Latin America looks East

It would appear that Africa is not the only continent "looking East" these days: Latin America likewise appears to be following suit.

Indeed, while the United States is preoccupied with other parts of the world (Latin America is currently not a major priority for the Obama administration), China is paying increasing attention to its international alliances, particularly in Africa and across Latin America. For starters, Chinese President Hu Jintao is embarking on his whistle-stop tour of Africa tomorrow, where he is expected to stress Sino-African energy relations and shore up African good sentiment. Just yesterday, Chinese Vice President Xi Jinping, who is likely to succeed Hu Jintao early next decade, left on a tour that will take him to Mexico, Jamaica, Columbia, Venezuela, and Brazil -- all nations eager to strengthen their ties with China. Annnd, elsewhere in the region, Vice Premier Hui Liangyu is paying official visits to Argentina, Ecuador, Barbados and the Bahamas from February 7-19. Whew. It's exhausting just writing about it.  

No biggie, you say? Well recall that: 

President Hu visited Latin America in November, stopping in to Cuba and Peru. And while Hu was rubbing elbows with most of the major Latin presidents at the APEC summit in Lima, China’s highest ranking military officer was elsewhere in South America on tour.

That officer, Xu Caihou, is vice chairman of the Central Military Commission, which controls the People’s Liberation Army. Only President Hu outranks Xu in the military hierarchy. On his trip in November, Xu toured military installations in Venezuela, Chile and Brazil and promised increased exchanges between the two regions.

Trade between Latin America and China has also grown 13-fold since 1995, from $8.4 billion to $100 billion in 2007. China is now the region's second biggest trade partner behind the United States, and is an official member of the Inter-American Development Bank, which has huge (huge!) implications for regional trade. Trade between China and Africa likewise reached an all-time high in 2008, effectively solidifying China's predominance in the continent. And let's not forget Beijing's ties with Russia and, of course, Iran.

So the world is indeed shrinking, and what was once America's playground is now China's playground, too.

We all live in a (Chinese) submarine, a (Chinese) submarine, a (Chinese) submarine...

Is it just me, or are my postings increasingly coming to be inspired by Beatles' songs? The Anglophile in me is seemingly making a formidable comeback. No matter. Onto more important things - the Chinese navy, for instance.

China's increasingly capable navy has indeed been in the headlines lately for its first distant-waters deployment to combat Somali pirates in the Gulf of Aden. In early January, too, China's national defense spokesman made it clear that the Chinese navy is in the market for an aircraft carrier (though Chinese capacity to actually deploy carriers is at least a decade away - which, in fact, is not that long), and most recently, the government released its White Paper on National Defense, which highlights China's steadily growing military and naval capabilities. 

But what is really drawing attention from rival navies and the country's neighbors is action below the surface: Chinese submarine power! [enter Beatles' music here]. The Chinese have been making substantial investments in subs - buying from the Russians (typical) and building their own. Just last week, the Federation of American Scientists issued a report saying that U.S. naval intelligence counted 12 "patrols" by Chinese attack submarines in 2008 - twice the number in the previous year, and the highest thus far. 

The number of patrols still remains below the likely level of U.S attack submarine patrols, though higher than that of Russia.  It's unclear as to what, exactly, constitutes a patrol, but it's thought to mean an extended voyage.

The larger question, however, is what does all of this mean? If we think about this linearly, we quickly come to the conclusion that China is harnessing its military and naval capabilities (duh). But for what purpose? If the submarines deployed into the Pacific, for instance, this would break with Chinese policy of not deploying nuclear weapons outside Chinese territory. So, either Chinese policy will change (which presently appears unlikely), or the focus is directed elsewhere, most likely Taiwan, which Beijing considers a renegade province. 

Indeed, second only to its economic development, Beijing's foremost focus is on national unity - the so-called "One China" policy.  Now don't get me wrong, I'm not suggesting a Chinese naval advance on Taiwan - heaven forbid! What I am suggesting, however, is that the buildup and modernization of China's naval forces is in the short term intended to secure China's sphere of influence in the Pacific. I would be very surprised if the motivation was discovered to be otherwise. If we accept this as the case, the subsequent question then becomes what does this mean for geo-politics and, from the American standpoint, how concerned should we be? Is China's naval buildup of greater consequence than its global economic and diplomatic advances? And how, if at all, should the U.S. parry this perceived threat? 

China to own up to its human rights record. Wait, what?!

From the CS Monitor: 

China will face unprecedented scrutiny of its human rights record Monday in a key test of Beijing's readiness to answer international criticism over its treatment of political opponents.

