dissertation seeks to explore the rise of
China and India in Africa. I argue that China and India represent a
second generation of donors that are able to free-ride on the previous
reforms imposed by Western donors, and are then re-interpreting this to
announce a new way of providing assistance, centred around
‘non-interference’ and respect for state sovereignty. In order to
understand this new way of doing things I explore the motivations
behind Chinese and Indian foreign policy in the continent, considering
internal developments within these two countries; external changes to
the international arena in the post-cold war era; the guiding
ideologies and principles behind their assistance; and most
importantly, internal reforms in African states enforced by Western
donors during the structural adjustment period. The latter had two
indirect impacts upon Chinese and Indian foreign policy regarding
Africa: firstly, they created resentment and hostility amongst
recipients towards traditional donors due to the detrimental impacts of
shock treatment and the forceful nature of reforms; African countries
are therefore attracted to China and India due to the policy autonomy
that they allow recipients. Secondly, the neo-liberal reforms in Africa
provided a hospitable environment for foreign direct investment, and
coincided with the rise of China and India who entered the 1990s and
early millennium looking for new markets, new allies, and new resource
||Common Market of
Eastern and Southern Africa
||UK Department for
Republic of the Congo
||Indian Ocean Rim
Association for Regional Cooperation
and Economic Cooperation
||The New Economic
Partnership for Africa’s Development
Economic Co-operation and Development
Commonwealth African Assistance Programme
Approach for Africa-India Movement
||Special Unit for
South-South Development Cooperation, United Nations Development
||United States of
the total size of the development
assistance from China and India is small in comparison to aid from
traditional donors, it is increasing rapidly in terms of both quantity
and importance. Whilst the actual amount only equates to around 3% of
ODA (Panitchpakdi, 2008: 72) recipients are particularly amenable to
South-South development cooperation as it is not loaded with
conditionalities, giving it enhanced significance. It is therefore
providing an increasingly attractive alternative for developing
countries, especially for smaller economies, as non-DAC donors “can
plausibly bankroll the economy over the medium term” (Manning, 2006:
381) giving recipients leverage against traditional donors. In this
manner, China and India’s newly found economic might poses the
opportunity for them to drastically alter the international development
paradigm. And with neither India nor China likely to become
incorporated into DAC or OECD in the near future, and as they continue
to grow economically and increase their aid flows, it is imperative
that these relationships and the effects of them are fully understood.
this dissertation, I seek to examine
whether China and India are offering an alternative to the Western
development paradigm and if so, what it is. In order to answer this I
will need to explore what the main drivers of this new relationship are
and how they have come to be, as well as what methods and tools are
being used to facilitate this process. This evidence should help to
provide an answer as to what China and India are doing in Africa, how
they are doing it, and what implications this has for Africa’s future
will begin this thesis by exploring the
determinants of China and India’s foreign aid to Africa. Internal
developments within China and India in the late 1970s and early 1980s
as well as shifts in the global power compositions that occurred in the
post-Cold War era forced a re-evaluation of both China and India’s
Africa policy. Following these changes there was a shift to more
economically driven goals as opposed to purely ideological ones. This
has been fundamental in shaping the methods of the current development
assistance granted by China and India to Africa. But I argue that this
must also be synthesised with an understanding of the internal
developments that have taken place in African countries over the past
twenty years. Neo-liberal reforms encouraged investment, providing a
hospitable environment for new companies to develop (Kragelund, 2009,
2010c). Furthermore, they also created resentment against recipients of
aid, who became tired of externally imposed conditionalities that often
had extremely damaging consequences. Neo-liberal reforms of African
economies and the enhanced liberalisation of global markets coincided
with the rise of China and India (Naidu, 2010a), and their demand for
new allies, new markets and new resource suppliers. Africa provided an
attractive resource base that had been prised open economically by a
previous generation of donors, offering ideal conditions for investment
from the Chinese and Indians.
shall also consider the methods and tools used
by China and India to provide development assistance to African states,
as well as an analysis of where their aid is directed and why. I will
explore the nature of Chinese and Indian involvement in Africa, and
seek to highlight the similarities between the two countries in their
provision of aid, both in terms of the tools they use, and the end
results that they hope to achieve.
then move on to analyse what the evidence I have
drawn upon through-out my thesis demonstrates. The approach employed by
China and India is centred round their need for resources and new
allies. But rather than culminating in an alternative development path
for African countries, China and India are replicating the traditional
relationships that have always existed (Clapham, 2010; Hattingh, 2010).
On the whole, their aid is providing a means of fast-tracking the
export of raw materials from African countries whilst they are
importing processed goods resulting in an unsustainable trade deficit
in the long term for many African states and harming those that are net
importers of primary resources through enhanced competition (Goldstein et
al, 2008). The only fundamental difference is that there is not
the need for China and India to impose external reforms enforcing open
markets as this has already been done by a previous generation of
donors. Instead, through offering infrastructure assistance;
transportation development; technical assistance; and energy provision
sustainability, China and India are focusing on areas which coincide
with the interests of African states whilst enhancing the efficiency
and profitability of their own investments in the continent. This is
allowing greater policy autonomy in regards to how aid is spent, whilst
validating China and India’s self proclaimed image as new donors that
respect recipient countries sovereignty.
has been a proliferation of literature in
recent years attempting to explore China and India’s most recent
advances into Africa. Chris Alden (2007: 5 – 6) states that there are
three competing interpretations of China’s new role in Africa, seeing
China either as: a ‘development partner’, a ‘resource-grabber’, or as a
first most optimistic analysis sees China as a
development partner, providing knowledge from its own experience to
Africa. This view largely emanates from academics of developing
countries (e.g. Six, 2009), heads of African states (e.g. Kagame,
2009), and most obviously, Chinese politicians and organisations
(FOCAC, 2009; FMPRC, 2006; State Council of the PRC, 2011). There are
also a number of Western scholars who argue that there are some
positives to be drawn from China’s new involvement with Africa
(Brautigam, 2009; Kragelund, 2008; Mohan & Power, 2008; Woods,
2008). Drawing upon evidence of the positive work done by China in
Africa, and the pledges made through FOCAC, this interpretation seeks
to identify the long-term development assistance that China is
providing to the continent. It also emphasises the mutual-benefits for
both China and Africa to be secured through this partnership, the long
term history between the two sides, and the policy autonomy which China
provides for Africa, in comparison to the more imposing Western donors
(Martin, 2008). Within this interpretation, much is also made of the
hypocrisy of the West’s criticisms of China’s relations with Africa
(Sautman & Yan, 2007), with many parallels being drawn between the
second interpretation sees the Chinese
invasion into the continent as a short-term effort to gain access to
resources (Taylor, 2006, 2010; Klare & Volman, 2006). This is done,
it is argued, with little consideration of African development needs,
environmental concerns or human rights records (Jansson, 2010; Ke,
2010; Goodman, 2004). The Chinese state is willing to deal with anyone
and everyone in its desire for new markets and energy access, with
evidence being drawn from China’s interactions with states such as
Sudan (Srinivasan, 2008) and Zimbabwe (Taylor, 2006).
final interpretation, Alden argues, is that of
China as a neo-colonialist power in the continent. Through business and
diplomatic links, it is argued, China seeks to displace the traditional
Western orientation of the continent. Forming long-term partnerships
with African elites under the banner of South-South solidarity, China
is on a mission in the continent to gain political control over these
states, and create a new set of alliances in order to form a
multi-polar world. There are fears that this will “delay necessary
reforms and waste resources on unproductive investments” (Manning,
2006: 381) which will only result in a “race to the bottom between the
continent’s former colonial powers and … China, with deleterious
consequences, namely Africa’s further underdevelopment and
marginalization from the processes of globalization” (Naidu, 2007: 41).
