West's difficulty in Angola is Beijing's opportunity
CHINA'S AFRICA - ANGOLA: The former Portuguese colony is China's main source of oil and largest African trading partner, writes Mary Fitzgerald
ANYONE WISHING to gauge the extent of China's penetration of some of the more unlikely corners of Africa need only take the South African Airways flight from Johannesburg to the Angolan capital of Luanda.
On a recent morning, at least two-thirds of the passengers on the fully booked Airbus A340-600 were Chinese. Slick-suited Chinese businessmen with briefcases sat next to Chinese engineers in jeans busily tapping on their laptops.
Taking up most of economy class were scores of what appeared to be Chinese labourers, with weathered faces and calloused hands. The cabin crew made their announcements in Portuguese, English and Mandarin. Among the in-flight entertainment offerings was Crouching Tiger, Hidden Dragon. Everything else came with Mandarin subtitles.
In the current phase of China's engagement with Africa, there is no more important country for Beijing than Angola. Not only is the oil-rich former Portuguese colony now China's main supplier of crude, having surpassed Saudi Arabia some time ago, it is also China's largest trading partner in Africa.
But in a country where state finances are notoriously opaque, it is difficult to pin down the exact nature of a relationship that many say encapsulates the notion that, when it comes to Africa, where the West sees difficulty, China sees opportunity.
In 2002, with Angola facing the mammoth task of picking itself up after almost three decades of civil war, plans to organise an international donors conference were abandoned. Western countries cited a lack of transparency and reports that billions of dollars in oil revenues had vanished from the country's coffers.
That slight clearly still rankles with Aguinaldo Jaime, Angola's deputy prime minister. "The donor community was not ready to come to our rescue so we had to look for alternatives," he says crisply, sitting in his office at the presidential palace high above Luanda's Atlantic coastline. And so the government turned to Beijing.
"We had just come out of a long war, our economy had been devastated and the country had massive social needs," explains Jaime. "China was willing to understand this reality and put a huge financial package on the table. This is the main reason Angola decided to enter into a relationship with China."
Beijing secured a major stake in Angola's future oil production in exchange for a multibillion dollar package of loans and aid that included funds for Chinese firms to rebuild the country's rutted roads and ruined railways, and replace long-destroyed schools, hospitals and offices. Since then tens of thousands of Chinese have arrived in Angola.
The blue-overalled Chinese construction worker breaking rocks or pouring concrete has become a common sight both in Luanda and some of the more remote towns of the country's interior.
One of the recent arrivals is Qui Shou Ying from Beijing. He is commercial director for Sino-Hydro Corp, a Chinese state-owned company contracted to build two roads, two water supply systems, 18 schools and four irrigation projects by next year. Qui lists the challenges that slow his projects down - erratic water and electricity supply is a particular annoyance, plus everything, apart from the local labourers he employs, needs to be imported from China.
What is striking though is Qui's zealous sense of mission. "Angola desperately needs help in reconstructing their country after the war," he says.
"It is very important for our company to do a good job in helping Angola develop." Qui and his wife, an accountant at Sino-Hydro, live in the company compound on the outskirts of Luanda, a sprawling site that houses 300 Chinese workers as well as acting as a storage and logistics base.
Most Chinese in Angola, and indeed in other parts of Africa, live in similar compounds, many of which are high-walled and completely sealed off from the surrounding community. As elsewhere, this isolation encourages sometimes fantastical speculation about the new arrivals and the way they live. One frequently heard rumour in Angola is that China has sent some of its prisoners over to work on the roads. The Chinese are to be found in the most unexpected places. I came across a small Chinese-run clinic in one of the many shanty towns known as musseques that ring Luanda. Xiong Kaihong, a 25-year-old nurse from Beijing, said the staff's use of traditional Chinese medicine such as acupuncture had become very popular with local patients.
Despite grumbling from some critics that Chinese labourers are doing jobs Angola's legions of unemployed could do - Beijing's deal stipulates that 70 per cent of the reconstruction tenders must go to Chinese firms and these companies tend to bring their own workers from China - there are few signs that the popular resentment which has bubbled up in other parts of Africa is gaining significant ground here.
There is no mention of China in any opposition party manifesto ahead of next month's elections, the first since 1992. "I think so far people generally see it as a positive thing," says Carlos Figueiredo, who works for the UN's development programme. "We see infrastructure being repaired and that's happening quite fast. As far as I know there is not much tension. It will be interesting to follow this and see how it will evolve. It's a real mixing of people and cultures on many different levels."
Allan Cain, a Canadian who runs a development agency and who has lived in Angola for almost 30 years, says the Chinese engagement, particularly its loan package, is an opportunity the country must be careful not to waste.
"The concern is that there is little national capacity and planning for the effective use of this credit line . . . Some of the projects are simply wasteful prestige projects such as sports stadiums that will burn a lot of that credit line for results that won't produce economic returns in the long term for Angola."
Others raise concerns that "no-strings-attached" Chinese credit creates a situation where the Angolan government has little incentive to implement political reform, tackle endemic corruption and make its economy more transparent.
Already there are signs of the problems that can arise when hard-headed Chinese business comes up against the realities of a country like Angola, which, despite its vast oil wealth, languishes on the bottom rungs of most development indices.
Rumours abound of suspended or cancelled contracts and billions of dollars worth of funds unanswered for on both sides.
Observers have speculated that relations have cooled considerably since the heady days of the first credit lines.
Deputy prime minister Jaime plays down that suggestion, pointing out that Angolan president Jose Eduardo dos Santos signed off on a number of new contracts while in Beijing to attend the Olympics.
"In any negotiation there are sometimes setbacks," Jaime says. "Just because parties sometimes cannot agree on a particular business point does not imply the relationship is not good.
