a deal with the Chinese to allow them exclusive access to exploit a certain range of natural and mineral resources for the next 50 years in exchange for the Chinese to build a showpiece sports stadium (and quietly make a deposit into a certain Swiss bank account). And the Chinese will import their own (trustworthy) labour to do most of this work.

    You may not like it but there is nothing you or anyone can do about it.
    Last edited by JMA; 05-11-2010 at 02:48 AM.

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    Quote Originally Posted by JMA View Post
    So your African President signs a deal with the Chinese to allow them exclusive access to exploit a certain range of natural and mineral resources for the next 50 years in exchange for the Chinese to build a showpiece sports stadium (and quietly make a deposit into a certain Swiss bank account). And the Chinese will import their own (trustworthy) labour to do most of this work.
    The deal in actuality will only be valid until a few colonels get tired of the crumbs, decide that the President needs an intimate meeting with a bullet, and figures out that they can earn much more from nationalizing the investment and selling the goods to the highest bidder than they could from bribes.

    Bribing your way into African contracts is nothing new... it didn't always work out well for Western companies back in the day, and I suspect that the Chinese may encounter a few surprises down the way. I wouldn't be at all surprised to see a severe anti-Chinese backlash coming along in many of these countries, especially where they are importing large numbers of laborers and acquiring agricultural land. The way that many Chinese treat Africans personally may emerge as an irritant as well. I'm remembering a comment from an Angolan businessman, along the lines of "we thought the whites were racist, we didn't know what racism was until we dealt with the Chinese".

    We'll see how it works out, but I suspect that China's neocolonial venture in Africa will trip up on many of the same issues that have derailed other neocolonial ventures. As long as the money is coming in they're likely to be tolerated, but when the mines and factories and farms are built and the money's going out, that's likely to change.

    I don't think it's accurate to say the Chinese are "shouldering the US out of the way". They're simply operating in environments far beyond the risk tolerance of US companies.

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    Council Member M-A Lagrange's Avatar
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    Hy JMA

    Well, you seem to be eager with Chinese. I do follow much of what you say on their presence in Africa: dirty deals and imported manpower. But this is not working on the long run, France and UK made that experience long ago. About USA, as you so well said: USA policy in Africa has not been consistent enough in the last 20 years to really allow USA to be a big player on that continent. But they do have something going on today. South Africa and Austral Africa might not be the priority of Africom, I would admit that.

    As you mentioned in one of your post in the beginning of the discussion, this is in relation with what is happening in Sudan. And I do agree more and more on that point. Sudan past elections and coming referendum are a corner/white stone for Africa, do the cntinent like it or not.
    I am actually working on the comparison I did on Sudan referendum and Berlin conference. And what you are saying is finding some echo in me. But I would not be that pessimistic (well not that dark in the darkness). China is like any other economical power: they will soon need fair and free legal environment to do business, even in Africa. On that point, I think that Dayuhan is close to reallity.

    But what I really feel behind bitterness in your posts is the need for Africa leader to change. And I do agree with that feeling. But what role do you see for Africa in its future? Do you really think that solution is in external power? I know, you said leave Africa alone. But it’s a little short young man

  7. #47
    Council Member Michael F's Avatar
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    Quote Originally Posted by JMA View Post
    Well you are not an African President.

    A loan from Beijeng can be directly diverted into a a Swiss bank account and the only thing the Chinese want is a lock onto the particular natural resources they have a strategic interest in. The Chinese are not interested in all that human rights and 'good governance' stuff.

    So your African President signs a deal with the Chinese to allow them exclusive access to exploit a certain range of natural and mineral resources for the next 50 years in exchange for the Chinese to build a showpiece sports stadium (and quietly make a deposit into a certain Swiss bank account). And the Chinese will import their own (trustworthy) labour to do most of this work.

    You may not like it but there is nothing you or anyone can do about it.
    A loan from Beijing might allow for some corruption, and not benefit the local companies (as the workforce and expertise is brought from China), that's not the issue and i don't deny it.

    The Namibian example is very revealing: http://www.telegraph.co.uk/news/worl...ion-probe.html

    Now, look at the economics of a deal in Africa:
    "Profit = Sales - Taxes (almost non existent) - Corruption money. "
    You can easily conclude that Corruption is a diverted form of Tax (instead of benefiting most, it benefits only a few but for the payer, it makes no economic difference). Additionnaly, corruption is an unstable, secret potentially ever increasing tax because unregulated.