Whilst some see this as a process of China ousting the West from Africa
(Olander, 2010), others believe that China is merely replicating the
relationship that Africa has traditionally held with the West, and
seeking to insert itself into this (Clapham, 2008; Hattingh, 2010)
rather than fundamentally changing it.
the whole, there is far less analysis of
India’s moves into Africa in the literature as its involvement is far
more limited and of a much smaller scale than that of China’s. However,
there has been an increased focus upon India’s Africa relations in
recent years as it has stepped up its involvement in the continent, and
increased its publicity through a number of high profile summits. Most
of these analyse India’s actions in relation to China.
strand of analysis of India in Africa has
commented on both its confusion as to its aims and purpose in the
continent (Price, 2004), as well as its focus on a more subdued
interaction with Africa (Vines & Sidiropolous, 2008; Naidu, 2010a).
These interpretations of India’s actions in the continent see a
confused, awakening giant, unsure of its goals, and aware of upsetting
the traditional hegemonic powers in the continent such as the USA and
separate area of the literature focuses upon the
extent to which India can be co-opted on board with traditional donors
in the continent. It is argued that India has the potential to either
swing towards the Western donors and co-operate on governance, security
and development projects within the continent, or to follow the Chinese
model of development assistance (Mansingh, 2009). India is in the
power-seat in this regard (Mohan, 2006), but either way academics
within this field believe that India must be engaged with as it is too
important a country to be left to its own devices (Pham, 2011).
Conversely, other authors seek to demonstrate the similarities that
already exist between China and India. Within this, the same three
categories can be applied that are labelled on China, viewing India
either as a ‘development partner’, a ‘resource-grabber’, or, most
damningly, as a ‘neo-colonialist’ (Sahni, 2010; Nelson, 2009). On the
whole, the literature in regards to India is not quite as
sensationalist as that written about China. Scholars have recognised
the similarities between India and China as donors, but on the whole
believe that India can be engaged with, and will be a more responsible
power in the continent.
the literature has been useful in
demonstrating why China and India are interested in Africa, few
scholars have sought to explore why Africa is interested in China and
India, or how the rise of China and India in Africa has been made
possible. My thesis attempts to move beyond what has been explored
already in the literature by considering the indirect effects of
neo-liberal reforms, imposed upon African states by Western donors in
the 1980s and early 1990s. Within this context the nature of Chinese
and Indian involvement in the continent can be understood more broadly,
providing a more holistic analysis of why China and India have been so
successful in their endeavours despite the many criticisms levelled
against their actions.
III: The Determinant’s of Chinese and Indian Foreign Policy
section seeks to explore the guiding factors
behind Chinese and Indian foreign policy. It will consider how internal
developments within these countries and changes to the international
arena impacted upon Chinese and India’s foreign policy. It will also
explore the guiding ideologies and principles articulated in Chinese
and Indian foreign policy, as well as the indirect effects of Western
Post-Mao China under the guide of new leaders,
China’s Africa policy began to lose its strong ideological leanings.
The country instead focused upon a form of ‘Communism with Chinese
characteristics’, assigning “priority to economic modernisation and to
maximising access to foreign markets, technology and capital” (Harding,
1995). During this time there was a relative decline in Sino-African
relations (Taylor, 1997) as Beijing increasingly viewed Africa as
“largely immaterial in its quest for modernization but also saw that
the rationale behind its support for anti-Soviet elements in the
continent was no longer valid” (Ibid., 1998).
liberalisation of Chinese markets led to
considerable improvements in investor confidence, providing new
incentives for businesses and leading to substantial increases in
production. It was also coupled with various other reforms: the private
sector was allowed to flourish (Brandt & Rawski, 2008: 3) whilst
fiscal de-centralisation allowed for the rise of the ‘entrepreneurial
state’, where political patronage was based upon economic performance
rather than party loyalty. Market expansion and reductions in state
spending brought about considerable improvements in China’s economic
development. Real GDP growth between 1978 and 1999 averaged 9.7% and in
some areas double digit growth occurred in the early 1990s (Gittings,
2006: 255). China has since “become the second largest economy after
the USA when measured on a purchasing power parity basis” (Leseure et
al, 2009: 617). Moreover, economic development since 1980 has
lifted an estimated 400 million out of poverty (Aziz & Dunway,
2007), and “rapidly growing middle and wealthy classes now enjoy
consumption levels that are approaching First World standards (Whyte,
internal developments changed China’s
external needs forcing it to re-think its foreign policy towards Africa
(Eisenman & Kurlantzick, 2006: 219), with increased emphasis on how
the continent would be beneficial to China’s economic interests as well
as its political ones. As China’s economy recovered from the initial
jolt of adjustment, aid rose again, and by “1984 China was the
eighth-largest bilateral donor in sub-Saharan Africa, with commitments
very close to those made by Norway” (Brautigam, 2009: 54). But there
was a shift in the end goal of development assistance, moving from a
“Cold War ideology to a more classical pursuit of economic
self-interest in the form of access to raw materials and the
construction of spheres of influence through investment, trade and
military assistance” (Mohan and Power, 2008: 27). Aid has become part
of a larger parcel within this, aimed at facilitating trade and
investment, and promoting Chinese exports (Snow, 1995:311).
was another jolt to the system in 1989 when
China was isolated diplomatically following the events in Tiananmen
Square. Nations across the world denounced China’s authoritarianism,
but many African states remained loyal to Beijing (Alden, 2007: 10).
These events forced another re-appraisal of who China wanted to deal
with and resulted in the developing world becoming a ‘cornerstone’ of
Beijing’s foreign policy with a renewed image of African states as
the early 1990s China launched its ‘Going
Global’ strategy. During the 1980s Chinese companies had tentatively
taken their first steps in terms of FDI. By the beginning of the 1990s,
“provinces like Fujian and Guangdong were actively promoting the
overseas activities of their companies” (Brautigam, 2009: 74). The
‘Going Global’ Strategy was formulated in order to counter three major
problems to China’s future development trajectory:
China’s vast economic growth has been
based upon export growth, averaging over 17% per annum (Taylor, 2010:
15). This has been a major pillar in China’s economic development so
far, however, “the mounting saturation of China’s export markets,
combined with a rapid increase in the cost of importing raw materials
into China… [made] Africa more and more important to China’s economy”
(Ibid.). In order to remain successful, the Chinese economy needed to
“to expand into new markets, manage the upgrading of its increasingly
mature domestic industries, and build its fledgling multinational
corporations” (Brautigam, 2009: 78).
