The Effect of U.S., China New Engagement in Africa and the Impact of Foreign Aid
Troublingly, it is too late for the world to turn a blind eye to the current raging friction between the world’s most economic powers-US and China. Already, the row has developed into a trade war with each lapping one another with tariff to the dismay and chilling pleasure of global economy. Amidst wailing concern, this study among others mainly compares the new dimension of China-U.S. engagement in Africa and goes further to discuss in detailed Washington and Beijing impact in Africa. Although some of the concerns cannot be ignored, this article focuses on China’s engagement with African governments and states, and the U.S. impact on Africa’s development. Moving the discussion further, this qualitative study looks at the effects for America, China and Africa exploration, development paths and experience. The article is authored by an assistant professor of International Studies, Professor Josephus Moses Gray of the University of Liberia Graduate Program of International studies.
Besides, the article further discussed the effects of America’s contemporary foreign policy towards African governments and interestingly, this work argues if Africa riches are blessing or curse of corruption and miserable poverty. On the other hand, it debates the advantages and disadvantages of Africa relations with China and America, while the current state of Africa’s development in alignment with AU’s agenda, 2063 is also discussed. This work also assessed America and China’s direct investment to African governments and states, and goes further to present some accurate data regarding both countries foreign aid towards African states and governments. While it is true that U.S. and China’s engagement in Africa has advanced the continent’s growth rate, it has also created substantial disagreement.
In the contemporary international sphere power politics is mainly being driven by realism, although there is always conflict with liberalism which sees power from a contrary view. These two theories usually swayed world leaders in the areas of globalist and nationalist, depend on the prevailing situation that involves a particular state’s national interest. But, this work considers mostly structural realism which suggests that countries formed a structure by their interactions and then being strongly affected by the structure of their interactions.
Waltz (2003) indicated that inline with structural realism, balance of power and lobby are the two main strategies that states use to gain protections interaction with other states, and that the choice of one of these strategies is directly influenced by the international structure. According to realism, the possibilities of an alliance forming are related to major powers in international politics while minor powers are only able to form coalition mainly to balance the rising power or to lobby with the recognized influential states.
This study is very essential as it delved into triangular relations of the Republic of Liberia, the United States of America and the People’s Republic of China, especially when both the U.S. and China are caught in a deadlock of a trade war. The question is can African take advantage of the trade war and maximizes its relations with both countries, and what does African need to do?
The Chinese ties with African countries cannot be analyzed without the United States of America being brought into the debate as an overbearing variable regarding the bond of friendship and cooperation. China has a major diplomatic presence in Africa. In fact, Beijing is more widely represented in Africa with missions on the ground than in the United States. Beijing, which has diplomatic relations with Fifty-one continent’s fifty-three countries, beijing maintains an embassy with an accredited ambassador in 48 of them. China maintains offices of a commercial counselor in 40 of those countries and seven consulates-general in five of them (China’s Daily, 2017).
The phenomena of China and the United States in the global arena are quite significant and it presents opportunities and challenges for post-war Liberia’s development. But what is the ultimate push behind Beijing and Washington’s new ties with Liberia and the impact of Beijing and Washington’s foreign aid assistance towards Africa’s poorest states including Liberia? The new level of Beijing’s influence has ignited political competition between China and the United States.
According to the Chinese Ministry of Foreign Affairs (2016), China views development and foreign aid as practical policy instruments to promote relations, friendship and economic cooperation, while the U.S. attaches clearly stated goals, stringent conditions, and strict criteria for its development programs. Therefore, considering the balance of power approach, Liberia, U.S. and China’s triangular relations placed the Liberia-state in a positive position to singly exploit America and China’s coalition. What needed is to balance the equation with both states, while at the same time benefit from the African Union bloc interactions with the U.S. and China’s friendship.
Similarly, the colorful Africa-U.S. ties on one hand and amazing China- African bond of exceptional friendship on the other-hand would be fractional if one does not take into consideration both states’ engagement with Africa’s entire five regions and 55 states. It is against this backdrop that this article provides a vivid picture of Liberia, U.S. and China’s triangular relations, a detailing of the three countries’ long-standing bilateral relations and the socioeconomic and development impacts. The three countries are known to be democratic states but run different forms of governments- both Liberia and the United States run a presidential system of government, while China, although democratic, runs a socialist form of government. The United States and China have been chosen as a case study for several reasons. The two countries are deemed as democratic nations, stable, are the world’s economic powers and are actively engaged in Africa. These countries have been selected, as they depict and reflect an alteration in governance, resources and economic powers.