Beijing has sent a large, high-level delegation to Geneva to defend China's human rights performance in the face of questioning from members of the United Nations Human Rights Council.

"This is an important test both for China and for the United Nations," says Nicholas Bequelin, a China expert with Human Rights Watch.

Some observers doubt that the formal and generally nonconfrontational UN body will actually put China on the spot for the wide-ranging human rights violations of which its authoritarian government stands accused [...] Monday's meeting "will be a kabuki dance, a farce," argues Brett Schaefer, an analyst with the conservative Heritage Foundation in Washington, unless China takes foreign criticism more seriously than it has done until now.

Human rights activists here and abroad, however, express hopes that Monday's meeting will indeed help speed China's efforts to improve its rights record.

Hmmm... well I certainly have a few questions I would love to ask the Chinese (see here and here and here, and oh, well heck... here too). Though if their answers will be in any way analogous to the ones I received during my own fieldwork, I'm not quite sure how worthwhile this meeting will actually be.

More on Chocolate City (Africans in China, that is...)

Earlier this week I posted on Evan Osnos' New Yorker piece documenting the mushrooming African population in parts of China ("African" used loosely here, of course. A large percentage of the population informing Osnos' piece is actually Nigerian). Following suit, the most recent issue of the China Monitor, a publication of the Centre for Chinese Studies at the University of Stellenbosch, is dedicated to precisely this subject matter. How delightful when things work in tandem like so!

You say goodbye, I say hello, hello hello...

After every previous financial crisis in a donor country since 1970, the country's aid has declined. This was true after the Japanese real estate bubble burst in 1990; and after the crisis in Finland, Norway and Sweden in 1991. After the Nordic crisis, Norway's aid fell 10%, Sweden's 17% and Finland's 62% (graph data available from Luc Laeven and Fabian Valencia's IMF Working Paper).

It would appear that history is repeating itself. This week, Ireland became the first major European donor country to announce that it will cut its overseas aid budget due to diminishing resources. A official statement from the Irish government observes that:

The Government has taken the difficult decision to reduce the total budget provided for Ireland’s Overseas Development Assistance in 2009 from €891million to €796 million. The size of our aid programme is linked to our own economy, and specifically to GNP growth. Our intention is that by taking action to curb public expenditure at this time, we will establish a platform for the resumption of strong economic growth, and further significant expansion of the Government’s development programme in years to come.

To this Owen Barder adds that other donor countries  - namely: Italy, Germany, Portugal, Greece and France - will not meet their aid commitments either. U.K. aid is estimated to decrease by $41bn over seven years (see corresponding paper here).

Yet all is not doom and gloom in the world of donor assistance: don't forget about China. Despite its own economic downturn, China is as eager as ever to continue its African investments. Just this week China Sonangol International announced that it would buy a 49% stake in Air Tanzania. Hu Jintao is making his first Africa trip of 2009 next week, too, where he will likely push his rhetoric of "friendly relations" and "win-win" cooperation. So while some Western donors are limiting their aid, China is forging ahead - not at full throttle, perhaps, but at quite a respectable speed. At least on the development front, the global financial crisis may provide China with the ideal opportunity to flex some developmental muscles (in Africa). Hello, hello, indeed.

Governance in Rwanda

A colleague of mine forwarded to me a fascinating report which assess the quality of governance in Rwanda. Rwanda: Joint Governance Assessment Report covers three broad subject areas: (1) Ruling Justly; (2) Government Effectiveness; and (3) Corporate Governance. It considers lessons learned, including whether a joint assessment approach to governance provides a model for other developing countries, the nature of trade-offs, and the picture emerging of governance in Rwanda. It's rather lengthy, but certainly worth the read.

The United States of Africa. A few decades too late?

On Monday Libya's leader, Muammar el-Qaddafi was elected year-long Chairman of the African Union. Like most who have followed Qaddafi's, mmm, shall we say activities and opinions, over the past few years, I have mixed sentiments over the choice, not least because of his anti-democracy, anti-Christian viewpoints (which risk escalating tensions between the continent's Muslim and Christian populations). What's even more curious is his push for greater African unity à la the United States of Africa.

What Qaddafi envisions is a unified African state that could play a powerful role in global affairs. He has repeatedly proposed immediate unity and the establishment of a single currency, army and passport for the entire continent, and is prepared to put the issue to a vote at the AU's next summit meeting in July. While all of this sounds rather preposterous now, a part of me wonders whether this might have made sense around the height of Africa's post-colonial independence.