(and related to this), in order to fuel
the continuing expansion of China’s economy, as well as in order to
satisfy its own consumers, China needed to acquire new resource
suppliers. China’s energy consumption is predicted to rise by 153%
between 2002 and 2025 (Klare & Volman, 2006) and forecasts predict
it will surpass the US as the world’s largest consumer of oil within
the next 10 years (Pehnelt & Abel, 2007: 10). As energy competition
intensifies between the US, China, and increasingly India, resource
producing regions, such as those in the African continent that were
previously marginal to global concerns have instead become of critical
strategic importance (Lyman, 2005). There was also the need to “secure
other primary commodities, which are … fundamental to sustain[ing]
heavy investment in infrastructures and the construction sector”
(Biggeri & Sanfilippo, 2009: 33). Africa is integral to this
strategy, with a high level of natural resources which have been so far
largely under-developed. Furthermore, with instability a continual
problem in the Middle East, African states appeared far more secure in
guaranteeing supply (Alden, 2007: 12).
“Beijing needed to calm concerns that its
rapid rise would pre-empt other developing countries’ development
prospects. It needed to establish China’s reputation as a rising but
‘responsible’ power” (Brautigam, 2009: 78). This required China to both
consolidate relations with its traditional allies, whilst also seeking
new friends in Africa. This is also necessary for China to “contain the
United States and facilitate the development of a multilateral system,
both of which are compatible with the continent’s long-term development
and political interests” (Habib, 2009: 264). Also important was China’s
attempts to isolate Taiwan diplomatically in pursuit of its ‘One-China’
policy (Alden et al, 2008). This required China consolidating
and strengthening its political relationships with African states in
order to win over states that recognised Taiwan.
the Cold War domestic problems had made
India extremely inward looking (Kragelund, 2010b: 9). Corruption,
governance issues and persistent levels of poverty as well as
problematic neighbours had forced India to neglect Africa in its
foreign policy in the 1970s and 1980s, with the continent increasingly
irrelevant to India’s national interests (Mansingh, 2009: 20 – 21).
However, a number of transitions, both internal and external, forced
India to re-think its Africa policy in the 1990s and early 2000s.
changes in the international arena
following “the end of the cold war compelled policy mandarins in Delhi
to consider how its foreign policy should be reshaped to take into
account the new impulses of the global arena” (Naidu, 2008: 117).
Secondly, India’s economic development began to take off in the early
1980s, and since 1990 India has averaged growth rates of around 6% per
annum (Jenkins & Edwards, 2006: 207). This has been a result of the
Government of India’s pro-business strategy since the 1980s, and its
emphasis on investment capital (Kohli, 2006). This was followed by
liberalisation reforms in the early 1990s and resulting moves by Indian
companies to look for new markets and investment possibilities ‘in
regions with large Indian diasporas, such as Eastern and Southern
Africa’ (Kragelund, 2010a: 2) where established relationships could be
India beginning to resolve its internal
problems, achieving impressive growth rates, and becoming too big
diplomatically “to lie under the security umbrella of any other power”
(Sahni, 2007: 22), it began to appreciate the need to develop a foreign
policy “that resonated with its economic ambitions. Opening up to
overseas investment also meant strengthening external relations that
could help [India] to realise its political and economic potential”
(Naidu, 2008: 117). As India’s economy began to grow relations with
African states began to step up again in the early 1990s. The
Government of India increased this involvement further in 2003
following the announcement of the Indian Development Initiative.
seeks many of the same economic goals as
China in the continent. In terms of energy needs and other primary
resources India is in drastic need of finding new suppliers. It is the
sixth largest consumer of energy in the world, and its energy
dependence is expected to grow fivefold over the next 25 years (Sahni,
2007: 24 – 25). The continued growth of India’s economy depends very
much upon the ability of the Indian government to secure “imports of
raw materials for industrial production and … energy sources to
overcome chronic shortages in energy [which are] repeatedly leading to
high economic losses” (Jobelius, 2007: 3). As of 2009 India imported
“70% of its oil and heavily subsidised domestic prices….leading to
double-digit inflation figures after 13 years of being under 6%”
(Shrivastava, 2009: 121).
with India increasing its exports year
on year, it was in need of new markets. Between 1990 and 2002 trade as
a share of GDP almost doubled in India (Jenkins & Edwards, 2006:
207). However, India, just like China, seeks new bases for it to export
to, and more importantly, invest in, in order for this growth to
continue and to improve deficits in the trade balance (Jobelius, 2007:
are also three more political motivations
which have led to a reformulation of India’s foreign policy towards
Africa. Firstly, since 1991 “India has been friendless in the
international system: it has friendly relations with many countries but
friendship, in the sense of mutual support in security matters, with
none” (Sahni, 2007: 22). Tensions with Pakistan and competition with
China has made its own neighbourhood more problematic, with countries
that have traditionally been allies of India, such as Nepal,
increasingly opening up relations with China. Furthermore, “India’s
much criticised nuclear tests in 1998… resulted in worldwide
condemnation and sanctions and [resulted in] India’s reformulation of
its foreign policy that came to include (countries in) Africa”
(Kragelund, 2010a: 2). Much like China’s Tiananmen Square diplomatic
crisis, India was forced to fall back on its African partners who
demonstrated their importance as ‘all-weather friends’ in this period,
and since then India has strengthened these relationships.
with India seeking to become a more
powerful global figure it is increasingly in search of new allies.
Whilst China has already gained international recognition within
institutions such as the UN, India is still seen as far less important.
For this reason, it is increasingly relying on Southern backing to
provide its diplomatic dealings with more credibility. Aid is now
perceived “as a means to get more international political leverage and
ultimately obtain a seat in (an enlarged) UN Security Council” (ibid.,
2010b: 9). It is following a very similar strategy to China in the
early 1960s: providing ‘soft’ aid in order to receive African backing.
this is all a part of India’s broader
strategy to change its global image. The rejection of foreign aid from
most of its donors in 2003 was done with the intention of diverting the
world’s attention away from India’s internal problems of poverty,
corruption and inequality towards its role as an emerging economy
(Agrawal, 2007; Six, 2009; Price, 2004) with lucrative investment
opportunities. By emphasising its role as a new donor it has sought to
demonstrate its importance amongst the global powers. As part of this
“India has begun to extend its development assistance way beyond its
immediate neighbours” (Reality of Aid Network, 2010: 11). India is also
scaling up its diplomatic initiatives within Africa in order to achieve
these aims, increasing the number of Indian embassies in the continent
and creating “three joint secretaries, covering the regional divisions
of Africa” (Shrivastava, 2009: 131).
