Increasing influence of BRICs in Africa: How should the EU respond?
During a business event sponsored by The Times in London, on 22 March 2011, President Bongo of Gabon stated that "in the past two decades we have seen less of Europe, creating a vacuum which is today being filled by others - mostly China... Europe is no longer to be seen." This is a paradoxical turn of events, especially at a time when the EU has been increasing development assistance funding that can be put to direct use in African national budgets. It is also unfortunate because the Union has forged innovative schemes in the social sectors in order to ease the effects of globalization on the most vulnerable. All these have been developed and are being strengthened within the framework of the Africa-EU Joint Strategy that was further articulated in Tripoli in November 2010. 1The EU can regain its leadership amongst various partners engaging with Africa, but for this to happen there is need for a clear understanding of the rapid shift of economic power towards the BRICs. It is also important to understand what the BRICs are doing in Africa both in the economic and political spheres.
Who are they anyway?
Jim O'Neill of Goldman Sachs noted in a study in 2001 that the gross domestic product of the emerging countries (Brazil, Russia, India and China) was growing faster than expected and that the increasing economic power of this group of countries had to be aligned with international decision making possibilities for them. 2 The study argued that their combined economies will eclipse the combined economies of the current rich countries of the world by 2050.3
Although they share common traits as emerging economies, these countries are also different in the sense that Brazil and Russia are primary commodity suppliers (especially of agricultural products and natural gas) while China and India rely heavily on cheap labour and labour-intensive manufacturing. They are all influential in their respective regions and are keen on exporting their influence to other regions of the world. Moreover, they are transforming economic leverage into political and security clout.
BRICs' economic influence in Africa
What is the nature of the advent of the BRICs in Africa? From an economic perspective China is the country that has expanded its ties farthest with Africa. From 1998 to 2008 China's trade value with Africa boomed from $6 billion to over $107 billion. This dwarfs figures for India, Brazil and Russia - for which trade figures were $32 billion; $20 billion and $3.5 billion respectively. 4
In terms of investment, Africa is China's fourth largest investment destination with China's contracted projects in Africa amounting to over $205 billion in August 2010. But while its economic cooperation with Africa is widening, Chinese stakes in Africa have been criticized for having a deprecatory attitude towards local populations and for violating environmental standards. In recent years, Chinese workers have come under fierce threats in various African countries such as Sudan, Kenya, Zambia, Chad, Ethiopia and Nigeria.
Although Brazil's economic clout in Africa is smaller (more sensitive to risks), it is still significant, especially since Lula's rise to power. With regard to investments, the influence of Brazilian companies is expanding in countries such as Mozambique, Angola, Congo, Zambia, Namibia, South Africa, Sudan, Guinea, Liberia and Nigeria, amongst others. The main sectors of investment include bio-fuels, infrastructure and banking. During eight years of Lula's rule, Brazil signed over 200 bilateral accords with various African countries. Brazilian companies like Vale (notably in the copper sector), the infrastructure firm Odebrecht and oil giant Petrobras are leading outfits in Angola, Guinea and Mozambique. In agriculture, through the state agricultural research institute EMBRAPA, Brazil provides technical assistance to the cotton sector in Benin, Burkina Faso, Chad, and Mali. Unlike with China, Brazilian cooperation with Africa is well received, mindful of the fallout in terms of local employment and importantly, transfer of knowledge and technology. It is regarded as a true South-South deal. Brazil dedicates significant resources to ensure that its policies are aligned with those of local populations. It is keen on expanding its economic leverage in various parts of the world to demonstrate that it is a global force and that it also deserves a voice in important decision making platforms. A few years back, the country sought the assistance of the International Monetary Fund. Today it has granted the IMF loans of $10 billion to lend to others. It has even teamed with the African Development Bank to create a Trust Fund to finance transfer of technology in South-South cooperation in fields of agricultural research and the environment.
This approach is a far cry from the Russian strategy in Africa. Andrei Petrov, chairman of the "New Africa Initiative" non-profit organization, has noted that Russia lags critically behind China, India and some countries in Western Europe, in promoting its interests in Africa. There is an absence of a global Russian strategy when compared to China which has already organized three grand African summits since the turn of the century. Petrov adds that there is also a lack of coordination amongst Russian ministries and agencies when dealing with Africa. Russia is keen to foster ties with Nigeria and Angola as they produce natural gas. Unlike China and India, Russia does not really need African resources but may be keen on selling arms and control the manner in which other players can access Africa's resources.