In The Bottom Billion, for instance, Oxford's Paul Collier makes a passing claim that some African states should likely have never come into existence, owing either to their size (the 'bad governance in a small country' trap) or geographical positioning (the 'landlocked with bad neighbors' trap). Of course it's too late for any of that now, and forcing 61 countries with nearly 992 million people into one big, happy state would lead to catastrophe. But what if the 'United States of Africa' had come into fruition in the 1960s? Would problems of economic development be fewer? What about ethnic conflict? Would it be on a greater or lesser scale than it is today? Is Qaddafi's vision perhaps correct, but merely several decades too late? Or is it as absurd as it sounds?

The end of the Chinese dream?

It's no secret that these are trying economic times for people everywhere, China included. Estimates released this week place Chinese unemployment at 20 million. 20 million rural migrant jobs, that is. Add to this urban unemployment and the soon-to-be unemployed graduates and we're in trouble. Could this be the end of the Chinese dream? 

It's catching on...

... the throwing of shoes at foreign dignitaries, that is. Following in the footsteps of Muntadar al-Zaidi, a reporter now famous for hurling two shoes at former President Bush, a pro-Tibetan protester at Cambridge University likewise hurled his shoe at Chinese Premier Wen Jiabao, who spoke there today on the state of the global economy. 

According to FP Passport, as Mr. Wen was approaching the end of his address, a Western man stood up, blew a whistle and shouted: “How can the university prostitute itself with this dictator? How can you listen to these lies?”

To his credit, Wen remained cool, calm and collected. My guess is this is not the first time that he's seen such protest: 

PS. This would never happen at Oxford. ;) Sorry, I couldn't resist: alma mater pride... 

I smell a grassroots rebellion brewing...

There was a great piece in last weeks' Washington Post on China's Charter '08.' The pro-democracy petition has been creeping up in email (and snail mail) inboxes across China, and has gathered over 8,000 signatures.

What first began as a document written by Chinese lawyers and intellectuals commonly associated with pro-democracy stances (and thus already on the government's 'to watch' list), has now grown to become a list containing the signatures of journalists, students, teachers, businessmen, and a host of other individuals who have never been associated with any such movement. This is also the first time a political stance has been issued by anyone outside of the CCP(!). 

The Charter lays out an extensive overhaul of the current political system by ending one-party rule, introducing freedom of speech, an independent court system and direct elections. In short, it stands opposed to juuuuust about everything the CCP stands for (just about), and calls the government's attempted modernization project downright abominable, reprehensible, and defunct (in not so many words, of course).

It's no secret that political revolutions - on whatever scale - have occurred in times of economic strife. In that sense, the time is ripe for a political upheaval, if there is to be one. China's labor unrest is even worse than expected, India has recently moved to ban imports of Chinese toys for six months - a move with grave ramifications for China's already suffering toy industry -  and attempts at a Chinese stimulus  appear dubious. I couldn't possibly think of a better time to press for political reform. Hopefully the Charter will gain even more momentum before the government moves in to quench it (*fingers crossed*).

Chocolate City: Africans in China

Despite pledges of "mutual benefit" and "win-win" cooperation on the part of Chinese government and business leaders, this current phase of Sino-African relations remains very much a one way street. We constantly hear about Chinese enterprises breaking into African markets and Chinese merchants migrating to various African states, but quite little about similar incidences going the other way. Even the China-Africa Business Council, a flagship of the UNDP, remains based in Beijing and has as its focus the grooming of Chinese businesses for entry into African markets, paying little heed to the prospects for African firms seeking to break into the Chinese market. 

There is, however, a growing population of Africans across China. In the most recent issue of The New Yorker, Evan Osnos writes about African merchants living in Guangzhou, in a part of town now referred to as "Chocolate City." You can read Osnos' piece here, and watch a narrated slideshow about the economic, social and religious life of African migrants in Guangzhou here.

Hey buddy, can you spare another yuan?: More on microfinance in China

Last Friday I found myself mulling over the prospects for microfinance in China, citing especially the promising work of an organization called Wokai, which engages in on-the-ground microfinance projects there, particularly in Inner Mongolia. Shortly after posting these reflections, I received a message from Wokai's Marketing Director who, after a lovely brief introduction, writes the following: 

[...] To answer your question about how well microfinance can work in China, I'd like to refer you to this recent article from China International Business magazine: http://www.cibmagazine.com.cn/Features/Economy.asp?id=782&giant_steps.html  On an individual level, microfinance in China has increased incomes and improved the status of women.  However, its impact on a national scale has been limited by legal regulations.