with India’s historical relations with Africa,
the China factor is still in an important driver of India’s foreign
policy (Bhattacharya, 2010). With many of the same goals in the
continent, in particular in regards to energy access, India is seeking
to counter China’s interests and limit its effectiveness (Naidu, 2010a:
Drivers of China and India’s
important factor in Chinese and Indian
foreign policy is the historical and ideological linkages between these
countries and Africa. South-South cooperation emerged in the 1950s in
the context of the common struggle of former colonies to attain
independence and greater autonomy. This was articulated formerly in the
Bandung conference in 1955, bringing together 29 countries from Asia
and Africa to promote economic and cultural cooperation in the
Asian-African region “on the basis of mutual interest and respect for
national sovereignty” (Reality of Aid Network, 2010: 2). This resulted
in the creation of anti-hegemonic groups such as the NAM in 1961 and
the Group of 77 in 1964. China and India were both at the fore-front of
this movement, and since then have been in competition with each other
to become the leading representative of Southern states. During this
time, China provided military assistance for African liberation
movements and India assisted anti-apartheid struggles in Zimbabwe and
this period, the ‘Five Guiding Principles of
Assistance’, set out by Premier Zhou Enlai were the mantra that
dictated Chinese aid to Africa. These were (1) Mutual respect for
sovereignty and territorial integrity; (2) Mutual non-aggression; (3)
Non-interference in each other’s internal affairs; (4) Equality and
mutual benefits; and (5) Peaceful coexistence. In 1964 these were
expanded upon, with the inclusion of the following principles: (6a)
That Chinese technical assistance should build local capacities, and
(6b) Chinese citizens working in Africa should have the same standard
of living as the local experts; (7) that economic cooperation should
promote self-reliance and not dependency; and (8) that respect for the
recipient’s sovereignty should mean imposing no ‘political or economic
conditions’ on recipient government’s (Haifang, 2010: 55). India’s aid
programme, which began in the 1950s, was principled upon “respect for
territorial integrity, mutual non-aggression, mutual non-interference
in domestic affairs, equality and mutual benefit, and peaceful
coexistence” (Woods, 2008: 1217). Also integral to India’s foreign
policy were the ideals of Mahatma Gandhi, who had once said that “the
commerce between India and Africa will be out of ideas and services,
not of manufactured goods against raw materials after the fashion of
Western exploiters” (Mahatma Gandhi, cited in Matthews, 1997). This
shaped India’s development assistance, culminating in the formation of
the ITEC programme which placed training and capacity building ahead of
historical links with Africa and guiding
principles are brought up again and again in both Chinese and Indian
official documents, speeches and within international fora. For
example, in 2008 at the India-Africa Forum Summit, Mohammed Singh,
India’s Prime-Minister announced that:
time has come to create a new
architecture for our engagement in the 21st Century. We visualize a
partnership that is anchored in the fundamental principles of equality,
mutual respect and mutual benefit. Working together, the two billion
people of India and Africa can set an example of fruitful cooperation
in the developing world” (Singh, 2008).
ideals can be found within Chinese
international foreign policy regarding Africa. This is based upon
principles of equality, mutual benefit and common development (State
Council of the PRC, 2011; FMPRC, 2006). This has required a commitment
from the Chinese government to operate on “a different basis from the
more overtly hierarchical, prescriptive power relations of established
external powers” (Alden & Large, 2011: 21). The 3rd
FOCAC meeting in 2009 articulated the ideals of this relationship quite
[China and Africa] reaffirm that the
injustice and inequality in the current international system are
incompatible with the trend of the times towards world peace and
development, hinder the development of the countries of the South and
pose threats to international peace and security. We stress that the
establishment of a just and equitable new international political and
economic order is indispensable for the democratisation of
international relations and for the effective participation of
developing countries in the international process of decision-making”
rhetoric and historical lineage plays an
important role in Chinese and Indian aid to Africa. It offers a way of
setting these donors apart from Africa’s traditional partners in the
continent, whilst legitimising their refusal to become involved in
issues of governance reforms or democracy. Respect of state sovereignty
and an equitable partnership where the donor cannot impose reforms upon
the recipient tend to take precedence in Chinese and Indian dealings
with African states, even where human rights and environmental
standards are put into jeopardy.
Washington Consensus and It’s Impacts on
Chinese and Indian Foreign Policy
the motivations outlined above are
important there is a need to look beyond developments within China and
India and shifts within the international arena following the fall of
the USSR. These changes cannot explain the rise of Africa in China and
India’s foreign policy alone. Academics need to synthesise this
analysis with an understanding of internal developments within African
countries imposed through traditional donors (such as the USA, IMF and
the World Bank). These reforms carried out during the structural
adjustment period made Africa more hospitable to new investment in the
early 1990s, and pushed African governments towards new donors that
offered greater policy autonomy, indirectly influencing China and
India’s foreign policy.
reforms imposed by these donors in the
1980s and early 1990s had drastic effects on African countries.
Structural adjustment policies comprised of trade liberalisation,
exchange-rate liberalisation, fiscal and monetary reforms, public
enterprise reforms, and deregulation of investments, labour and prices
(Bennell, 1997; Cockcroft and Riddell, 1991). They represented a major
assault on the state, in favour of a new “model based on the primacy of
individualism, market liberalism, [and] outward-orientation” (Onis
& Senses, 2005: 263). The end goal of these reforms was “the
‘adjustment’ of malfunctioning economies in order that they become
viable components of a global system” (Riddell, 1992: 53). In many
cases the initial ‘shock’ of these reforms had detrimental consequences
on immediate poverty reduction, the degree of inequality in societies
and socio-economic growth (Cornia & Court, 2001: 1 – 2). In this
period, more and more complex conditions emerged requiring “recipients
to adopt policies well beyond those that were thought to be needed
explicitly to make aid effective” (Riddell, 2007: 35 – 36),
and in some instances, changing societies in ways that often ran
counter to developmental aid’s purported aims (Macamo, 2005).
neo-liberal reforms imposed by these donors
through conditional aid had two major impacts upon Chinese and Indian
foreign policy towards Africa. Firstly, they made African countries
more hospitable and open for foreign investment, lowering the barriers
to FDI whilst also creating fiscal and financial incentives to attract
FDI (Kragelund, 2009). With a drive to improve investor confidence in
the continent in the late 1980s and early 1990s increased attention
from China and India was almost inevitable. These emerging countries
were in need of new markets to invest in as well as low-cost locations
to develop their multi-national companies in, whilst Economic Recovery
Programmes in Africa were persuading foreign investors to invest in the
continent’s economies (Ibid., 2010c: 208). This, combined with the more
general neo-liberal character of the global economy at the time,
coincided with the rise of India and China (Naidu, 2010a: 47).
these reforms led to tensions emerging
between recipients of aid and donors. There was widespread
disillusionment in developing countries surrounding “the conditions
Western donors have attached to aid for the past quarter-century…
[where] every decade has brought new donor priorities and
conditionalities – and none of these have been aligned with their own
calls for developing the productive ‘supply side’ of their economies”
(Woods, 2008: 1217). As a result, there was a cry from developing
countries for a new model of development assistance that was far less
imposing, and instead based around respect for national sovereignty and
with less conditional aid. Fundamentally, African states were in search
of new donors that allowed the recipient to set the terms of the
agreement and the overall purpose of aid. Paul Kagame, Rwanda’s
President, announced his desire for a different approach in 2009,
would benefit if the world focused on
increasing investment in Africa, and if Rwanda and the rest of the
continent worked to establish more equitable international
partnerships. A trade relationship built on this new approach would be
more helpful in reaching what should be our common goal: sustainable
development, mutual prosperity and respect” (Kagame, 2009).
