Saturday, 9 February 2013

Special Series: Part 3 - Exploring U.S. military presence in Africa

This is a special report on the United States military involvement in Africa. The report will explore the changing militant landscape of sub-Saharan Africa, American motives for creating military bases, and a look at where and how those bases are functioning.

Part 3 discusses the motives for increased United States military presence in Africa, China’s investments in the continent, African reactions to Chinese investment tactics, and Washington’s underlying strategy for countering Chinese influence in Africa.

China and Sino-African relations

It has been suggested the increasing U.S. presence in Africa is part of the Obama administration’s “pivot” to Asia, which by extension includes a new concentration on the continent in response to increasing Chinese presence there.

The pivot strategy itself has been criticised for its brashness in emphasising addressing a rising China, instead of underlining the positive economic outcomes of increased Pacific cooperation. In planning to increase the U.S. Navy’s Pacific warship ratio from 50 percent to 60, Beijing has, not surprisingly, interpreted this pivot as a containment of China. A conclusion not exactly rebutted in Washington.

Many Asian countries are welcoming a heightened American presence in their backyard, feeling that the past decade spent mired in the Middle East and South Asia has been somewhat of a distraction for the world’s only superpower. Old rivalries in South East and North East Asia did not magically disappear during the U.S. adventures in Iraq and Afghanistan. Instead they have simmered and grown more pronounced as each vie for greater autonomy over regions with borderlands so ambiguous that lines in the dirt do little to assuage tensions.

China has been most aggressive in the Asian world. However their growth is worldwide with many different investments in South America and Europe. But especially, and increasingly, China is moving investment to Africa.

As global demand for energy continues to rise, China is turning to Africa to secure resources and energy that could sustain China’s truly incredible economic and social evolution. China has helped many African countries improve their promising oil sectors while benefiting from advantageous trade deals as that oil heads to market. China presently receives an estimated one-third of its oil imports from Africa, even though the continent itself holds only 9-10 percent of the total world’s oil reserves.

Chinese investment in Africa for 2012 clocked in around US$180 billion according to a report in the Financial Times. China’s top five African trading partners are Angola, South Africa, Sudan, Nigeria, and Egypt. An estimated 800 Chinese corporations are doing business in Africa, many of which hold private enterprises working in the energy, infrastructure, and banking sectors.

The reason for this spectacular increase in Chinese direct investment is a simple one. Africa desperately needs what China is offering – money to finance infrastructure projects such as roads, ports, railroads, and telecommunications systems.

And of course, China needs what Africa has in abundance: raw material and energy supplies. Those Chinese funds landing in African coffers without any of the conditions usually associated with Western donors, makes them very attractive to African governments.

In 2010 China became the most important trading partner for Africa. Since then more than US$10 billion in debt owed to the People’s Republic of China has been forgiven from various African countries.

African governments often sing the praises of Chines investors. For instance, "China’s approach to our needs is simply better adapted than the slow and sometimes patronising post-colonial approach of [Western] investors, donor organisations and non-governmental organisations," explains Abdoulaye Wade, former president of Senegal.

As an example of this investment, China Daily reported the China-Africa Development Fund is projected to expand to US$5 billion in the next five years, and may eventually exceed that figure.

Thus far, US$1.3 billion invested in more than 40 projects in 20 countries is expected to facilitate more than US$5 billion extra capital investment and create more than 100,000 jobs. The fund plans to invest more in "mega projects" such as transportation and harbour construction in the next five years, seeking partnerships with domestic investors for large projects.

Courtesy Commodity Discovery Fund
Specifically, the Heglig oil fields in Sudan are extremely important to Beijing, whereas the teetering political situation in Sudan is not.

The oil rich region has been plagued with unrest and even the demarcation of two separate countries in the past few years. Yet close to 60,000 barrels per day of oil is produced here, and China is the majority stakeholder. China has been willing to influence both Khartoum and Juba to ensure oil production stays online. But China’s neutrality in the conflict between the two countries is threatening their investments in the region. Getting involved in the conflict will increasingly become necessary for China if it is to protect its oil investments.

As part of a long-term interest in the war-torn country, Sudan announced January 9 that it will receive a US$1.5 billion loan from a Chinese bank. The loan will bridge a fiscal gap and enhance its balance of payments. It provides a critical cash infusion for Sudan’s economy, which has struggled since South Sudan seceded in 2011 and took the majority of Sudan’s oil producing territory.

In light of all this movement, the United States is watching Chinese economic investment in Africa intently.

According to diplomatic cables publicised by Wikileaks, Chinese economic activity has been an obsession for U.S. spies and diplomats over the last few years. Niger’s capital Niamey is virtually awash with American spies keeping tabs on who’s talking to whom. One of these cables counselled that, “China is building a major portfolio in Niger’s resource sectors and will probably replace France as Niger’s top foreign investor when projects under construction are fully operational…There are no current examples of US-China collaboration in Niger.”

Overall, Chinese investment in Africa is being touted as a positive development for the continent.

The International Monetary Fund's Regional Economic Outlook for Sub-Saharan Africa estimates growth of 5.3 percent and 5.8 percent for 2011 and 2012, respectively. And just like their American counterparts, the investment strategies are like down-payments for future opportunities, with China investing not just to benefit their own economy but to help leverage contentious political issues should they arise.

(Photo: Reuters
As written elsewhere on this site, the strategy of chequebook diplomacy is in full swing in Africa as well as in the Pacific. If China were to encounter obstacles in the United Nations, countries it has assisted economically in Africa would become ideal support for Beijing.

Yet on the negative side, China does not regularly hire local African labour in many of its investments, angering local African labour markets.

Even if those investments are private enterprises, the Chinese prefer to ship their own workers into Africa to complete the projects. While this frustrates local African labour pools, it is entirely understandable from the Chinese perspective. China is overflowing with citizens in prime working age and there simply is not enough employment back on the Chinese mainland.

Shipping young Chinese workers out to build roads, bridges, pipelines, ports, and cell-phone towers in Africa removes them from China and keeps the money flowing. The former reason is politically important for Beijing because of the historic threat that social instability brings in China with high unemployment rates.

So, coolly assessing all this, Washington feels a pressing need to include itself more overtly in Africa, and covertly. Not only to protect American enterprises already working there, but to counter the influence China is gaining on the continent.

The United States is outpaced by China in terms of trade and investment in Africa. African nations psychologically align themselves with Chinese investors because they rarely request political reform of the governments before investing. Another diplomatic cable, released in the Guardian, warned that if oil or gas is found in Kenya then, "Kenya's leadership may be tempted to move ever closer to China in an effort to shield itself from Western, and principally U.S., pressure to reform."

After the Cold War ended, American support for Africa was larger discarded. Now, with a rising China, whose investments far outweigh American contracts, the United States is slowly beginning to focus once again on the continent.

Aside from militancy and resource acquisition, Washington’s plan for a stronger military presence in Africa stems from a wish to counter Chinese influence in the region before Beijing becomes the new “imperial power” in Africa, much like the British and French before it.

1 comment:

Steve Finnell said...

you are invited to follow my blog