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Sunday, November 26, 2006

Orient Express II

A reader disagreed somewhat with my critique of China's involvement in Angola saying in part:

Here are my questions: Does anything in this transaction reflect negatively on the Chinese? My answer is no. My answer is the Chinese are giving Africa better terms than they would get from Western capital cartels. This transaction reflects positively on the Chinese...

The terms are not perfect but 1- the terms are better than anyone else offered 2- the terms are better than not doing the projects at all.

I think the reader may not have understood my objections about this case. First let me restate my position in regards to the financing itself. The Chinese "Loan" Angola $2.2 billion. most (?) of this money is supposed to go towards infastructure development which includes roads, bridges, school buildings. etc. To do this work, Angola hires Chinese companies (who apparently are paying very poorly) to do the work. In short the Chinese are indirectly putting money to and providing work for Chinese companies. Therefore; the Chinese have basically created a situation whereby Angola is paying the Chinese for development. Let me put it another way:

I loan you 10 bucks. I then have you spend the 10 bucks in my store AND you pay me interest on the 10 bucks I loaned you. Who is coming out ahead?

Now perhaps this is a "better" arrangement than with the IMF and World Bank. Maybe. The reason I say maybe is because for all the Western leanings of said organizations as well as the clear failures of said organizations in places such as Argentina we still don't know how effective the programs could have been because we know that a great deal of monies ended up in Europe. Which brings me to the second objection.

While "condition free" loans sound good to anyone with challenged credit. We as Pan-Africanists must not be swept up in the hysteria and convenience of Europe hating to not see that there needs to be checks on governments and government officials who are corrupt and exploiting these loans for their personal enrichment often at the cost of the very people the "condition free" money is supposed to help. Sure it's good the Chinese are offering competition, but competition is not neccessarily what Africa needs but rather competence.

Lastly I think that the reader takes a unnecessarily bipolar view of the situation. The option here is not between projects and no projects. Rather as a Pan-Africanist it is a means of using such loans to bring full benefits to the continent. As I said in another forum, the projects discussed in the article were not World Trade Center complicated. The skills involved could be found in any Patty store in Flatbush Brooklyn. That is there are any number of black people on the continent and across the diaspora that could do this work. Ultimately I think that the leadership in Angola was being lazy (and possibly corrupt) in this decision making of who did the work in Angola.

So ultimately since Angola is underdeveloped and therefore dependent on somebody for money we know it will have to come from somewhere. My concern here, understanding that reality, is how that money is spent and competence of the government making that decision.

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1 comment:

OneBlackMan said...

I agree, but

1- Every government should be more competent

2- Given that I want a more competent government in Angola, I don't have a plan to put one in place

3- Maybe the Angolan gov't is corrupt. I'll say probably. But
a- I am very doubtful that Angola turned down a better offer from the West in favor of Chinese for reasons of corruption there is no evidence of that.
b- The fact that the Chinese are competing, and putting competitive pressure on the Portuguese and US who would otherwise face Angola as a cartel is good either way

I'd favor the United States passing a law that all dealings of corporations with African nations or poor nations must be fully disclosed publicly. I'd favor such a law passed by Angola even more strenuously, and I would break my face smiling if such a law could be passed on a pan-African basis.

I hate corruption in Africa. On the other hand, I'm more glad than sad that China is becoming an alternative source for capital.