28 October, 2021

Blog

Chinese Economic Clout In Africa

By Kumar David

Prof. Kumar David

Usually if goods are on sale and a buyer purchases at an agreed price, one certainly cannot blame seller for putting items for trade unless they are defective nor blame buyer for grabbing a bargain. But then if an indigent lady, maybe with children to feed, puts her services up ‘voluntarily’ is she a soiled person or are men who visit her degraded predators? The argument can go on till daybreak. Sociologically, are people destitute and hungry ‘voluntarily’? No. In a hand-to-mouth world will someone watch her children go hungry? In a streetwise sense if the offer is voluntary and the transaction agreeable, morality apart, are two adults entitled to do as they please?

These are matters on which I am not erudite, but the parallel in global economics and politics is an extension of the topic that I am comfortable to comment on. Let us say that Zambia or Sri Lanka spends more on imports than it earns on exports and say that it incurs large debts as project loans. Say the projects are failures (stupid decisions, corruption or incompetence). Indebtedness will grow year by year as it cannot service its commitments. In this case the President, Central Bank Governor, Finance Minister and the other jokers who run the country will have no option but to do the glorified equivalent of what the unfortunate lady was compelled to do. Now say a knight in shining armour riding a dragon or a saviour from Washington comes by and spotting a joker in distress offers a loan. The interest, repayment terms and penalties in the event of default are made clear. Here’s the moral of the story: Should the ‘benefactor’ refuse to lend to the impecunious supplicant, walk away and leave the tramp to squirm in the dust, or should a stern economist read out the riot act to this nation of easy virtue? Tell me reader what’s the right answer? Don’t say “just hand out billions” because that doesn’t happen in the real world.

Zambia fits this tale of whoring. She mismanaged per finances, sold copper and her people ate a part of the income while political pimps purloined the rest. Now, espying the glitter of Chinese gold she sells what’s left of her body. National resources are mortgaged or leased for up to four generation, ZESCO (Zambia’s CEB), the country’s principal airport (Kenneth Kaunda Airport), National Broadcasting Cooperation are handed over to China. Prime land in Victoria Falls has been sold and Konkola, Zambia’s second largest copper mine complex has been or soon will be Chinese owned. And much more. It is first African country to default on its debts and is unable countenance $23 billion in investment $ 3 billion in loans from China. Zambia has fallen on its face. Over 600 Chinese enterprises operate in the country and there were 80,000 Chinese people living there.

What I do not accept is the notion that innocent Zambia was ravished by rapacious China which lavished billions of dollars on an unwilling virgin. The terms and conditions of loans and investments were always clear. Charges of deception have to the best of my knowledge not been made by serious analysts. Did China take advantage of Zambia’s plight and other African nation to spread political influence and to make profitable investments? No doubt the answer to that question is a resounding YES. I would be amazed if China or any other powerful country with surplus resources to invest had not done the same. If the United States, or Germany or Japan (everybody else is too broke to play on this scale) which could lend and invest profitably would have done something similar. The terms on offer may have been tougher especially if the investor was a profit seeking capitalist enterprise.

The predatory dimension of this story is the strategic competition between superpowers. The Belt & Road Initiative is intended to further China’s strategic and economic clout. Will China offer better terms to whores who deny favours to competitors and will it seek to entice the most well-proportioned and nicely positioned (pun intended) partners? Sure it will. Is China to blame for post-colonial world third world impoverishment? Certainly not. Who is to blame for Lanka’s indebtedness and misery – corrupt political whores, or a country which consumes more than it produces, or the Masters of the Middle Kingdom who strike a good deal when it is on offer? Whatever your judgment on that issue, surely you cannot say that I have misstated the facts though I have couched them in a pungent idiom for your enjoyment.

Print Friendly, PDF & Email

Latest comments

  • 4
    13

    All nations must realize that those nations who did not share their vaccines with others need not be friends with them. China and Russia both shared all they had with the poorer nations. They are the two nations to stand with.

    • 6
      0

      ReginaldShamalPerera,
      China and Russia both shared all they had with the poorer nations. They are the two nations to stand with.
      —————-
      Yet you are living in canada!

      • 2
        4

        Humble,

        That is absolutely correct. Not only I support the Western Economic model of Capitalism, I thrive in it.

        But I don’t support the Western humanitarian model.

        Just because someone lives somewhere does not make him ineligible to criticize certain aspects of that society.

