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America's China-Africa Conundrum

Aug. 06, 2012 4:57 PM ET
Chip Krakoff profile picture
Chip Krakoff's Blog
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It must come as some reassurance to Mitt Romney that he is not the only would-be President who says remarkably silly things he knows to be untrue. Last week Hillary Clinton, on a tour of sub-Saharan Africa, delivered a speech in Senegal in which she said that the United States would stand up for democracy and universal human rights "even when it might be easier or more profitable to look the other way, to keep the resources flowing." In a barely veiled dig at China, she added, "Not every partner makes that choice, but we do and we will."

China is widely seen as engaging in an aggressive grab for Africa's energy and mineral wealth in ways many African leaders find irresistible. Unlike the United States and multilateral institutions such as the World Bank, in which the U.S. has a dominant position, the Chinese offer money and technical assistance without attaching bothersome conditions on human rights, democracy, and free markets.

It is hard nowadays to visit an African capital city that does not boast a brand new soccer stadium built entirely at China's expense and with Chinese labor. Chinese companies have paid top dollar for loss-making state enterprises, such as Mali's state textile concern, and have invested in major agricultural projects such as the massive Magbass sugar complex in Sierra Leone. The Chinese Government is spending $1.5 billion for a Chinese state company to rebuild the Benguela Railway, which hasn't operated in 35 years, but which used to, and will again, link Zambia's copper belt to the port of Lobito on Angola's Atlantic coast.

This isn't an entirely new phenomenon. In the 1970s China built the Tazara Railway linking Zambia to the Indian Ocean port of Dar es Salaam, in Tanzania. I remember watching a film in a high school geography class, which featured Tanzanian President Julius Nyerere vigorously rebutting allegations of Chinese influence: "The Chinese do not own a single biscuit shop on the Island of Zanzibar!"

There is a crucial distinction between American and Chinese involvement in Africa. U.S. oil and mining companies are active all over the continent, including several countries not known for their democratic values and respect for human rights. Angola, ruled for the past three decades by the family clique of President Jose dos Santos; Equatorial Guinea, which according to the World Bank has a higher per capita GDP by purchasing power than either Britain or France and which, under the 30-year rule of Teodoro Obiang Nguema Mbasogo, has achieved a ranking of 136th out of 187 countries on the United Nations human development index.

But the companies in question are private, answerable to their shareholders. As long as they steer clear of countries under official U.S. sanctions (Sudan, Iran) and do not run afoul of the U.S. Foreign Corrupt Practices Act by bribing government officials, they can pretty much do as they please as long as the local authorities allow it.

Official U.S. assistance to Africa and other underdeveloped regions, on the other hand, often does come with stringent conditions attached. The U.S. Agency for International Development (USAID), which dispenses most of America's non-military foreign assistance, operates programs to promote economic liberalization and regulatory reform, and democratic governance. The Millennium Challenge Corporation, created under the first George W. Bush administration, undertakes hugely ambitious infrastructure projects, most costing hundreds of millions of dollars. In order to qualify for such assistance a country must undergo a rigorous assessment of its commitment to and progress in achieving democratic governance, respect for human rights, and free markets.

By contrast, most of the Chinese companies active in Africa, especially in the resource sector, are state-owned, and they act as quasi-official arms of Chinese foreign policy. I remember once visiting the offices of the Magbass sugar company in Freetown, Sierra Leone, which were located in the Chinese Embassy compound. It is much harder for the Chinese government than the U.S. government to maintain a plausible distinction between its own strategic objectives and the activities of Chinese companies, so they don't even try. China, which last month pledged $20 billion in loans to Africa over the next three years and which three years ago overtook the United States as Africa's largest trading partner, last year recording $166 billion in bilateral trade, is certainly pursuing both commercial and geo-strategic interests on the continent.

It is hard to see anything sinister in this. Countries have always mixed commerce and politics in their foreign relations, none more blatantly than Britain, which twice in the 19th century went to war to force China to open its market to imports of opium from India. In many ways, China's approach is more honest than that of the United States. Our promotion of democracy and human rights is highly selective, and much of that selection is based on the business interests of American companies, which in the case of energy and mineral resources are closely linked to geo-strategic concerns.

