Democracy Won't "Save" Africa, the Chinese Will

On June 5, 1873, in a letter to The Times, Sir Francis Galton, the cousin of Charles Darwin and a distinguished African explorer in his own right, outlined a daring (if by today's standards utterly offensive) new method to "tame" and colonize what was then known as the Dark Continent.

"My proposal is to make the encouragement of Chinese settlements of Africa a part of our national policy, in the belief that the Chinese immigrants would not only maintain their position, but that they would multiply and their descendants supplant the inferior Negro race," wrote Galton.

"I should expect that the African seaboard, now sparsely occupied by lazy, palavering savages, might in a few years be tenanted by industrious, order-loving Chinese, living either as a semidetached dependency of China, or else in perfect freedom under their own law."

Galton’s view was a 19th century Euro-centric vision of how to bring change to Africa. The Chinese have developed a different way.

Reminiscent of the West's imperial push in the 18th and 19th centuries – China’s rulers believe that Africa can become a satellite region solving some of China’s own problems.

Beijing has launched its African policy because of increasing pressure on its own natural resources in a country where the population has almost trebled in 50 years, from 500 million to 1.3 billion.

Chinese world trade has increased over 20-fold in under 20 years. Even though Africa represents a minor portion of that growth at present, Africa could be vital for China’s long-term security and prosperity. Africa contains a vast quantity of the world’s natural resources (more info).

In 2008, I realized that Chinese penetration of Ethiopia was succeeding beyond anyone’s wildest imagination. Having grown up in Ethiopia, I feel comfortable frequenting the places most foreigners avoid. While visiting friends in one of the poorest neighborhoods of Addis Ababa, the Ethiopian capital, I ran into a group of Chinese, perfectly at ease, having drinks and a good time. That is when I knew that the Chinese way was better than Sir Galton’s vision.

In Ethiopia, the Chinese have unleashed a variety of state-sponsored tools for building economic ties reflecting the surprising complexity of Chinese engagement in Africa, differing from Western approaches on the continent.

The China-Africa Development Fund has made equity investments in an Ethiopian leather factory, a cement plant, and a glass factory. A Chinese company is building and running the Eastern Industrial Zone of Addis Ababa with performance-based subsidies from China’s economic cooperation fund. The Chinese telecom firm ZTE has teamed up with Chinese banks to provide $1.3 billion in commercial suppliers’ credit at the Libor (interbank) lending rate plus 1.5% to roll out cellular and 3G service across the country.

A preferential export buyer’s credit is paying more than half of the $612 million cost of a toll road that will cut travel time between Addis Ababa and Djibouti, whose port now provides landlocked Ethiopia access to the sea. Tolls will help repay the loan over 20 years.

The Eximbank has provided commercial loans for electricity distribution lines, cement factories, and other projects; secured (and repaid) out of Ethiopia’s exports to China, mainly sesame seeds. These credits are known (in Chinese) as hu hui dai kuan, or “mutual benefit loans.” A Chinese company gets the business; Ethiopia gets financing for development at the Libor rate plus 2%-3%.

In 2009, China built and equipped the Ethio-China Polytechnic College in Addis Ababa to focus on teaching construction and industrial skills. Staffed by Chinese professors, the college offers a two-year degree in engineering skills along with Chinese language classes.

In 2011, the Huajian Group established again in Addis Ababa, a shoe factory with two production lines making 1,000 shoes a day for global brands including Guess and Tommy Hilfiger. They sent 86 Ethiopians to China and trained them in shoe making skills. Now the group has a program working closely with the government to train another 300. In the past, China also gave aid to African countries, as the West did. However now it has opted for the more remunerative option of training Ethiopians for joint commercial undertakings as the core of a new Chinese economic strategy in Africa.

While the West wrings its hands over scenes of drought and dead children and wants to “save” Ethiopia, the Chinese see a fast growing economy with 90 million consumers and business to be had. While the West’s official engagement with Ethiopia’s authoritarian but development minded government is still largely limited to foreign aid that winds up everywhere except where it was originally destined, the Chinese offer multiple ways to make cooperation economically attractive to both sides.

Is this economic colonialism? I do not think so. I see a mutually beneficial arrangement that is much more productive than aid will ever be. Remember, “Give a man a fish and he’ll eat for a day, teach a man to fish and he’ll eat every day”.

Frankly, I do not think democracy is a prerequisite for growth. If you want real world examples, look at China or Singapore. It is not personal it is business. Therefore, while China is securing resources through business, we create AFRICOM to secure them through the military. Who do you think is getting the better ROI (Return on Investment)?