However, the triangular concept has its own deep flaws. According to Ellis (2012), the “triangle” concept does not consider other important actors in the international arena; it treats Africa as a unitary actor. The triangular relations approach also offers a comprehensive analysis of complex interactions among the three states involved, therefore the study brings a focused approach to three countries’ relations by assessing impact, challenges and implications for Liberia. The work considered triangular relationships in a plural, nonexclusive style, considering a subcategory of the numerous imaginable triangular relationships that hypothetically exist, without suggesting that the relations of Africa.
Since there are three sides interacting, the conduct of their apparent bilateral relations produces almost simultaneous effects among the three states. it is against this background that Liberia, the first independent state in African is brought into the narrative as the basis of this work since Liberia was founded by freed slaves from America-the American Colonization Society (ACS) in 1847, while Liberia and China to some extent share similar historical experience having suffered imperialism. Therefore, significant effort has been devoted to evaluate the triangular relations involved Liberia, particularly Africa, U.S., and China. Even though there have been several publications, there is no such study regarding Liberia, U.S. and China’s triangular relations and its impact. Therefore, the author deems it very appropriate that the ties are put under investigation to contextualize the framework of triangular relations, as the basis to present informed conclusions.
It is appropriate because the United States and China’s relationship with Liberia is amazing and projects the much anticipated social, political, economic and culture dividends, while at the same time it also has the consequence in the context of gaps. China and U.S’s triangular relations with Liberia and engagement with African states and governments is an opportunity since the two states engaging in several projects, foreign aid assistance, and other supports. One can argue that the prevailing political engagements and contacts between China and the African states, and the interactions with the U.S, on the other hand, present an opportunity that needs, with Africa suited at the middle of the power politics and completion (MOFA, 2014). Both U.S. and China need Africa, while Africa also needs China and U.S., especially considering both countries’ dynamics role in global politics and their economic influence.
Chinese Embassy (2019) discloses that China’s GDP per capita had raised to US$9,732 by the end of 2018, from around US$54 in 195, a 180-fold increase. China was probably one of the world’s poorest countries at the time. According to World Bank (2019), during the same period, US GDP per capita increased from US$2,349, or 44 times China’s, to US$62,606, just 6.4 times. In terms of its share of global GDP, China’s economy now makes up 16 percent of the world’s total, from a mere 1.8 percent in 1952. Additionally, China’s population has grown from 575 million in 1952 to nearly 1.4 billion at the end of 2018, an increase of 140 percent in 66 years.
China has gone from being a predominantly agricultural economy to the world’s factory and beyond, with 27 percent of global manufacturing value,. In 1952, a large part of China’s population struggled to feed themselves and starvation was common. Then, the agricultural value-added accounted for 50.5 percent of the country’s GDP, with farmers making up 83.5 percent of the workforce. By 2010, according to the World Bank, China’s manufacturing value-added had become the largest in the world, and by 2017, it accounted for 27 percent of the global total (Chinese Embassy, 2017)..
According to Bachelet (2005), China is not a substitute to America’s global dominance, but rather presents social, culture, economic and political prospects for Liberia, a tiny West African state of less than 4 million population, but have copious of resources. But political pundits viewed the mounting Chinese involvement on the continent as a potential challenge to the U.S. long influence and interests, especially when America and Liberia are traditional allies while China-Liberia are and strategic partners.
But what the phrase triangular relations depict? According to Ellis (2004), triangular relations are interactions among three states that produce complex processes of cooperation and conflicts among them. The term “triangular relations” can suggest a new bond interrelating to Liberia, U.S., and China. “A “sphere of influence” can be best described then as a geographic region characterized by the high penetration of one superpower to the exclusion of other powers and particularly of the rival superpower. Hast (2014) revealed that the “sphere of influence” has two main elements: “exclusion of other powers and limitation of the independence or sovereignty of the influenced state”. According to Hast, the concept of the “sphere of influence” recognizes a country that plays a significant role in influencing the alliances and bilateral relations that other countries in this region may have.
