Maravi

Zim must forget the West, look East

Zim must forget the West, look East
by Garikai Chengu
07/03/2010 00:00:00

AS THE global economic balance of power shifts from West to East, it is becoming increasingly evident that we are living through the end of 500 years of Western dominance. Consequently, Zimbabwe must exercise long-term strategic vision, by perfecting the art of benefiting from China. Most analysts agree that China will break away from the US and have the world's largest and most influential economy by 2025.

However, as things currently stand America needs China to buy her Treasury bills; and China needs America to buy her exports. They are like two drunken giants leaning on each other. Yet a sobering reckoning of some sorts seems inevitable; and it is difficult to see how both can be winners.

The defining moment of the past decade which suggested that only one giant would remain standing, was the crippling global recession and consequent realisation that China holds vast global reserves, while the US lives increasingly on unsustainable credit.

US reliance on Chinese capital to stabilize its accounts signifies that the decline and fall of America's undeclared empire might therefore be due not to despicable terrorists at the gates or to the rogue regimes that sponsor them, but to a fiscal crisis at home.

For 500 years prior to this crisis, what had given the West the edge over the East was five key features: the capitalist enterprise, scientific advancement, global imperialism, the consumer society and the 'Protestant' ethic of work and capital accumulation.

China has clearly replicated the first and second points and may be in the process of adopting the others with some alterations (consumption and the work ethic). Only point number three- imperialism (in the overt manner in which it was practised by the West) - shows little sign of emerging in the People's Republic.

The new world order will not commence after China's economy overtakes that of the US in 2025, it has started already. The US was the old order's main architect, and China is the rising power of the new.

Thus, the decision by President Robert Mugabe to Look East was strategic and prescient; however, the country must now perfect the art of benefiting from China's colossal rise.

In order to do so Zimbabwe must recognise and expand mutually beneficial areas of political, economic and social cooperation between the two nations.



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Sino-Zim relations
From the outset it is important to note that looking East does not mean completely turning one’s back to the West.

A great deal of emphasis has been placed on the need to re-engage the Bretton Woods institutions as well as establish a kind of détente with the West; and rightly so.

However, this rapprochement must occur in simultaneity with a strengthening of economic relations with China, which has fast become of great geo-strategic importance to Zimbabwe on several fronts:

Firstly, President Mugabe's administration has had links with the Chinese government ever since China provided Zimbabwe's guerrillas with training, logistical and material support to wage the Liberation Struggle.

Chinese authorities’ associations with the Second Chimurenga, and subsequent cordial political relations, have resulted in the crucial formation of an ideological alliance with a permanent member of the UN Security Council.

This alliance has been unwavering throughout the Third Chimurenga, where China's support was instrumental in derailing attempts by Western nations to use the UN Security Council to put sanctions on the people of Zimbabwe in pursuit to illegal regime change.

Illegal economic sanctions have brought Zimbabwe and China closer resulting in the former’s increased reliance on the latter for imports of telecommunications, road-building, irrigation and farming equipment that can no longer be imported from the west. Presently, over 40 major Chinese companies operate in Zimbabwe.

From China's perspective, this long-standing alliance serves as a means of not only, improving political ties with its fifth largest trading partner in Africa, but also cultivating good relations with a nation that is strategically nestled between its two biggest African trading partners, namely Angola and South Africa.

Crucially for China, Zimbabwe neighbours its flagship infrastructure project on the continent, a transcontinental rail-road linking Tanzania’s port to copper filled Zambia and oil rich Angola.

China's keen interest in Zimbabwe is by no means confined to the location of Zimbabwean soil, but also includes the abundant natural resource endowment that lies beneath it.

These strategic minerals include the second largest platinum deposits in the world, estimated at in excess of $500 billion; voluminous yet to be exploited coal-bed methane gas; vast coal reserves and immense hydroelectric power potential; as well as the geological treasure zone in the Great Dyke region, home to abundant deposits of copper, chromium, nickel and gold, to mention but a few.

Secondly, China’s voracious appetite for these mineral resources has driven it to become the largest investor in Zimbabwe.
The People's Republic has also overtaken Western nations as the investor with the fastest growing foreign direct presence in Zimbabwe.

Crucially for Zimbabwe however, increased FDI and export opportunities are more likely to come from an economy that is continuing to grow at a booming pace, than from those that are begging for bailouts and assistance from it.

Finally, Beijing’s propensity to give Zimbabwe assistance in the form of interest-free loans and grants is of increasing importance as Western capitals, and the multilateral institutions they commandeer, continue to maintain illegal economic sanctions on Harare.

Over the past three years, China has provided approximately half a billion dollars to Zimbabwe in direct assistance for investment in infrastructure including schools, clinics and transport routes. These no-strings-attached soft loans for economic development are a far cry from IMF and World Bank 'reforms' which require a reduction in spending on the aforementioned infrastructure.

Why would Government look west and agree to voluntarily lower its citizenry’s living standards on the back of exorbitant loans, when it can receive virtually interest free capital aimed at investing in development and improving people’s living standards, by simply looking east?

Chinese loans and grants on the African continent last year amounted to more than $8 billion to Angola, Nigeria and Mozambique alone, compared to the $2.3 billion granted by the World Bank to the entire Sub-Saharan African region.

Therefore, as important as World Bank and IMF approval is as an indicator for countries and investors like, the deepest and most generous pockets are found in the East.

The economic tectonic shift eastward may have taken 500 years but the Zimbabwe Government must waste no time in perfecting the art of benefiting from China, by focusing on strengthening Sino-Zimbabwe relations on all fronts.

Garikai Chengu is a scholar at Harvard University's Faculty of Arts and Sciences. He can be contacted at chengu@fas.harvard.edu. The views expressed herein are solely those of Garikai Chengu

Labels: CHINA

posted by MrK @ 7:50 PM