of this can be seen clearly in Zambia,
which is now one of China’s main partners in Africa. In the 1990s IFIs
implemented financial policies with little regard of their social
consequences, legal ramifications or long-term impact upon the Zambian
mining industry (Larmer, 2005). A major motive of the Economic Recovery
Programme employed in Zambia was “to stimulate the interest of foreign
investors in investing in African economies and thus bring about the
expansion of production capacity, increase foreign exchange earnings
and create employment (Kragelund, 2009: 489). In this regard, the IFIs
were extremely successful, with liberalisation of investment codes
facilitating an enhanced role for FDI in Zambia (Hutchful, 2002, cited
in Kragelund, 2009: 489). However, there was also a significant
increase in poverty levels following these reforms (Mkandawire &
Soludo, 1999), and a renewed authoritarian nationalism that fed on
popular resentment of the effects of neo-liberal policies (Larmer,
2005). It is within this context that the rise of Chinese FDI in Zambia
has been made possible. And these trends can be seen across African
nations in the post-Washington Consensus era. It is within this context
that China and India burst into Africa. The neo-liberal content of the
global economy that precipitated India and China’s rise was ideal for
these economies, and almost invited them to participate in a new
chapter of African development. It is paradoxical that the very same
reforms that have led to African countries calling for a new set of
donors are the very same reforms that encouraged China and India to
invest in the continent in the first place.
order to test this, I need to consider the
development assistance tools being used by China and India in African
countries. It is important to understand the degree of freedom which
China and India allow in the use of their assistance, as well as the
overall purpose of their aid, and their modalities of providing
Methods Of Dealing With African Countries
this section I am going to explore the
different ways that China and India provide assistance to Africa. I am
going to explore how much they give; who they give to; and the methods
they use. Their methods consist of economic assistance for trade
facilitation; economic assistance in the form of debt cancellation;
infrastructure assistance; and finally, technical assistance.
of the amount of aid given by China and
India to African nations vary wildly. As aid is part of a wider parcel
it is difficult to discern how much is actually given. In addition, the
Chinese government is very secretive about development assistance (Chan
& Frolic, 2007).
of the amount of money given by China
range anywhere between US $970 million and US $27.5 billion (Reality of
Aid Network, 2010: 6). The World Bank estimated that by mid-2006 the
Chinese Exim-Bank had granted more than US $12.5 billion of financing
(including concessional and non-concessional loans) to infrastructure
projects in Sub-Saharan Africa (Broadman, 2007). These figures are also
separate from China’s debt relief packages, which consist of a large
part of their assistance to African countries (Davies et al, 2008:
India’s trade levels with Africa and its
development assistance to Africa are much smaller than that of Chinas
(Agrawal, 2007: 13). Despite this, estimates suggest that the amount of
aid, grants and loans provided by India has increased dramatically over
the past decade (Kragelund, 2010b: 11), rising from an estimated Rs 9.2
billion in 1999 / 2000 to Rs 26.99 billion in 2008 / 09 (Sahni, 2010:
79). However, “a significant increase in Indian development
assistance [on a scale to match China]… is not to be expected in the
next few years given India’s liquidity bottleneck and the country’s own
huge need for investment” (Jobelius, 2007: 5). A number of other
projects and initiatives sponsored by India have provided loans and
finance to various countries and regional organisations in order to
enhance economic and political cooperation with Africa.
has included a US $200m line of credit to
NEPAD under the India-Africa Fund designed to promote African economic
integration; a US $500m line of credit for TEAM-9 which is an
initiative with 8 (resource rich) Francophone countries; a US $1bn
investment in a joint venture with the African Union to build a Pan
African e-Network to provide tele-medicine and tele-education through
integrated satellite, fibre, and wireless connectivity; and letters of
intent signed between the State of Andhra Pradesh and Kenya and Uganda
to send 500 Indian farmers to cultivate land in the respective
countries. Also important is the Focus Africa Programme (2002-2007)
totalling US $550 million, administered by the Export Import Bank of
India. This offers export subsidies to Indian companies trading with
African nations and tied lines of Credit to African governments and
regional entities (Naidu, 2008: 122 – 124; Kragelund, 2010b: 11; Sahni,
2010: 79 – 90; Chaturvedi & Mohanty, 2007). India also provides a
large amount of aid through the ITEC program as well as through the IMF
and World Food Programme (Chanana, 2009: 11; Chanana, 2010: 5).
is this directed?
concentrates its assistance in those
countries with large possessions of natural resources or of particular
geo-strategic importance (Taylor, 2010: 20). In this manner Chinese aid
allocations seems to resemble Western donors, whom are largely
motivated by personal interests (Alesina & Dollar, 1998). 70% of
Chinese assistance goes to just four countries: Nigeria, Angola, Sudan,
and Ethiopia (Foster et al, 2009: 4), all of which possess
large amounts of oil. Other significant recipients are those that are
politically important such as South Africa, Egypt and Ethiopia (Davies et
al, 2008: 5).
provides aid to fewer countries than China,
but uses more criteria in deciding whom to give to. Like China,
countries with large amounts of resources and of particular
geo-strategic importance are favoured in Indian foreign policy, however
there are also a number of other criteria used. For example, countries
with historical links to India and countries with high levels of Indian
diaspora, such as Kenya and Tanzania also receive higher levels of
economic assistance (Bijoy, 2010: 71). These countries are also
important in regional organisations such as the IOR-ARC, which seeks to
protect India’s trade routes. This has resulted in India’s relations
with Madagascar, South Africa, Tanzania, Kenya and Mozambique becoming
more embedded in recent years, as well as further linkages with SADC
and the COMESA (ibid.). India also has an aid program targeted at
specific African countries that share a similar colonial past: the
SCAAP. Within this, “recipient countries include Botswana, Cameroon,
Gambia, Ghana, Kenya, Lesotho, Malawi, Mauritius, Mozambique, Namibia,
Nigeria, Seychelles, Sierra Leone, South Africa, Swaziland, Tanzania,
Uganda, Zambia, and Zimbabwe” (Agrawal, 2007: 8).
China and India are involved in a number of
regional organisations, for example India is a major player in the
African Capacity Building Foundation becoming the first Asian country
to become a full member of this organisation in 2005, pledging US $1m
towards the foundation’s sustainable development and poverty
alleviation capacity building initiative (Shrivastava, 2009: 131). Both
countries are also founding members of the AARDO, and are both heavily
involved in the African Development Bank and NEPAD.
China nor India discriminate against
states with poor governance, democratic, or human rights standards
(Taylor, 2008; Sahni, 2007: 29). It is interesting to note that China
has been lambasted over its engagement with states such as “Zimbabwe,
Sudan, the Democratic Republic of Congo and (until recently) Angola;
yet India has been engaged in similar economic endeavours largely
without parallel international or indeed significant domestic political
fallout” (Mawdsley & McCann, 2010: 88). Some commentators argue
that China and India actually favour these countries as there is far
less competition over their markets due to their relative international
neglect. For example, whilst China and India have both been involved in
oil drilling in Sudan in recent years, this has been at a time when
other Western companies have been pulling out due to human rights
abuses (Goodman, 2004).
until recently China and India have dealt with
different African countries. Whilst India has favoured those with which
it shares a similar colonial past, or historic trade links, such as
Kenya and Tanzania and other East African countries, China has
historically dealt with those it has had ideological connections with.
However, we are seeing a collision of Chinese and Indian interests,
which is increasingly bringing them into competition with each other.
