The Aid Model is not working in Africa,
so what's the alternative ?
China, the country who recently built a 30-storey hotel in 15 days, noted that Africa couldn’t even get its Cape to Cairo Railway (a British vision to connect Egypt to South Africa) completed 50 years after independence, while China had constructed 110,000 km of railways in this 50 years (distance from Earth to moon: 380,000 km)http://newsfeed.time.com/2012/01/10/chi ... n-15-days/
In 1950, Africa has the same level of development and living standard as Asia, in some famous examples given by World Bank, South Korea was poorer than the nation of Ghana while Taiwan in par with Congo at that time. All of them received foreign aid from the West, but while South Korea and Taiwan were able to channel the aid into developmental projects that transformed themselves into one of the world’s most developed economies today, Ghana and Congo remain in dark, poor and underdeveloped.
In the 50 years since the first African countries won independence, the world has spent $568 billion on Africa. Yet Africans are poorer now than a quarter century ago, and much of the money has ended up on the road to nowhere. Ironically, if you take any of the two tiny Asian islands, Singapore or Hong Kong, and put them in Africa, they would be the second largest economy in the continent by GDP after South Africa (if you put in Taiwan it would be the largest). This dismal record is sparking a vigorous debate on how best to help the world’s poorest and most underdeveloped continent, and to what degree aid is the answer.
China believes it has a better model to help Africa than what the West had been doing all along.China’s African investments, as supplementary info, the trade value is $150 billion now
Unlike the West who simply send in aid money, China physically engage with the Africans. As parts of the agreements with local governments, Chinese companies agreed to hire a certain quota of African workers. There are however, growing cases of conflicts between Chinese supervisors and African workers due to different work ethnics. In China, hard work and working long hours are accepted as norms in life, and it is not surprisingly for individuals from lower income groups in Hong Kong, Shanghai and other Chinese cities to take 2-3 jobs with only 3 hours sleep per day. It is also common for Chinese managers and executives to stay late in office even up till 2pm midnight, planning business strategies or working out ways to secure business deals, due to this, the ‘Chinese takeaway’, where people would bring food to workplace and eat while work, becomes popular.
Such working culture though, is deemed as abuse to African workers, who adopted a more relaxed stance in works. Resentment against the Chinese has also grown after they setup businesses catering for local markets. Chinese businesspersons believe in economies of scale and maximum return on investment, and since they are coming to Africa for construction works, companies’ joint and shared costs to open restaurants and retail stores bringing in cheap imports from Chinese manufacturers. African businesses complained that they cannot compete and are put out of jobs.
Another problem China faced is the low labor productivity in Africa. The global share of African industrial output is only 1%, while China’s 21.6% (or $5.33 trillion worth of goods), with China having a total active labor workforce of 816.2 million and Africa 463.1 million, which could be more but many of them invalidated by starvation, wars and diseases. By this calculation, the average Chinese workers are more than 12 times more productive than the average African workers (on another comparison, the average German workers are 3 times more productive than Chinese workers, while the Japanese, whose productivity have been falling as its industries lagged behind, are 2.6 times more productive than Chinese workers).
Japan during its economic growth in 1960s-1980s faced similar dilemma, and though African wages are lower, Japan choose to setup factories in Southeast Asia (especially Thailand), instead of Africa, despite its largest export markets was Europe, and setting up factories in Africa can allow faster shipments of goods to Europe. Japan factored in African labor productivity and work ethnics last time, and so does China now.
China, the country who recently built a 30-storey hotel in 15 days ( http://newsfeed.time.com/2012/01/10/chi ... n-15-days/
), noted that Africa couldn’t even get its Cape to Cairo Railway (a British vision to connect the northern (Egypt) to southern (South Africa) tip of Africa) completed 50 years after independence, while China had constructed 110,000km of railways in this 50 years (distance from Earth to moon: 380,000km) China cannot be convinced that using African labors would be the best utilization of resources, hence continued to bring over Chinese workers into Africa. The Africans regard this as racialist selection in employment, critics also point to land grabs and mistreatment of African workers on Chinese-funded projects.
The Chinese are more inclined to believe in ‘survival of the fittest’ theory, after all, they compete, and successfully grab market share from Western and Japanese industries. This put them in clashes with the Africans, who feel more towards native entitlement and long lived under the protection of indigenisation policies. Uganda in 1972 expelled all Indians as they ‘controlled too much of the economy’, while Zimbabwe recently seized White-owned farms.
While Africans commonly blamed their governments for the lack of advancement, the problems run deeper than just a simple government mismanagement, it also involved African work ethnics and their perception of progress. South Korea and Taiwan for instance, were pretty much a dictatorship with corruption problems when their industries took off in 1970s. It ain’t the government, but that their people built up a strong private industries which later turned the countries into major exporters. China in its current form is likewise autocratic and plagued by high-profile corruption cases. The development of China is credited more to its people than government.
African competitiveness can also be witnessed by comparing Hong Kong and South Africa. During colonial times, the British, unsurprisingly, controlled a huge amount of assets in Hong Kong, with the Jardine Matheson, a company responsible for the opium-tea trade in China in 1830s, which resulted in the opium war and the ceding of Hong Kong to Britain, as one of the most powerful companies in the island.
After the handover in 1997, Jardine Matheson, fearing uncertainties, immediately re-domiciled itself to Bermuda, but the new Hong Kong government adopted open and meritocratic business policies, which encouraged free competition, with the best and most capable, thrive. The World Bank today ranked Hong Kong the second most business-friendly economy in the world after Singapore, and Jardine Matheson is now a Fortune 500 company. 9 of the top 10 richest men in Hong Kong are now the Hong Konger Chinese themselves, and the remaining one (the 6th richest) a White Jew – all built up under fair but tough, competitive environment.
With the collapse of the apartheid government in South Africa in 1994, the Whites, likewise, controlled a majority of the economy. The new South African government’s solution was to enact a Black empowerment policy, which favored the Black race. South African economic growth has slowed compared to the apartheid-era, while foreign investment remains a struggle and unimpressive. Among the worse, 10% of Whites in South Africa now live under poverty level.
While the Hong Kong Chinese compete in equal terms and prospered. 9 out of 10 richest person in South Africa remains Whites or White Jews, with the remaining (and 4th richest) being a direct beneficiary of the South African government’s Black Economic Empowerment policies.
Today the West and Indians proceed cautiously and hesitatingly when investing in Africa, making China the continent’s biggest foreign investor. Bilateral trade between the Asian nation and the continent has reached over $150 billion, a jump from less than $10 billion a decade earlier.
While critics say it is a new “Scramble for Africa”, China sees itself helping African economic development. At a time when Europe and the United States are mired in economic turmoil, Japanese fortunes sinking, Middle East rocked by political instability, India hit by high inflation and falling currency, Latin America, Southeast Asia, Russia and Australia pretty much have enough resources of their own, China is a crucial customer for the resource-export dependent continent.
For the past decade, Africa has recorded economic growth of an average of 5 percent but its under-developed infrastructure has in part hindered its capacity to develop further. Chinese companies are changing that, by building roads, investing in the energy sector, and are active in areas such as telecoms and technologies – all these investments in Africa which otherwise are shunned by most of the world as the continent is not an attractive investment destination of its own. The Chinese tied these investments to African resources.