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Chinese Bid For Africa Could Have Substantial Trickle Down Effect
UPI Senior Correspondent Washington DC (UPI) Jun 23, 2007 China's growing interest in Africa should not be seen as a threat, but rather as a major boost for international efforts to raise living standards on the continent. Yet there are also growing concerns that Chinese financial aid to struggling African nations may lower standards for environmental protection and human rights. With its seemingly insatiable appetite for oil and other natural resources, China's stake in Africa is obvious: It needs the commodities that Africa can provide. What's more, it is happy to pay for them, largely by stepping up development assistance to resource-rich but cash-poor countries. As a result, the country has developed relations with several major countries with ample crude oil supplies that often have shaky governments, including Sudan, Chad, Nigeria and Angola, as well as Algeria, Gabon, Congo and Equatorial Guinea. In fact, China's thirst for oil is such that according to the U.S. Energy Information Administration, China accounted for 40 percent of total growth in world demand for petroleum over the past four years. Meanwhile, it is estimated that China spent nearly $200 million in African countries, largely for oil exploration projects and infrastructure. Yet China's attempts to expand its energy resources are not necessarily a bad thing, either for the Asian giant or for African countries. China's incentive to invest in Africa for its natural resources is "obvious ... and welcomed," argued Callisto Madavo, an African studies professor at Georgetown University and a former vice president for the Africa region at the World Bank. He pointed out that as China is willing and able to provide more loans and grants to African countries in exchange for what the East Asian behemoth wants most, Africa benefits from having alternatives to securing financial aid just from Western countries. "There is an alternative, with China as a partner, and its conditions (for making loans and grants) are softer than that required by the West," Madavo said, adding that China's active contribution as an aid donor "leveled the global terrain" in international development. Another positive factor is that China as a donor can be more inspiring to African recipients as they seek to learn from China's success when planning their own economic future. Moreover, Madavo noted that Beijing often provided assistance to areas largely bypassed by other major donors, such as Sudan and Angola. In the case of Angola, which is the second-largest oil producer in sub-Saharan African, it now exports about 25 percent of the 2 million barrels a day it produces to China. It is estimated that Angola has attracted more than $20 billion in foreign direct investment for its oil and gas industries since 2003, the bulk of it from China. Beijing in turn has provided more than $2 billion in loans and grants to the country including building roads, schools, hospitals and other facilities that Chinese state enterprises excel at constructing. Still, the World Bank's China representative emphasized that having China as a major donor in Africa was beneficial not just for the Chinese and African governments, but for the international community at large. Providing development assistance "is not a zero-sum game," said David Dollar, the World Bank's country director for China and Mongolia. He stressed that the ultimate objective in providing financial aid to the region was to lift as many people out of poverty as possible, which in turn would lead to greater global stability. As such, so long as poverty levels in Africa decrease as a result of Chinese aid, it is a positive development that the United States and other countries should not regard as a threat. Still, there are risks for African countries relying too heavily on Chinese aid, especially for the poorest people of the continent, Dollar said. In particular, he pointed to the possibility of corruption between the Chinese government and their African counterparts, a concern echoed by Georgetown's Madavo. "Governance matters in African development ... but China de-emphasizes that," Madavo cautioned. Given Beijing's tendency to give little weight to social justice, environmental protection, and other factors that are so heavily emphasized by multilateral agencies including the World Bank, along with China's willingness to pay bribes, there is always a real risk of the "African elites and the Chinese making deals of the poor," he added.
Source: RIA Novosti Email This Article
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