Race is on for our rich resources

2008-05-08 00:00

As the Zimbabwean crisis has suggested, any doubts one entertained about the economic prospects of the region must by now have gone beyond the cynical. The South African government’s embarrassing response to the Mugabe regime’s totalitarianism must surely have further damaged this country’s credibility in foreign direct investment circles. This columnist previously called for a non-politically aligned globalisation strategy for South Africa, in the belief that this country could utilise and benefit from its pole position within Africa.

A truly globalised South Africa, it was argued, could help to globalise the entire continent. However, as recent regional developments have suggested, and as the ANC government’s arrogant and naïve policies at the United Nations have proven, the best laid schemes can be destroyed, or at the very least severely hampered, by obstructionist governments. The Washington Post recently reminded the world that ever since South Africa commenced its term on the UN Security Council last year, it has consistently allied itself with the world’s rogue states. It has positioned itself against Western democracies, and has shielded the likes of Sudan and Burma from the sort of pressure the UN once directed at the apartheid regime. A fine example of stabbing humanitarianism in the back, and in particular those nations from which most of the world’s foreign direct investment emanates.

Just as Africa was colonised in the 19th century, the race is now on for the rich resources that the continent has to offer. Africa, it would appear, is available to the highest bidder, with the

Chinese demonstrably becoming further entrenched in the continent’s political and economic affairs. For example, according to the Financial Times, human rights proposals against China have been defeated 11 times at the United Nations over the past decade, thanks to the support of African countries. Many African states appear to feel comfortable with a country that not only disregards the basic human rights of its own people, but also arrogantly continues the subjugation of a neighbouring state, despite world condemnation.

While many African nations became pawns during the Cold War, the current economic rivalries between East and West suggest that Africa will this time become an economic pawn in a wider geo-political front. Meanwhile, China continues its economic advance into the world, unabated. In an announcement to Western bankers in Beijing during April, Gao Xiqing, the president of The China Investment Corporation, stated that his country’s sovereign wealth fund (currently valued at $200 billion) has allocated $90 billion for the specific purpose of acquiring assets abroad. In the past year it invested $3 billion in a pre-

Initial Public Offering (IPO) stake in Blackstone, an American private equity fund, $5 billion for a 9,9% stake in Morgan Stanley, $200 million in Visa’s IPO and $100 million in the Hong Kong IPO of the China Railway Group. In Africa, the Industrial and Commercial Bank of China recently acquired a 25% stake in South Africa’s Standard Bank, a move seen by some analysts as a first step in acquiring similar stakes in the continent’s more developed countries. With the continent satisfying so much of China’s needs (30% of its oil requirements come from Africa, as well as substantial requirements for copper, uranium, gold, silver and platinum), it is no wonder that the Chinese are keen to cosy up to those African countries that will serve its purposes.

For Africa, and in particular South Africa, the price may well be high. The danger is that the continent will become an integral part of the globalisation plans and strategies of other nations. Colonisation by globalisation has a sinister ring to it.

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