This is a very well done 6 page piece about the history of Anhttp://beta.blogger.com/img/gl.link.gifgola and the increasing influence of China in this oil-rich country. It highlights the type of investment relationship that China is creating all over Africa...
Angola is a very, very poor country, but it is also an extremely rich one, for immense deposits of oil lie under the South Atlantic Ocean within its territorial waters. Thanks to the growing appetites of several developing nations, China in particular, that need oil to sustain the furious expansion of their economies, last year Angola, which otherwise has almost no economy, had more than $10 billion to play with. And it has used that money to pay more advanced countries to rebuild its infrastructure. This vision — call it “
Development by China” — looks like a catastrophic mistake to the Western experts and institutions that have scrutinized, invested in and at times despaired of Angola.(..)
Angola traditionally exported not only oil but diamonds, iron ore, cotton, sisal and corn. But Portugal, Angola’s colonial master for four centuries, abruptly abandoned the country in 1975, provoking a civil war between a government backed by the Soviet Union and Cuba, and Unita, a rebel force supported by South Africa and the United States. The war waxed and waned through stalemates, cease-fires and even, in 1992, an election.
By the end, in 2002, more than a million people had died and about a third of Angola’s population of 12 million had fled from their homes. The war reduced Angola to a beggar nation, dependent on handouts from the World Food Program.
(..)The one industry that continued to function throughout the war was oil, for even Angola’s fighting couldn’t spread to the ocean floor. Oil revenue allowed the regime of President José Eduardo dos Santos, who took power in 1979, to buy weapons and mercenaries, and ultimately to destroy the Unita army. A bizarre wartime financial system evolved in which revenue flowed into the national oil company, known as Sonangol, and then . . . disappeared.
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Vast sums — no one knows how much — were stolen by members of the regime.
By the mid-’90s, the government was running enormous deficits, and inflation was zooming past 1,000 percent. The end of the cold war had deprived Angola of its Soviet patron; the regime, which in 1990 officially forswore Marxist-Leninist doctrine and supposedly began making a transition to a market economy, now turned to the West for help. But the United States and other donor nations no longer needed to prop up sympathetic dictators. And they had learned, through painful experience, that aid given to corrupt regimes with opaque financial systems was bound to be wasted.
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An I.M.F. team that came in 2002 to help the country put its financial affairs in order was flabbergasted by Angola’s Potemkin economy, and even more by the nonchalance of its leading officials.
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After the I.M.F. report, the United States and Britain pulled out, and Angola, still deeply in debt despite billions in oil revenue, was left to bitterly contemplate its options.
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And China offered a model of development, driven from above and powered by high-tech investment, vastly more gratifying and reassuring to third-world elites than the Western gospel of unleashing growth through democratic and marketplace reform. Western donors, led by the I.M.F., conditioned aid on the achievement of meaningful, and often painful, reform. China, by contrast, offered aid without “conditionality.” According to China’s official African policy, published earlier this year, China seeks “a new type of strategic partnership,” which, among other things, “respects African countries’ independent choice of the road of development.”
China invokes this doctrine of noninterference when defending the grossly abusive regimes in Sudan, Zimbabwe, Eritrea and elsewhere with which it carries on a flourishing business.
(..)By 2003, the regime in Angola was every bit as disgusted with the I.M.F. as the I.M.F. was with it.
(..)
In November 2003, Angola’s finance minister traveled to China to discuss a financial package. One year later, China announced that it had extended to Angola a $2 billion oil-backed loan, an Angolan specialty in which credit is secured by future oil production — just the kind of risky gimmick the I.M.F. had preached against. China uses its foreign aid as a means to promote opportunities for private investment, and the two countries agreed that Chinese construction companies would build the giant infrastructure projects financed by the loans.
China immediately began to increase its purchase of Angolan oil; by early this year, Angola had replaced Saudi Arabia as its single-largest source of oil. The extent of China’s commitment to Angola became stunningly clear this spring, when Sinopec, a Chinese state-owned energy company, bid $2.2 billion for the right to develop two deep-water blocks — a sum that shattered all previous records anywhere in the world. Sinopec made its investment in partnership with Sonangol. The billions China offered astonished the Western oil companies, which had already explored adjacent areas and had submitted only modest bids.