For example, India has been striving to make moves in Angola, a
traditional ally of China (Vines & Campos, 2010); whilst China has
been engaging more and more with Senegal, which until recently was a
backer of Taiwan, and a traditional Indian ally (Hazard et al,
2009). Furthermore, China and India are increasingly coming into
contact through regional organisations, such as the African Development
Bank, providing an extension of their competition.
assistance: trade facilitation
the 1990s Sino-African trade grew by 700%; from
2001 – 2003 trade between China and Africa doubled to US $18.5 billion;
and in the first ten months of 2005 it jumped to US $32.16 billion
(Woods, 2008: 1215). This has, in large part, been achieved through
China’s aid policy towards Africa, “combining loans, credits and debt
write-offs with special trade arrangements and commercial investments
(ibid: 1205). For example, in May 2007, the Chinese government provided
US $5 billion to the recently founded “China-Africa development fund to
stimulate Chinese investments in Africa” (Reality of Aid Network, 2010:
7). African countries are able to draw resources from this fund to
build infrastructure projects and in the process, utilise Chinese
Chinese government also uses development
assistance in order to make Chinese firms more competitive on the
global stage. Many Chinese firms in Africa are backed by the
government, allowing them to undercut competitors within the continent
(Cross et al, 2007: 58; Alden & Davies, 2006). Some firms
have begun to gain more autonomy, especially as more local enterprises
have developed within the continent, but ties between the CCP and large
Chinese multinationals still remain strong (Mohan & Power, 2008:
25). Chinese companies thus have a clear advantage in securing
contracts “in that they are prepared to undertake projects at very low
tenders as a means to ensure future contracts” (Taylor, 2010: 22). This
is especially advantageous when dealing with one of their main
competitors, Indian firms. Chinese investment has been far more
aggressive than their Indian counterparts, with SOEs enjoying both
political and financial support to undercut other competitors in the
African market (Cheru & Obi, 2010: 3). These methods have been seen
in Zambia, “where the Chinese government’s position as a prominent
donor has helped both large SOEs and smaller Chinese SMEs to expand
their market access opportunities” (Davies et al, 2008: 4).
with China, India does not adhere to any
standard definition of development assistance, providing “project
assistance, purchase subsidies, lines of credit, travel costs, and
technical training costs incurred by the Indian government” (Agrawal,
2007: 4). India’s trade with Africa, excluding oil, “surged from US
$967 million in 1991 to more than US $10 billion in 2007… During the
period April 2006-January 2007, its trade with the continent was
estimated at US $19.3 billion (Bijoy, 2010: 71). Furthermore, these
relations are likely to burgeon in the coming years (Vines &
Sidiropolous, 2008), with estimates suggesting that trade levels are
likely to grow to US $150 billion by 2012 (Mawdsley & McCann, 2010:
85). India’s imports from Africa have also been on the increase, mainly
in primary goods such as oil, gold, phosphate chemicals, nuts and
cooper ores (Bijoy, 2010: 71).
development assistance generally comes with
“direct investment, trade agreements … technology transfers and the
prospect of improved negotiating power in international fora within the
context of intensified South-South cooperation” (Jobelius, 2007: 5). As
with China, India’s aid is “only one element of a broader engagement to
boost bilateral trade and gain access to new markets, often appearing
together with private-sector participation on the supply or demand
sides” (Chanana, 2010: 14). One important tool in achieving this has
been the IDI. Through this tool India borrows “in the international
capital markets and then will lend on concessional terms to less
credit-worthy countries in Sub- Saharan Africa and elsewhere” (Bijoy,
2010: 68). As a result, India’s private sector is being “subsumed as an
extension of the donor mechanism or, conversely … the donor programme
becomes an extension of the private sector’s promotion strategy”
(Chanana, 2010: 4), and in this regard India is beginning to match
important, more recent development has been the
creation of Special Economic Zones in Africa created by China. Whilst
these zones are being identified as “important economic interlockers …
they also represent an important space for China to move its low cost
manufacturing base offshore” (Naidu, 2010b). MOFCOM is “supporting the
development of six or seven economic and trade cooperation zones in
five or six African countries. Chinese enterprises have also set up a
handful of industrial zones outside the MOFCOM programme (Brautigam
& Xiaoyang, 2011: 28). These are intended to help African countries
develop industries and expand local employment whilst providing a
hospitable environment for Chinese investment and production. These projects
indicate two things: firstly, that the Chinese are there for the
long-haul, with long term leases being signed on land, and secondly,
that they are looking to expand further beyond resource extraction and
offer medium to long term investments to African countries (Adebayo, 2011).
important development assistance tool used
by both China and India in order to facilitate trade is debt
cancellation. At the first China-Africa Cooperation Forum (FOCAC) in
October 2000 in Beijing, “the Chinese government pledged to write off
in two years overdue obligations on 156 loans owed by African
countries; these totalled 10.5 billion yuan (US $1.3 billion)… In
November 2006 China announced that it would cancel another 10 billion
yuan (US $1.3 billion) in debt … By mid-May 2007 China had signed debt
forgiveness agreements with 11 of these countries and expected to
conclude agreements with the other 22 by the end of 2007” (Wang, 2007:
9). And at the 2009 FOCAC conference, the Chinese government announced
a further US $10 billion in concessional loans and cancelling of debts
(Kragelund, 2010b: 8). Through this process China has effectively been
turning its loans into grants over the past decade (Eisenman &
Kurlantzick, 2006: 221). India’s efforts in this area have been much
smaller in comparison. So far India has cancelled “US $24 million worth
of debt of seven Heavily Indebted Poor Countries (HIPCs): Ghana,
Mozambique, Tanzania, Uganda, Zambia, [and] Guyana (Bijoy, 2010: 68).
This strategy assists developing countries in reducing their debt
burden, but also frees up the resources of African states meaning that
they are able to invest in Chinese and Indian products.
and Indian assistance and investment has
largely been focused on African supply side problems in an attempt to
counter the problems that have plagued African industrialisation.
Furthermore, this aid modality provides tangible benefits and quick
results (Tan-Mullins et al, 2010). Africa’s infrastructure
deficit needs an estimated US $20 billion of investment per year and
has an associated funding gap on the order of US $10 billion per year
(Foster et al, 2009: 5). China has the ability to plug this
gap, with the world’s largest and most competitive construction
industry and particular expertise in the civil works critical for
infrastructure development (ibid.). Since the mid-1990s, under the
influence of the World Bank, China has been securing around 20% of all
construction contracts in Africa (Taylor, 2010: 22). Whilst this method
of development assistance benefits African nations with cheap
infrastructure, it also eases the pressures on China and India’s own
domestic construction industries.
scale of investment since 2000 has been vast.
Chinese enterprises have built more than 6,000 kilometers of roads,
3,000 kilometers of railways, and 8 large and medium-sized power plants
in Africa” (Wang, 2007: 12). The two largest beneficiary sectors of
Chinese infrastructure investment are power (mainly hydropower) and
transport (mainly railroads) (Foster et al, 2009: 3). A
staggering 133 out of around 800 Chinese aid projects have consisted of
infrastructure development (Wang, 2007: 10). This assistance is often
conditional, with Beijing requiring that “70% of infrastructure
construction and other contracts are awarded to “approved”, mostly
state-owned, Chinese companies and the rest handed to local firms, many
of which are also in joint ventures with Chinese groups. Many [of
these] projects have been undertaken with imported Chinese labour”
(Reality of Aid Network, 2010: 14). Whilst this is a problem often
associated with Western development assistance, the Reality of Aid
Network (ibid.) note that “a number of program countries indicate that
the goods and services provided by tied aid from Southern donors such
as China and India are in fact better priced and of appropriate
India’s infrastructure investments do not
compete at present with the amount of money that China is putting in,
their quantity and significance are both on the rise (Bijoy, 2010: 72).
