New colonists: Ideology is the mortar for Brics’ success
By Richard Lapper
Published: September 13 2010 17:21 | Last updated: September 13 2010 17:21
China pops up all over Africa these days. Its construction companies build everything from roads and railways to football stadiums and airports. Its exports range from mobile phones to cheap shirts. And its own industry depends on a steady supply of iron ore from South Africa, copper from Zambia, and oil from Nigeria, Angola and Sudan.
But less well known is the fact that India and Brazil, two of China’s fellow Bric nations, are deepening their ties with the continent as well.
In Angola, for example, Odebrecht of Brazil rather than any of the many Chinese construction companies is the biggest private-sector employer.
Three Indian companies as well as Brazil’s Vale are exploiting coal reserves in Mozambique considered to be the biggest discovered since the early 1960s.
Indian pharmaceutical companies are doing a roaring trade in the region and although Brazil has focused its efforts on Portuguese-speaking Angola and Mozambique, its interest is much wider. Vale, the world’s biggest iron ore miner, recently made a $400m investment in a Zambian copper mine, for example.
Under President Luiz Inácio Lula da Silva, Brazil has opened many embassies in Africa and the peripatetic leader has visited the continent several times since he was first elected in 2002.
This growing web of ties amounts to a “seismic economic” shift, according to a recent report by economists at South Africa’s Standard Bank, one of the many continental financial institutions orienting their strategies around the Brics.
Trade between the Brics and Africa as a whole soared from $22.3bn in 2000 to $166bn in 2008 and, although China accounts for two-thirds of that amount, Brazilian and Indian commerce in the region is expanding equally quickly.
Indeed, overall, the Bric countries’ share of Africa’s total trade rose from 4.6 per cent in 1993 to 19 per cent in 2008.
What is more, the strong secular trend has been reinforced by the financial crisis of 2008, with China replacing the US as Africa’s biggest trading partner in 2009.
“Asia’s demand for Africa’s resources has proved, in large part, recession-proof,” wrote Jeremy Stevens, an author of the Standard Bank report. “The Brics have unequivocally attached themselves to Africa to ensure long-term economic growth.”
This shift has not been uncontroversial. The single-mindedness of the Chinese drive into Africa has raised hackles. Thabo Mbeki, the former president of South Africa, famously warned three years ago about a new form of colonialism, prompting his government briefly to impose quotas on imports of Chinese textiles.
Human rights groups have criticised the way in which China has backed openly repressive governments in Sudan and Zimbabwe. Workers contracted by Chinese companies tend to be badly paid and work in poor conditions, and the Chinese tendency to employ Chinese workers rather than local labour has occasionally caused uproar.
“What bothers me is that no African has ever worked with a Chinese company and seen his life improve,” said one young Ghanaian entrepreneur at a recent conference on Chinese investment in Africa.
On the other hand, many governments like their new partners. Chinese and Brazilian construction companies can be cheaper than European rivals. In 2008, China overtook the UK as the biggest source of foreign investment in Ghana, partly because Chinese groups committed to build roads and other infrastructure at a fraction of the cost of competitors.
“The Chinese build three roads for the same price that the Germans would charge to build one,” said one Ghanaian official at the same conference.
Speed is another attraction for African government. In Mozambique, new coal deposits around the dry and dusty city of Tete have been developed phenomenally quickly by Brazil’s Vale and Riversdale, a company in which Chinese, Brazilian and Indian companies all have significant stakes.
Steve Mallyon, managing director of Riversdale, says eight power plants in India and three steel factories in China are “screaming for product. Twelve months ago, China wasn’t even on our horizon.”
Connections with China, India and Brazil are also sought-after because they tend to reinforce the ideological predispositions of African governments, especially those formed by what were national liberation movements.
Big government – featuring strong regulation, nationalised companies and close links between political and business elites – has been one of the features of the Brics’ success.
That is appealing to those African leaders who are distrustful of the market-based orthodoxy that has prevailed for the past two to three decades.
Martyn Davies, chief executive of Johannesburg-based Frontier Strategies, says officials from South Africa’s governing African National Congress regard the success of the Bric economies as proof that the state should be doing more, not less, to nurture growth.
“Pretoria’s interpretation of what’s driving Brics is that it’s very much a state-capitalist approach,” he says. |
