Uncovering African Agency

Angola's Management of China's Credit Lines

Lucy Corkin

• Publisher: Routledge
• Year: 2016
• ISBN:
  9781317005377
• Edition: 1
• Topic: Sozialwissenschaften
• Subtopic: Soziologie

China's engagement in Africa is generally portrayed simply as African countries being exploited for their mineral wealth by a wealthy political and economic superpower. Is this always the case? Certain African countries have been able to use China's involvement in the region to grow their economies and solicit renewed interest from previously disengaged foreign powers by using their relationship with China to bolster their political capital. In this thought provoking and original work Lucy Corkin demonstrates how Angola has been amongst the most successful of African nations in this role. The concept of 'African agency' covers a wide range of different countries with very different capabilities and experiences of engaging with China. In each individual county there are a myriad of actors all with increasingly discernible agencies. Uncovering African Agency; Angola's Management of China's Credit Lines casts a fascinating new light on China's involvement with her largest African trading partner and through this shows how different African states and the governmental actors within them are able to exploit the relationship to their best advantage.

Chapter 1
Introduction

In March 2004, the Angolan government announced it had received a US$ 2 billion loan from China Export Import Bank to finance the African country’s reconstruction efforts, to be repaid in oil. This declaration sparked controversy around the world. It was seen as an aggressive move by China to sew up African oil supplies, while allowing the Angolan government to escape the strings attached to proposed International Monetary Fund (IMF) financing. Despite a short history of official diplomatic ties (begun in 1983), Angola is now China’s largest African trading partner, currently providing 15 per cent of Chinese oil imports, vying with Saudi Arabia to be China’s largest source of crude oil. In addition, Chinese financial institutions are playing an increasingly significant role in Angola’s post-war reconstruction, bolstering the African country’s regional aspirations.

Angola is touted as emblematic of China’s perceived engagement model with African countries; a ‘resource for infrastructure’ barter system, dubbed rather erroneously the ‘Angola Mode’. It has been lauded by Chinese and African politicians alike as a model for other African countries to follow. In fact, although Angola is without doubt an important case study, this is not the first time China has extended oil-backed loans, nor that Angola has received them, so why should Angola be considered a model at all?

Despite the attention this so-called ‘Angola model’ has received in popular press, and its frequent use in academic and policy discussions, few, with notable exceptions (see Brautigam 2009) have gone into the mechanics of how the China Exim Bank loan works. Most assume that, given China’s access to Angola’s resources and the success of Chinese construction companies in undertaking the contracts that the oil pays for, the government in Luanda drew the short straw.

Indeed, China Exim Bank making available loans for Angolan post-war infrastructure rehabilitation has been regarded with a rather jaundiced eye by Western donors and development agencies. Even more worrying for the other international financial institutions, China Exim Bank’s arrangements have also defied traditional categorisation as either aid or investment, making it difficult to compare with capital flows from other partners, in what Brautigam (2009: 162) calls ‘comparing apples with lychees’. Nonetheless it has also raised uncomfortable questions as to the disbursement and effectiveness of Western aid (Moyo 2009).

China Export Import Bank has become an important foreign policy tool in Beijing’s diplomatic arsenal, yet the results of the bank’s role on the continent and in Angola in particular are poorly understood. This book addresses these and other gaps in the literature. As we shall see, far from being exploited, the Angolan government has effectively managed to harness its relationship with China to bolster its position, both politically and economically.

A Cold War Prelude

The Chinese state’s current relations with the ruling incumbents in Luanda is a marked contrast with relations during the Cold War. Angola, together with Portugal’s other former colonies, achieved independence in 1975. Prior to decolonisation and in the years following, during Angola’s subsequent civil war, China at various times supported several of Angola’s political parties including the Movimento Popular para a Libertação de Angola (MPLA), the Frente Nacional para a Libertação de Angola (FNLA) and the União Nacional para a Independência Total de Angola (UNITA) (Taylor 2006). In the 1960s Jonas Savimbi and several UNITA guerrilla soldiers were offered training at China’s Nanking Academy.1 Conventional wisdom suggests that UNITA became China’s favoured movement because Savimbi’s guerrilla tactics were similar to Mao’s ‘revolution from the countryside’, whereas MPLA was a much more urban-based elite-dominated organisation.2 However, African liberation movements were expert in appearing to emulate the ideologies of their patrons in order to coax out further material support, so this political affinity may be overstated. The MPLA’s already strong Soviet links precluded China’s support following the Sino-Soviet split, so UNITA and China may have found each other by default. China’s links to FNLA were brokered by Mobuto’s Zaire, and Beijing later also gave direct military assistance to this movement led by Holden Roberto from 1974 to 1975 (Guimarães 2002: 158). China’s early engagement with these movements was thus rather confused, propelled as it was by China’s primary motive of countering Soviet influence in the third world (Jackson 1995: 389).

