29.12.06

China holds the key to unlocking growth in Africa...

The recent Beijing Summit made it clear that the Chinese government is becoming more publicly emboldened in their African policy initiatives. Many mainstream pundits and analysts have recently written about this topic, and I thought I would interject with my thoughts while the debate is still young and minds are still impressionable. I have for some time felt that it was essential for the Chinese to take the lead in Africa, and my confidence in this opinion has only been strengthened as coalition forces face increased difficulty in Iraq, and the situation in the Palestinian territories continues to deteriorate.

Though I wish the Chinese would take more responsibility in the current Middle Eastern crisis, I can understand their unwillingness to get involved in a situation that they are neither responsible for nor capable of substantially pacifying. Instead, they should use their experience in managing the development of their own impoverished regions to shape a more prosperous future for the people of Africa, and they should do so without the fear of igniting a diplomatic firestorm among Western governments that view a more proactive China as a threat rather than an opportunity. Africa now faces rampant disease, famine, violence, economic malaise, and is plagued desertification; all the while Western diplomats sit on their thumbs on the upper-east side and squabble over the merits of peacekeeping missions to halt genocidal slaughter in Sudan.

For decades, U.N. policy has failed the people it was established to benefit, those in the developing world, and until recently, there was no end to the destitution is in sight. There is no government in the world more experienced with and successful in the implementation of development policy than the Chinese. Its immense population has required its leaders to climb down from their perches in Beijing and travel to the poor villages in its western provinces to better understand the nature of poverty and conceive of more realistic and effective policies to combat its debilitating consequences. However, China has heretofore been unwilling to assert itself on issues which it fears may derail its economic prosperity because of political opportunists in Western capitols eager to keep them in check as they grow and expand their influence beyond their borders.

Nobody questions the merits of exploring innovative solutions to problems that have vexed policymakers for decades. However, few Western politicians or bureaucrats have been willing to admit that when their initiatives to stimulate economic growth abroad are compared with the initiatives undertaken by the Chinese government to combat similar inequalities domestically the proof is in the pudding. The Chinese economy is booming, its peasantry is becoming increasingly self-sufficient and educated, and most people would agree that the future for the Chinese people (ALL Chinese people) is bright, and their international prestige and influence growing. This leaves western leaders in the precarious position of having to confront a communist government whose success challenges the legitimacy of their own democratic systems. As the U.S. and her allies battle for the hearts and minds of impoverished, war-torn peoples in the Middle East, for whose current situation they bear the lions-share of the responsibility, it is essential that other less-developed regions do not become lost in the chaos. Missions that have been relegated to the back-burner since 9/11 because of the shift in our foreign policy mustn't be permanently retarded, for social stability in a world growing in both population and inequality is not guaranteed and should not be taken for granted anywhere or on any issue.

It seems logical to me that governments in the developed world would feel threatened by the rapid ascendancy of such a formidable competitor in the less-developed world, but I doubt that they have the resources necessary to offer a viable alternative strategy while they become further bogged down in the "War on Terror". As the Chinese begin to spread their wings and establish friendships with countries on the African continent that have felt slighted by the West for years, they are undoubtedly going to earn the respect of the people and governments of these countries, and will finally enter the realm of nations which share collective responsibility to provide aid and assistance to the developing world (G8 members). Therefore, I think it would be in the West's self-interest to allow, in fact encourage, the Chinese to expand into Africa unabated to both relieve themselves of the distraction it poses to progress on current initiatives elsewhere. It is important to make sure the Chinese do not become too ambitious for their own good but rather stay focused on international projects that they are best suited to manage, of which African economic development is clearly one.

Some may argue that by ignoring the African continent and allowing the Chinese to build their prestige through cooperation in economic development projects and poverty alleviation, the West would be squandering their opportunity to build the partnerships necessary to capitalize on the rich natural resources the developing economies in that region will become increasingly adept at harnessing, packaging, and exporting.

I take a contrary view, as I feel that the best way to substantially benefit from the vast reserves of oil, uranium, iron ore, and other minerals and fuels that have only begun to be realized is by allowing the Chinese multi-national companies to take responsibility for financing, constructing, and operating the sorely needed infrastructure that will allow these goods to be extracted and brought to market in a manner that is both efficient and has a real effect on the currently inflated market prices that are currently under the sole discretion of the OPEC ministers.

I suspect that the Chinese are not going to make an investment in these countries unless they have reason to believe that their return on that investment will be substantial. Even if the Chinese and their partners are reluctant to open up their co-ops to full participation from foreign companies and governments, there is likely to be a tangible easing of the pressure the economy's unprecedented growth has placed on global markets, so by allowing them to have preferential access to these reserves it should result in a decline in the price of oil contracts traded in Chicago, New York, and other major commodity markets around the world. This is Economics 101, simple supply and demand.

In terms of realizing benefit on behalf of the American people and the citizens of our Western allies, this tweak in the fundamental market makeup could have a tangible downward effect on the price of gasoline for consumers, as well as ease the burden on airlines that are struggling to cut costs and climb out of bankruptcy. Thus, it would be positive for American industry generally to encourage the Chinese to explore possible partnerships in countries like Zimbabwe, Zaire, Nigeria, Kenya, and others that are ready to test the waters of globalization and improve their embattled economies.

Another comparative advantage China offers its potential African partners is its rich experience in building a domestic economy upon a manufacturing force that can both produce at unparalleled levels while simultaneously maintaining a cost of production well below that sought by countries in the America's and Eastern Europe, which are its only true competitors in terms of quality of labor. The last great untapped labor force in the world occupies most of the African continent and if provided the proper industrial management, the continent has enough raw material to become very competitive in numerous industries by following the Chinese economic development model.

I believe strongly that one of the most debilitating handicaps endured by G8 nations is their irreversible and misguided obsession with framing the debate on international development and poverty alleviation as a domestic political issue, instead of leaving the diplomats to contrive of innovative solutions to the complex problems of the 21st century which are devoid of political calculation. After spending several months considering the merits of the solution I have proposed it seems apparent to me that it will be successful based upon one precondition: the US and her allies acknowledge China's right to use the arena of international trade and developmental economics to enhance its prestige among its peers atop the international community. The ideas I have articulated in this post are an attempt to refocus the debate on development policy in the West away from the prevailing approach of "what should we be doing", towards one that asks the question, "what should we be encouraging others to do?" I hope to stimulate thought, and I welcome all feedback.

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