When John Perkins released his book “The Confessions of an Economic Hitman” the US Congress was exposed for how it used institutions such as the IMF and the World Bank to swindle developing countries out of trillions. The claim that Perkins made was that there seemed to be a blurry line between government and the large corporations in the USA. Developing countries were given loans, forced into policy changes as a condition for those loans and later required to submit their natural resources once the loan was not paid. When you owe someone several billion or so, natural resources and land become a considerable down payment. Sadly though, if countries were not willing to take the loans, economic hitmen like John Perkins were sent in to convince the government to take them, if that didn’t work then a coup or riot would be staged by the economic hitmen to destabilise the country. Nations with accessible resources, like oil, gold, and fruitful agriculture were targeted. In a couple of years the nation’s valuables would be the property of U.S. corporations. Now with China expanding across Africa and also being the largest funder to the continent, fears are rising about how this relationship seems to be similar to that of the U.S. and developing countries in the past. Let’s take a look. • China invested 5.5 billion USD into South African financial services by acquiring a 20% stake in Standard Bank. As part of African development China has facilitated a further 1 billion USD in loans to Standard Bank. This is part of its 10 billion USD commitment of concessional loans to Africa. • In the DRC China plans to invest 6 billion USD of infrastructure. These are schools, railways, roads and hospitals. All in exchange for cobalt and copper from the mines. Having Chinese firms actually doing the work with subcontracted Congolese companies eliminates a large portion of the corruption that would otherwise take place if the money was donated. • China plans to invest in tax free zones across Africa where they plan to stimulate employment across the continent, without having to pay tax of course. • The Chinese have built infrastructure in Angola worth 6 Billion USD. As Angola is China’s biggest oil source, this investment is beneficial to both parties. With that said there are more projects China is involved in across the continent. The question we have to ask as Africans is: do we blindly take much needed Chinese development finance or do we follow the path of western development finance ? Western finance with all its promises and large figures has little to show in the 50 or so years it has been active in Africa. Yet China shows the possibility of not only a form of help but a system of mutually beneficial assistance that takes Africans away from being beggars, to building roads, schools and hospitals that will benefit Africa in the long term. I say regardless of the Chinese’ reputation of violating Human Rights and internet freedom, they mean business when it comes to Africa. The thought of having China owning mines, power plants and financial services is a scary one. But then again we as Africans don’t own those too, the British and Americans do. While it may seem that making deals with China is shaking hands with the devil, accepting finance from them is a risk we have to take.
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