Taylor (2006: 81) places some importance on China’s earlier role in Angola, as support of UNITA in unwitting alliance with apartheid South Africa cost China dearly in diplomatic terms across Africa. Desphande and Gupta (1986: 46) agree that China’s early intervention in Angola was calamitous for China’s relations with African countries in the 1960s. Apart from violating China’s sacrosanct principle of non-interference, China’s de facto alliance with a racist white-minority government drew heavy criticism from even China’s closest allies on the continent. Jackson (1995: 389) argues that China viewed the conflict in Angola as a manifestation of Cold War polemics and did not recognise the internal impetus for rivalry between Angola’s liberation movements nor the broader regional context in Africa. As such, China severely misjudged the impact of its disastrous involvement in Angola’s protracted civil war and was only able to normalise relations with Angola in 1983. This historical background added impetus to the Chinese government’s willingness to reach an economic agreement in favour of Angola years later, in order to make up for China’s messy involvement in Angola’s civil war.3

In fact, despite China’s infamy in supporting UNITA, the MPLA’s first crucial, albeit limited, funding came from China (Snow 1988: 77). The first contact between the MPLA and the Chinese Communist Party (CCP) was at the conference of the Afro-Asian Peoples Solidarity Organization (AAPSO) held in Guinea Conakry in April 1960. Following an invitation from the CCP, Mário Pinto de Andrade, the then MPLA President, Viriato da Cruz, MPLA Secretary General, and leading light Lúcio Lara visited China in August 1960. They brought back crucial funding for the nascent independence movement. The MPLA leadership actually experienced a schism as to whether to ally with Soviet Russia or Communist China. Viriato da Cruz, one of the founding fathers of the MPLA, was ousted as a result of the decision to follow Moscow. He fled to Beijing, where he died in exile in 1973 (Pinto de Andrade 2007: 3). It is suspected that the liberation movement turned to the USSR in order to access more advanced weapons technology than those available from China.

The existence of prior early links allows Chinese and Angolan officials to gloss over China’s rather inconvenient support of the Angolan incumbent regime’s mortal enemy, UNITA, over a period of time. Politicians from both countries also liberally refer to a long ‘history of relations’ between the two countries, despite the fact that Angola’s official bilateral contact with China has not been as extensive as that of other African states.

The MPLA established official relations with the CCP in 1980, three years prior to China’s official recognition of the new Angolan government on 1 January 1983 (Davies et al. 2009: 7). Party-to-party relations have become a more prominent feature of China’s relations generally (Shinn and Eisenman 2008: 2), but are significant in this case. In many instances, the party structure of both countries supersedes those of the government (Jakobsen and Knox 2010: 1; Messiant 2007). Solid relations between parties would have been a prerequisite to official governmental relations being subsequently established.

A bilateral commission between the two countries was set up in 1988, although, due to the disruptions caused by the ongoing civil war, its inaugural meeting was only held in December 1999. After this, sessions took place more regularly, the next occurring in May 2001, and then in March 2007 and March 2009 (Alves 2010a: 5).

The end of Angola’s civil war in 2002 provided an opportunity for closer interaction between China and Angola. In the same year, China Construction Bank and China Exim Bank made US$ 145 million available in financing for Chinese companies operating in Angola (ERA 2009: 81). From the late 1990s, the Chinese-language business journals were full of the economic opportunities waiting for Chinese companies in Angola (see Zhang 1998; Huang 2002, 2003). The telecommunications company Shanghai Bell signed an agreement with Angola Telecom worth US$ 60 million to expand and optimize the existing network. Furthermore, in 2004, Shanghai-based China Overseas Engineering Corporation completed the construction of Luanda General Hospital (An 2008: 21).

Bilateral relations reached a new height when, on 26 November 2003, the Chinese Ministry of Foreign Trade and Economic Co-operation (MOFTEC4) signed a framework agreement with the Angolan Ministry of Finance that would form the basis of Chinese state lending to the Angolan government5 (ERA 2009: 91). The following year, during a visit of Vice Premier Zeng Peiyan to Angola, China Exim Bank’s first significant loan to Angola, the controversial US$ 2 billion was announced. An Angolan Ministry of Foreign Affairs official called the credit lines the ‘key point’6 of the relations between the two countries.

