Tuesday, June 22, 2010

Africa's Trade Increases With China and Other Developing States

Africa’s Trade Increases With China and Other Developing States

Continent looks to enhance cooperation outside the West

By Abayomi Azikiwe
Editor, Pan-African News Wire

A major impediment to economic development in Africa and other former colonial territories in the world has been the legacy of imperialism and its stronghold on the productive forces within these states. The phenomenon of neo-colonialism has hampered so-called Third World countries from exercising their independence irrespective of the political and class character of the leadership within the developing nations.

In recent years numerous African governments have sought to increase their trade and economic cooperation with nations which have similar histories of colonial domination. These efforts have caused much consternation in the West where the imperialist states have sought to maintain influence over the political direction taken by the developing countries.

The United States since the conclusion of the second world war has become the dominant imperialist power in the world. Its influence in Africa has surpassed that of other imperialist states such as Portugal, Spain, Germany, France, Italy and Great Britain.

According to Kwame Nkrumah, the first leader of independent Ghana during the 1950s and 1960s, the United States had overtaken the European powers in regard to economic control of Africa and other developing regions of the world. Although after the war in the late 1940s, the official U.S. policy was ostensibly in support of colonized states gaining their national independence, the actual aims of the ruling class inside the country was to replace the European imperialist system with a more sophisticated mechanism of indirect rule.

Nkrumah in his book entitled “Neo-Colonialism: The Last Stage of Imperialism,” that was published in 1965, says that “Foremost among the neo-colonialists is the United States, which has long exercised its power in Latin America. Fumblingly at first she turned towards Europe, and then with more certainty after world war two when most countries of that continent were indebted to her. Since then, with methodical thoroughness and touching attention to detail, the Pentagon set about consolidating its ascendancy, evidence of which can be seen all around the world.” (Nkrumah, p. 239)

In Africa there has been a strong concentration of mineral extraction since the continent contains large volumes of strategic natural resources that are vital to both the capitalist production process as well as the U.S. military industrial complex. Various governments have been and still are under tremendous pressure to supply key sectors of the United States and other industrial economies with the minerals needed to maintain their dominant positions within the international market through the maximization of profit.

In the same above-mentioned book by Nkrumah, the writer says also that “More energetic exploration for metal and mineral resources was undertaken in Africa and elsewhere. Africa’s raw materials are an important consideration in the military build-up of the NATO countries, in which are included those of the European Common Market.” (Nkrumah, p. 59)

This constant supply of African resources has been the guiding force behind the U.S. foreign policy towards the continent. Governments have been overthrown in Africa amid their attempts to exert a greater degree of independence from western imperialism and to move the national economies of these states towards socialism. This was the motivation behind the United States in its pivotal role in toppling the government of Kwame Nkrumah.

In a section of Nkrumah’s “Neo-Colonialism” entitled “Monopoly Capitalism and the American Dollar,” the former president says that “Their industries, especially the strategic and nuclear factories, depend largely upon the primary materials that come from the less developed countries. Post-war Europe sustained a precarious shortage of basic supplies for its steel manufactures. Belgium needed more rich ores, Sweden more coal and coke, which America supplied in return for fine ores.”

Recent Trends Within Africa and the Developing Countries

A recently released Economic Development in Africa Report 2010 by the United Nations Conference on Trade and Development (UNCTAD) entitled “South-South Cooperation: Africa and the New Forms of Development Partnership,” examines the rising levels of trade between the continent and other developing regions including the People’s Republic of China.

This report indicates that the total trade in merchandise with developing countries outside the continent increased significantly from $34 billion in 1995 to $283 billion in 2008. This represents the fastest growing area of trade between Africa and other areas of the world.

Since 1980, Africa’s trade with other developing regions rose from 8% to 29% in 2008. The continent’s trade with other developing countries, including states within Africa itself, has surpassed that of the European Union since 2007.

