Working where others won't

Last year, Václav Pleštil spent three months in Ghana working on a humanitarian project for an NGO. Back in the Czech Republic, recounting one of his travel stories, he recalled the situation in a small fishing town on the shores of Lake Volta. Pleštil talked to people from three generations. The elders thought back with regret to the times when they caught fish 6-feet-long. The middle-aged group recalled the days when they caught 3-foot-long fish, while the younger generation, only able to catch small fish, jealously lamented stories of the good old days. "There must be something wrong with these fish," a local said. Pleštil's story, in its genuine simplicity, highlights an endemic problem in many African countries: the incapability, of many, to think for the long term vis a vis the short run. For the locals, the problem is the fish themselves. The long-run prospect of exhausting resources through three generations of intense fishing had never crossed their mind.

This story in its own way explains the failure of Western-style development programs in Africa and has opened the door for an increasingly assertive global player, China, to fill the gap.

The April G20 summit, where former Prime Minister Mirek Topolánek led the European Union contingent, saw a pledge for increased resources to the International Monetary Fund (IMF) and World Bank surpassing $500 billion, a billion of which was contributed by the Czech Republic. The recent economic crisis has highlighted the ability of IMF and World Bank loans to stabilize countries facing economic difficulties, bringing temporary relief. However, recent events have also shown that such moves succeed only in places where financial infrastructure already exists. Lithuania and Hungary - with their infrastructure and ability to direct the money toward longer-term development - are recent examples of positive results from such loans. As Pleštil's story shows, thinking beyond the short term is hard for much of Africa as the struggle for daily survival intercedes.

Tribal affiliations

The problem intensifies when traditional short-term thinking coexists with the social framework of African states themselves. Many African elites see the legitimacy of their power bound to a clientalist system of favors and tribal affiliations. The dependence on such webs of relations exacerbates the problem of short-term thinking. If political power depends on a client network, ultimately everything relies on the ability to keep clientele happy, especially financially and economically. This results in the proverbial chicken-and-egg dilemma between the mindset of many Africans and the structure of many states, and points to the idea of a "zero-sum" democracy, where support for the client network means those funds are not directed to development projects, and any funds for development don't benefit the elite clients. The implied result is that, because of the structure of the system itself, African leaders shift all resources toward the base of political support.

This theory is an alternative and explanatory theory as to why IMF and World Bank structural readjustment and stabilization programs fail to produce tangible success in most African countries. To try to enforce a form of guarantee for the return of the repayment of loans, international institutions have been increasingly attaching requirements that interfere with state sovereignty. Intrusion by international institutions has generated animosity and has led African states to search for different paths to growth. Sudan, for example, isolated by international diplomacy after its Islamist revolution, sees in the rising global economic power of China a key to unlocking the doors of international isolation.

Contrary to European and North American sponsored loans, China posits itself as highly committed to the values of national sovereignty. No conditions are attached to its financial involvement, and, most importantly, no direct monetary transaction occurs between Beijing and African countries.

The "Beijing Consensus," labeled as such after the 2008 meeting in Beijing of a multitude of African leaders with Chinese President Hu Jintao, outlined relationships based mainly on the exchange of resources for the building of infrastructure. For instance, if the Sudanese government is in need of a road to connect Port Sudan to the capital Khartoum, the Chinese government undertakes the project with payment in oil or other natural resources concessions. China's strategy allows it to avoid the risk of debts in African states punishing its bottom line, while it extracts much needed oil to feed growing industry and, at the same time, leaves a traceable and significant benefit for the country, which can then use the said infrastructure to subsequently attract investment. The Chinese model, in fact, allows for the efficient construction of basic infrastructure that, under the conditions of IMF and World Bank loans, would otherwise lead to the spreading of resources to the clientalist web of the country's leadership. For example, a road in Zambia sponsored by the IMF and the OECD never saw the light of day as the loan disappeared down leader Rupiah Banda's clientalist drain.

Funding from afar

When Pleštil worked in Ghana, he stayed at a newly built hotel. Wondering who funded its construction, he questioned the owner. It turned out the hotel was a converted school, whose conversion had been financed by EU funds. Pleštil sets out the cycle where, "The president depends on [the hotel owner's] support. His support varies with the economic advantages he receives, and the loans depend on their being a legitimate government facade." In recent years, the Czech Republic has undertaken a number of projects involving a great number of African countries. Czechs cooperating with the Angolan Education, Youth and Sport Ministry deployed the equivalent of $586,820 for the development of infrastructure and other aid projects.

The project, like so many others, slows as it nears completion and as money trickles further from its intended destination, finding its way down non-transparent client networks. The general situation in Africa is further hampered by democratic requirements imposed by global institutions that often fail to acknowledge the crude reality of African political power. Many African countries prefer China's approach, which recognizes the sovereignty of African countries and allows for a degree of independent economic decision-making more in parallel with the times. Chinese President Hu Jintao's visits to Africa outnumber that of any European leaders', with the possible exception of those from France.

While the Chinese approach has its own flaws - such as its failure to employ local labor, which does generate some animosity among locals - it is a route increasingly attractive to African leaders.

Africa's natural resources could be the key to Africa's future. Africa now has a choice between a European/North American development model and a Chinese one. In recent years, the Chinese approach has seemingly generated more concrete results, and is evidence of the growing power of a major global player. The failure of European or North American states to adjust their development models could result in ceding much of a continent to Chinese influence.

- The author, presently based in London, is a freelance journalist who has worked for Lebanon's  The Daily Star and The Financial Times.

Alberto Mucci can be reached at
features@praguepost.com