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Kishore Mahbubani - Great Decisions

Kishore Mahbubani

Kishore Mahbubani is currently Professor in the Practice of Public Policy and Dean of the Lee Kuan Yew School of Public Policy at the National University of Singapore. Previously, he served as Singapore’s Permanent Representative to the United Nations.

Transcript

What is behind China’s interest in Africa?

Well I think there are many reasons. One obvious national interest reason is that China is looking for resources. Africa is rich in resources and the demand and supply meet very well in that area. At the same time, the Chinese are also aware that the African States like to have an option. They feel that they’ve been treated brutally by the West over the last few centuries and frankly even when Western aid came to Africa, it was so painfully conditional and humiliating in its terms and conditions.

So the Chinese actually found that when they went to Africa they were welcome and they said, “Please, come to Africa and give us a choice.” So for them as far as the Chinese could see it was a win-win formula- they benefited and so did the Africans.

What is the history in China’s relationship with Africa?

China, as you know, despite its immense size and power – its had the world’s largest economy for 1800, 2000 years – never actually colonized countries far away in the way Europeans did and subsequently, Americans did too. The only infamous Chinese who visited Africa was Admiral Zheng And even though he reached African shores with a mighty armada of ships, he never actually landed or conquered any African countries; he traded with them. So the Chinese don’t have a record of colonization in the way that the West has had. And this has made it easier for the Chinese to establish a relationship because there’s no track record of having ever been occupied by the Chinese.

Where are China’s investments in Africa going?

I think Chinas investment is quite diversified in Africa. I don’t know the details but I do know they do support infrastructure development, railway development, roads development. They built the organizational headquarters for the African Union. At the same time also I think they’re trying to help the Africans do well in agriculture so they can export their food products. Because China is going to have the world’s largest middle class in ten to twenty years is going to have a greater demand for food. And I should emphasize that China is not just doing this in Africa, but in Latin America and in other parts of Asia also. It’s also by the way buying a lot of natural resources from Australia so Africa is not the only place that the Chinese are going to.

How do Chinese loans to Africa work?

I think it’s through a variety of sectors. As you know China Is the world’s largest country in terms of foreign reserves so they have the capacity to provide long terms loans at very low interest. And these loans can come either straight from the government or from state-owned enterprises that have access to loans from the state owned banks. So the Chinese have very deep pockets. Chinese loans to Africa are actually far larger than what the World Bank loans to Africa because China has far deeper pockets that what the World Bank has. And as long has the Africans are ready to accept long term loans for infrastructure projects or investments in other areas, China’s going to be happy to make more loans to Africa.

Africa is now seeing exporting from China to the continent? What does that mean for the economies of those African nations?

I have a very old fashioned view: I think trade is inherently good. I believe in Ricardo’s theory of comparative advantage and frankly, if the Chinese can provide shoes or slippers or pencils for African children at really low prices, the capacity to go to school is much, much greater there, no? So I think low prices do benefit the African consumer significantly and I don’t see Africans suffering as a result of buying cheap goods. I grew up, by the way, in Singapore, (when it was) a British colony and when Singapore per capita income was the same as Ghana’s. The only slippers we could afford to wear were cheap Japanese slippers for less than a dollar and until that came along, we couldn’t afford to wear slippers. So just as we benefitted from cheap Japanese slippers in the 1960s when Singapore’s per capita income was the same as Ghana’s, the Africans are also benefitting from cheap Chinese slippers in the same way.

Has there been African resentment toward Chinese as their investments and presence on the continent has grown?

The traditional western narrative on the Chinese presence in Africa is completely negative. The west will only highlight the negative points and it is true that China has made mistakes. Let’s be clear about that. I think the Chinese had to go through a learning experience. For example, when they would go into many African countries, they refused to use local labor, they would bring in their own labor in, their own managers in and dominate the development and after a while, the Chinese realized that this has cause a lot of resentment among some population. Zambia is a good example, where the opposition president ran again China in a presidential campaign. This is true, even though the Chinese have made some mistakes, their overall track record is undeniably positive. Because it has given the African states alternatives they never had.

And other people in the west have a very benign view of what the west does. And they’re so unaware that quite often when western countries go to Africa- western interests are more important than African interests. There was a former Nobel prize winner Joseph Stiglitz has described how when Ethiopia at one stage decided to pay back a loan to an American bank because the interest was too high, the U.S. used the IMF (International Monetary Fund) to punish Ethiopia. Now, that was brutally unfair for the U.S. to punish Ethiopia for paying back a loan, interest rates were too high. And that’s the kind of behavior many Americans and many in the west are not aware of how tough and brutal the U.S. government can be when it deals with these relatively weak states. And I experienced this first hand when as Singapore’s Ambassador to the UN, I chaired the legalizations between the Western states and the African states and the Western states used to run circles around the African states because they had far more resources, were far better bureaucrats. They really gave the African states hell and that made me aware that even though the rhetoric of the West towards Africa was very positive, the deeds do not match the words.

