Flashback: What Sata said about Chinese investments as an opposition leader

Flashback: What Sata said about Chinese investments as an opposition leader

Chinese Investment in Africa and Implications for International Relations, Consolidation of Democracy and Respect for Human Rights: The Case of Zambia

By

Michael Chilufya Sata
President
Patriotic Front, Zambia

Paper presented to the Harvard University Committee on Human Rights Studies Events Series, October 24, 2007, Harvard University, Cambridge, Boston, MA
Chinese Investment in Africa and Implications for International Relations, Consolidation of Democracy and Respect for Human Rights: The Case of Zambia

1.0 Introduction
Recent involvement of the People’s Republic of China in the exploitation of Africa’s natural resources has attracted worldwide attention and concern, especially to people within and outside the African continent interested in the social and economic advancement of the poorest continent on earth. The concern, debates and speculation are not without foundation, because with a population of 1.3 billion, China is the most populous nation in the world. It is also the largest country in the world in terms of physical size. The enormous human resource and physical size, cannot, however, generate adequate capital for quality investments at home and abroad. It is, therefore, not surprising that China has found it difficult to generate adequate capital since the end of its 1947-49 Civil War.

China’s recent march into Africa is by and large a search for natural resources, and especially oil, timber and base metals to guarantee survival for its people. This is critical to coerced internal stability and unity, as well as to ensuring that China remains a global power. As an investor in Africa, China is said to be the continent’s third largest investor, after the United States and France. This newly found economic power has enhanced China’s influence on the continent, and has a bearing on the conduct of international relations, especially in the 46 African countries that have diplomatic ties with China.

The increased clout of the People’s Republic of China in Africa has a bearing on consolidation of democracy and a culture of respect for human rights, because China does not subscribe to democracy and is inconsistent in upholding human rights at home. China also tends to ignore human rights abuses in developing countries in general, and in countries with which it has closer diplomatic ties in particular. The excuse for ignoring human rights abuses in other countries is China’s policy of “non interference” in the internal affairs of other countries, which basically amounts to appeasement of individual leaders of the countries concerned.

China’s increased clout in Africa has emerged at a time when the continent’s democratic evolution is at cross roads. Most African countries embraced democracy and open market economies only in the 1990s, after the collapse of communism in Eastern Europe and end of the cold war. Progress towards consolidation of democracy and respect for human rights has been poor in most African countries, due to the narrow depth of internal democratic forces, and high levels of poverty. Most of the democratic concessions obtained in Africa in the 1990s were in fact obtained with the help of western governments, which relied on conditional economic support. Many African countries have, nevertheless, been trying to leave behind their brutal past of dictatorship, economic chaos and decline. Among the principle objectives of the African Union, for example, are promotion of democracy, good governance and respect for human rights. Under these circumstances, what are the implications of Chinese economic presence in Africa for international relations, consolidation of democracy, and respect for human rights? To address, these questions, we ought to examine Chinese policies towards Africa and its interaction with that continent. We should also bear in mind that poverty in Africa is pervasive, and has hardly spared any one, including the political leaders. The Chinese are aware of this, and are preying on the poverty of many African political leaders.

Background to Zambia
Zambia was called Northern Rhodesia when it was a British colony. It was granted independence on 24thOctober, 1964. After 8 years of multi-party democratic rule, the country descended into a One Party Socialist State, and changed for the worse, from one of the most promising middle-income African countries in the early 1970s, to one of the poorest in the world by the late 1980s. The country reverted to a free market economy and multi-party political system in 1991, after the wind of change that swept away the dictatorial regimes of Eastern Europe. Like many other African countries, however, Zambia has found it difficult to consolidate democracy, the rule of law and respect for human rights. In consequence, Zambia has also found it difficult to attract genuine investors and has become the prey of the rogue Chinese investors that have no regard for the welfare of those that are unfortunate enough to work for them, let alone the countries that have allowed them to exploit their natural resources and people.
Chinese Involvement in Africa
China declared support for some African liberation movements in 1965 in a bid to break its isolation orchestrated by the USA and the Soviet Union. Declaration of open support for the African liberation movements earned China recognition among some African countries. Many countries were, however, wary of China’s intentions, especially in the light of its governance of its so-called autonomous regions, such as Tibet, which are predominantly occupied by ethnic minorities, as well as its attitude towards the Republic of China (Taiwan). Rapprochement between the US and China in the early 1970s, however, resulted in China’s admission to the United Nations at the expense of Taiwan. This helped improve China’s image and enabled her to establish diplomatic relations with most African countries.