    Countries going greedy on taxes (or corruption) tend to scare investors away.

    Let's make two distinctions here: African Countries with little ressources and with huge ressources.

    Little ressources: For countries with little ressources like Namibia, Rwanda,... with little attractivity to investors, high taxes or corruption further reduce already meager potential benefits for the investor. It just decreases the interest of investing in those country.

    Lots of ressources: For countries like DRC or Angola, with lots of ressources, again the corruption tax reduces their attractivity but the potential gains of investing there far outweight the losses due to corruption. So What ? Anti-corruption laws in most western countries are making it increasingly difficult for western companies to sweeten their deals but China has different standards. Again, the Electronic Herd is the mitigating factor: THE VERY FACT that you mention the link between China and Corruption is part of the solution. China is investing around the world. It can hardly continue disreguarding "good governance" practice for long if it gives it a bad name.

    Let me give you an example: The Milk scandal. Chinese corrupt officials killed many by using improper milk. http://www.chinadaily.com.cn/china/2...nt_5421631.htm
    The Chinese authorities had to hit hard on those companies to avoid other Chinese food companies to loose all their markets abroad.

    My conclusion being, China will learn, as we did, that bad practice by our companies in Africa bring short term advantages but long term disadvantages:
    * Bad image in main client markets ( i mean the real big ones-EU, US),
    * Corruption feeding leads to more corruption untill benefits are outweight by disavantages
    * Companies that tend to use corruption abroad import it back to their homeland.

    In both cases, China's dealing with corrupt governments will have to change, on the short term for the less juicy countries, on the long term for the most juicy countries.

    Fedding corruption to gain market shares is a great entrance strategy but rapidly it becomes a huge liability.

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    Quote Originally Posted by Rex Brynen View Post
    There's no doubt that the Chinese have become increasingly important economic actors in Africa, and will continue to do so. Also, Chinese investment is more strategic, and more closely linked with political engagement.

    However, at the moment, Chinese DFI in Africa continues to be dwarfed by that of the US, UK, France, Germany, and Japan by several orders of magnitude. Indeed, in many years Indian (and even Malaysian) investment in Africa exceeds that of China too.
    If you look at Mozambique, I think there's a realization in the upper echelons of the establishment of what getting involved with China entails:

    China’s Relations with Mozambique: A Mixed Blessing
    http://csis.org/blog/china%E2%80%99s...mixed-blessing

    Former Mozambican ambassador:

    Lets stop blaming the Chinese, they have money and they want to buy. Nobody is forcing us to rape our resources; we are being paid generously for it. In the end, my friend, it’s up to us to decide how we want to do business. This is our country, so it’s our fault.
    As a side note, in 2007 South African President Thabo Mbeki cautioned that China risked replicating in Africa a “colonial relationship” of the kind that existed under white rule.

    http://en.ismico.org/content/view/439/15/

    I don't believe it's likely these statements will turn into actions, so long as China keeps paying up.
    Last edited by davidbfpo; 05-11-2010 at 06:38 PM. Reason: Add quote marks and PM to author

  9. #49
    Council Member Dayuhan's Avatar
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    Quote Originally Posted by Slowandsteady View Post
    I don't believe it's likely these statements will turn into actions, so long as China keeps paying up.
    These investments run in a cycle. Early on, the leaders are getting bribes, so they're happy, and the populace sees roads, mines, and factories being built, so they're happy. As things go on, a gradual disillusionment sets in, as it becomes clear that most of the "investment" is going back to China, that the foreigners are bringing their own labor instead of hiring locally, and that local folks are increasingly being treated as second-class citizens in their own country. As the investment reaches the point where it's generating returns (and let's face it, the Chinese wouldn't be going in if they didn't think they'd take out more value than they bring in), it becomes clear that the resources are being stripped and the only ones earning out of it are the leaders. At this point the foreign presence becomes a focus point for political opposition and eventually can generate serious disorder.

    We'll see what happens... but if a European country did what the Chinese are doing I suspect most of us would see it as a recipe for disaster. Why should it be any different for the Chinese?