The early twenty-first century has marked a new phase of bilateral interaction, focusing on the increasingly economically driven and pragmatic relations between China and Angola as described by Campos and Vines (2007) and Corkin (2008b), particularly as regards Angola’s plans for post-war reconstruction (Burke and Corkin 2006). Angola is currently China’s largest African trading partner, primarily due to China’s hunger for crude oil. Indeed, the ruling party now has strong ties to Beijing due to China Exim Bank and several other Chinese financial institutions’ sizeable loans to the Angolan government. Thus, in the so-called ‘new type of China–Africa strategic partnership’ (He 2006: 5), China has only been a serious commercial actor in Angola since approximately 2004 (Corkin 2008d: 110). This will be our point of departure for the examination of China–Angola relations.

A Ministry of Foreign Affairs official described Angola’s relations with China in the following manner: ‘Today bilateral cooperation is excellent. We have privileged relations with China. The relations are characterised by rapid evolution, established and strengthened by the two governments.’7 These sentiments are reflected in almost exactly the same words by the Chinese Ambassador Zhang Bolun speaking before the beginning of the fourth Bilateral Commission in March 2009 (Dai 2009). As with most official diplomatic rhetoric, both claim a flawless relationship and no hint of the challenges both sides faced in negotiating Angola’s finance from China Exim Bank. Such challenges and the evolution of China’s relationship with Angola through its Exim Bank loans, are the focus of this book.

Emerging Themes

The book is based on several years of research into Angola’s renewed relations with China, which took off in 2004 with the entry of China Exim Bank as a primary financier of Angola’s national programme for reconstruction. Two key themes have come to light:

African Agency

An analysis of China–Angola relations would be considered by most to be an extension of Chinese foreign policy research. Unwittingly, this reveals how the African actors involved in relations with China are often overlooked or dismissed as passive or inconsequential, with China as the driving force in this relationship. In fact, this misses half the story.

The prevailing view of China’s engagement in Africa is that African countries are being exploited for their mineral resource wealth by a country whose political and economic power is much greater than their own. These largely government-to-government contracts are criticised by the international community, ostensibly due to their lack of transparency and accountability but also because China is perceived to be gaining preferential access to natural resources. But what is the mechanism that China (through China Exim Bank) uses to provide financing for infrastructure to African countries like Angola? And what is the role of the Angolan elites in this process? The standard approach found in much of the analysis of China–Africa relations is that China is the driving force in this set of relationships and that the African actors are passive recipients. In fact, certain African countries have been able to ‘play the China card’ well. This has involved soliciting renewed interest from foreign powers. Strengthening relations with China has thus altered the dynamic of their relations with other countries. Still others have managed to successfully employ the leverage this has afforded them, to use China to balance the influence other countries have on their political economy. Angola, as we shall see, has successfully managed both.

This book will also analyse the mechanism of the China Exim Bank loans and the infrastructure construction that they are intended to facilitate. We shall be able to see that, rather than being exploited, as many suppose, Angolan political elites have actively shaped the nature of negotiations with China and that Angolan government plays an important role in the outcome of this bilateral cooperation. Indeed, the Angolan president and his cabal have exploited relations with Beijing to strengthen their grip on political and economic power. Therefore, the Angolan government bears as much responsibility for the benefits (or lack thereof) accrued to Angola’s people through pursuing stronger commercial and financing engagements with China. Furthermore, Angolan political elites, in a post-civil war environment, are attempting to use Chinese financial assistance as a state-building device. Although this could be construed as infrastructure creation in the expansion of state capacity, it is more that Angolan elites are exploiting the policy space afforded by a political relationship with China to pursue an agenda according to their professed national priorities.

There is a tendency on the part of many Western observers to assume that, because African elites do not seem to be working for the development of the masses, they are powerless. Indeed, this is far from the case, and once again points to a lack of appreciation of African agency.

Language and Rhetoric

Linked to the theme of perceptions of African agency is that of the importance of rhetoric and the shaping of perceptions surrounding this political relationship. Where Chinese foreign policy towards Africa is interpreted solely through a realist positivist lens (an excessive focus on China’s search for raw materials in Africa), with scant regard for the importance of the political rhetoric in this relationship, the analysis loses the depth it might otherwise attain. This leads to the second issue, in that a neglect of Chinese and African rhetoric allows a Western-centric perspective to dominate the discourse. According to Beer and Hariman (1996: 11),

the rhetorical tradition includes appreciation of the dynamics of power, the valorisation of both argument and style, a focus on negotiation, involvement in the dialectic of elites and their publics, a strategic sensibility, and an ambivalent mixture of ...