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Asia and the Orient in Africa

Many people are now showing greater interest and some concern about Asia’s and the Orient’s increasing
commercial role in all parts of Africa; from mineral resource investment through to purchases of very large
tracts of agricultural land. Some of the Asia’s and the Orient’s major economic powers are now investing
heavily in Africa's assets, amongst these are China, South Korea and India and it is well noted that they
take little or no interest in the local political issues, believing that they are there for commercial purposes
and have no rights to demand social or political reforms, as part of any investment package.
It should also be noted that some of the Gulf States are likewise showing greater interest in African
resources, especially in agricultural land.
This has caused considerable consternation in western democratic nations that believe that governance
and social development must go along with any western investment. Thus, the west uses blackmail tactics
in African countries where civil rights issues, general corruption and political wheeler-dealing are below the
standards that the west find acceptable.
Many of the reasons why Asian and Oriental nations are investing heavily in Africa are very basic -
Resources. Asia and China need base minerals for their manufacturing industries in order to compete with
the western manufacturing countries and also, all need to be able to better ensure food security against
competing western nations. These reasons are supported by the expanding economies of the participating
countries whereby as their populations become richer or more middle class, there is an expectation of
improved employment opportunity, improved incomes and with these, improved diets. These great
pressures on Asian and Oriental economies have pushed these governments to invest in larger resource
bases than they presently need and yet, secure the future ability to gather the resources. Thus, by creating
surplus supplies of raw materials at reasonable prices, these economies hope to dominate the
manufacturing base for many years to come.
Therefore the Asian and Oriental nations have little choice other than to heavily invest now, regardless of
the wishes of the western nations and thus, their investment activities are very high profile especially given
the facts that these nations choose to ignore civil rights and other contentious issues that the west sees as
problematical. To emphasise the point, China has cleverly written off the debts of some African nations and
has added ten billion dollars worth of soft loans for infrastructure projects on the continent and have clearly
stated that their interest is in base resources. Put this together with China’s ‘see no evil, hear no evil and
speak no evil’ policy, they have offered a loss leader that is irresistible to developing African nations.
Often, the west is perceived as being America only and although this is an incorrect perception, developing
nations see some value in not only befriending Asian and Oriental countries but also that these countries
openly refuse to become involved with governance or civil rights issues.
Recipient nations have had to face two problems, albeit small in their eyes. One, wishing to stay friendly
with the western states and to maintain the large amounts of money they put in towards development
projects. Two, not wishing to endure the moral pressure to change their ways regarding civil rights and
governance issues. In this, Oriental nations fit the bill very well and the African nations will openly invite the
Orient into their back yard.
By offering a further ten billion dollars in soft loans to African nations, China will be seen to benefit the
health, education, social services and infrastructure development in direct competition with western nations
and China’s policy in not commenting on civil and other rights issues will find many takers for its offer. With
some of the Chinese soft loans being available for infrastructure improvement for roads etc, these of course
will be of benefit to the Chinese also, in that ores and other resources have to be moved. One incidental
benefit may be to the remote farmers in being able to market their crops cheaper and more efficiently.
Africa, with its vast untapped mineral, oil, agricultural land, forest and marine resources in is the primary
target of many industrial nations, where governments’ are in great need of wealth creation and where
poverty, climate change and food resources are problems.
However, as many African governments have found western based wealth creation has given little benefit
to the host countries, as profit migration is a major problem, or, how to keep a significant proportion of the
profit created, in the host country. This is not necessarily about cash as much as the low value raw
materials that are exported for processing outside of the supplying country and thus, the profit from these is
created outside of resource country.
Western governments insist on certain issues being addressed before funding is agreed and these include
governance, civil rights, land reforms; improved health, education and labour laws and indigenous peoples
issues over land and water rights. At the root of these demands from western funding agencies is poverty,
as this is the most pressing problem of many areas of the world. Poverty alleviation is affected by education
and employment opportunity and with many of the many manufacturing and processing industries owned
and managed by foreign conglomerates; there will be little improvement in the educational and employment
status of the general populace without the demands of western governments. One issue that must be kept
in the public eye is the probability that whole communities will be relocated as foreign corporations take
over large tracts of land for commercial mining or agriculture and the indigenous land and water rights
involved should be protected.
There are some drawbacks and restrictions for those investing in Africa and of these some are external, but
most can affect production and distribution.
Political instability.
Long haulage distances.
Power shortages.
o Blackouts.
o General shortages.
o The cost of generating self-contained power supply.
o International fuel prices
Skilled labour shortages.
Extreme seasonal changes.
Civil and/or military unrest.
External pressures.
o General market volatility for base materials.
o General market volatility in consumer markets.
As time goes by, other factors will create problems for investors in Africa and many of these, related to the
expected changes in climate. Climate change will create food production problems and water shortages
and large numbers of populations will migrate and create a greater demand on local and international
governments to provide support.
In summary, it could be said that China is giving the African nations what they want and without the strings
attached by western governments who are now calling ‘foul’. And although there are some concerns about
a number of the African nations with poor civil rights and governance issues and although there some
states in danger of failing, is it not the democratic right of sovereign states to determine who they do
business with; without interference from western governments, keeping in mind that most African states
have a history or tribalism?
Without doubt, Asian and Oriental nations will benefit hugely; allowing them to build their stocks of basic
resources, plus maintaining and increasing their trading positions with many emerging nation states.

twofer – November 2009

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