Africa is classed as the richest continent in the world with gold, diamond, copper, oil and vast forest, but yet, the continent is the poorest in the world due to bad governance and corrupt leadership by political bureaucratese. Scientists believe that Africa was the birthplace of mankind. By 100,000 BC modern humans lived by hunting and gathering with stone tools. From Africa, they spread to Europe. Meanwhile, about 3,200 BC writing was invented in Northeast Africa, in Egypt (Work Bank, 206). As a matter of fact, the aftermath of colonialism is more serious in Africa than anywhere else. Sub-Sahara Africa is especially hindered by its tropical location, high prevalence of malaria, a small portion of people living near the coast, and low coastal population density (Gallup, Sachs and Mellinger, 1999).
Some of the draw-backs for Sub-Sahara Africa’s poor development status include weak institutions, miserable economic endowment, and widespread corruption and abuse of state resources, ethnic, political and religious conflicts and the patronage style of holding public offices of public trust. Africa is especially vulnerable to terms of trade shocks, famines, political conflicts, drought and floods (Morrisey, 2001). It is found that African nations have aid-to-GNP ratios more than ten times that of Latin America or East Asia, but still suffer inferior economic performance. Ironically, within Africa, countries with poor economic policies have received more aid per capita than those with responsible policies (Graham and Hanlon, 2001).
In the 16th century, Europeans began to transport African slaves across the Atlantic. However, slavery was nothing new in Africa. For centuries, Africans had sold other Africans to the Arabs as slaves. The trans-Atlantic slave trade grew until it was huge. According to the World Bank, the current population of Africa is more than 1.2 million Africa’s population is equivalent to 16.14% of the total world population. The continent ranks two among regions of the world. About 39.8 % of the population is urban while 61.2% is rural.
The emergence of China as a major player in the development of African countries did heat up the competition with the U.S., especially in terms of using foreign aid as a venue to strengthen the donor’s power among developing countries. Chinese development assistance and other transcontinental infrastructure projects to Africa, like US$900 billion to the One Belt One Road Initiative, are growing, but the Trump administration aims to slash the foreign aid budget in 2018, especially the aid to Africa, citing corruption as the main reason. The proposed cut encountered fierce opposition in Congress and was deemed simplistic and arbitrary by Senator Patrick Leahy, the Senate Appropriations Committee’s top Democrat.
While for the U.S., foreign aid helped to place the U.S. in advance position to project its national interest, at the same time to give the country’s leverages to influence political and economic situations in Africa. According to OECD (2017), the U.S. foreign assistance includes loans, contracts, and grants, while Xi Jinping (2017) book title: The Governance of China, disclosed that China-Africa relations are based on ten major pillars include Committed to political equality and mutual trust, mutually beneficial economic cooperation, enriching cultural exchanges, mutual assistance to security commented to solidarity and coordination in international affairs. China-Africa comprehensive strategy focused on industrialization program, Agricultural modernization program, infrastructure program, financial program, green development program, trade and investment program, peace and security, poverty reduction program, public health program, cultural and people-to-people program.
Aid Data (2014) report which cited William and Mary, claimed China committed US$350 billion in foreign aid between 2000 and 2014, while the U.S. gives US$394.6 billion for the period. According to the Brooking Institute, from US$210 million in 2000 to US$3 billion in 2011, Chinese investment in foreign aid to Africa experienced a dramatic increase. By 2009, China gave about RMB 250 billion of foreign aid to the world, with almost half (45.7 percent) of the total Chinese aid going to African countries.
China Africa Research (2018) argues that China is not Africa’s largest “donor”, that honor still belongs to U.S, but other publications have disproved that assertion. However, China is Africa’s number one partner since 2002, but USAID has gradually boosted the total foreign aid budget to a steady amount that rests around $32 billion. According to USAID (2017) report, more than two hundred countries have received U.S. foreign aid but said it unduly goes to a few. The top five countries are Iraq ($5.3 billion, Afghanistan $5.1 billion, Israel $3.1 billion, Egypt $1.2 billion, and Jordan $1.2 billion. In the fiscal year 2017, the U.S. government allocated $49.87 in aid for economic and military assistance.
