Analysis: LUBINDA HAABAZOKA
ONLY 12 months ago, discussions on China centred around steel, a ballooning real estate bubble, and investment screening in Europe.
Despite these issues still being unresolved, international scrutiny has pivoted to Western concerns over Chinese investment in Africa.
Much of this scrutiny has been a consequence of increased interest in Africa in general, including its resources, its use of technology and the trade opportunities it presents. This increased interest and engagement by both the EU and America is of course welcomed. We wish to build stronger partnerships in a broad and in-depth range of mutual interest. However, analysis toward Chinese investment in countries like my own—Zambia—has been perplexing in its simplicity.
It seems as though criticism of Chinese investment in Africa has been a consequence of little reflection upon the depth of investment and influence of Chinese investment in Western economies. China’s engagement in Africa is a natural expansion of its global investment strategy of the past 10 years under its Belt and Road initiative.
Over the last decade, private and state-owned Chinese firms have acquired stakes in eight maritime ports in Belgium, France, Greece, Italy, the Netherlands, Spain. Hungary, and Serbia, and China signed a trilateral plan to build a new railway line, financed with loans from the Export-Import Bank of China. Chinese direct investment in the Eurozone was up 37 percent in 2015. That same year China also invested US$15 billion in the US, with US$5.4 billion of that in New York alone.
Almost half of all China’s global investments have been in the energy sector, such as Hinkley Point in the UK. Chinese investment has only increased in the UK since Britain announced it was leaving the EU. China has been very honest in that it wants to invest over 100 billion pounds in UK infrastructure by 2025.
It is, therefore, patronising to act as though Zambia is either victim or reckless in allowing Chinese investment. Zambia’s investment strategies mirror that of any other country in the West. In the absence of IMF financial backing, and the retraction of development assistance from the UK, Zambia has made a strategic decision, that in order to secure a stable economy that provides world-class services and infrastructure, we are going to have the Chinese invest in our nation. We were not tricked into this.
To suggest that Zambia is unknowingly being placed in a power struggle between the West and China, unaware of any future implications, is to impose the same old patronising imperialistic view, that we are somehow not in control of our own destiny.
The message from Zambia to the West has been loud and clear for years. We want your investment — we want to be diplomatic and competitive trading partners with like-minded nations. That is why we have always strongly welcomed investment from the US, Japan, Canada, the UK, Germany and Italy and many other countries.
Knowingly engaging in an economic partnership with China does not mean that we are “veering toward a Chinese model of repression”. Far from it, we are using these infrastructural developments to broaden our global horizons, and to attract the widest possible pool of countries and businesses, in order to create a free, egalitarian, and liberal trading nation.
So here are the facts. Our debt to China is US$3.1 billion. Our stock of external debt during the third quarter of 2018 was US$9.51 billion, a figure below the internationally agreed threshold of 40 percent. We have never defaulted on our international debt payments. Zambia has not offered any state-owned enterprise to any lender as collateral for any borrowing, nor does it ever have plans to do so.
The Government’s goal is to improve the lives and standard of living for Zambian citizens, to provide them with industry, jobs, hospitals, roads, and build the foundations of an economy that will thrive for a generation. China builds projects on time and offers up the capital to achieve this. It really is that simple.
If Europe and America seek to have more skin in the game when it comes to their future geopolitical influence in Africa, then invest, lower trade tariffs, and help us build infrastructure by encouraging your businesses to invest. The ball, as they say, is firmly in their court.
This was the response by Lubinda Haabazoka, president of the Economics Association of Zambia, to a Bloomberg Businessweek article published on January 10, 2019.
Analysis: LUBINDA HAABAZOKA