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Everything seems to be breaking right for Angola just now. Angola is swimming in oil money. Last year’s oil revenue of $10.6 billion was almost double the figure from 2004. A recent report by The Economist Intelligence Unit projects the country’s growth rate at 16.7 percent this year and 20.8 percent in 2007, making Angola’s one of the world’s fastest-growing economies
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And yet this is the same country where one out of three children dies before reaching the age of 5, where average life expectancy is 38, where cholera, polio and hemorrhagic fevers like the Marburg virus flourish — a country that ranks 160th out of the 177 countries on the United Nations’ Human Development Index. How, and when, will the cataract of oil money flow down the hill from Luanda Sul to improve the lives of Angola’s impoverished, war-weary citizens?
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“If you don’t have roads, if you don’t have bridges, if you don’t have the energy system, electricity, water,” he said, “how can you expect the private sector to invest in such a country?” Yes, he said, Angola needed to pay teachers better. “But public expenses for personnel account for 50 percent of the current budget. Some people”—I.M.F.-type people, presumably —“say that you have to bring down your expenses for personnel. How do you solve that in a postconflict situation? Do you create massive unemployment?”
(..)
Jaime had, of course, glossed over the untold sums lost to corruption, but he had also neglected to mention another distinctly Angolan factor: the combination of war, theft and indifference to the plight of the ordinary Angolan had rotted away the machinery of government. The state’s capacities, whether in regard to bricklayers or teachers or civil servants, or banks, or power grids, were so feeble that any attempt to push all those billions through normal government channels would produce a colossal blockage. The only way to actually put the money to use was to pay the Chinese — or the Portuguese or the Brazilians — to build things. And so Angola was spending staggering sums to repair its infrastructure: $2.7 billion for a dam in the north, $4 billion for three railway lines, including the one that ran through Huambo. The regime wouldn’t be able to provide a public health care system or a skilled work force for years, but it could deliver passable roads. And roads mattered. “By the end of 2007,” Jaime grandly predicted, “most roads linking main production centers will be finished, and the economy will just jump.”(..)
China is now one of Africa’s largest customers not only for oil but also for timber, minerals, cotton and other natural resources. China in turn has flooded Africa with cheap consumer goods. The I.M.F. forecasts that China’s trade with Africa will top $50 billion this year and could reach $100 billion by 2010. Over the last five years, sub-Saharan Africa’s growth rate has almost doubled, to 5.8 percent from 3 percent; economists attribute much of the increase to trade with China and other Asian countries.
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The People’s Republic has declared 2006 “the Year of Africa.” The West had its own unofficial Year of Africa in 2005, and it is instructive to compare the two. The industrial nations conducted a sort of moral crusade, with advocacy organizations exposing Africa’s dreadful sores and crying shame on the leaders of wealthy nations and those leaders then heroically pledging, at the G8 meeting in July, to raise their development assistance by billions and to open their markets to Africa. Once everyone had gone home, the aid increase turned out to be largely ephemeral and trade reform merely wishful. China, by contrast, offers a pragmatic relationship between equals: the “strategic partnership” promised in China’s African policy is premised on “mutual benefit, reciprocity and common prosperity.”
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If we believe that a model of development that strengthens the hand of authoritarian leaders and does little, if anything, to empower the poor is a bad long-term strategy for Africa, then we are going to have to come up with a strategic partnership of our own. And it is not only a question of what is good for the African people. The United States has a real security interest in avoiding failed states and in blocking the spread of terrorism in East and North Africa. What’s more,
the United States already imports 15 percent of its oil from Africa, mostly from Angola and Nigeria; that figure is bound to rise and could even double, eventually making Africa as large a supplier of oil as the Middle East now is. China’s Africa policy shows that globalization is increasingly divorced from Westernization.
We have grown accustomed to the idea that Africa needs us; it’s time to recognize that we, like China, need Africa.
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