Chinese State Council (2017) discloses that the overseas Chinese aid between 2000 and 2014 amounts to $354.4 billion while William & Mary (2016) research claims that China has committed $350 billion to foreign aid between 2000 and 2014, parallel to the U.S. total of $394.6 billion reported by USAID. According to Chinese State Council “White Paper” (2016), China has given about US$58 billion in development aid to 166 countries and international organizations over the past years. During the fiscal year 2017, the U.S. government allocated US$49.87 billion towards economic and military assistance (USAID, 2017). A country by country report across Africa showed that the Liberian-state, a traditional ally of the United States has received foreign aid from the American government.
According to William & Mary (2013) research paper, between the period 2000 to 2013, sixty percent of the total aid went to transportation $29 billion, energy $25 billion and communication $6.9 billion, but explained that the Chinese investment in foreign aid to Africa experienced a dramatic increase. By 2009, China gave about US$48 billion of foreign aid to the world, with almost half (45.7 percent) of the total Chinese aid going to African countries. The China’s development assistance and other transcontinental infrastructure projects to Africa excluding the recent Chinese government US$60 billion development assistance has cut the world’s attention. Presently, the U.S. has reduced its foreign aid budget to Africa.
Wan (2018) revealed that China’s phenomenal economic reform in the post-Mao era, Beijing has built strong relationships with developing economies, continuing to provide aid in a bid to promote South-South cooperation. Chinese foreign aid is often referred to as having “no political strings attached,” and therefore, a more attractive option for many non-Western countries.
China’s foreign aid expenditures increased steadily from 2003 to 2015, growing from USD 631 million in 2003 to nearly USD 3 billion in 2015. Foreign aid expenditures fell by nearly USD 750 million from 2015 to 2016. Foreign aid levels rose in 2017 to USD 2.45 billion. However, this amount is still less than the annual aid expenditures from 2011 to 2015 (China Africa Research, 2018).
According to China Africa Research (2018) report, in 2017, the gross annual revenues of Chinese companies’ engineering and construction projects in Africa totaled US$51.19 billion, a 0.5% decrease from 2016. Bachelet (2005) explained that the top five countries are Algeria, Angola, Ethiopia, Kenya, and Nigeria. These top five countries account for 53% of all Chinese companies’ 2017 construction project gross annual revenues in Africa; Algeria alone accounts for 15% and that the number of Chinese workers in Africa by the end of 2017 was 202,689. According to USAID (2012) report, the U.S. gave out US$97.67 billion over 18 years in ODA to sub-Saharan Africa, with infrastructure projects (48% of total aid) and humanitarian aid (26 percent) being the top priorities. The health sector was given US$6 billion, the agriculture sector received US$4.2 billion and US$3.5 billion was committed to education.
Contemporary China’s active rendezvous in Africa dates to the 1950s, while both countries The People’s Republic of China and the Republic of Liberia entered bilateral relations on February 17, 1977, during the leadership of former president William Richard Tolbert, Jr., a year after the death of Premier Zhou and Chairman Mao Zedong’s deaths, with Hua Guofeng at the head of the top offices of the state, government, and party.
State Department (2010) discloses that U.S.-Liberia relationship dates back nearly 200 years and is stronger than ever as both countries continue working together on several fronts. On September 23, 1862 U.S. recognized the Republic of Liberia when the American Minister to England Charles F. Adams was empowered to conclude a treaty of commerce and navigation with the Republic of Liberia 15 years after its establishment as a sovereign nation, and the two nations shared very close diplomatic ties
According to New York Times (1962) edition, former President Abraham Lincoln in his message to the present Congress stated: that if there was any good reason why the independence of Haiti and Liberia should not be recognized by the United States. President Lincoln said he was not aware of it. President Lincoln noted that: On the contrary, there are many very good reasons why it should be recognized, and hence we are very glad that the Chairman of the Senate Committee on Foreign Relations has brought in a bill for the appointment of diplomatic representatives to these republics. On October 25, 1862 the Treaty was signed by President Adams and the President of Warner
Both countries belong to a number of the same international organizations, including the United Nations, International Monetary Fund, World Bank and World Trade organization. On February 23, 1864 Diplomatic Relations and the American Legation at Monrovia were established during the administration of Abraham Lincoln and Daniel B. Warner, when Abraham Hanson an English-born American pastor and diploma, American Commissioner and Consul General presented his credentials to the Liberian government. On May 6, 1949 U.S Legation in Monrovia was elevated to Embassy status, when Edward Dudley, the first black American to lead a U.S. Mission abroad with the rank of Ambassador presented his credentials to the Liberian government (State Department, 2010).
