05/16/2007, 00.00
CHINA – AFRICA
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Beijing’s much needed aid and the risk of plunder

The annual meeting of the African Development Bank opened in Shanghai. Beijing comes with a bag full of offers and sincere pledges of assistance, but African countries remain cautious. They need help the West often denies them, but fear that Beijing will end up plundering their raw materials and install a new form of economic colonialism.

Shanghai (AsiaNews/Agencies) – The annual meeting of the African Development Bank opened today in Shanghai, the first time that it is being held in Asia, signalling the importance China has acquired for the continent. The two-day gathering, which brings together finance ministers and central bank governors from more than 50 countries, marks China’s newly-acquired status as a leader in Africa’s economy and development. It also marks African states’ appreciation for such role, notwithstanding concerns and fears they might have about it.

In his opening speech Chinese Premier Wen Jiabao said that Africa “needs to rely on itself to sustain development but international support and systems are also indispensable.” For this reason, we “call on the international community to deliver on aid pledges to Africa and reduce and cancel African debt.”

We are truly sincere in helping Africa speed up economic and social development for the benefit of the African people and its nations," Wen added.

To mark its word, China cancelled 10.9 billion yuan (US.42 billion) of African debt and announced additional relief of 10 billion yuan, the premier said.

However, many experts are less than sanguine about Beijing’s intentions and suggest that such steps are just reactions to criticism levelled at China for breaching a UN arms embargo imposed on the Sudanese government for its role in the massacres in the Darfur region. Sudan is a key oil supplier for China.

Similarly, Beijing has also come in for harsh attacks over its no-strings attached loans to African countries and for its partnership with repressive or corrupt regimes, compared to Western governments trying to impose conditions to the development aid they give.

Last but not least, Beijing has been slammed because in exchange of loans it has gained access to African oil and raw materials and the right to set up its own refineries and factories, ignoring labour and environmental standards and undermining local industries by flooding the continent with cheap goods.

Through the China Development Bank Beijing has decided to help Chinese companies invest in Africa, with an initial kitty of US$ 1 billion, moving eventually to US$ 5 billion.

Yet China’s “promises and achievements must be specifically monitored and reported on," said Ken Kwaku, a special adviser to former Tanzanian president Benjamin Mkapa.

The danger is that the “rush by China for raw materials from Africa could easily lead to another plunder of Africa's natural resources like the Europeans did in the last century,” said Peter Nyongo, a former Kenyan minister of planning and national development.

For many experts, Chinese loans go to beef up Africa’s infrastructure like road, ports, buildings, but are often require that the work be done by Chinese companies employing Chinese workers. This has little positive effect on Africa’s generally poor population in terms of employment.

According to some estimates, more than 700 Chinese companies are active in Africa, sending two-way trade soaring to US$ 55.5 billion last year. In 2005 Africa's exports to China reached US$ 21.1 billion, primarily raw materials. Its imports from China, mainly low-cost manufactured goods, were worth US$ 18.6 billion.

Increasingly, many Africans are worried that Chinese assistance will not favour the takeoff of the continent’s economy but will instead create dependency on Chinese trade and investments.

“The question we must ask ourselves, and answer today and from now on, will be: is this a blessing or a curse for Africa?” Kenyan Finance Minister Amos Kimunya said.

“We'd be deluding ourselves if we think the interests of China are purely altruistic,” said South African Finance Minister Trevor Manuel. Indeed, in his opinion, Beijing was behaving no differently from any other government. For this reason, he said, the “key question is whether we have the ability to negotiate” with them.

Still, “because of China's growth, and because of its interest in Africa, Africa is suddenly seen in a new light by investors, both domestically and internationally,” said Razia Khan, regional head of economics at the Standard Chartered Bank, which is present in more than 50 countries. (PB)

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