For example, at the most recent India Africa Forum Summit in May 2011,
India’s PM, Manmohan Singh, announced an extra US $300 million to be
added to the African Development Banks’ funding of the
Ethiopia-Djibouti railway line (Maasho, 2011), for which India has
already provided significant investment. In addition, Indian firms are
also heavily involved in Africa’s energy production. Kalapataru Power
Transmission Ltd. already has a presence in Zambia and is expecting to
acquire a major contract worth US $35m in Algeria. Indian firms are
also involved in a rural electrification project for the Ministry of
Energy in Kenya and are supplying material to the Tanzania Electricity
Company (Tanesco). They are also undertaking a project for the
Ethiopian Electric Power Corporation which links to the
Ethiopia-Dijbouti interconnection (Naidu, 2008: 124).
mentioned earlier the ITEC programme has been a
central part of India’s development assistance to other countries since
the 1960s. India’s own growth is based on its higher education and
high-technology sectors, and the knowledge that the country has
garnered through this process is imparted through the ITEC programme,
in the form of education and training opportunities (Agrawal, 2007: 9).
The ITEC programme uses a slots system to allocate aid. Countries are
provided with a certain amount of ‘slots’ and then these can be
exchanged “into five different aid modalities, namely: training of
personnel in India, project aid, technical assistance, study trips and
humanitarian assistance” (Kragelund, 2010b: 10). India provides “5,000
vocational training slots annually in over 200 courses at 42 leading
institutions, many of which specializing in technology such as IT
(Reality of Aid Network, 2010: 3) and in the 2011 India Africa Forum
Summit India increased its technical assistance, announcing an extra US
$700 million of financing for training programmes and institutional
building in Africa (Maasho, 2011).
assistance and capacity building
initiatives allow the Indian government to provide assistance to Africa
that ensures a large amount of donor control, and results in a more
appropriate and therefore sustainable approach for empowering other
developing countries than Western donors can provide (UNDP-SSC, 2009a).
Their approach also reflects “the expertise and high quality provision
available in many Indian universities, training centres and institutes”
(Mawdsley & McCann, 2010: 86). Through this approach India can
offer advice from its own development experiences, drawing upon its
“vast array of knowledge and language skills, and human capital”
(Agrawal, 2007: 13). It also means that “India focuses on smaller
interventions, allows recipient countries to define their own
priorities and encourages mutual economic growth and long-term trade
linkages rather than purely a development impact” (Chanana, 2010: 3).
With India unable to always compete with China, it uses this modality
to emphasise the fact that to a certain extent it can provide both
financial assistance and technical assistance. Furthermore, by building
domestic capacity and staying small scale, India’s technical assistance
efforts try to avoid the problems “traditionally associated with
Western aid programmes (most notably, that they undermine local
institutions by diverting resources away and reduce a country’s
competitiveness through large scale transfers)” (ibid., 2009: 13).
technical assistance programs receive a
minute amount of funding in comparison with their financial assistance
and infrastructure projects, yet they are still important. Between 2003
and 2006 “China trained more than 10,000 Africans in many sectors,
including 3,700 government officials and 3,000 professionals” (Haifing,
2010: 59). Both China and India run technical assistance programs and
institutional capacity building initiatives in association with the
UNDP. China’s partnership with UNDP was established in the early 90s,
and since its initiation has created “about 20 regional centres through
the years in a variety of technical fields, such as small hydropower,
solar energy, aquaculture, sericulture, biogas, acupuncture, primary
health care, integrated rural development etc.” (UNDP-SSC, 2009b: 38 –
39). Both China’s ‘Lighten-Up Africa’ Project and India’s ‘Pan African
e-Network Project’ have been highly commended for being demand driven,
highly applicable to the needs of developing countries, and highly
participatory, ensuring sustainability (Ibid: 50).
and India, alongside Brazil, Russia and
South Africa, are beginning to offer a new approach to the Western
dominated trade and aid system. Aid, loans, grants and infrastructure
and technical assistance are all providing them with a way in,
fast-tracking this process. But the more fundamental question is what
are China and India replacing the traditional relationship with? The
above section explored their methods of interaction with Africa and
demonstrated the kind of development assistance that China and India
are offering. I now seek to analyse these methods and approaches.
and India’s investments in Africa are
primarily driven by their need for resources and their demand for new
markets to invest in. Whilst their projects are aimed at assisting
African state’s development problems, there is a focus upon China and
India’s relative strengths within this. China has emphasised its
position as an efficient and cheap infrastructure builder. One of its
main ways of providing assistance is through the provision of roads,
railways, or energy plants. Similarly, India has sought to develop aid
projects round its own strengths in the IT sector. Projects such as the
Pan African e-Network and the TEAM-9 initiative are built round such
skills. There is however, a significant amount of overlap between the
donors: China offers training and technical assistance, such as its
projects in association with the UNDP, whilst India’s own MNCs have
invested heavily in infrastructure, energy and transportation projects.
return, as stated above, they are receiving
preferential access to Africa’s resources. In this regard both China
and India have been extremely successful in achieving their aims. China
has been offered exploration rights in important Nigerian oil fields
and is already heavily involved in Sudan’s, Angola’s and Algeria’s oil
industries (Eisenman & Kurlantzick, 2006: 222). Major Indian
companies have also increased their dealings with other African states,
including Nigeria who OMEL, an Indian MNC, entered into a US $6 billion
infrastructure deal with in exchange for two off-shore acreages (Naidu,
2008: 118). Indian MNCs have also secured significant stakes in blocs
in the Ivory Coast, Libya Egypt and Gabon (Ibid: 119).
this emphasis on resource access means
that China and India are doing little to improve Africa’s trade
balance. As argued by Goldstein et al (2009: 1539) “the
African export mix remains dominated by raw materials, merely a small
share of FDI supports diversification into new manufacturing and
services activities and the risk of a rapid appreciation of the real
exchange rate lingers behind the prospect of higher commodity prices”.
African “imports from China comprised mainly manufactured products
(45%) and machinery and transport equipment (31%)” (Wang, 2007: 5). In
contrast to this, “the bulk of African exports to China are minerals,
petroleum and timber. Angola, Cameroon, Democratic Republic of Congo
and Sudan are significant exporters of crude petroleum to meet China’s
demand for energy. Cameroon and Congo, along with Mozambique and
Tanzania are exporters of wood, while Ghana, Namibia and Zambia supply
non-ferrous base metals, which are important raw materials for China’s
booming industrial sector. In all cases the exports involve very
limited processing within the African countries” (Jenkins &
Edwards, 2006: 213 – 214). The same problems are occurring with Indian
– African trade, although to a lesser extent: “Mozambique is important
as an exporter of fruit and nuts to India as are Ghana, Nigeria and
Tanzania. Sudan is primarily important as an exporter of cotton. Zambia
and Tanzania export precious stones. Senegal has large exports of
phosphoric acid while South Africa’s main export to India is gold”
(ibid: 214). Furthermore, through direct investment China and India are
directly entering into competition with their African counterparts, and
mostly winning (Brautigam, 2009: 190). Textiles and garments offer easy
steps on the ladder for industrialisation, but with Chinese and Indian
competitors increasingly flooding the market, many African companies
are being displaced (Goldstein et al, 2009: 1539).
