China 'taking advantage' of Nam
Although China says the aim is reaching 'common prosperity', commentators are convinced that ordinary citizens are getting the raw end of the stick.
23 April 2019 | Economics
It sounds like sound advice.
China seems firm on its agenda here while Namibia, like other African countries, lags behind in setting its own agenda in the Africa-China relationship and locals are not sure of their place in this fast-growing relationship.
As political scientist Dr Henning Melber puts it, “While China has an African policy, Africa has not really coordinated any coherent China policy.”
In this absence of a coherent approach, business dealings between China and Africa often turn into an “elite pact”, suggests Melber.
“It is the few in control over government and state and, by implication, over the licences for the exploitation of natural resources, who enter the win-win situation as so often before at the expense of the ordinary citizens,” Melber adds.
He is, however, quick to add that China cannot be blamed for “taking advantage” of its growing preferential position with local leaders, and suggests that African leaders should negotiate the best deals - deals that are not in their individual interests but in the interests of the ordinary citizens.
The Swapo government and China often extol a common history often described in comradely terms for China's support in weaponry and military training of the liberation movement during the pre-independence era.
Little or nothing, however, is ever said about China's arms trade with apartheid South Africa from at least 1980 despite China being a permanent member of the United Nations Security Council, which in 1977 imposed a mandatory embargo on South Africa. This embargo lasted for 17 years until 1994.
These secret and murky dealings with apartheid South Africa were recently revealed in Hennie van Vuuren's book 'Apartheid Guns and Money'.
“Publicly a friend of the liberation movements throughout southern Africa, China was a supplier of the bombs, guns and ammunition used against them by the apartheid military and its proxies,” Van Vuuren wrote.
However complex and even embarrassing this may be, China is forging ahead with its African plans, which are described as a win-win situation in which China maintains a 'no intervention' attitude towards countries' foreign policy.
The FOCAC financing
With the conclusion of the 2018 FOCAC, China announced US$60 billion new financing for Africa: US$50 billion comes from the Chinese state - which is US$10 billion less than what was pledged in 2015 – and the difference is to come from private Chinese investments.
The Chinese state funding pledged in 2018 includes US$20 billion in new loans and US$15 billion in foreign aid, as well as US$5 billion in two 'special funds'.
Although the 2018 FOCAC loans are US$10 billion less than what was pledged in 2015, they mark a decrease in interest-bearing loans offered then, while foreign aid (or grants, interest-free loans, and concessional loans) come in at “US$5 billion per year, the highest level ever” offered to Africa, Deborah Brautigam for the China-Africa Research Initiative Blog points out.
This means that China is giving more interest-free loans and less through interest-bearing credit lines, a shift by China after it was accused of creating a 'debt trap' for African states.
“I do share the concerns that the Chinese 'interest-free' policy is anything free of own interests,” Melber commented. “They are as little philanthropic as any other external actors seeking collaboration with African countries. Access to resources is the ultimate motive.”
China's current dominance in Namibia's uranium sector is a case in point, Melber says.
The FOCAC plans
The 2018 summit adopted two outcome documents. The one is called the 'Beijing Declaration – Towards an Even Stronger China-Africa Community with a Shared Future'; the other is called the 'FOCAC Beijing Action Plan (2019 to 2021).
There are more than 100 new measures to accelerate trade and other cooperation launched with the implementation of 'eight major initiatives' at its core.
These 'major initiatives' are stated to include industrial promotion, infrastructure connectivity, trade facilitation, green development, capacity building, healthcare, people-to-people exchanges, and peace and security matters.
“We will support Chinese companies in participating in Africa's infrastructure development by way of investment-construction-operation or through other models, with a focus on enhancing cooperation on energy, transport, information, telecommunication, and cross-border water resources,” the charge d'affaires in the Chinese embassy in Namibia, Yang Jun, said recently.
Twenty-eight African countries, including Namibia, agreed to China's Belt and Road Initiative, which refers to overland routes for road and rail transportation, called the 'Silk Road Economic Belt'.
Worryingly, from figures provided by the Bank of Namibia (BoN), is that during 2014 to 2017 a fraction less than N$12 billion has gone from Namibia to China. During the same period about N$5.5 billion came from China to Namibia.
The BoN is still to provide figures of previous years.
But Jun said the impetus of Namibian-Chinese cooperation was to realise the dream of “common prosperity”.
Since the 2015 FOCAC Summit in Johannesburg, Jun said over 20 Chinese-backed projects were completed in Namibia or were continuing, with N$2.8 billion funding in grants and concessional loans.
Jun said Chinese companies had created 11 000 jobs in Namibia and had brought in US$34 million in foreign direct investment to Namibia. He said Chinese companies had generated N$250 million in tax revenue since 2016. Jun said in 2018 there was robust growth in bilateral trade at a volume of US$800 million.
Jun said in Namibia China wanted to assist with technology, send agricultural experts, support construction of major infrastructure projects, implement environmental cooperation like desalination, wildlife protection, prevention and control of desertification, and assist with vocational training.
There are more than 40 Namibian students studying in China with Chinese government scholarships.
Jun said more than 300 Namibian “elites from all walks of life” participated in training and research projects in China, while more than 400 primary and middle school learners received Chinese ambassador scholarships. Ten thousand poor Namibian families got 'Panda Packs', which include schoolbags and stationery.
The Chinese medical team at the Katutura State Hospital have reportedly treated as many as 100 000 Namibians over the last 22 years.
China wants to set up Confucius institutes here, and support the construction of a 'safe city' project, which is a duplication of what it has done in Pakistan and elsewhere.
The 'safe city' concept is a Huawei product solution including CCTV cameras monitoring streets for law-enforcement purposes.