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Growing Afro-Asian Ties: Opportunities for Future Research
Ian Taylor*
Since the days of Bandung in the mid-1950s, the idea of “South-South” interaction - be it political or economic - has been an initiative that has inspired many in Africa. But except for Chinese involvement in the liberation struggles of the 1970s and ubiquitous aid from Japan, this has never really amounted to much. Until today. The modernization of large parts of East Asia and the huge economic growth in both China and India mean that a substantial trade and investment relationship, as well as political linkages between Asia and Africa, is now very much developing. Indeed Africa is seeing a veritable explosion of interest and activity by Asians in Africa (and to a lesser extent, vice-versa). Between 1995 and 2001, total trade between Africa and developing countries in Asia grew by nearly 50 per cent, from $20.9 billion to $30.1 billion. This new interest is likely to stake out a major development in global politics, as well as crafting a new geography of trade and co-operation outside of the traditional North-South linkages.
There are plentiful examples. For instance, in Kampala a Malaysian Business Centre has been set up to advance trade and investment opportunities between Kula Lumpur and Uganda. The Malaysians trail the Chinese, who already have eleven such centres across Africa. Over 2,000 Vietnamese agronomists are currently providing education in agriculture in Benin, Congo-Brazzaville, Madagascar and Senegal, whilst in Tanzania a local pharmaceutical company has, with technological assistance from Thailand, started manufacturing antiretroviral drugs to treat HIV/AIDS. India is training Senegalese technicians and professionals and provides assistance to projects developing rice, cotton, solar energy and information technology in the West African country. Motor buses manufactured by India's Tata Corporation were produced in a factory in Senegal in 2003 and are now in full production.
Compared to the period even a decade ago, Afro-Asian interaction has grown exponentially. Of Africa’s total export earnings (estimated at about US$130 billion per year), around 16 per cent comes from sales to Asia. The rate of increase in export values to Asia (10 per cent per year) has been higher than the comparable rates for the EU or United States over the last ten years. Although total African exports to Asia make up only around 1 per cent of Asia’s total imports, they account for over 14 per cent of Africa’s total exports - a not insignificant amount for the continent and something which is only likely to increase in the future.
China is now Africa’s third most important trading partner, behind the United States and France but ahead of the United Kingdom. Indeed, the burgeoning of Sino-African links is unprecedented and is becoming the main topic of interest vis-à-vis Africa’s international relations. The figures speak for themselves. In 1999, the value of China’s trade with Africa was $2 billion; by 2004, this had grown to $29.6 billion and in 2005 reached $39.7 billion. A senior economist at the Chinese Ministry of Commerce predicts that trade volume between China and Africa will top the $100 billion mark in the next five years.
Africa’s exports to Asia are mainly driven by primary commodities and related products. As with Africa’s EU and U.S. exports, oil and oil-related products account for a large share of the continent’s exports to Asia. However, other primary commodities such as agricultural and fishery products, and minerals and crude materials are also and increasingly being exported to Asia. African exports to Asia of mineral fuels and other raw materials such as mineral and mining products have experienced strong growth because of rising manufacturing sectors in Asia, particularly in China, India, Korea, Taiwan, and Southeast Asian countries such as Indonesia, Malaysia, the Philippines, Singapore, and Thailand.
Learning from Asia?
Interestingly, the growth in Afro-Asian linkages has provided a possible alternative model to African leaders, many of whom are frustrated by the lack of economic progress in their countries, despite following Western advice regarding market liberalisation. The role that a strong public sector played in the East Asian "miracle" is particularly of interest and in turn the issue of whether or not Asian-style developmental states are a possibility in Africa has occupied the minds of a large amount of African academics and policy-makers. Though the conclusions are varied, the growth in an Asian presence in Africa has opened up space to rethink development policy and has provided alternatives to the advice proffered by the IMF and the World Bank. Indeed, the Asian experience continues to inspire many policymakers, who perceive it as perhaps more relevant to their own developmental aspirations than the Washington Consensus model.
Asian countries in turn have not been shy in advertising their relative success. Malaysia, for example, provides technical training courses for Africans which are explicitly based on Malaysia's development planning experience, in particular how the state can operate closely with the private sector, whilst also retaining a concentration on the social impact of economic growth.
Aid to Africa
Equally of interest is the growth in aid disbursements coming from Asia to Africa. Japan has traditionally led the way in this regard, and continues to do so. In 2002 Japan contributed nearly $9.3 billion in official development assistance (ODA), the most of any other country except the United States. Whilst two-thirds of Tokyo’s aid goes to Asia, between 1993 and 2001 Japan provided $11.2 billion to Africa in aid. Recently, Prime Minister Koizumi announced that Japan would double its aid to Africa, to US$1.6 billion annually, over the next three years. It should be noted that Japan also makes contributions to development institutions, with a sizeable share ultimately allocated to Africa. Over the last decade more than 10,000 Africans have been trained in Japan whilst 7,000 Japanese technicians have provided support to Africa.