The article she cites is actually quite brilliant, and goes a long way in addressing the regulatory and legal hurdles faced by the microfinance industry in China (indeed, the logic underpinning my hesitation to wholly embrace the potential success of this industry).  While the Chinese government granted official status to microcredit and microfinance companies in 2008, this has seemingly done little to ameliorate the challenges faced by microfinance NGOs (sneaky, sneaky), who must now transform themselves into regulated financial institutions. Microfinance in China is permitted to operate, then - and by the look of things, succeed - so long as it falls under the auspices of the state. 

Particularly prominent in China are "village banks,"  which provide individuals with microcredit loans and other microfinance services. While it's too early to gauge the actual effectiveness of these institutions, the prospects do appear promising. To answer my own question, then, it would appear that microfinance might actually work quite well in China; that is, of course, so long as the industry has a cooperative state by its side.

The rise and fall of China's factories

Loretta Chao and Andrew Batson of the Wall Street Journal have a fantastic piece on the present state of China's factories. The article is not earth-shattering by any stretch of the imagination, but does do a brilliant job of examining factory closings, product diversification, and the growing importance of China's small sector enterprises. A must-read for anyone hoping to gain a better understanding of what is going on with China's factories.

Hey buddy, can you spare a yuan?

Is microfinance en route to becoming China's next big thing? Does it make sense for China? Does it make sense in these difficult economic times? All important questions worthy of further investigation. 

Over the last few years, lending in China has gotten marginally better and, among other things, China has loosened up a bit in terms of allowing foreign entities to engage in microfinancing. In October 2008, New York-based Citigroup announced the opening of two micro-credit firms in China's Hubei province after regulators approved its application. London headquartered HSBC and Standard Chartered also entered the Chinese microfinance sector last year. According to a piece in Ethical Corporation, all is indeed hunky-dory in the world of Asian microfinance, broadly speaking:

Despite the trouble in global financial markets, investors continue to put money into Asian microfinance. A $40m fund aimed at financing start-ups in microfinance was launched in October by the India-based Institute for Financial Management & Research Trust, supported by a group of investors including India’s Icici Bank. In May, ASA International of Bangladesh, ranked number one on the Forbes list of top 50 microfinance institutions, raised $125m in funding – the largest ever by a microfinance institution – through private equity firm Catalyst Microfinance Investors. 

Abhijit Ray, vice-president at microfinance consulting firm Unitus, in India, says: “Large and well-managed microfinance institutions have not been affected much by the credit crisis.”

In China specifically, an organization called Wokai seems to be making great strides. What makes Wokai particularly interesting is that it has set up an internet interface between the lenders (people like you and me) and the borrowers (generally entrepreneurs in rural China). So, for example, there's a herdswoman in Chifeng, Inner Mongolia, who is seeking $600 for cattle feed, and a butcher also seeking $600 to expand her inventory. Both have received some funding towards their goals, but still require more. For more on Wokai, see "Empowering the impoverished with Wokai."

I've always been a fan of microfinance, and it indeed appears to be working (see here and here). Given especially the global economic slowdown and the rising unemployment among China's migrant workers, this may be the perfect opportunity for microfinance agencies to significantly impact the lives of many Chinese. Yet a part of me remains skeptical: how well can microfinance actually work in China?

Currency manipulation and world trade

On the coattails of the Geithner/China currency manipulation flap, Staiger and Sykes have an interesting piece in today's VoxEU cautioning against likening Chinese currency undervaluation to export subsidies and import tariffs responsible for global trade imbalances, as well as against many of the proposed countermeasures under discussion in the political arena. A most interesting read. 

Let's chat Somalia again, shall we?

In mid-December I posted on the then quickly collapsing state of affairs in Somalia, hypothesizing that al-Shabab would quickly move in to assert its control (quick refresher: al-Shabab is an extreme al-Qaeda aligned terrorist group that has been active in Somalia since 2006). Sure enough, the Shabab captured Mogadishu on Monday and have since declared the ascendancy of Islamic Law, threatening punishment on anyone who acts in opposition to it. The country now hangs in a period of uncertainty (sadly nothing new for this Horn of Africa country) until its new president is sworn in. A number of individuals have announced their candidacy for the post, including the Islamist Sheikh Sharif Ahmed. 

Some analysts remain optimistic about Somalia's future (bless them), reasoning that if al-Shabab is anything like other rebel groups, it will likely fracture from within before it manages to do any serious damage to the country. Drawing on the experiences of other African Islamic states, however, I remain huuugely skeptical. Al-Shabab may be a rebel group, but they are really, really good at what they do. Lucky for them, not so much for the rest of us.

