|DRC Minerals & Infrastructure
From Le Monde Diplomatique - Philippe Rekacewicz
Home again for a few days, I found a China-Africa posting on Chris Blattman's terrific development economics blog. Chris provides a link to Texas in Africa who writes:
"Say what you will about China's multi-billion dollar deal with the Congolese government to trade infrastructure development for access to minerals with little regard for human rights and environmental issues. They've still managed to turn a big segment of North Kivu's main highway from this [photo] into this [photo]." Read more and see the photosThe comments following the post run the whole range of opinions. Some assume that these roads are being built solely to transport the DRC's copper ... to China. The Chinese infrastructure package does include a railroad from the mine-rich Katanga area to the port. Yet as the map above shows, there is a mix of roads that will serve to link the DRC to its neighbors (the green bands on the map above are transport corridors being built under the package. This map can be seen much more clearly at Le Monde Diplomatique).
Some warn that the new roads are unlikely to be maintained. This is a huge risk, although the deal also includes toll roads which in theory could provide an incentive for a commercial operator to swap maintenance for tolls.
One person comments that he/she lived in Tanzania while the famous Tan-Zam/Tazara railway was being built in the 1970s. The cost of poor quality goods Tanzania was required to buy in connection with the this project was higher than the value of railway, he/she alleges.
I doubt this, simply because of my understanding of the facts around the supply of these goods. With the Tazara railway, as with many other Chinese aid projects built during the late 1960s and 1970s, Zambia and Tanzania had difficulty financing the local costs (local labor, local inputs for the civil works, compensation for land and resettlement, if any, etc.). So the Chinese, who had very little foreign exchange at that point (how things change), provided finance for local costs. Because the renminbi could not be used in Africa (i.e. it was not a convertible currency), they shipped Chinese consumer goods to Zambia and Tanzania, allowing the two countries to sell them on the local market and use the proceeds to pay for local labor, etc.
This commodity financing was very similar to some provisions in Title I of the US PL-480 law which allows US food surpluses to be sold for local cost financing (on a concessional loan basis) of projects in cash-strapped countries. I believe the supply of Chinese goods was also financed under the concessional loans that paid for Tazara.
As a researcher in the 1980s, I saw that this had been common practice on Chinese projects, and I was surprised that there was no follow up to retain a Chinese export market. That wouldn't happen until at least a decade later. Today, it's hard to imagine African markets without Chinese goods everywhere. But that's another story.