Aid and the China connection: Pink dollar, meet red renminbi

Like a rainbow

A reporter once said that the most boring headline he could think of was one beginning “Worthwhile Canadian Initiative.” OK; here’s a Canadian initiative; see if you think it’s worthwhile. As the premier of British Columbia gets ready for a trade mission to China, she’s laid down some rules for business people tagging along:  “Tourism operators marketing trips to the province for Chinese people must agree not to promote casinos, gambling or gay tourism.”

B.C. Tourism Minister Pat Bell …  said the federal government accepted the terms when it negotiated approved-destination status with China last year, and B.C. had no say in the matter.

Approved-destination status allows tourism operators in Canada to market their services in China, and Chinese tour operators to organize and promote travel packages to Canada.

He said B.C. simply wanted to ensure that its tourism operators understood the rules: “We’re not necessarily endorsing the specifics.”

The government soon retracted its requirement. But it was an embarrassing moment, especially with Vancouver trying to hawk itself as a gay tourist destination, like other cities from Cape Town to Tel Aviv. It’s also embarrassing in other venues. Gay conservatives in the US have long contended that the “pink dollar,” the buying power of gay consumers, can eradicate inequality better than the law. As Stephen G. Miller, founder of the right-wing Independent Gay Forum, affirms, “Corporations increasingly are courting the gay, lesbian, bisexual and transgender markets for their buying power and trendsetting value”:

The gay market is a significant demographic. … Free markets work to sweep away the ineffectual, inefficient and irrational (including unprofitable prejudice) when allowed by the state to do so.

Maybe so — but not if they meet a bigger market with prejudices of its own. China right now is the mother of all buyers and sellers, the 800-pound panda (dragon? duck?) in the room. The puny pink dollar can posture if it likes. The red renminbi — China’s victorious currency — rules.

The same is true of China’s aid policies. That‘s the chord this story struck with me — coming in the midst of the global South debate over the UK’s vague promises to tie LGBT rights to development assistance. Chinese aid, to Africa in particular, has become a slowly growing question-mark, a cloud of discomfort, hanging over geopolitical discussions in the West. A blog I noticed last week carried a British gay man’s “Letter to Tanzania,” in which he intones with gravid sarcasm:

To have to lower yourself to accept money from such selfish nations as the UK must be extremely galling.  I’m sure you have only done so for the last 35 years because you simply had no other choice, but maybe, if you’ll permit me to make a little suggestion, it’s time to consider asking the Chinese for more help, or some of the oil-rich nations of the Middle East?  They don’t let pesky little things like gay rights get in their way so I think you’d get on very well.

Ask the Chinese? Uh, don’t worry. African countries will.

China’s aid role is a crucial point not fully considered in the aid debate. Western countries that once had plenty of of “policy leverage” in attaching conditions to assistance now have less, because another donor has come to town.

The motives and forms of Chinese overseas aid are not well understood elsewhere. All that’s fully known is that there’s a lot of it. In a recent report, researchers from the University of Stellenbosch in South Africa argue China doesn’t strive deliberately to obscure the aid flows; it’s just that the information is scattered in different papers and websites through the Chinese bureaucracy. Still, it’s difficult to extract simple figures — such as how much money goes to Tanzania or Malawi –from the facts at hand.

However, for the first time, China this year published a white paper outlining its policies on overseas development assistance. Vague in many areas, the document is evidently but perhaps not adequately calibrated to assuage uneasy critics in other industrialized countries.  One can take three overall facts from it:

a) China is overwhelmingly interested in Africa. Almost half its aid goes there.

b) Chinese aid goes heavily to economic infrastructure projects. For instance, the government breaks down its low-interest loans to developing countries as follows:

c) China advertises its aid as no-strings-attached, in respect of rights or any other conditions. It still proudly foregrounds the “Eight Principles for Economic Aid” Mao promulgated in 1964, among them:  “In providing aid to other countries, the Chinese government strictly respects the sovereignty of recipient countries, and never attaches any conditions or asks for any privileges.”

Let’s start with the last point first.

Unconditionality is obviously attractive to many aid recipients, often for all the worst reasons. Robert Mugabe knows that Beijing will never care if his handshakes leave bloodstains behind. China is notoriously unwilling to integrate rights discussions into its aid mechanisms — indeed, to talk about rights at all. (The white paper contains no mention of rights, or of gender for that matter.) When I worked at Human Rights Watch, directors had desperate discussions about the impossibility of opening any channels with China’s rulers. At one point we were urged to make any kind of contact we could — if we met a Chinese official anywhere,  even in a public restroom, to strike up a conversation and try to connect. I have no idea whether any HRW staff got arrested for indecent conduct as a result.

Conditionality in Western aid has a long history. As one US official said in the 1990s, “”Aid appears to have established as a priority the importance of influencing domestic policy in the recipient countries.” However, it’s far from true that all or even most conditions  tied to aid were rights-related. Many were raw attempts to gain economic advantage — which makes the whole subject of conditionality rankle in the memory of some nations. One account notes:

[Njoki Njoroge] Njehu [director of the 50 Years is Enough campaign] cited the example of Eritrea, which discovered it would be cheaper to build its network of railways with local expertise and resources rather than be forced to spend aid money on foreign consultants, experts, architects and engineers imposed on the country as a condition of development assistance.

Strings attached to US aid for similar projects, she added, include the obligation to buy products such as Caterpillar and John Deere tractors. “All this adds up to the cost of the project.”

