16 October 2009

Africa: Deal With Guinea Raises Questions About Chinese Role

Washington — Reports of a large infrastructure and minerals agreement between Guinea and Chinese investors this week have turned a harsh spotlight on the human rights and geopolitical stakes of the scramble for Africa's natural wealth.

The deals, which the Guinean military junta says are worth over seven billion dollars, come just weeks after soldiers opened fire on protesters in a Conakry stadium, reportedly killing 157 people and raping women in the streets.

The incident drew international condemnation. U.S. deputy secretary of state William Fitzgerald was sent to personally rebuke junta leader Capt. Moussa Dadis Camara, making it clear the U.S. held him responsible for the killings and, like the protesters, hoped he did not run in the upcoming January elections.

"We were there for two hours," Fitzgerald said following the meeting, according to The New York Times. "I was quite uncomfortable."

The snapping up of the riches in Africa's mountains, forests and offshore waters by the Chinese government and both state-owned and private Chinese firms is also becoming increasingly uncomfortable for the U.S., and this deal would bring the awkwardness to an unprecedented level.

The timing of the announcement just weeks after the Sep. 28 massacre could not be worse for China. In the past, China has been criticised - by Western nations - and commended - by some African nations - for making mutually beneficial deals without the strings, like human rights or governmental reforms, which are so often attached to investment from governments in the West.

China has yet to confirm any deals have been made or negotiations taken place and Ma Zhaoxu, a spokesman for China's ministry of foreign affairs, said Thursday that the government has no role in the deal.

"As far as we know, this is the corporate behaviour of an international company registered in Hong Kong," Ma said. He also pointed out that, "As a developing country, China has South-South Cooperation with Guinea based on equality, mutual benefit, international norms and market rules. It serves the fundamental interest of both peoples."

As private behaviour, this investment would not stand out from much of the actions of many corporations based in the U.S., which are also routinely criticised for profiting from states with problematic human rights records.

The Guinea deals are nonetheless very reminiscent of deals African states and the Chinese government, through its state-owned firms, have struck in recent years. Many of these deals, such as the nine-billion-dollar minerals-for-infrastructure deal with the Democratic Republic of Congo (DRC), point to a willingness of the Chinese government to take substantial risks and face international criticism that many Western governments cannot match.

"We have expressed concerns about this kind of activity," a U.S. State Department spokesman, P.J. Crowley, said Wednesday in response to a question on the Guinea deals. "We think it's important that, as you do business with countries, that you also have respect for human rights."

"At some point in time, it really does matter what you do when you engage with a particular country to help that country advance. And we certainly think that it's a responsibility. We certainly take on this responsibility ourselves so that in our dealings with various countries, we are pushing to see better governments emerge, corruption dealt with," Crowley said.

Certainly, not all U.S. firms feel the same way. Some U.S. electronics companies, for instance, have come under fire for using minerals mined in war-torn DRC, where an estimated 5.4 million people have died in the violence that has plagued the country for the past decade.

As far as deals with the U.S. government are concerned, it is frustrating for some in Washington to see the no-strings-attached deals being made with Beijing. The Guinea deals, however, as private agreements with a corporation, may not present a particularly special or troubling situation.

"I don't really see it as a major concern for the U.S.," said David Shinn, a former ambassador to Ethiopia and Burkina Faso currently working on a book on Chinese-African relations. "If the Chinese are the only ones that are going to go in and do these deals, then so be it."

The major issue with the deal, as Shinn sees it, is its role in "helping to prop up a Guinean government that is being subjected to a lot of criticism in the world right now."

A significant deal with Chinese investors would go a long way toward dislodging the international pariah label that has been attached to Guinea since the Sep. 28 massacre, and is a likely reason why the junta was so happy to boast of the deals earlier this week.

The deals Guinea says it has struck with the Hong Kong-based Chinese Investment Fund include a seven-billion-dollar agreement in which infrastructure and mineral projects would be owned and developed jointly. This differs from past Chinese investment in African countries like Angola or the DRC, where access to the countries' mineral resources has been traded for investment in infrastructure.

The Guinean government also reported it had an oil-prospecting deal with CIF and Sonangol, the Angola state oil company.

Guinea's mineral wealth includes gold, diamonds, iron ore and uranium and it is the world's top supplier of bauxite, a key component in aluminum production. Recent oil discoveries in fellow West African nations Ghana and Sierra Leone have increased interest in its oil prospects as well.

While Chinese and U.S. interests clash most directly when it comes to access to Africa's oil reserves, in a broader sense, critics say, China's no-strings-attached investment in the continent also undermines international efforts to promote transparent, democratic governance in African countries.

Trade between China and Africa has been growing by around 30 percent annually since 2000. It reached 100 billion dollars last year as China became the continent's biggest trading partner.

Deals such as those with DRC and Sudan have drawn criticism and frustration from governments like the U.S.'s that would prefer to use investment as carrots in efforts to stop violence and repression in these countries.

The U.S., for instance, cut off its aid to Guinea, about 15 million U.S. dollars yearly, following the coup that brought the junta to power last December.

"I think the Chinese people and African people have the best say in how to evaluate China-Africa cooperation and activities of Chinese enterprises in Africa," Ma said Thursday.

There has, however, been some opposition among Africans to the increasing Chinese presence in their cities and mines, though the official messages of the governments consistently speak of promoting Sino-African friendship.

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