In April 2019, the United States’ (U.S.) development finance institution (DFI), the Overseas Private Investment Corporation (OPIC), signed a memorandum of understanding with the European DFIs and FinDev Canada. In it, they promised to provide viable “alternative[s] to unsustainable state-led models.” That same day, the Malaysian government revived the Chinese rail project with the state-owned China Communications Construction Company, fueling criticisms against China’s “debt-trap diplomacy.”
Similarly, the U.S. recently unveiled a new strategy towards African countries with the announcement of “Prosper Africa,” an initiative designed to increase two-way trade and investment between the U.S. and Africa. Former National Security Advisor John Bolton remarked that the policy was a national security strategy to ensure that “all U.S aid on the continent will advance U.S. interests” and counter “the predatory practices pursued by China and Russia.” The U.S. has since downplayed such comments, instead focusing on the ‘mutual benefits’ the initiative advances, from expanding trade and investments to support the region’s information and communications technology sector.
It might be a familiar sight to some: a humanitarian jostle where leaders praise each other for their compassion, foreign aid inflows increase, and politicians accuse each other of using aid for strategic gains. This might appear to be a description of the new geopolitical landscape, but the dynamics observed today are deeply rooted in Cold War development practices, when the Soviet Union (USSR) and the U.S. attempted to gain international prominence and influence countries with the usage of foreign aid.
Some argue that the Prosper Africa initiative may be promising for U.S. agencies attempting to escape the institutional silos surrounding trade and international development. However, beyond it being an oblique attempt to use Development* as a vehicle for foreign policy, it is an earnest and flawed response to surging competition within the region from actors such as China and the E.U.
China’s Presence in Africa
Unlike Western constructions of modern development geographies, China has actually been present in the region since the 1950s, when it signed its first bilateral trade agreement with Algeria, Egypt, Guinea, Somalia, and Sudan. It wasn’t until the 2000s, however, that stronger alliances began to emerge: China’s growth created demand for natural resources and employment while a resource-rich Africa offered a plethora of commodities and a need for infrastructure. China has since become Africa’s largest trading partner in 2012, surpassing the U.S. and traditional European partners. Between 2000 and 2014, Chinese financiers provided $86.3 billion to African governments and state-owned enterprises, becoming the largest creditor in the region. This dynamic has led some to criticize China as a rogue donor enticing African nations into “dept-trap diplomacy.”
In the face of stagnating U.S. involvement in Africa, Chinese investment has increased exponentially. As a McKinsey report on China-African relations found, China has catapulted itself to the regional stage, becoming the top partner for Africa in trade, investment stock and growth, infrastructure financing, and aid. China’s presence in the region has become even more pronounced since the unveiling of the Belt and Road Initiative (BRI), an unprecedented policy initiative to connect China to Central Asia and Europe through infrastructure, trade, and investment links.
Despite China insisting that its development partnerships are “mutually beneficial,” Chinese aid is often tied—China’s foreign aid often requires governments to use Chinese goods, services and labor for infrastructure projects—and has followed political motivations similar to that of the U.S. and Soviet Union during the Cold War. As researchers Andreas Fuchs and Marina Rudyak find, Chinese foreign aid is often used as a political tool to advance domestic and foreign policy goals. Using data from 2000 to 2012, research lab AidData claim that if African countries in the United Nations voted with China an extra 10 percent of the time, they would on average get an 86 percent increase in official aid. In the context of “common development,” Chinese foreign aid can instead perhaps be best interpreted as an effort to establish a more favorable environment for China’s own development and support the country’s ascension as a global power.
E.U. Presence in Africa
As the United States Trade Representatives (USTR) commented on in its 2019 National Trade Competitiveness report, E.U. agreements (EPAs) have been challenging the competitiveness of U.S. investment and trade with African countries. Importantly, as Brookings’ Witney Schneidman and Jay Ireland note, “the proliferation of the [EPAs] provide E.U. goods, services, and companies with tariff advantages with more than 40 African countries.”
E.U.-Africa relations are at a crossroads; the Cotonou Agreement—a treaty between the E.U. and African, Caribbean, and Pacific groups—expires in 2020 and leaves a unique space for the E.U. and African nations to renegotiate their positions. Such an opportunity aligning with the renewed interest in investment and trade within Africa marks an important turning point to which the E.U. will likely attempt to ‘push’ out its competitors, such as the U.S. and China.
U.S. Presence in Africa
Foreign aid programs emerged in response to the Cold War and were based on motives that were what scholar Keith Griffin calls “always more political than economic.” The USSR and the U.S. used international development assistance as a tool to encourage political alliances. In the middle of the U.S.’s competition with the USSR, countries would leverage their newfound power to benefit from ideologically driven foreign aid. While the USSR may have disappeared from the world stage, international development as a practice of perpetuating a nation’s objectives has not.
