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292 CHAPTER 17 Natural Resources for African Development under Sino-American Geo-strategic Rivalry Alexis Habiyaremye INTRODUCTION The inability of most African countries to use the leverage of their natural resources to generate economic growth and decent living standards for their citizens has been a hotly debated issue in development economics for many decades. Most attempts to explain the paradoxical contrast between Africa’s prodigious mineral wealth and its dismal economic performance invariably point to the intricate links between local elites and foreign powers and corporations, who often play a nefarious role in the appropriation of the benefits at the detriment of local development. Indeed, African abundant oil and strategic mineral deposits have often attracted foreign powers that sought to exploit them for their own benefits at the expense of local communities and their livelihoods. While external observers from developed countries have repeatedly claimed that Africa is a continent of poverty doomed to underdevelopment, so often have the Africans replied that theirs is a wealthy continent, if with a poor population, yet sitting on gold, gems and other precious minerals. The temptation to bet on the wealth of African gold and gems as a source of prosperity is indeed strong, since Africa has the world’s richest concentration of mineral ores and gems in its soil. According to US Geological Survey (USGS), Africa is in effect home to 40% of the world’s diamond reserves and almost all of the world’s chromium reserves, whereas more than 50% of the world’s cobalt reserves are found in Democratic Republic of Congo (DRC) alone.1 In some regions of the continent, like the Katanga province in the DRC, the mineral wealth is so prodigiously abundant that it has been referred to by the late Belgian geologist Jules Cornet as ‘a geological scandal’.2 In other regions, countries around the Gulf of Guinea have large oil and natural gas reserves, which provide an attractive source of energy supply to Europe and the United States. 293 NATURAL RESOURCES FOR AFRICAN DEVELOPMENT UNDER SINO-AMERICAN GEO-STRATEGIC RIVALRY However, instead of enriching African countries, the exploitation of natural resources has often fuelled armed conflicts, provoked civil unrest, and caused environmental degradation and social disruption in many parts of the continent. Decades of export of these resources to rich Western countries since the colonial period have failed to bring prosperity to African populations. Until 2002, when resource-rich African countries started to record strong growth rates as a result of a buoyant demand from China, the abundance of natural resources seemed to have brought a curse rather than being a blessing to African populations, and appeared to validate the ‘resource curse’ thesis.3 The arrival of China on the African resource market, under a trade structure known as the ‘Angola mode’, with its strategy of swapping large infrastructure projects against access to mineral resources , has thus created completely new dynamics in the growth of African economies.4 These new dynamics of Sino-African trade and investments have largely contributed to the relatively good growth performance of many African economies in the years that preceded the 2008 global financial crisis.5 As a result, some of the principal beneficiaries of these trade arrangements have been growing at spectacular rates over the last decade, with Angola even outpacing China to be the world fastest growing economy over the decennium 2001–2010, according to IMF data. In fact, no less than 6 sub-Saharan TABLE 1 Fastest growing economies: 2001–2010 estimates and 2011–2015 forecast World top-10 fastest growing economies* Annual average GDP growth,% 2001–2010a 2011–2015b Angola 11.1 China 9.5 China 10.5 India 8.2 Myanmar 10.3 Ethiopia 8.1 Nigeria 8.9 Mozambique 7.7 Ethiopia 8.4 Tanzania 7.2 Kazakhstan 8.2 Vietnam 7.2 Chad 7.9 Congo 7 Mozambique 7.9 Ghana 7 Cambodia 7.7 Zambia 6.9 Rwanda 7.6 Nigeria 6.8 * Excluding countries with an economy of less than 10 million population (+Iraq and Afghanistan) a 2010 IMF estimates,b IMF forecast Source IMF; The Economist 294 CHAPTER 17 Africa countries trading with China under this form of swap agreements were in the world top ten fastest growing economies over the last decade. For the period 2011–2015, the IMF projections are that seven out of ten fastest growing economies will be from Sub-Saharan Africa (see Table 1). China’s active involvement in infrastructure financing and...

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Additional Information

ISBN
9780798304054
Related ISBN
9780798303873
MARC Record
OCLC
870684317
Pages
564
Launched on MUSE
2014-02-18
Language
English
Open Access
No
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