African development: The role of traditional and emerging players reconsidered
Most U.S. discussions about international development pay scant attention to the activities of India, Turkey, Korea, Brazil and other emerging investors and donors in sub-Saharan Africa. Instead, the focus is almost exclusively on China. The exact nature of emerging commercial and financial commitments in Africa is often poorly understood. U.S experts disagree on the basic issue of whether Chinese loans for infrastructure projects should be considered as commercial investments because the funds are loaned and not granted; or whether they are aid because they are state-backed and secured through bilateral agreements, often acting as loss leaders for Chinese companies rather than risk-bearing business transactions. Resolving this disagreement is made more difficult by the fact that reliable Chinese data on the subject is elusive.
Overlaying this technical confusion is the reality that for both geopolitical and more instinctive, intangible reasons, American politicians and business interests are uneasy with the prospect of China (or, for that matter, India or Brazil) as a competitor. Generally, most of this uneasiness centers on high-profile international issues, such as national security and acquisition of vital mineral and energy resources. As a result, much of the energy spent developing an “emerging powers strategy” often ignores economic development policy.
Practically speaking, the activity of emerging powers on the African continent has different implications for the United States. It means that African partners have more options for achieving their priorities, which could result in some actors (new or traditional) being marginalized in economic influence, generally followed by reduced political influence. It means that there is yet another global arena in which U.S values and practices may be challenged by potential rivals. It means that the American private sector, even if it makes a decision to become more involved in African markets, will have to compete with companies from countries that have often given them a head start in those markets. It means that American development policymakers are faced with alternative models of investing in African economies. All of these pose real and significant challenges, but it is the nature of the strategic response to them that matters.
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(Picture by J.C. Costa)