"As we like to say," he adds with a smile, "business is business, friendship is friendship."
© 2008 The Irish Times / August 26, 2008
ANYONE WISHING to gauge the extent of China's penetration of some of the more unlikely corners of Africa need only take the South African Airways flight from Johannesburg to the Angolan capital of Luanda.
On a recent morning, at least two-thirds of the passengers on the fully booked Airbus A340-600 were Chinese. Slick-suited Chinese businessmen with briefcases sat next to Chinese engineers in jeans busily tapping on their laptops.
Taking up most of economy class were scores of what appeared to be Chinese labourers, with weathered faces and calloused hands. The cabin crew made their announcements in Portuguese, English and Mandarin. Among the in-flight entertainment offerings was Crouching Tiger, Hidden Dragon. Everything else came with Mandarin subtitles.
In the current phase of China's engagement with Africa, there is no more important country for Beijing than Angola. Not only is the oil-rich former Portuguese colony now China's main supplier of crude, having surpassed Saudi Arabia some time ago, it is also China's largest trading partner in Africa.
But in a country where state finances are notoriously opaque, it is difficult to pin down the exact nature of a relationship that many say encapsulates the notion that, when it comes to Africa, where the West sees difficulty, China sees opportunity.
In 2002, with Angola facing the mammoth task of picking itself up after almost three decades of civil war, plans to organise an international donors conference were abandoned. Western countries cited a lack of transparency and reports that billions of dollars in oil revenues had vanished from the country's coffers.
That slight clearly still rankles with Aguinaldo Jaime, Angola's deputy prime minister. "The donor community was not ready to come to our rescue so we had to look for alternatives," he says crisply, sitting in his office at the presidential palace high above Luanda's Atlantic coastline. And so the government turned to Beijing.
"We had just come out of a long war, our economy had been devastated and the country had massive social needs," explains Jaime. "China was willing to understand this reality and put a huge financial package on the table. This is the main reason Angola decided to enter into a relationship with China."
Beijing secured a major stake in Angola's future oil production in exchange for a multibillion dollar package of loans and aid that included funds for Chinese firms to rebuild the country's rutted roads and ruined railways, and replace long-destroyed schools, hospitals and offices. Since then tens of thousands of Chinese have arrived in Angola.
The blue-overalled Chinese construction worker breaking rocks or pouring concrete has become a common sight both in Luanda and some of the more remote towns of the country's interior.
One of the recent arrivals is Qui Shou Ying from Beijing. He is commercial director for Sino-Hydro Corp, a Chinese state-owned company contracted to build two roads, two water supply systems, 18 schools and four irrigation projects by next year. Qui lists the challenges that slow his projects down - erratic water and electricity supply is a particular annoyance, plus everything, apart from the local labourers he employs, needs to be imported from China.
What is striking though is Qui's zealous sense of mission. "Angola desperately needs help in reconstructing their country after the war," he says.
"It is very important for our company to do a good job in helping Angola develop." Qui and his wife, an accountant at Sino-Hydro, live in the company compound on the outskirts of Luanda, a sprawling site that houses 300 Chinese workers as well as acting as a storage and logistics base.
Most Chinese in Angola, and indeed in other parts of Africa, live in similar compounds, many of which are high-walled and completely sealed off from the surrounding community. As elsewhere, this isolation encourages sometimes fantastical speculation about the new arrivals and the way they live. One frequently heard rumour in Angola is that China has sent some of its prisoners over to work on the roads. The Chinese are to be found in the most unexpected places. I came across a small Chinese-run clinic in one of the many shanty towns known as musseques that ring Luanda. Xiong Kaihong, a 25-year-old nurse from Beijing, said the staff's use of traditional Chinese medicine such as acupuncture had become very popular with local patients.
Despite grumbling from some critics that Chinese labourers are doing jobs Angola's legions of unemployed could do - Beijing's deal stipulates that 70 per cent of the reconstruction tenders must go to Chinese firms and these companies tend to bring their own workers from China - there are few signs that the popular resentment which has bubbled up in other parts of Africa is gaining significant ground here.
There is no mention of China in any opposition party manifesto ahead of next month's elections, the first since 1992. "I think so far people generally see it as a positive thing," says Carlos Figueiredo, who works for the UN's development programme. "We see infrastructure being repaired and that's happening quite fast. As far as I know there is not much tension. It will be interesting to follow this and see how it will evolve. It's a real mixing of people and cultures on many different levels."
Allan Cain, a Canadian who runs a development agency and who has lived in Angola for almost 30 years, says the Chinese engagement, particularly its loan package, is an opportunity the country must be careful not to waste.
"The concern is that there is little national capacity and planning for the effective use of this credit line . . . Some of the projects are simply wasteful prestige projects such as sports stadiums that will burn a lot of that credit line for results that won't produce economic returns in the long term for Angola."
Others raise concerns that "no-strings-attached" Chinese credit creates a situation where the Angolan government has little incentive to implement political reform, tackle endemic corruption and make its economy more transparent.
Already there are signs of the problems that can arise when hard-headed Chinese business comes up against the realities of a country like Angola, which, despite its vast oil wealth, languishes on the bottom rungs of most development indices.
Rumours abound of suspended or cancelled contracts and billions of dollars worth of funds unanswered for on both sides.
Observers have speculated that relations have cooled considerably since the heady days of the first credit lines.
Deputy prime minister Jaime plays down that suggestion, pointing out that Angolan president Jose Eduardo dos Santos signed off on a number of new contracts while in Beijing to attend the Olympics.
"In any negotiation there are sometimes setbacks," Jaime says. "Just because parties sometimes cannot agree on a particular business point does not imply the relationship is not good.
"As we like to say," he adds with a smile, "business is business, friendship is friendship."
© 2008 The Irish Times / August 26, 2008
