From: Judy Miriga
Date: Tue, Nov 10, 2009 at 12:02 PM

China and Southern Africa: Resource Management for Economic Development
Wednesday, 12 August 2009 12:27 SARWATCH

Background

China has prioritised Africa as a strategic partner at both the political and economic level, while seeking to link African commodity and consumer markets to China’s growing economy. Two-way China-Africa trade has grown significantly in recent years surpassing US$100 billion by the end of 2008. At the same time, China’s development assistance is expanding, while China’s investment footprint increasingly covers key economic sectors on the continent. China’s drive for oil and raw materials has initiated a “new scramble for Africa” as external powers increasingly compete for control over key commodities. Enhanced political influence, promotion of South-South co-operation, increased market share and guaranteed access to Africa’s resources characterises China’s expanding African engagement. China’s African agenda provides both threats and opportunities for African states and poses a major challenge for the effective African management of this evolving relationship. China’s new presence on the continent raises questions about its political intentions, commercial objectives as well as the long-term impact on Africa’s political evolution and economic progress. China’s meteoric rise and increasing global economic influence have profound and wide-ranging consequences for global strategic alignments and well as for Africa’s political and economic future.
China and Africa’s Resources

To date, China’s African agenda has been dominated by a growing effort to access Africa’s resources, with forecasts predicting a Chinese investment of over US$80 billion in new and existing oil field development over the next 20 years. This is expected to be the largest investment in Africa’s history and will have significant consequences for the economic development of the continent. However, the expansion of Africa’s commodity output has not helped fight poverty, nor create the conditions for accelerated economic development. China’s increasing participation in Africa’s extractive industries suggests a new more intense struggle to control the continent’s wealth, with a possible concomitant decline in transaction transparency and best practice corporate governance. This general trend is now perceptible in the extraction industries more generally as China’s rapidly expanding economy drives up demand for commodities. Given China’s massive dollar reserves ad strategic growth imperative, increased involvement in Africa’s extraction industries is inevitable.

Thus over the next few years and possibly decades, African affairs will be significantly shaped, or impacted on, by China’s direct commercial involvement. China’s growing geopolitical influence globally and in Africa will have significant long-term consequences for the continent’s political and economic evolution. China’s African engagement, underpinned by a policy of non-intervention in domestic affairs, brings into focus the so-called “Beijing Consensus” which runs counter to the precepts of the “Washington Consensus.” The later, characterised by World Bank, IMF and Western donor community conditionalities, includes restrictions on macro-economic policy, reduction in public spending, commitments to transparency and the holding of democratic elections. In contrast, the Beijing Consensus is predicated on non-interference in domestic affairs and the promotion of sovereign integrity. At the same time, some African leaders are attracted to the Chinese model of development, which has facilitated spectacular economic growth without a challenge to single party rule. Thus by design or default, China is building a bloc of African states which buy into the Chinese vision of domestic and global affairs.

Given China’s apparent lack of interest in African governance and human rights, the implementation of Beijing’s Africa policy largely contradicts the African reform agenda. China’s actions signal a new effort to expand economic and political influence in Africa outside the confines of the “Washington Consensus” and in some cases, contradicts the OECD rules for engagement of “fragile states.” Beijing’s Forum on China-Africa Co-operation (FOCAC) is intended to provide a comprehensive and coherent framework for managing China’s engagement with Africa, but Africa’s failure to formulate a united response threatens to undermine the continent’s ability to shape the Sino-African agenda, or impact positively on the longer term outcomes of this process. An appropriate and effective policy response from Africa is required to ensure a mutually beneficial China-Africa relationship. In this context, this study will suggest policy options and dialogue processes with a view to advancing the interests of Africa’s economic development, human security and democratisation in the face of new challenges from China.
Project Aim

The aim of this project is to investigate the China-Africa relationship in the context of the interplay of the Washington Consensus (good governance, transparency and democratisation), versus the Beijing (non-interference), with an emphasis on natural resource extraction and the impact of China’s growing exploitation of Africa’s oil and mineral wealth. The project will focus on Southern Africa, targeting the following countries for investigation: Angola, DRC, Mozambique, South Africa, Zambia and Zimbabwe.