The Sino-African diplomatic relations are based on the so-called “one China policy”, which basically requires non-recognition and isolation of Taiwan. Most African countries that have established diplomatic relations with China have done so without adequate information about Taiwan. This is because China has employed cold war tactics of keeping them ignorant about Taiwan, while China trades and welcomes Taiwanese investment. Taiwan is, for example, China’s biggest trading partner, while Taiwan invested as much as US$6 billion in China in 2005 alone. Most diplomatic ties between China and many African countries have, therefore, been forged in ignorance on the part of the African countries. The one China policy, on the other hand, lacks diplomatic etiquette, as it does not reflect equality and mutual respect between China and Africa.

Sino-Zambia Relations
Diplomatic relations between China and Zambia were forged in the run up to Zambia’ independence, but were deepened by the western countries’ partial handling of the Unilateral Declaration of Independence (UDI) by the Smith regime in Rhodesia, on account of racial and blood ties. It was, however, the western countries’ refusal to help construct the Tanzania-Zambia Railway on account of protecting the interests of the white colonial settler regimes in Southern Africa that delivered Zambia into China’s sphere of influence. China took advantage and offered Zambia and Tanzania an interest free loan of One Hundred and Sixty Six (£166) Million British Pounds and undertook to construct the railway line. She also undertook to pick up any additional costs, should the actual cost exceed the estimated cost of the railway line. China also offered consumer goods to the two countries to help them raise funds to meet the local construction costs.

Construction of the Tanzania-Zambia railway begun in 1970 and was completed in 1975. Completion of the new railway line, however, coincided with an economic melt down in both Tanzania and Zambia. The economic melt down was due to rising oil prices against declining commodity prices; and poor economic management, as both countries had undertaken massive nationalization of large and medium size firms in their economies. Short- term economic stabilization programs provided by the International Monetary Fund (IMF) failed to halt the economic stagnation. Economic decline and decay thus set in. The economic deterioration in both countries was, in fact, so deep that, by 1982, the IMF advised a return to market economies in the two countries.

Zambia undertook the economic reforms without strong political will, which resulted in an “on and off” approach to the reforms. This approach delayed the economic turn around and damaged the economy further. The Government of Zambia courted China during the economic crisis, because it was considered an ideological ally. China, however, could not give any help. The economic crisis degenerated into a political crisis when the trade union movement and other social groups that had been cowed into silence, challenged the legitimacy of the one party state after the fall of the communist regimes in Eastern Europe. Partial reform of the political system led to a return to a multi-party political system in 1991.

The first multi-party elections in 17 years were held in October 1991. They were won by the political movement, which advocated a multi-party political system and a free market economy. The new Government carried through most of the economic reforms within its first five years, but failed to build on the democratic gains of 1991. On the foreign policy front, the main change was the establishment and re-establishment of diplomatic relations with South Korea and Israel respectively. Zambia’s diplomatic relations with China and other countries thus remained intact, while trade between Zambia and China like before remained low too.

Development cooperation between Zambia and China during Zambia’s economic crisis was confined to education and culture, health and defense. China never got involved in any significant efforts aimed at reviving the Zambian economy after the construction of the Tanzania-Zambia Railway. The Zambian Government did, however, contract China to construct two trunk roads, and invested in a textile plant in partnership with China. The latter was a feeble and belated attempt to diversify Zambia’s economy in the late 1980s. Issues of economic reform were, therefore, left entirely to the Government of Zambia and the international financial institutions (the IMF and the World Bank), as well as the western bilateral development agencies. Even when Zambia’s heavy foreign debt burden got out of hand at US$7 billion, China did not step in with any help. It was only after the international financial institutions and the western bilateral donors had come up with the Multi-lateral Debt Relief Initiative (MDRI) and the Highly Indebted Poor Countries Initiative (HIPC) that Zambia’s debts even to China could be forgiven.

In times when Zambia had policy disagreements with the international financial and western bilateral development agencies, however, and especially on governance and human rights issues, China stood out by providing dubious loans and grants mostly for consumption, and the impoverished defense and security services. China’s dubious assistance to Zambia enabled the Government to arrogantly stand its ground on serious governance and human rights issues. Chinese assistance, in particular, helped postpone Zambia’s constitution making to some other time in the future. Ten years down the line, Zambia is still tying to enact a new constitution that could meet the aspirations of its people, uphold human rights, and stand the test of time.

Chinese Investments in Zambia
Chinese direct investment in Zambia begun when the Government started to dispose of the firms it had previously nationalized. The Chinese acquired Chambishi Copper Mine and the Sinazeze Coal Mine. Due to corruption, the Chinese were given favorable terms, including generous tax exemptions for 15 years and even permission to export unprocessed ores to China. The tax exemptions had to be extended to the other mining companies that had acquired the other Copper mines, such as Glencore, First Quantum Minerals and Vendata Resources. Although the tax exemptions should have been reviewed in 2005, the Government grew cold feet, because of its close ties with the Chinese. As a result, the country and its people have not benefited from the recent high copper prices. The losses to the people of Zambia have been made worse by Government’s agreement to relieve the mining companies of responsibility for social services in the mining townships. As a result, most of the money from the exports of minerals is accruing to the mining companies, which tend to take out most of the money. Thus, Zambia has little to show for the high copper prices obtained over the last few years.