Promises of governance (in whatever form...) have also done little to bring to a halt Somali pirates, who today seized a German tanker off the coast of Somalia. Japan is now trying its hand at tackling the pirates (I wonder if we might see a Japan vs. China pirate showdown... kidding, kidding), adding to what are already largely international efforts aimed at averting this growing threat. 

Curiously, under his presidency, George W. Bush pressed for a larger international force in Somalia, but was met with little support. It would seem that *gasp!* he may have been right. Indeed, of all the African challenges Obama now faces, I'd place Somalia's turmoils at top of the list. We need to keep our eyes on this one. 

Africa, the U.S., China and the economic crisis

Stephen Ellis writing in African Arguments:

The Chinese government clearly thinks long-term and is highly pragmatic. It does not entirely trust world markets. Therefore, even if China goes slow on the implementation of the mining and infrastructure agreements to which it is already committed, we can expect to see China continue to take the necessary steps to maintain its rights to resume these projects at some future date, when conditions are more conducive. The important thing for China is to maintain a firm hold on African commodities until the day when the mines start working and the trucks start rolling again.

A key question for the Obama administration in this context will be what strategy it adopts towards Africa’s oil. Thinkers within the US Department of Defense in particular see access to oil from the Gulf of Guinea—broadly defined as the swathe from Mauritania to Angola—as a major strategic concern for the US. The neo-conservatives who wielded such influence under President Bush believed that this was best done by the projection of military power. In short, they believed that the US should plan to deploy its armed forces in such a way that it could secure Africa’s oil for the next generation, putting it into not merely a commercial competition with China, but a militarized one. This was some of the thinking behind the creation of an autonomous Africa Command, Africom. China, however, has shown no enthusiasm for supporting its commercial aspirations in Africa with military power. On the contrary, in recent years it has shown every sign of playing a greater role in some of the complex multilateral arrangements by which Africa is bound into global systems of governance. For the first time, China has committed troops to United Nations missions in Africa, for example.

How will the games of great powers affect Africa itself? There is no foreseeable future for industrialization in Africa. Some African countries were earning serious money in recent years, before the collapse of commodity prices, but there was little sign of any of them using it in the service of a serious development strategy while conditions were propitious. Now, that option has gone. In principle, a shortage of foreign exchange plus high food prices could spark a revival of African agriculture, but there is no serious evidence of that happening as yet, despite encouraging signs here and there. What we are likely to witness is a situation that is in some ways rather reminiscent of the period immediately before the colonization of Africa, during the third quarter of the nineteenth century, with few centres of power in Africa being able to guarantee the rule of law in the Western manner, and external interests investigating local permutations with a view to identifying viable local collaborators. 

China Africa Research Network event (and a shameless plug)

While I'm no longer in Oxford, the China Africa Research Network I began there in January 2008 is alive and well, despite a short hiatus in the autumn of 2008.  To that end, for those of you still in Oxford or in and around the area, you may be interested in this upcoming event:

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The China-Africa Research Network is a group of students and professors interested in bringing issues of politics and development, related to China's involvement in Africa, to the forefront. In the last year, we hosted events on China's oil investments, aid and political relationship with Africa.

We will be holding a meeting this Friday, at 4pm in the SSL lounge, to discuss a day conference in Trinity term and plans for the following year. We're interested in recruiting new members to the group - so please do come and check it out!

For more information please contact Amreeta Mathai: amreeta.mathai@st-annes.ox.ac.uk

Noteworthy….

Oh good, someone told them (see post on Obama, Geithner and China for reference). Clinton signals broader focus on Beijing, from the FT.

Obama leads U.S. drive to topple Mugabe, from The Times.

Let developing nations rule. Dani Rodrik on the opportunities for developing nations to project their interests in multilateral institutions and gain influence in shaping economic globalization, even as the global financial crisis rages on, from VoxEU.

And now for something completely different: Refugee Run (!!??) at Davos. [HT: Bill Easterly]

You go, girl.

A new UN publication - Governing Women: Women's Political Effectiveness in Contexts of Democratization and Governance Reform - is out and looks quite interesting. Using case studies from around the world (actually, all the case studies are taken from the global South), the essays in the report consider the conditions for effective connections between women in civil society and women in politics for the evolution of political party platforms responsive to women's interests, for local government arrangements that enable women to engage effectively, and for accountability mechanisms that answer to women. 

An interesting read for those interested in good governance and women's rights.