But Japan’s presence in Africa is increasingly being overshadowed by the new kid on the blockChina. It is known that Beijing provides significant aid to some African states, although data is hard to come by, as China does not publish figures. China however has said that it will increase its contributions to what it calls the African Human Resources Development Fund by 33 per cent, and provide training to 10,000 African personnel in the next three years. In addition, China has cancelled $1.3 billion in debt owed to it by 31 African states. For the other emerging Asian giant, India, Africa is also increasingly becoming an area of activity. In 2003, New Delhi set up the India-Africa Fund with a goal to disburse to $200 million in credits to various projects in Africa. Even South Korea provides aid to Africa, with Angola figuring amongst Seoul's top ten aid recipients. Although actual Korean aid to Africa remains small, between 1995 and 2002 South Korean aid more than doubled and it is expected that more disbursements to Africa will follow.
However, having mentioned the above, there is a potential downside to Asian aid, particularly if compared to Western aid. This is becoming more apparent and also, more controversial. Essentially, this controversy is based on the reality that some Asian aid to Africa is being given with no questions asked and, critics allege, little or no concern as to the democratic or human rights credentials of the recipients. No wonder that Gabonese President Omar Bongo gushingly praised Chinese aid as coming with no conditions and with “mutual respect and regard for diversity". For a dictator who has been in power since 1967, overseeing what is routinely described as one of Africa’s worst managed and most corrupt oil economies, a no-questions-asked aid is highly attractive. Chinese activity in Sudan and Zimbabwe can be similarly viewed in this light.
But it is not only the Chinese who openly support autocrats through the provision of aid and other linkages. In November 2005 the outgoing Malaysian ambassador to Zimbabwe commented openly that Malaysia wanted to strengthen its relationship with Mugabe and that he has assured the Zimbabwean government ‘of our sympathy and support of Zimbabwe on correcting the historical imbalances’. Thus, whilst Afro-Asian ties may be crafting a new trade geography, there is also the dangerous potential that they might be cementing a new political geography which allows autocrats and dictators to bypass international pressure vis-à-vis democracy and human rights, in favour of ties with less scrupulous Asian allies.
Rivals or Partners?
Whilst investment in Africa by Asia has been welcomed, there are other economic activities in Africa that are not viewed as benignly. The huge surge of manufactured exports, particularly from China and India, is becoming increasingly problematic for Africa. Indeed, the inflow of Chinese imports of such products has served to impede, if not stop, African exports of manufactures, particularly cheap textiles and clothing. For example, in South Africa nearly ninety per cent of all imported clothes are from China, which sell for cheaper prices than locally manufactured products. Consequently, since 2002 300,000 textile workers have lost their jobs. Consider Lesotho, a poor mountainous enclave of 1 million people surrounded by South Africa. It developed a thriving textile industry in 2000 based on the passage of the US African Growth and Opportunity Act, which for the first time gave a number of African nations preferential entry into the US market for their textiles. It is not only in South Africa where this has happened and, with the expiry of the WTO’s Multi-Fibre Agreement, China and India are almost certain to capture at least 80 percent of the global market in textiles and clothes. African (and other) manufacturers are unlikely to be able to compete and it is predicted that globally, around 27 million textile workers will steadily lose their jobs outside of China and India. Eroding the manufacturing base of African countries jars quite considerably with the rhetoric of South solidarity.
The Bottom Line
Because of the high profit returns that investors can make in Africa, Asian investment in the continent is increasing massively. In particular Chinese, Indian and Malaysian firms have been increasing their investments in Africa immensely in recent years. Malaysia's Petronas oil company now has oil production or exploration ventures in a dozen African countries, whilst the state-owned China National Petroleum Corporation owns forty per cent of Sudan’s largest oil venture. Over 600 Chinese businesses already operate in 49 African countries. India also has wide-ranging investments in Africa, with over $350 million invested in Egypt alone. India is now the third largest source of foreign direct investment in Uganda and numerous ex-Ugandan Indians have been returning to the country to invest, openly welcomed by President Museveni. India’s state-owned Oil and Natural Gas Corporation has investments in Sudan totalling $1.6 billion.
It is clear that Asia could thus become a strategic target in diversifying the markets of African products and in attracting much-needed investment. Demand from Asian markets has a potentially good fit with the existing primary commodities profile of most African exports. And Asian investment in Africa has provided an alternative source during a period when Western interests in the continent has somewhat declined. But, there are potential problems with the new upsurge in Asian activity in Africa. Firstly, the scope for value-added processing in Africa is limited and an increase in exports of primary products to Asia might simply perpetuate the dependency of the continent on volatile commodities. And in opening up their economies, there is a real danger that Africa could become flooded by cheap Asian products, particularly from China and India. However, more serious than that, it could be argued, is the opportunity that (some) Asian investment affords various African leaders to continue to ignore human rights and democracy. As actors in Africa, some Asian countries such as China and Malaysia provide a discourse that effectively legitimises human rights abuses and undemocratic practices under the guise of state sovereignty and combating “neo-colonialism”. This clashes with the growing international consensus that political leaders cannot escape justice for violations against an emerging, if fragile, global norm. Whilst a renewed interest in Africa by Asia is to be welcomed, this must be cautious and be viewed with a certain level of alarm, if and when, “South-South solidarity” is used as a smokescreen to mask business with heinous regimes. Future research on Afro-Asian linkages, once seen as moribund and a leftover from the Bandung days, will become more and more important.
* PhD, School of International Relations, University of St. Andrews, St Andrews KY16 9AL, Scotland, United Kingdom. E-mail: ict@st-and.ac.uk