As an economic bloc, the European Union still constitutes the largest trading partner with Africa, although the proportion of trade with the continent has shrunk from 55% during the 1980s to less than 40% in 2008. Nonetheless, the foreign direct investment in Africa by other developing countries outside the continent rose at a much more modest rate from 12% during the mid-to-late 1990s to 16% between the years of 2000-2008.

According to UNCTAD Secretary-General Supachai Panitchpakdi, who unveiled the report at the World Expo 2010 held in Shanghai, China on June 18, the strongest growth in trade has taken place between Africa and Asian states, with the People’s Republic of China being the most significant. China’s trade with Africa was recorded at $93 billion in 2008 making it the second largest country partner after the United States.

The Economic Development in Africa Report 2010 found that trade between Africa and China had increased by 1000% between the years of 2000-2008. Today China accounts for 11% of the continent’s external trade with the bulk of transactions taking place in the sectors of primary products, including fuel and minerals.

In contrast to the legacy of trade between Africa and the western imperialist states, trade with China has been important in fostering economic and social development. One UNCTAD economist Janvier Nkurunziza, who was present at the unveiling of the report in Shanghai, refuted allegations by western-based media sources that China’s increasing role in Africa was not benefitting the continent.

Nkurunziza said that “The challenge is for Africa to find ways to harness and manage this relationship for better developmental outcomes.” He did not view China’s growing relationship with Africa as a “new form of colonialism,” arguing that this emerging economic cooperation was based on the principles of “mutual respect, reciprocal benefits, respect for sovereignty and non-interference in the internal affairs” of the continent. (Engineering News, June 18)

West Continues Efforts to Dominate Africa

Even though the various African states are moving to diversify their economic relations with countries and regions throughout the world, the imperialist states continue to undermine development efforts. In Nigeria, which is a large trading partner with the United States in the oil sector, the various multi-national firms and the Obama administration have escalated pressure on the government of this most populous country on the continent.

Nigeria recently signed an oil cooperation agreement with China that is reported to involve between $32 billion to $50 billion in trade and investment. High ranking U.S. officials have sought to influence the structure and pace of the Nigerian electoral process claiming that political stability inside the West African state is vital to its financial and security interests.

A Petroleum Industry Bill (PIB) that has made its way through the parliamentary process is now stalled at the executive level due to the concerns expressed by multi-national oil firms. Royal Dutch Shell’s country representative Mutiu Sunmonu said recently that the firm was placing potential investments on hold pending the outcome of the final implementation of the PIB.

Sunmonu said in an interview with Reuters press agency that “Just looking at deepwater alone, we have a portfolio of about $40 billion worth of projects…but we will not be able to make a move on these until we have a landing on the PIB. That is potential investment that we are not able to sign off on at this time. “(Reuters, June 17)

Increased attention has been given to the role of multi-national oil firms in Nigeria that have dominated the industry since 1956. In light of the oil spill in the Gulf of Mexico off the coast of the U.S., it has been pointed out that there are frequent occurrences of a similar nature in Nigeria, yet there is never the amount of publicity given to these environmental disasters as the one currently plaguing the states of Louisiana, Mississippi, Alabama and Florida.

“The U.S. government’s all-out fight to contain the BP oil spill in the Gulf of Mexico is a marked contrast to the situation in the Niger Delta, leading local communities and campaigners to ask why Shell and other international oil firms in Nigeria are not paying compensation.” (Reuters, June 17)

According to Sunmonu of Nigeria Shell, “It is incorrect to draw a parallel…The law in Nigeria is very clear. We do not pay compensation for sabotage spills,” attributing the pollution in this West African state to theft and not technical malfunctions.

At the same time in recent years, the U.S. military involvement in Africa has increased, with the formation of the Africa Command (AFRICOM) and the 2009 war games that were held by the Pentagon in the Gulf of Guinea as well as several West Africa states. The presence of a U.S. military base in the Horn of Africa nation of Djibouti and the flotillas of warships off the coast in the Gulf of Aden, demonstrates clearly that imperialism is still very much committed to maintaining its stranglehold on the continent.

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