Post-colonial, external engagements with Africa have drained the continent’s wealth through the depletion of mineral wealth, forests and other natural resources. The emphasis on resource extraction and exportation, without value added has undermined the development of domestic economies and retarded industrialisation. The continent’s wealth has been systematically transferred to non-Africans, undermining development prospects in Africa. Since 2000, China has emerged as a major importer of Africa’s commodities and the available evidence suggests that China’s approach largely mirrors established neo-colonial patterns of engagement. China purchases Africa’s resources without beneficiation, technology transfer, job creation, or investment for development in the non extractive industries. Consequently, China’s engagement adds little to the long-term development of the continent.
Hypothesis

The broad research hypothesis is : “China’s engagement in SADC’s extractive industries presently conforms to a neo-colonial exploitative approach, with little emphasis on building the domestic economy.”
OSIA and the Extractive Industries

Since 2005, OISA has promoted the Southern Africa Resource Watch (SARW) with a view to strengthening and consolidating extractive industries monitoring. The specific objectives of SARW are:

• to monitor corporate and state conduct in the extraction and beneficiation of natural resources in the Southern Africa region, in particular assessing to what extent these efforts contribute to sustainable human development in the region;

• to consolidate research and advocacy on natural resource extraction issues in Southern Africa;

• to focus interest in the specific dynamics of natural resource extraction in the Southern African region with a view to building a distinctive understanding of the regional geo-political dynamics of resource economics;

• to provide – for researchers, policy makers and social justice activists, especially in academic and civic spaces – a platform of action, co-ordination and organisation, in the watching and strengthening of corporate and state accountability in natural resource extraction;

• to increase general awareness as well as public policy interest in natural resource extraction issues and their impact on livelihoods and human development in southern Africa; and

• to highlight the relationships between resource extraction activities and human rights as they obtain o the ground, and to develop advocacy efforts that engage this reality.

SARW seeks to identify corporate and governmental policies which can better manage Southern Africa’s resources. The long-term objective is to ensure that the natural resource curse becomes a source for development that benefits the poor and not only the region’s political and economic elites.
Project outcome

It is hoped that the outcome of this research will lead to modifications of China’s corporate behaviour in Africa’s extractive industries. For example, the Global Environmental Institute (GEI) has been influential in reforming China’s logging industry overseas. In 2005, GEI launched a programme in co-operation with China’s State Forestry Administration to introduce an “integrated policy package.” The programme suggested changes to relevant laws and policies governing Chinese logging companies operating overseas. GEI specifically aimed at convincing China’s State Forestry Administration to take responsibility for regulating Chinese forestry corporations operating overseas. It also sought to train forestry corporations on how to implement relevant laws and regulations. Its activities have helped to convince banks to adopt lending criteria for overseas timber extraction, such as requiring that environmental impact assessments be performed.

As a result of GEI’s activities, in August 2007, China’s State Forestry Administration intervened against Chinese companies illegal logging operations overseas. The Forestry Administration issued new guidelines aimed at ensuring sustainability and biodiversity in Chinese logging operations. They have insisted that Chinese companies formulate sustainable forestry programmes to provide work opportunities for people in host countries and to improve the livelihood of local people. GEI’s guidelines now serve as a model for industry-specific standards and are helping to improve prospects for logging and sustainable development in African countries.

Thus this project hopes to provide the empirical data to underpin specific suggestions and recommendations which could lead to corporate behaviour alterations, which in turn will foster increased economic development and improved commercial conditions for local communities. At the same time, building a stronger domestic economic environment would have advantages for Chinese investors and thus create a “win-win” situation ensuring benefits for both China and Africa in the pursuit of mutual, co-operative economic development. The long-term objective is to assist African decision makers in knowledge building which provides the foundation for policies intended to escape the “minerals curse” and resultant poverty trap.

SADC’s challenge is to ensure that its natural resources are used to promote pro-poor growth and progress towards achieving the Millennium Development Goals (MDGs). The effective management of these resources is critical in achieving these objectives. Innovative and constructive ways of engaging with and managing external actors (in this case China) could help to turn the resource curse into a source of economic development and prosperity. Ensuring that China’s intervention in SADC’s extractive industries is managed for mutual long-term benefit is the key challenge for regional decision makers. This research seeks to inform, empower and encourage both Chinese and SADC decision makers to craft policies, regulations, approaches and processes which results in tangible progress towards achieving the MDGs and providing the foundation for regional economic growth and long-term prosperity.

Judy Miriga
Diaspora Spokesperson
Executive Director
Confederation Council Foundation for Africa Inc.,
USA
http://socioeconomicforum50.blogspot.com

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Subject: Africa to Burgain their worth through Civil Society/Community Development