FDI or the scramble?


IN THE current multilateral system, it is the choice of words one has to use to differentiate between Foreign Direct Investment and the ‘New Scramble for Africa’, simply because a critical analysis of the two will in most cases reveal that they all come in the same manner: there is interest from the other country – often the powerful or developed states.Perhaps it is justifiable that Dambisa Moyo titled her book Winner Take All.
Zambia has seen rising levels of foreign investors coming into the country for very good reasons and outstanding of all is the good business and political environment that favours high returns on their investments. These investments have come under the augury of foreign direct investment. On the other hand, these foreign companies have a national attachment to them. The proliferation of multinational companies in Zambia is such that it unthinkable to expect a Zambian-owned company to compete with them.
Notwithstanding the fact that every state has its own domestic interests embedded in the foreign policy documents, it is very prudent that Zambia re-asserts her national interests by ensuring that the foreign interests within are in check. There is need to find a balance between national interests and those of the US, Europe and BRICS (though India, China and South Africa have become dominant). For example, while everyone has been focussing on China, South Africa is represented by many multinational corporations from which Zambia must adequately get a fair share of tax to lessen any impact on citizens.
The US does things in a totally different way from China, its main rival in global politics. This owes partly to the hegemony that the US created after World War II. On the other hand, global politics has changed and there is a shift of power. China and other blocks are gaining power and slowly difusing the US dominion. Militarily, this sounds like a far-fetched dream but these countries have used economic desires of developing nations such as Zambia to penetrate areas where the US has dominated over time.
It is, however, important to realise that Zambia hosts different interests from the US, Europe and the BRICS (comprising of Brazil, Russia, India, China and South Africa). These countries’ interests are either represented at national or corporate level. The struggle for dominance at a global scale is real and superpowers are using economic relationships with developing nations to extract as much resources as possible. This, in the long term, gives the economic power through capital accumulation. Remember, what has made China to be able to challenge the US is not political power but economic and so other countries and blocs are following suit. The Chinese have been well drilled to achieve China’s goal and Xi Jinping told them openly that “harmony in the family leads to success in everything”. For China, Africa is a big family of shared destiny.
Zambia is at the centre of interest from both the developed and developing states because of her rich natural resource endowment. It is basically an issue of ensuring that all this ‘goodwill’ from the rest of the world is cultivated in ways that are mutually beneficial and if possible more bias should be towards Zambia.
Zambia should be wary of the fact that while FDI is good for the economy, there is always the need to counter-check the conditions under which it is coming into the country. Indeed there is nothing for free but it is so evident that Zambia’s raw natural resources are a target. Hence, Immanuel Wallerstein re-emphasises the structure of the world economy using the core versus periphery scenario where the poor and weak states (periphery) help supplement capital accumulation in the developed states (core). Wallerstein asserts that through appropriation of labour and raw materials of the periphery and using them as markets for finished products, the periphery countries become dependent on the core countries.
Time and time again, emphasis will be put on the need for Zambia to quickly industrialise in order to become an economic powerhouse. Nigeria and South Africa’s political status is as a result of their economic power and that’s how the international system is currently structured. The developed states, hungry for natural resources, will always do anything possible that pushes their agenda. Investments in capital, technical and human will increase every year but critical to the recipient (Zambia) is maximising these gains without losing the economic sustainability of the country for future generations.
It is only right that Zambia claims a very good share of any investment that comes in by turning it into tangible sustainable economic growth that trickles down to the citizens. No one can run away from the effects of globalisation, but with the objective of improving lives for Zambians at home, there is need to ensure that investors consider local skilled labour before any other persons; offer good wages, pay their fair share of taxes due and invest in semi or complete processing of raw materials within the Zambian economy. That way, FDI has a meaningful effect on the economy.
The author is a Master of International Relations and Development student at Mulungushi University.