China’s win-win policy of core principles is welcomed by Liberia’s former leaderships and the current administration because it places socio-economic, development and equality at the forefront of diplomatic ties and cooperation. Recent trends confirmed that China-Liberia relations are moving ahead in a very positive way, based on a vision of the community of a shared future, mutual support and equality grounded on a common historical struggle against imperialism and national independence.
Liberia is a case study where China’s infrastructures are visible. China has provided aid to hundreds of projects in Africa which involved agriculture, road, infrastructure, health, education, animal husbandry, fishery, textile, energy, water conservancy, power generation, and other sectors. Africa in recent years has come to be a major Geo-strategic importance to the oil-dependent industrialized economies and giving attention that Africa receives from state actors on the global stage in the context of international politics, the idea of an African rebirth seems to be finding more and more acceptance within the contemporary global politics.
For example, Chinese companies have been working in Liberia and have engaged in visible bilateral projects including the construction of public buildings, health delivery, and educational facilities across the country, telecommunications sector, roads, awarding of hundreds of scholarship programs for oversea studies, and has contributed to UN peacekeeping force in Liberia. China has completed the construction of US$55m Ministerial Complex, about US$40m New Terminal at Roberts International Airport in Margibi County, the multimillion Jackson F. Doe’s Hospital in Nimba County, and the planned construction of a US$55m overpass Bridges. The figures regarding of China aid to Liberia from 2006 to 2018 has ben be obtained despite of several studies.
China also undertook millions dollars’ worth of projects in Liberia including the “Chinese Building” University of Liberia Fendell Campuses, the Capitol Building Annex, rehabilitation of the New Health Ministry and the Samuel K. Doe Spoke Complex in Paynesville, installation of Traffic lights in Monrovia and its environs, the Extension of MVTC, rehabilitations and refurbishing of roads and bridges, support towards security, health, education, human development programs, public and private sectors development.
President Xi Jinping, in his 2017 publication titled: The Governance of China”, explained that China-Africa adopted the principles of sincerity, affinity, and good faith and uphold the values of greater good and shared interests. According to President Jinping, to ensure successful implementation of China-Africa ten cooperation programs, Beijing provides financial support in the tone of US$60 billion. According to the breakdown of the money, US$5 billion is allotted for grants and interest-free loans while US$35 billion earmarked for concessionary loans and S$5 billion goes towards China-Africa Development Fund and the Special Loan for the Development of Africa SME. Additional, US$5 billion is targeted towards Africa-China Fund for Industrial Cooperation.
The Chinese US$60 billion earmarked for Africa development alignment with AU agenda 2063 China offered an alternative to the western style of cooperation, which often required adherence to fiscal or other policy requirements as a pre-condition for providing of funds (Trombly, 2010). Borgenproject (2018) reported that U.S. gave out $97.67 billion over 18 years in ODA to Africa, with infrastructure projects taking 48 percent of total aid and 26 percent towards humanitarian aid being the top priorities. The analysis of the content of the report showed that the health sector received $6 billion, followed by the agriculture sector$4.2 billion and $3.5 billion was committed to education.
During the regime of ex-president Johnson-Sirleaf, China’s waived Liberia’s debt. The rehabilitation of major roads and fender roads including the Mount Barclay-Ganta highway, Harper-Fish Town road, Cotton Tress-Buchanan highway Tubman Boulevard and the construction of the Waterside bridge carried out by Chinese companies. Nowadays, China is Liberia’s second trade partner, next to Ivory Coast. While on the other-hand, Liberia has persistently received foreign aid assistance from the American government. However, figures regarding U.S. foreign aid to Liberia focusing on the period 2004-2017 amounts to US$3,701,080 billion. Africa receives about $133.7 billion each year from official aid, grants, loans to the private sector (Worldatlas, 2018).
