How much can Raytheon, Mastercard, Nokia, Monsanto and the like be trusted to invest in long-term outcomes in the global South? When you see the actors behind U.S. ‘aid and development’ in Africa, is it any wonder that African leaders would look for any other partner to work with?
by Jim Carey
Part 3 - Chinese investment highlights new possibilities
China spends around $5 billion a year on direct ‘aid’ projects, which are acknowledged to be effective even by Western analysts such as Bradley Parks — executive director of AidData, an organization that tracks effects of global aid programs — who conceded in the Washington Post that “many African leaders insist that China is a more reliable and efficient partner,” than the U.S. However, China also projects investments through another channel: direct investment in infrastructure and industry. Since a majority of Chinese industry is controlled by the state, there is no need for the philanthropic cover and subsidies like those provided by U.S. NGOs. The investment is just an extension of Chinese economic policy, which seeks to invest in lifting African economies as partners rather than making them clients.
China enacts this policy through massive development projects that bring jobs, attract investment, and promote the construction of innovative infrastructure. China is building everything from brand new cities, giant hydroelectric dams, and massive tech research centers to solar farms, highways and some of Africa’s largest rail networks. These massive projects were all funded by Beijing, knowing that they would be long-term investments integral to Xi Jinping’s larger Belt-and-Road economic initiative that is written into the Chinese constitution.
Many U.S. analysts believe that the credit ratings and economic woes of Belt-and-Road partner nations are going to be a possible cause of the plan’s downfall. What China is actually doing is banking on these ‘junk’ rated countries in the global South — that comprise 60 percent of Belt-and-Road partners — to be very-long-term investment partners in a system that will challenge the Western capital dominance that impoverished these nations in the first place.
The differences between U.S. and Chinese approaches are night and day when one considers the long-term implications. Compare U.S. aid schemes like those described above — where short-term technocratic solutions provide multinationals with long-term customers and local monopolies — to Chinese investment, which doesn’t produce immediate returns but does contribute in other ways, such as being the largest driver of job creation in Africa.
While Washington tries to downplay conditions in Africa, there is some concern brewing among the pundit and analyst classes in the U.S. One such example of this realization taking root is neoliberal think-tank Eurasia Group’s founder, and editor for Time, Ian Bremmer, who is constantly producing content lamenting that China is the new global leader and the greatest threat to the U.S.-led world order.
According to Bremmer, many nations across the globe look at China and see a stronger leader, a more stable economic structure, the ability of central planning to create employment and stimulate economies, and China’s technological advances that rival those of the West. According to Bremmer, analysts in his camp who once believed “there was consensus that China would one day need fundamental political reform for the state to maintain its legitimacy,” now question that thesis and speculate that “China’s political and economic system is better equipped and perhaps even more sustainable than the American model.”
If Bremmer is to be believed — and, as a pro-U.S. neoliberal thinker, he should be, since he is inclined to distrust China — then it isn’t just the amount of money China dumps into projects that makes for such success, but the framework of how investment is implemented and the farsighted goals of these projects.
China is heavily investing long-term in a system specifically made for countries that have been rejected or ignored by the Western nations due to their perceived insignificance and making it Beijing’s priority to build these countries up as partners in Belt-and-Road rather than as neocolonial vassals. Compare this to the U.S., which has been interfering in African affairs and extorting the continent for centuries — and is now ruled by a man who calls these nations, in essence confirming their already established ‘junk’ status, “shitholes” — and it’s no wonder African leaders would rather work with Beijing.