Despite the presence of many Russian companies, including oil leviathan Lukoil, in Africa, the perception of Africa in Russia is still that of a lost continent. Indeed, Russia still has a steep curve to overcome in Africa before its economic efforts are collated against those of the other BRIC countries, but this could be changing. In 2009 President Medvedev led a team of more than 100 Russian business leaders to Egypt, Nigeria, Namibia and Angola. In Egypt, a ten year Strategic Cooperation Pact was endorsed under which Rosatom would help construct Egypt's first nuclear power plant, granting the company an edge in a region where similar Western outfits were keen to make inroads. In Nigeria, Gazprom will team with the Nigerian state-owned oil company to develop gas and oil fields and to construct a pipeline from Nigeria to Europe, thereby providing greater leverage to the Kremlin in influencing the sale of Nigerian oil and gas to Europe. As such, Russia is gradually making an inroad back into Africa whilst also providing carrots such as debt relief that amounted to 20 billion dollars between 2007 and 2009.
India is also interested in Africa's proven oil reserves. However, Indian companies have a knack for investing in less crowded sectors in Africa such as the flower industries in Kenya and Ethiopia. Compared to Chinese economic stakes in Africa, India still lags behind. Nonetheless, the country has a vested interest in fostering these ties, as it was revealed during a conference organized by the Indian Prime Minister Singh in 2008 with 14 African leaders in attendance. Although India also has continent-wide ambitions in Africa, its focus has been on Ethiopia, Nigeria, South Africa, Mauritius, Kenya, Tanzania and Ghana, accounting for around 69 percent of the country's total bilateral trade with sub Saharan Africa.
All these factors allude to the ever increasing economic leverage of the BRICs in Africa. However, is the renewed economic foray by the BRICs into Africa translated into political strategies on ensuring security and peace in the continent?
The politics: security and peace
The BRICs are also keen on influencing political processes in Africa. Although it lacks a permanent military base in Africa, China is actually the highest contributor of peacekeepers amongst the members of the UN Security Council, with many operations in Africa. On the negative side, however, between 2006 and 2009, China was the largest arms exporter to Africa. It has also been argued that China has used its political clout in the past to back regimes that do not uphold human rights such as in Sudan and Zimbabwe. Such actions on the part of Beijing fortify the belief that the Asian giant's primary goal is simply to access Africa's resources.
Russia remains influential, mindful of the scientific and political cooperation forged during yester years of the East/West rift. Another area where Russia has vital leverage in Africa, apart from its veto in the Security Council, is in the realm of arms sales, a factor which has led countries like Egypt, Angola and Morocco to endorse arms deals with the country.
India is also keen on developing political and security clout with African countries and has therefore signed military cooperation accords with many countries of Eastern Africa including Kenya, Madagascar and Mozambique. India has military cooperation (training) with a third of African nations and has thus participated in all the peacekeeping operations in Africa. It has deployed military training teams and defence attachés in a number of African countries. It has formidable military equipments stationed in the Indian Ocean and Indian officials make it clear that this is to defend the country's economic interests.
It must be noted that Brazil is also exerting political influence in Africa. When Lula came to power, he made a distinctive break with the erstwhile policies of his predecessors of dealing only with Portuguese-speaking African countries. Brazil has also participated in peacekeeping operations in Africa and contributed military and police personnel to four UN peacekeeping missions in Africa. This is partly due to the importance that Brazil places on being regarded as a global player with an eye to a seat on the UN's Security Council. Nevertheless, the country's attachment with Africa runs deeper and is also emotive.
Responding to the BRICs: What should the EU be doing?
The European Union (EU) has many instruments to promote democracy, peace and economic development in the developing world, and especially in Africa. It thus has a range of options to respond to the increasing influence of the BRICs in Africa.
First, it must continue to press African leaders on questions of democratic reforms. It would be wrong for the EU to downgrade its democratic demands in terms of rule of law and respect for human rights on the pretext of responding to the BRICs' indifference to these issues. However, standards need to be applied (and be seen to be applied) consistently in a manner free of double standards. Support for people power in Egypt, Tunisia and other countries should also be extended to countries such as Kenya, Côte d'Ivoire and Zimbabwe.
Second, the EU should encourage its companies to continue to uphold standards of corporate social responsibility. Western companies will succeed where the new companies fail in terms of upholding core social standards. People care about the social dimensions of economic development and Africans are increasingly aware that failure to respect social standards may be costly, with some ready to pay the price even if it entails shunning companies from the BRICs.
Finally, the EU should continue facilitating cooperation between African and European businesses. Similar efforts should be made in enhancing ties between educational and research institutions. Moreover, joint initiatives between civil society organizations from the EU and African countries should be bolstered.
Stephen Kingah is research fellow at the United Nations University Institute for Comparative Regional Integration Studies (UNU CRIS Bruges)
1 For more information in this respect, please see Feria/Laporte (2011). TNI. Vol. 9 No 12.
2 South Africa has formally joined the group.
3 Jim O'Neill, "Building better global economic BRICs," 66 Goldman Sachs Global Economics Paper (30 Nov 2001).
4 Saferworld, China's growing role in African peace and security (Saferworld, January 2011); Global Trends, "The new colonization of Africa, BRIC Style," 3.3.2011, at http://www.globaltrends.com/blog/the-new-colonization-of-africa-bric-style.html