        • 5
          0

          ReginaldShamalPerera,
          You live in the west, benefit from their freedom of speech and all the pro-minority benefits they give you over there.
          But at the same time you prefer the ‘humanitarian model’ of countries like russia, china and sri lanka?
          In china they used tanks to run over peaceful protestors and now use their social credit score tyranny to stop any kind of criticism against their government.
          In russia and sri lanka they have jailed or murdered many critics.
          All three are highly racist towards their minorities.
          At least you admit you are a shameless hypocrite trying to have your cake and eat it also. Maybe thats why some call you shameless perera.

    • 4
      0

      RSP,
      Give the details of vaccines shared by China and Russia to poor countries.

  • 7
    1

    Irrespective of the moral of the story I love how smooth he was in calling the President and his henchman a bunch of Ttramps. The Lady might have done it for the children but these goons are not doing to support the community but to enrich them selves and their families.

  • 4
    2

    Everything that the west doesn’t like about China today, is the making of the west, specifically the USA. Since the $ was taken off the gold peg in 1971 (Nixon), it has stopped at nothing to keep the value of the US$ from falling, first by “making the $ as good as gold for oil” by ensuring that oil was priced in US$, and then by outsourcing its manufacturing to China and the Asean bloc. This has resulted in China (and the Asian Tigers) becoming the manufacturing base for US goods, priced at “Asian” labour costs and thereby keeping the US consumers happy and the US administration busy exporting “democracy”, fighting “wars on terror” and funding other escapades such as in Yemen fought by its great “human rights” proxy, the kingdom of Saudi Arabia. All this needed $, which were now freely printed from paper, so the party went on, and it was a happy period for the USA. To add to its “rewards”, China would send back its US$ proceeds from the sale of goods back to the US to invest in US Treasuries.
    Things changed when the printing presses kept going, to bail out crooked bankers and continue its escapades in the real and virtual / proxy battlefields, and the interest rate cycle turned down.

    • 7
      1

      Easton,
      “Everything that the west doesn’t like about China today, is the making of the west, specifically the USA. “
      You are absolutely correct.
      It started with setting up China as an ally of sorts against the Soviet Union. The US would have preferred China to churn out low-tech products for US markets. The bad-mouthing of China is reminiscent of pre-WW2 Western bad-mouthing of Japan, which was more overtly racist.
      Similarly, the US funded Afghans of the 80’s have morphed into terrorists nowadays. Unlike our own government, the US puts its own interests first.

  • 1
    5

    China must take note that Sri Lankans of some ethnicities hate China more than others. Many Sri Lankans are ready to fight for China.

  • 5
    1

    Its very simple and does not require over analysis and complex terminology.
    Nations ruled by lazy and highly corrupt communities, who want to enjoy the fruits of modernisation,
    invite the chinese to colonize them.
    It is an indirect admission that since european colonial rule ended, they have failed to develop and run a modern nation/s on their own. So they need to be recolonized by another foreign power this time.

  • 0
    1

    If the terms of loan offer is one hundred percent clear at the outset the lender cannot be blamed for demanding repayment as agreed.
    The rich man who refuses a loan to a woman in need to feed the children cannot blame the guy who did but now demanding repayment and has no right for a superior moral posture.
    That rich man has two options. Meeting the loan on her behalf or keep the mouth shut.

    Soma

  • 0
    1

    On the Internet Indian media has become the megaphone for anti Chinese propaganda. Even offering Covid assistance has been portrayed as Chinese villany dubbed as ‘Covid diplomacy ‘.
    Even oxygen tanks for India itself!

    Soma

  • 2
    0

    Dr Kumar David,

    Is it true that ZESCO, the country’s principal airport (Kenneth Kaunda Airport), National Broadcasting Cooperation are handed over to China and Prime land in Victoria Falls has been sold to China and . Zambia’s second largest copper mine complex has been or soon will be Chinese owned ?. Or have you raised a false alarm?

    Zambia faces a serious challenge in managing the country’s growing $11.7 billion debt to China and to the Western creditors. The debt to China is only around US Dollars 3 Million.

    Even if Zambia will become the first African nation to default on their debt will it be a Chinese take over?
    Dr Kumar David, please clarify

Leave A Comment

Comments should not exceed 200 words. Embedding external links and writing in capital letters are discouraged. Commenting is automatically disabled after 7 days and approval may take up to 24 hours. Please read our Comments Policy for further details. Your email address will not be published.