  10. #50
    Council Member M-A Lagrange's Avatar
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    Default A recipe for disaster or a usual practice?

    From Dayuhan
    We'll see what happens... but if a European country did what the Chinese are doing I suspect most of us would see it as a recipe for disaster. Why should it be any different for the Chinese?

    Macmillan admits to bribery over World Bank Sudan aid deal

    Macmillan, the British publishing giant, has admitted it made "corrupt payments" in an attempt to win a World Bank aid contract in Africa.
    A Macmillan Education representative made the undisclosed bribery payments to a local official in an unsuccessful attempt to secure the multi-million pound contract for an education project in southern Sudan.
    The World Bank said it had banned Macmillan from bidding for any of its contracts for six years.
    Macmillan, which focuses on educational and scientific books, has been added to the World Bank's "debarred" list, which names and shames organisations found to have acted corruptly.
    Leonard McCarthy, vice president of integrity at the World Bank, said: "[The ban] demonstrates the World Bank's unwavering commitment to ensuring all those who participate in World Bank-financed projects, including those who do not actually get contracts, are held to the highest levels of integrity, while also encouraging companies to come forward and join our fight against corruption."
    A spokesman for the World Bank said: "Macmillan admitted engaging in bribes in an attempt to get a contract to print textbooks for the education rehabilitation project in south Sudan."
    The payments were offered between 2008 and 2009.
    International donors have committed to pumping more than $1.5bn (£1bn) into World Bank projects in Sudan to help the war-ravaged country recover from decades of bitter conflict.
    A spokesman for Macmillan, which has drafted in an emergency press team to deal with the scandal, said: "We will not tolerate improper behaviour as a company, and the fact that we have worked closely with the World Bank to reach this agreement is evidence of that.
    "There is no suggestion that these concerns have affected any of Macmillan's other principal businesses, and it is the case that they are confined to a limited part of our education business."
    Macmillan, which is owned by Germany's Verlagsgruppe Georg von Holtzbrinck, declares in its "anti-bribery policy" that it has a "zero tolerance approach to acts of bribery and corruption".
    In its mission statement Macmillan states that "businesses should work against all forms of corruption, including bribery and extortion".
    The ban was originally set in place for eight years, but was reduced to six after Macmillan admitted to the bribery. It may be reduced by a further three years if the company continues to cooperate with the World Bank's "compliance monitoring program".
    http://www.telegraph.co.uk/finance/n...-aid-deal.html

    We always blame the Chinese to encourage corruption… But we better have a look at our selves!
    What Chinese may be accused of is to have sky rocketted corruption (They can pay ridiculous amouts of money with more 0 than anyone else that’s for sure.) but not to be THE corrupter criminalizing Africa.

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    Quote Originally Posted by M-A Lagrange View Post
    Hy JMA

    Well, you seem to be eager with Chinese. I do follow much of what you say on their presence in Africa: dirty deals and imported manpower. But this is not working on the long run, France and UK made that experience long ago. About USA, as you so well said: USA policy in Africa has not been consistent enough in the last 20 years to really allow USA to be a big player on that continent. But they do have something going on today. South Africa and Austral Africa might not be the priority of Africom, I would admit that.

    As you mentioned in one of your post in the beginning of the discussion, this is in relation with what is happening in Sudan. And I do agree more and more on that point. Sudan past elections and coming referendum are a corner/white stone for Africa, do the cntinent like it or not.
    I am actually working on the comparison I did on Sudan referendum and Berlin conference. And what you are saying is finding some echo in me. But I would not be that pessimistic (well not that dark in the darkness). China is like any other economical power: they will soon need fair and free legal environment to do business, even in Africa. On that point, I think that Dayuhan is close to reallity.

    But what I really feel behind bitterness in your posts is the need for Africa leader to change. And I do agree with that feeling. But what role do you see for Africa in its future? Do you really think that solution is in external power? I know, you said leave Africa alone. But it’s a little short young man
    I am not bitter I am merely irritated that people from over the seas are not able to learn from history or willing to read enough history from which to learn.

    Then we look at the history of mega crooks like Lonrho's Tiny Rowland who bribed his way around Africa much the same way as the Chinese are doing today. With investors/friends like Tiny Rowland and the Chinese Africa does not need investors/friends.