The amount of money China has invested in Zambia is often exaggerated, because it has mostly invested in already established mines. The only green investment was in an explosives factory, which was set-up for the sole purpose of supplying explosives to the two mines acquired by China. However, China has also promised to invest in the so-called Zambia-China Economic and Trade Cooperation Zone and to construct a sports stadium on the Copperbelt. The Chinese investment in the two mines has been accompanied by medium and small-scale Chinese private investments, including traditional healers. The private Chinese investments have also been established with the assistance of the Chinese Government.

Chinese investments in Zambia have raised controversy on a number of counts. The large scale-mining and construction firms have created industrial disharmony, because of providing poor working conditions, which do not comply with the labour laws, environmental regulations and the occupational health and safety standards. They also pay “slave wages”. The Chinese investments have also created only a limited number of skilled and unskilled jobs for Zambians, because most technical and managerial positions, as well as a significant number of unskilled jobs are reserved for, and held by the Chinese workers, who have come along with the investment. The situation is worsened by disparities in wages paid to the Chinese and Zambian workers doing the same jobs, with the Chinese being paid substantially more. Similarly, the issuance of work permits in Zambia is now marred by discrimination, because whereas the Chinese firms can take into Zambia any number of Chinese workers they wish to take in, whether skilled or unskilled, the non-Chinese employers find it very difficult to obtain work permits even for very few skilled workers from other countries. Due to the favorable treatment given to the Chinese by the Immigration service, there are currently more than 80 000 Chinese nationals in Zambia.

Exclusion of Zambians from technical and managerial jobs denies qualified people employment opportunities in their own country, while the unskilled Chinese workers have taken away employment from their unskilled Zambian counterparts. Many Zambians cannot understand why unskilled workers from China should take away employment opportunities from their Zambian counterparts, in the face of very high unemployment levels, estimated at more than 70%. The Chinese investment in Zambia is therefore more beneficial to China than Zambia. The Chinese investment in Zambia also provides China with the natural resources at very low cost and jobs for its surplus labour. The situation is worsened by China’s preference to export copper ores from Zambia to China, which entails transfer of more jobs to China and further reduction of Zambia’s income from its minerals, while at the same time undermining prospects for industrialization and technology transfer to Zambia.

Chinese investors have also been violating the labour laws, environmental regulations, and occupational health and safety standards with impunity, because the Zambian Government shields them from the regulatory bodies. It also ignores very serious reports of abuse of Zambian workers by their Chinese superiors. Failure to observe the occupational health standards at the Chinese government owned explosives factory even resulted in the death of 50 Zambian casual workers, in an explosion that destroyed the entire plant, but in which not a single Chinese life was lost. Many questions surrounding the death of the 50 Zambians workers at the Chinese explosives factory to this day remain unanswered.
Zambia’s failure to curb the violation of industrial and labor laws can be attributed to the overbearing influence of the Chinese Government on its Zambian counterpart, through provision of generous gifts to the ruling Movement for Multi-Party Democracy (MMD) and the powers that be. An editorial comment in an increasingly pro-Government private newspaper, for example, observed that:
“It cannot be denied that some of our investors are treated with kid’s gloves. They are over-protected. And that is why they have the audacity to ignore the laws because they know that, after all, nothing will be done against them.”(The Post, Wednesday 3rd October 2007, p.26)

The situation is, however, unlikely to improve, because the Chinese Government continues to relate to the ruling Movement for Multi-Party Democracy, like it were the only political party in the country, and as if Zambia was still a one party state.

Chinese private investment has also brought into Zambia unfair competition. The Chinese traders, for example, sell cheap low quality products from China ranging from clothes to electronic household goods, which do not meet the local standards for various products. The garments, for example, wear out after being washed once, but they cost substantially less, and uninformed poor people, buy such garments at the expense of stronger locally made garments. Such trading activities are killing the local industry and taking away livelihoods from local people, such as tailors and traders selling better quality garments, not to mention the textile firms, most of which have collapsed not only in Zambia, but in Southern African region as a whole. The entry of Chinese traders in the micro enterprise sector has also worsened competition in an already over-crowded informal economy, which supports the bulk of the labor force.