WIll China in fact be better? Many suspect China’s aid programs carry a similar economic agenda: the attempt to build markets for cheap Chinese goods.The Chinese white paper, as one commentator notices, refers to “financial support of a certain scale to developing countries” in the form of “preferential export buyer’s credits.” The pundit adds,

[T]his means more subsidies to help China’s exporters continue making money. It also means preferential financial packages that will continue to make it difficult for large multi-national organisations – including those from developing countries like South Africa and elsewhere in Africa – to compete with China’s for major contracts.

Economic infrastructure aid reveals the other side of Chinese ambitions. Here, Chinese assistance seems focused on a few areas. For instance, the graph shows that transport stands out: the white paper adds that

By the end of 2009, China had helped other developing countries build 442 economic infrastructure projects, such as the Sana’a-Hodeida Highway in Yemen, the Karakoram Highway and Gwadar Port in Pakistan, the Tanzania-Zambia Railway, the Belet Uen-Burao Highway in Somalia, the Dry Dock in Malta, the Lagdo Hydropower Station in Cameroon, Nouakchott’s Friendship Port in Mauritania, railway improvement in Botswana, six bridges in Bangladesh, one section of the Kunming-Bangkok Highway in Laos, the Greater Mekong Sub-region Information Highway in Myanmar, the Shar-Shar Tunnel in Tajikistan, the No.7 Highway in Cambodia, and the Gotera Interchange in Addis Ababa of Ethiopia.

Many of these projects would be quite useful in moving large quantities of heavy things, as well as energy, from place to place.

This tends to support suspicions that a priority of Chinese aid is to facilitate extracting raw materials and other resources from recipient countries. The pattern of Chinese trade with Africa, which is burgeoning, bolsters this.  Crude oil and minerals are the main things China imports from there.  You can see an emerging picture of the Africa Chinese aid may aim to build. Countries send raw materials to China; in return, they become a market for Chinese consumer goods, which presumably help make the populations happy. The prospective flows of capital, and the vision of mobs kept quiescent by cut-rate cellphones and toys, must be pleasing to many an African oligarch’s reveries.

Not everyone would agree with this. (For a nuanced and more optimistic view of China’s role in Africa, see Deborah Brautigam’s blog here.) But if it bears some truth, there are at least two lessons to be drawn. There’s one for Western governments — and activists in their countries — who want to support LGBT movements, and human rights movements, in the South. There’s another for Western states thinking about the geopolitical future.

First, on a purely pragmatic level — and whatever you think of the ethics of aid conditionality — tying bilateral aid to LGBT rights won’t work. It won’t work because increasingly governments know they can get stringless aid from a different source, China. The best way for Western governments to advance LGBT rights is to aid LGBT rights movements themselves directly. As African states move into the orbit of a flush and generous funder uninterested in rights protections, the same will hold true for almost any human rights issue. If you want to promote it, don’t try bullying officials. Your dollars or pounds, pink or green or whatever, carry no clout against the indifferent renminbi. Fund the advocates; fund civil society.

Then there’s the question of Western countries’ own self-interest.  I am obviously unwilling to make an argument that appeals, even implicitly, to the the industrialized countries’ desire for unrestricted access to the fuels and other raw goods lodged in Africa’s soils.

That interest can’t and shouldn’t be met. We want a world in which countries keep autonomous control over their own resources, and  tend and protect the environments in which those resources are embedded. But, again in pragmatic terms, one can at least appeal to Western countries’ desire to keep China from having unrestricted access, either. This is a geopolitical concern that most of the old industrialized countries share.

The best way to do that is for Western governments to support strong democracies; strong civil societies, but also strong states that are simultaneously responsive to the diverse interests in their own populations, and resiliently resistant to external economic and political pressure. Such societies and such states will indeed make the West pay a fair price for any resources they get, on the countries’ own terms; but they’ll make China do the same. Such proximate equality is probably the best bargain the West can hope for.

The other alternative they have is to rely on the outworn oligarchies they’ve supported for decades, perhaps with new faces and new uniforms, but with the same old kleptocratic manners and brutal morals. That seems to be the route Western states are taking now. How much are they really concerned with full democratization, and how much with clinging to “political leverage,” and economic leverage too? The example of diehard US and European support for Yoweri Museveni in Uganda is not promising.

The problem is, oligarchies are notoriously ungrateful. They know a cash cow when they see one — they grew up milking them — and if the Chinese market appears before their kraal, swollen and mooing, the temptations of a dried-up West will seem desiccated and despicable. China has as much money as the West has now, and will soon have more. Oligarchies can be bought. Buying democracies is harder.

In Zambia, long lusted after by the industrial world for its copper reserves, Michael Sata — locally known as “King Cobra” — ran three populist presidential campaigns partly based on condemning Chinese economic intrusions. He called for investigations of working conditions in Chinese enterprises, and demanded economic independence for Zambia. In 2006, China threatened to cut diplomatic ties if he were elected. After two losses, Sata finally won in 2011, toning down his rhetoric somewhat. (He also survived a campaign controversy fed by his Christianist opponent after he appeared tentatively to support LGBT people’s rights. In a presage of current aid controversies, opponents accused him of selling out — for Danish money.)

Is Sata’s imperfect populism, defending African autonomy against all comers, a way forward for the continent?

8 thoughts on “Aid and the China connection: Pink dollar, meet red renminbi

  1. Great read Scott! One of the conditions of China aid is that the receiving country cannot recognize Taiwan, well at least that’s how it played out in Fair Helen of the West Indies….St. Lucia.

    • that was the initial problem with Sata in Zambia too — he threatened to recognize Taiwan if elected, and China said they’d cut relations. I didn’t know about St Lucia. So much for non-conditionality!

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