    Africa won't be left alone because their are 'wolves' at the door after her natural resources so all we are seeing is a shift in the balance of power as it affects Africa. China rising, India rising, USA shrinking, UK and France being old history and trying to cling on.

    The real problem will begin when China begins to depend on the flow of these resources from Africa and something/someone threatens the flow to feed the insatiable Chinese economy. Then we will begin to see China "acting in its national interests".

    In the meantime the smart guys will start to learn to speak Mandarin.

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    Quote Originally Posted by M-A Lagrange View Post
    http://www.telegraph.co.uk/finance/n...-aid-deal.html

    We always blame the Chinese to encourage corruption… But we better have a look at our selves!
    What Chinese may be accused of is to have sky rocketted corruption (They can pay ridiculous amouts of money with more 0 than anyone else that’s for sure.) but not to be THE corrupter criminalizing Africa.
    Granted the Chinese are just using the same routine as has been the case for years before. But they are doing it on a far larger scale in tying up the long term rights to the continents natural resources as opposed to the odd book deal or arms deal or whatever. The Chinese are taking it to the next level and they have watched and learned how the West did it. Now they are three to five chess moves ahead of their competition.

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    Quote Originally Posted by Slowandsteady View Post
    As a side note, in 2007 South African President Thabo Mbeki cautioned that China risked replicating in Africa a “colonial relationship” of the kind that existed under white rule.

    http://en.ismico.org/content/view/439/15/
    And by September 2008 Mbeki had been forced to resign and now the Chinese are the largest benefactor of the ANC and the 'new' president is cozy with the Chinese.

    Ok, so lets watch what happens to the next African leader who dares to warn against Chinese influence in Africa. Just keep your eyes and ears open.

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    BERLIN — A private security firm's plan to deploy more than 100 German ex-soldiers to Somalia to work for a warlord has triggered intense media coverage and was harshly criticized by lawmakers on Tuesday, some of them calling it a possible violation of U.N. sanctions against the war-ridden East African country.
    http://www.google.com/hostednews/ap/...C6aFwD9FTTBR81

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    Default Will Israel Become Involved in East Africa?

    According to a story in the Washington Post Israel may become more involved in East Africa's fight against terrorists. They have a history of suffering at the hands of terrorists in the region.

    http://terrorisminafrica.com/2011/11...nst-terrorism/

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    Israel has a very strong base of support among the evangelical populations of Kenya, Uganda and Ethiopia. They probably realise that, so they have greater latitude to operate there.

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    People tend to forget that just as there is a radical Muslim population, there is an evangelical christian population

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    Quote Originally Posted by KingJaja View Post
    Israel has a very strong base of support among the evangelical populations of Kenya, Uganda and Ethiopia. They probably realise that, so they have greater latitude to operate there.
    I think you are correct, especially with Ethiopia. A few years back quite a few Ethiopian Jew were allowed to immigrate to Israel. Evangelicals (I consider myself one to some extent) here in the US and East Africa are very uninformed about Israel and scripture concerning them for that matter (but that is for another forum).

    Kenyans and Ugandans, in my opinion, have learned to accept aid from almost anyone. In fact, many have learned to depend on it, even connive for it. I understand how they have gotten that outlook, but it has not served them well. They have become too dependent. I find West Africans must less dependent and more willing to speak their mind than East Africans.

    Israel could well find open arms in some parts of East Africa, but where they do, they will also find the terrorists right behind them.

    Kenya has made some strides against al-Shabaab. I hope that they do not make a wrong move by accepting some help from Israel and end up with an even great terrorist problem.

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    yep, and a Lords Resistance Army. hmmmmmmmmm.

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    Kenyans and Ugandans, in my opinion, have learned to accept aid from almost anyone. In fact, many have learned to depend on it, even connive for it. I understand how they have gotten that outlook, but it has not served them well. They have become too dependent. I find West Africans must less dependent and more willing to speak their mind than East Africans.
    Western perception of East Africa has largely been coloured by humanitarian disasters - Live aid, Ethiopia, Horn of Africa famine etc. Most of "the spend X dollars and send X African children to school" campaigns are centered around East Africa. It creates the impression that East Africans lack agency and have no shame.

    However, there is a an emerging business community in Nairobi and many East Africans work hard.

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