Chinese investment in Zambia has also brought in Chinese business cartels in which the large-scale Chinese firms only source supplies from the Chinese suppliers. Such restrictive business practices are denying Zambian suppliers not only business opportunities, but livelihoods. The private investors from the People’s Republic of China also have “an unfair advantage” over their competitors in Zambia, because they have access to generous Chinese Government loans and grants provided only to Chinese nationals and enterprises through the Bank of China, which has opened branches in Lusaka and the Copperbelt. Zambians in business of all sizes, on the other hand, have no access to any such generous financial services. Lack of access to finance is in fact the main constraints to the participation of Zambians in the economy of their country. Zambians, therefore seem condemned to exploitation by the emerging Chinese entrepreneurs, who have access to generous Chinese Government loans and exclusive business opportunities from the Chinese enterprises in Zambia.

China’s African Policy
The Chinese Ministry of Foreign Affairs published the China African policy in 2006. It is an update of China’s foreign policy towards Africa in the 21st century and beyond. The China African policy is, however, not futuristic, because it is stooped in the past on issues of democracy, good governance and respect for human rights, as well on “outstanding cold war political conflicts”. The China African policy also seeks to bring China to the same level as the more developed countries in its economic dealings with the African continent. The China African policy is stooped in the past, because it is built on the Chinese Communist Party’s desire to bring all the lands that were once under imperial China under its rule. Little consideration has, for example, been accorded to peaceful co-existence with Taiwan and to the right to self-determination for its people. To avoid a democratic resolution of the Taiwan question, China seeks to retain the “existing global status quo”. Being content with the status quo, however, ignores the profound changes that have taken place and that ought to take place, especially in Africa, for the Africans to step on the ladder of sustainable development.

The China African policy is also not in line with the democratic aspirations of the Africans, because whereas the Africans have recognized absence of democracy and respect for human rights as the major contributing factors to their continent’s lagging behind the rest of the world, China is yet to accept that. For example, while Articles 3 and 4 of the African Union (AU) mandates the African Union to promote democracy, good governance and protection of human rights, as well as to intervene in member states on account of human rights violation, genocide or even to restore order, China still advocates non-interference in the affairs of other countries. As a result, instead of a pledge to cooperate with African countries in the promotion and protection of human rights, China only pledges:
“…to continue to strengthen solidarity and cooperation with African countries …on major international and regional issues and stand for mutual support on major issues concerning state sovereignty; territorial integrity, national dignity and human rights” (Government of the Peoples’ Republic of China, 2006, p.9).

China is not even interested in the governance and human rights records of its partners in Africa and indeed elsewhere. On the basis of the China African policy, it is clear that, China is not interested in advancing democracy, the rule of law and respect for human rights.

Conclusions
The growing influence of China in Africa through its direct investment and provision of loans and grants to governments is a risk to consolidation of democracy and a culture of respect for human rights, because China does not subscribe to these values. China, in particular, perceives human rights as contentious ideological issues between the more advanced countries and the undemocratic regimes in the Third World. China’s attraction to Africa is not an accident, because it is the most populous nation on earth, while Africa is the least densely populated continent. Africa also has enormous natural resources in its soils and forests, which are attractive to a rapidly growing and aggressive China. For the Chinese, therefore, Africa is a mere source of essential natural resources and a potential area of resettlement for its surplus population. The Africans, therefore, ought to engage with China in a more intelligent manner than most are willing to do.

The development of Africa and its people cannot be achieved on the basis of designs and strategies of other people. The Africans ought to take responsibility and protect their heritage and the future of those yet to come. It is, therefore, critical for African countries to review their engagement with China. The foreign policies of African countries should be based on the universal values of democracy, good governance, protection and respect for human rights. A human rights approach to policy formulation in Africa would guarantee human dignity and peace. It is for this reason that, the Patriotic Front in Zambia finds it more prudent to cultivate relations with Taiwan, a democracy and a more advanced country than China, which can provide high quality investment and more equitable trading opportunities.

In comparative terms, Zambia’s experience with Chinese investment is much closer to Africa’s experience during the mercantilist period, which culminated in the enslavement of its people. European colonial exploitation in comparison to Chinese exploitation appear more benign, because even though the commercial exploitation was just as bad, the colonial agents also invested in social and economic infrastructure and services, such as roads, education and health services, particularly through the Christian Missionaries. Investment in education helped nurture the natural yearning for freedom and human dignity, which culminated in the provision of leaders for the African freedom struggles. Chinese investment, on the other hand, is focused on taking out of Africa as much as can be taken out, without any regard to the welfare of the local people. Africa may have barely survived the last 500 years, but it has consistently fought for human dignity. Just as the Africans rejected European exploitation, oppression and dehumanization, there is no doubt that Chinese exploitation and domination will be rejected too.

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