The U.S. has suspiciously looked at China’s BRI and involvement in Africa as a thinly veiled attempt to expand China’s geopolitical presence. As the relationship between China and the U.S. is tinged with trade tensions and accusations that both are attaching political significance to their development assistance programs, it’s predictable that cooperation between the U.S. and China in the region will be limited. But China only highlights a waning U.S. presence in an increasingly important region.
Since the 2000s, U.S. foreign aid has focused primarily on the health and education sectors while proving inconsequential in Chinese-dominated sectors. While previous endeavors, such as PEPFAR, had a substantial impact in the region, other dimensions of U.S.-African cooperation have diminished. For example, despite the U.S.’s enactment of the African Growth and Opportunity Act, commercial engagement with African nations resulted in only $39 billion in trade in 2017, while trade between China and Africa amounted to $148 billion. Because the U.S. is the continent’s largest investor, its trade presence should be substantial, but it has found itself unable—or unwilling—to fully leverage its financial presence. Parallel to this, the U.S.’s diplomatic presence has weakened, as European and Asian nations attempt to penetrate the continent with diplomacy, holding countless summits while President Trump has yet to set foot on a single African nation.
While U.S. investment in Africa since 2017 has been on an upward trend, there has been long-term competitive issues for U.S. trade in Africa as nations such as Russia, China, and notably the European Union’s Economic Partnership Agreements (EPAs), have begun to intensify.
Prosperous for Who?
By the end of the century, Africa will be home to 40 percent of the world’s population and provide 42 percent of the global working-age population. In testimony before the U.S. House of Representatives Subcommittee on Africa, Global Human Rights, and International Organizations, Brahima Coulibaly testified that “as healthy and productive members of the global economy, the [African] workforce will significantly expand global economic opportunities” and is incredibly important to the success of all nations.
The inauguration of the Prosper Africa initiative marks a significant policy shift intended to perpetuate neoliberal market mechanisms using development as a vehicle to do so. Such a strategy is additionally borrowing from Cold War policies to counter what the U.S. considers its global competitors. Attaching geopolitical significance to development initiatives while engaging in a larger global contest for power is a common tactic obscured by benevolent narratives of ‘development’ and ‘cooperation’ and one that must be either be deconstructed or rightfully ignored.
The success of Prosper Africa is, as some suggest, dependent upon its ability to ‘unleash’ the potential of the region through its commercial policies and the project’s ability to increase the magnitude of commercial flows between the U.S. and African nations.
In examining initiatives such as Prosper Africa, it becomes obvious that the ‘scramble’ for African nations has become a salient instance of a global jostle for power. Importantly, similar to the non-aligned countries during the Cold War, the rivalry may allow nations to leverage their importance to improve their own socio-economic and political status. This premise is one that has been attached to Development for decades: by appropriating or accepting narratives and beliefs of what exactly a ‘successful’ country entails—from its institutions to its economic practices—nations can obtain resources offered by development actors attempting to improve their global influence. However, the continued injection of geopolitical considerations into the development sphere will likely result in projects similar to those that emerged from the Cold War: of dubious value.
Development projects such as Prosper Africa, the EPAs, and the BRI are poorly veiled attempts to use Development as a vehicle of foreign policy. Development in this manner evokes a static image of nations evolving from ‘unproductive’ to ‘productive’ entities be included within the global system and its economic markets. As such, there can be no recommendations that derive from the premise of Development as it currently stands—a mechanism to create or perpetuate hegemonic norms of how an economy, nation, or people should function. This is, of course, a reality impossible to ignore in the current state of international development.
As such, in a Foreign Policy article, J. Peter Pham and others argue that for nations, “Chinese loans are neither inherently good nor bad—they will be whatever…nations choose to make of them.” Similar to how they did during the Cold War, nations can take advantage of the recent entries to the development ‘market’ to create a better environment for themselves.
Instead of projects designed for African nations by non-African countries, leaders and nations across the continent should take advantage of their renewed importance. Though necessary to institute internal mechanisms to prevent crystallization of inequality and despotism as seen during the Cold War, countries in Africa should use the renewed global competition in Development contexts to strengthen their institutions, economies, and own global presence in a manner conducive to their self-defined development.
*To note, “little d-development” refers to social, economic, and political change occurring ‘naturally’ within a capitalistic model. Conversely, “capital D-Development” implies intentional or deliberate economic, social, and political projects and subsequently change as engineered by nations and development actors.