ChinainAfrica

Duncan Green puts the American bailout in international perspective: 

To put the proposed Wall Street bailout into perspective. $700bn:

• Would clear the accumulated debt of the 49 poorest countries in the world ($375bn) twice over
• Is almost 5 times the annual amount of extra aid needed to achieve all the Millennium Development Goals on poverty, health, education etc ($150bn a year)
• Is about 7 years of current global aid levels ($104bn in 2007)
• Is enough to eradicate all world poverty for over two years (UNDP  calculates it would take $300bn to get the entire world population over the $1 a day poverty line).

On the other hand it’s

only a quarter of the cost of the Iraq war ($3 trillion on Joseph Stiglitz’ calculation )

a half of annual global military spending ($1339 bn)

Those at the World Bank’s AfricaCan blog are also speculating on the impact of the crisis on Africa. To this I would add that the current crisis has put China in a rather advantageous position vis-a-vis its African ‘friends’ - at least for now.

In a series of earlier posts I had noted Turkey’s growing interest in forging relations with Africa. According to The Jamestown Foundation, Afro-Turkish relations are indeed an emerging force in South-South cooperation: 

Turkish interest in Africa is underwritten by soaring bilateral trade: while Turkey’s trade volume with the entire African continent was $5 billion in 2003, Gul noted that with government encouragement, Turkish-African trade had been increasing annually by double digit figures since 2004 and exceeded $12 billion last year, a figure that his government hoped to increase to $30 billion by 2010

According to the report, it appears that Turkey’s approach to developing trade with African nations differs from that of China, or even the US. Unlike the macro-projects pursued by most Western donors (and China), Turkey is concentrated on lower profile development issues such as agriculture, which carries the promise of affecting positive change in the lives of many across the continent. The underperformance of the critical agriculture sector remains a major drag on Africa’s development, and has been neglected by both donors and governments over the past two decades.  Turkish assistance may prove to be precisely the boost the continent needs.

Taking place under the theme ‘Solidarity and Partnership for a Common Future,’ the four-day event began yesterday in Istanbul. This first summit meeting is intended to allow the leaders of both sides to take stock of the progress made in various areas of development cooperation and look at the future of their relations with a view to further developing and diversifying them.

In an earlier post I noted the benefits such partnership may boast for Turkey, the most obvious being access to resources. Not surprisingly, the country is now eager to sign cooperation accords with Angola where oil reserves are around the 20 billion barrel mark. Sudan’s president Bashir is also in attendance at the Summit, likely for similar reasons.

The trade volume between Turkey and the continent allegedly rose by 140% between 2003 and 2007, and 55% in the first half of 2008. 

Turkey has declared 2008 as ‘Africa’s Year.’ Africa also had a “year” in 2006, which belonged to the Chinese, and another in 2007 which was claimed by the Indians. At this rate I’m curious to see who will claim the continent come 2009.

In recent days I’ve had a slew of information about the development of information and communications technology (ICT) in Africa come across my desk, the most useful of which is Ryan Hahn’s post “All Things Africa and ICT” on the PSD blog site. It appears that Africa’s telecoms sector is quickly becoming the new “it” thing within the development community. While most of the mobile operators are home-grown, countries like China, India and Japan are not far behind in the scramble for contracts. 

According to the most recent edition of Africa-Asia Confidential, “China is assuredly in the lead.” In March 2008, a US$69 million agreement was signed between Angola’s MundoStartel and China’s ZTE Corporation to develop telephone networks in Angola. This past June, Tanzania’s Excellentcom Ltd signed a $180 million contract with China’s Huawei Technologies. Under the agreement, Huawei Technologies will start building Excellentcom’s network to enable it to cover the whole country within 13 months. Similar deals have been signed between China and Kenya, Zimbabwe, Sudan, Algeria, and other countries across the continent. 

It may be pure coincidence, but mobile subscriber and penetration figures have nearly quadrupled since China’s entry into the continent in 2000:

With other countries fighting to enter the market - new among them Kuwait’s Zain and UAE’s Etisalat - the African telecoms sector will definitely be one to keep an eye on in the coming months.

A colleague of mine who works with the International Crisis Group based in Beijing recently sent me a copy of the contract between the DRC and China on exploitation of mines and construction of infrastructure. You can find a copy of this document here:  drc-chinese-contract (In French).

I also found the following links to be quite useful in shedding light on the DRC-China partnership:

IMF to study China’s Congo deal before any accord

China in DR Congo aid deal

China, Congo Trade For What the Other Wants (part of a great NPR five-part series on China’s rising power in Africa)

In case you missed it (as I initially did!) FastCompany has an interesting six-part series on China in Africa, with focus on Mozambique, Zambia, Congo, and Equatorial Guinea. The report has, as Chris Blattman notes in his post, an at times alarmist tone referring, for example, to Chinese resource extraction as the “Great Chinese Takeout.” An interesting perspective, to be sure.

Curious phrases aside, the report offers much valuable information. Particularly in its analysis of the Zambian case (the country with which I’m most familiar) it aptly describes China’s role in Zambia’s mining industry, its labor ’standards,’ access to credit and linkages with the Chinese government. Moreover, it presents quite remarkable bits of data such as these:

For those who previously questioned the significance of China’s entry into Africa, these graphs alone should be enough to allay their doubts. What remains to be yet determined, however, is what exactly all this means for African economies. While the report goes a long way in describing the ‘what’ element of China in Africa it falls short of addressing the ‘why’ and ‘how.’ Nevertheless, the series makes for a good read and presents much useful information. I highly recommend it.

The World Bank recently released a Working Paper entitled Are There Lessons for Africa from China’s Success against Poverty? In it, Martin Ravallion concludes that despite different contextual constraints (foremost among these: African states have higher inequality, higher dependency rates and lower population density), two key lessons stand out. First, “the importance of productivity growth in smallholder articulture, which will require both market-based incentives and public support.” Second is the “role played by strong leadership and a capable public administration at all levels of government.”

While these lessons are seemingly correct, neither strikes me as particularly new. Debate over rural development in Africa has been a long-standing issue with policymakers sitting on both sides of the fence. Most of my personal encounters with African leaders would suggest the short-term necessity of such an approach, with a switch to an urban economy when the time is right. The need for strong institutions to bring such reforms to fruition is also not especially novel. For decades Western donors have been emphasizing the need for good governance and institutional reform in African development.

Why, then, the Chinese comparison? Is it that Africa has ‘gone East’ so much so that these lessons resonate deeper when presented from a Chinese standpoint? Is this report in part a suggestion that China is quickly replacing the West as a purveyor of foreign assistance and lessons in development? I haven’t quite yet made up my own mind regarding these issues; a cursory examination of recent events, however, would lead me to answer both questions in the affirmative. Regardless, Ravallion’s paper offers an interesting perspective on an old issue. Have a look and let me know what you think.