The targeted areas covered under the U.S. foreign aid to Liberia include energy sector project, forest incomes for environmental sustainability, strengthening political parties Programs, advancing partners and community-based, health care, basic education, good governance, agriculture cooperative development, environmental protection, rule of law and justice, social empowerment and support towards government programs. The first foreign aid Liberia received from the U.S. government through Congress approval was US$100,000. The U.S. has emphasized that it is prioritizing investments to restore and expand health services to address declines in maternal and child health, declines in immunization rates, and increases in malaria. Liberia, under the leadership of former President Ellen Johnson Sirleaf, has emerged from over a decade of war to be a key champion of democracy, peace, and development. The U.S. is Liberia’s leading partner, having invested over US$1 billion in bilateral assistance since 2003 (Whitehouse, 2011).
In her remarks, Secretary Paulson (2007) said: I applaud these reform efforts and we will work with the international community to find ways to eliminate Liberia’s debt burden, which will allow Liberia to normalize its relations with the the multilateral donor community, gain greater access to desperately needed development assistance, and put its finances on a more sound footing. We call on other countries to make similar commitments.
“I had the honor of meeting with Liberian President Johnson-Sirleaf this week to discuss her strong efforts to rebuild Liberia after its devastating civil war. Since her election in January 2006, President Johnson-Sirleaf’s government has focused on Liberia’s reconstruction while demonstrating its commitment to economic and political reforms (Paulson, Treasury Department, 2007).
According to the Treasury Department, Secretary Paulson on February 14, 2007, requested Congress to authorize the use of up to $35 million in debt reduction funds provided for in legislation now under consideration by Congress to help fund the costs of forgiving Liberia’s debt to the international financial institutions. The request was based on the Bush’s administration policy to forgive $391 million in claims on Liberia under the Heavily Indebted Poor Country (HIPC) framework, and requested funding in the fiscal year 2008 budget to cover the start of that process, set aside $15 million to contribute to forgiving Liberia’s debt to the African Development Bank and redirect more than $150 million in funds held by the IMF as a contribution to forgiving Liberia’s debt to the IMF, in consultation with Congress.
Besides, the U.S. government has also provided more than $500 million of development assistance to Liberia over the past three years from 2005 to 2007, accounting for more than half of total bilateral development assistance received by Liberia during that time while in the fiscal year 2007 and 2008budgets, the U. S. government requested more than $200 million for Liberia.
Prior to the election of Madam Johnson-Sirleaf, Liberia’s debt equals $3.7 billion, but the full amount including the more than $1.5 billion of that debt that was in arrears to the international financial institutions (World Bank, IMF, and the African Development Bank) was waived. However, vast majority of the arrears were eliminated using internal resources at these institutions (Treasury Department, 2007).
In accordance with the Enhanced HIPC Initiative and the Multilateral Debt Relief Initiative, the completion point brought the debt cancellation of an estimated $2.7 billion in debt from the Paris Club, the IMF, World Bank, African Development Bank and other creditors (Treasury Department, 2010). The Treasury Department added that the U.S. also canceled 100 percent of its remaining claims after the meeting of the Paris Club of international creditors, bringing the total amount of U.S. debt relief for Liberia under HIPC to more than $400 million.
The remarkable relations between Liberia and the U.S. further resulted in the U.S. government in 2007 to provide $185 million as part of Liberian debt relief financing at the IMF. In its report published on November 13, 2007, the Treasury Department disclosed that the U.S. also provided $15 million to the African Development Bank for Liberian debt relief financing, and additional $391 million in claims on Liberia under the Heavily Indebted Poor Country (HIPC) framework.
Additionally, U.S. provided funding for Liberia’s required approximately $2.5 million contributions to clearance of its arrears at the African Development Bank (AFDB) which brought the total U.S. contribution to clearing Liberia’s arrears at the AFDB to about $17.5 million. Since 2008, Treasury technical advisors have worked closely with Liberia’s Ministry of Finance to implement a Code of Ethics, strengthen internal controls to deter and detect corruption, and improve tax collection procedures. Author: Josephus Moses Gray. Contacts: (231)880330299 or email:[email protected]