this renewed emphasis in Africa from China
and India is assisting in helping Africa’s supply side problems and
bringing desperately needed capital to the continent, it “will lead to
increased energy prices for net oil importers in Africa and a worsening
of their terms of trade” (Zafar, 2007: 126). In this regard, it appears
as if these new donors are merely replicating the traditional
relationship that Africa holds with Western powers (Hattingh, 2010;
Clapham, 2008). All that they are “seeking to do is … insert themselves
into an existing bilateral relationship between Africa and the West…
This does not however involve any change in Africa’s role within either
system as a supplier of raw materials” (Clapham, 2008: 368).
if this is the case, then why are China and
India so attractive as new partners? In order to understand
this, we need to recognise that there have been fundamental changes in
the way that China and India deliver aid, even if the end
result is relatively similar. In-keeping with their rhetoric and
official announcements of respect for sovereignty, African countries
are provided with a significant degree of autonomy as recipients of
Chinese and Indian aid. Furthermore, China and Indian aid provides
recipients with leverage against traditional donors. This occurred most
recently in Angola when Chinese aid and development assistance allowed
the government to delay IMF reforms (Vines & Campos, 2010) and push
for a better deal. In this regard, we are witnessing a second
generation of donors that do not seek to impose reforms, but instead
focus upon Africa’s supply side problems.
importantly, I argue, that this new of
delivering aid has been made directly possible through the actions of a
previous generation of Western donors. The first generation of donors,
such as the IMF, World Bank, and Western bilateral donors significantly
changed African state’s internal policy. With an emphasis first upon
the removal of the state, and then a shift towards good governance
reforms, traditional donors in the continent provided the necessary
conditions for foreign direct investment in Africa. This coincided with
the rise of China and India who were seeking new markets, new resource
suppliers, and new allies. Not only did these reforms provide
hospitable locations for investment, it also left African economies in
demand of a new way of doing business that allowed a more equitable
partnership where the recipient could set the terms of engagement and
the purpose of aid. China and India have been able to maximise the
potential that this offers. Development assistance subsidises Chinese
SOEs and Indian MNCs in the continent (Kragelund, 2009; Sahni, 2010),
making them competitive investors with cheap prices. This, combined
with their stance of few questions asked makes them attractive
partners. Yet there has not been the need for them to impose reforms
and conditionalities as, to put it bluntly, the work has already been
done for them. This neatly dovetails with China and India’s rhetoric,
centred round an equitable relationship that does not interfere with
either side’s sovereignty, and instead emphasises an equitable
partnership where neither side calls the shots. China and India are
focusing upon what needs to be done to make their FDI in the continent
more efficient and more profitable. Focusing on transportation, energy
sustainability and technical training, China and India are more
concerned with making Africa a long-term investment opportunity than
anything else, and in many instances their needs in the continent in
the supply side sector coincide with the needs of African states.
this dissertation I have sought to understand
the motivations and methods of China and India in Africa, and what
differences and similarities exist between them. I have also sought to
explore how this new relationship can be put into context of the
previous development efforts practised by more traditional donors
within the continent. I have tracked how internal developments within
China and India, external developments in regards to the balance of
power within the world, and internal developments within African states
influenced these relationships, right up until the present day.
evidence suggests that China and India are
seeking many of the same goals in the African continent. As a result of
this there are a number of similarities in their foreign policy. Both
use development assistance as means of facilitating trade and
investment, as well as helping to secure access to resources. Whilst
their project assistance is centred (to an extent) around different
areas (China offers its expertise in infrastructure delivery whilst
India’s aid programmes are more designed around its own relative
strengths in IT and services), their way of delivering aid is very
similar. With an emphasis upon mutual respect and sovereignty
articulated in both of their foreign policies, neither China nor India
seeks to impose aid conditionalities upon other countries. They have
attempted to distance themselves from the formal terms of recipient and
donor, and instead offer a significant degree of policy autonomy in
their aid delivery. In this manner we are witnessing the rise of a new
generation of donors that do not attempt to transform the societies
they are investing in. They are instead looking at offering aid in a
manner which improves the efficiency and sustainability of their own
investments in the continent. By improving energy provision,
infrastructure, transportation and IT services, these donors are making
their investments in the continent more profitable, and more durable.
have also attempted to demonstrate that China
and India’s success in infiltrating the continent can only be perceived
through an understanding of traditional development assistance. Both
China and India have been able to thrive in Africa as a result of
liberalisation reform policies imposed by the IFIs during the
Structural Adjustment period of the 1980s. This has allowed China and
India to penetrate African markets and resource sectors whilst
increasing both their imports and exports with the continent
exponentially. Furthermore, by contrasting their motives of
‘solidarity’, ‘mutual-benefits’ and a fairer international trade system
with a more negatively viewed West with neo-imperialist intentions
China and India have been able to portray themselves in a positive
light whilst validating their rhetoric of ‘mutual gains’, ‘respect for
sovereignty’ and ‘equality’ between recipient and donor.
understanding the nature of Chinese and Indian
development assistance in the continent it is possible to identify
areas where traditional assistance from Western donors may be
complementary to the assistance of these emerging donors. Tri-angular
partnerships between Western donors and China and India have been
trialled recently in the DRC combining China’s expertise in
infrastructure provision with DFID’s assistance in helping the national
government introduce important social and environmental safeguards.
Tri-angular partnerships have also been utilised in the treatment of
Malaria and HIV / AIDS, combining the relative expertises of India,
DFID and The Clinton Foundation (Mitchell, 2011). Whilst the impact and
effectiveness of these are yet to be realised, it signifies a
productive move by both China and India to develop their development
assistance beyond their own economic interests, and into more
beneficial areas that promotes longer-term social, environmental and
political development. Whether this is being done in order to counter
Western and African criticism, or in order to make Chinese and Indian
aid more productive for the recipient, it recognises that there is the
possibility for traditional donors to engage in development assistance
projects with non-DAC donors, even if they are not co-opted formally
into the international development community. Other progressive steps
include China and India’s technical assistance programs. These are
highly commended by the UNDP Special Unit for South-South Cooperation,
and avoid problems commonly associated with traditional donor’s
technical assistance programmes. China and India’s assistance in these
areas is regarded as highly applicable to the needs of developing
countries, highly participatory and demand driven. Seeing as there is
much overlap in regards to the countries that emerging donors and
traditional donors deal with, a tri-angular approach that emphasises
their different strengths could be formulated, producing development
programmes which are applicable and relevant to developing countries
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 In April 2011
the State Council of the PRC released a White Paper entitled ‘China’s
Foreign Aid’ detailing where its assistance is directed and what form
it takes. This represents a major shift in the Chinese government’s
foreign aid policy, indicating a move towards greater transparency.
 The success of
these Special Economic Zones is not yet known as they have only began
to be implemented, although some in-depth studies can be found already
which identify potential pitfalls with them (Brautigam & Ziaoyang,
2011; Mthembu-Salter, 2009; Davies, 2008).
Written by: Tom
at:University of York
for: Louise Haagh
written: June 2011