It is a happy coincidence when a democratic African country discovers commercially important oil resources, as is the case in Ghana, but it makes little difference to the conduct of our foreign policy. We tend not to give much financial aid to countries swimming on an ocean of petroleum, but we do give them military assistance when conditions warrant, though in Marxist-ruled Angola in the 1970s we were treated to the surreal spectacle of Cuban troops guarding American oil installations against attack by U.S.-backed guerrillas. You couldn't make this up.

For all our vocal support for the Arab Spring, we remained almost entirely silent when Bahrain's government, with Saudi assistance, brutally put down the Shiite community's pro-democracy protests. It is no coincidence that Bahrain is the home base of the U.S. Navy's Sixth Fleet, whose main purpose it is to keep the Persian Gulf open to oil shipments. For similar reasons we maintain a significant military presence in Saudi Arabia, a close U.S. ally that has never shown tremendous concern for democracy or human rights.

Back to Africa, we maintain very close ties to Uganda, whose President Yoweri Museveni, originally a reformer who has recently completed his 25-year anniversary in office, has altered the Constitution to extend his term, and has jailed political opponents. There may be multiple reasons for this support, but it cannot have escaped the attention of the U.S. State Department that Uganda is about to embark on a new era as an oil-exporter, its Lake Albert Rift oilfields expected to produce 200,000 barrels of oil per day. Secretary Clinton may reconsider this support in light of the sale of a 2/3 interest in the development by Tullow, the U.K. firm that discovered and developed the fields, to China's state-owned CNOOC (China National Overseas Oil Company) and Total, the state-owned French oil company.

Evangelizing for democracy and human rights is part of America's exceptionalist self-image as a country founded on the highest of ideals. But it is often hard to determine when to adhere to and promote those ideals and when to soft-pedal them, especially when the commercial stakes are high. sometimes we get it right, as for example, when the U.S. placed an embargo on columbium-tantalite ores mined in appalling conditions of near slavery in Eastern Congo, and has been pretty effective in getting other countries to help enforce it. But it is a decision we often get wrong, whether it is in support of the hopelessly corrupt and inept Karzai government in Afghanistan, the thirty-plus years of military dictatorship in Egypt, or the autocratic Ethiopian government of Meles Zenawi, each of which advances some combination of commercial and strategic interests. There is no question that Sudanese President Omar al-Bashir is a nasty character, but it is hard to escape the conclusion that stringent U.S. sanctions against his government have at least something to do with the dominant position of Chinese companies in the oil industry in both North and South Sudan.

Having visited nearly 100 countries, in most of which I have had conversations of a political nature with local citizens, I have to conclude that much of the hatred people feel for the United States - hatred which, by the way, is nowhere near as strong or as widespread as many Americans think - is rooted in the disconnect between what we do and what we preach. Sometimes this cuts in our favor: even as we arm and subsidize Israel, we much more quietly and modestly provide grants and technical assistance to the Palestinian Authority and Palestinian businesses. Much of the time, however, it cuts the other way. We preach democracy and human rights even as we assist and support governments that respect neither. We support some democratic movements (such as the Libyan revolution) while maintaining a hands-off policy toward others (e.g., Rwanda, Syria, Bahrain). Americans and non-Americans alike look for and fail to find coherency, and many conclude that talk of democracy and human rights is merely a fig leaf to hide our true, self-interested, motives.

I don't believe this. I think more American foreign policy failures (the Vietnam War, the Second Gulf War, the Afghan War, and others) result from idealism and hubris than from calculation. We think we can improve a situation through military intervention and dollops of money and then, at huge cost, find we can't. It would be wrong, and untrue to American nature, to practice a strict form of realpolitik in which geopolitics and commerce trump all other concerns. But we have to be more realistic about what we can and cannot accomplish, and more open with respect to our real motives. If the Chinese can do it, we should be able to as well.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

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