Is the U.S. late to Africa?

Well, I think from the point of view of the African states, it’s wonderful that China is interested in Africa, that Brazil is interested in Africa, and by the way, that India is interested in Africa. As you know by 2015 or earlier the number one economy in the world will be China, number two will be India and number three will be the U.S. So when the two largest emerging economies pay attention to Africa, its good for Africa.

And the U.S. has to realized that it no longer has a monopoly, it has to learn to compete with others and it wasn’t the case where in the past where the only choices for African states were the U.S. or Europe. So it has to accept what was given to them no matter how hard the conditions are. Now, Africa no longer has to accept hard conditionality, so it can say, “Thank you very much, I can go somewhere else.” And I think the U.S. should recognize, it is actually in its long term interest for African states to do well. And they should therefore take an enlightened long term view to say to themselves that even though in the short term they may be losing contracts, in the long run a prosperous Africa will create more markets for American products. So don’t look at the short term losses, look at the large big picture.

Is China taking human rights into account in their investments in Africa?

I think it is a fact of the matter than no country puts its values ahead of its interest. I mean, the U.S. supports Saudi Arabia and there is no democracy in Saudi Arabia. I think many would be surprised the U.S. supported the Arpatheid government in South Africa and that one of the worst dictators, Mobutu, was kept in power by the Americans. So of course you say, “Those were the Cold War days we had to do.” Come one look it’s still true today. So China doesn’t behave any different than any other country in the world. It’s just that Americans, American citizens perceive themselves as having higher human rights standards.

But I’m going to say something very painful here. Forgive me. In the eyes of most of the rest of the world, American lost its right to lecture on human rights when it became the first country in the modern developed world to use torture. And once it did that, everyone in the world said “excuse me, don’t give me any more lectures- go fix your record first.” And I think many Americans are not aware than the rest of the world is far more aware and far more educated and fare more knowledgeable than most Americans are. And they are very puzzled when they see Americans strutting around the world wearing this cloak of model virtue when they walk around the world cause what they see if a naked emperor with no clothes or model virtue.

Well number one, I can assure you that China will not colonize Africa in the way that Europe did for a long time. By the same time, I think the African states are better off if they have many choices, and actually it would be good if America, and Europe, and Brazil, and India compete with China in Africa because the more choices you give to the African states, the better their bargaining position will be becomes. But if America and Europe walk completely away from Africa and say “ok, we’ll leave you to the Chinese” of course, that’s much better for the Chinese. And from the point of view from the weaker African states, it’s good to have many choices.

So I would say the U.S. and Europe should step up their efforts to compete in Africa, but they now have to compete more intelligently and not in the crude way they used to in the past.

Have the Chinese learned from U.S. and European mistakes in relationships with Africa?

I think the Chinese are learning in many different ways. I think they’re learning first from their own missteps and then the missteps of other. And the Chinese by the way will be the first to admit that they’ve made mistakes, they acknowledge that. And the Chinese have a very long term view in the way that many in the West do not, you know. In America, you think of your 4 year election cycles and African policy changes 180 degrees. So the Chinese have a long term view. They do ask themselves where does china want to be in African, not next year, two years down the road but twenty, thrity years down the road. So if you have a long term view, you want to make your investments with a long term dividends, you don’t want to have a short term pay off and a long term negative return. So the Chinese will be very careful as they move ahead in Africa.

Well, I think the honest answer depends on the African countries. I would say it varies. In some countries the Chinese are more successful than other countries, in some countries there is still a lot of good will towards the west that might still be there, it’s a historial legacy; so it varies. You can’t say all over Africa there is one picture. For example, when President Kagame of Rwanda came to speak at the Pew School of Public Policy, where I am the dean, he gave a very positive speech on China and said, “We never had choices, now we do.” And it’s interesting because Paul Kagame has been as you know a favorite child of the west and even he appreciates the fact that China is there and it brings choices.

As you know, many American companies are still among the most competitive in the world and I don’t think the Chinese will come up with a product to match Coca Cola; you know how much Coca Cola and Pepsi are being sold in Africa and you know how profitable that business is. As you kno African economies are doing well and Africa is going to produce a large number of consumers who will buy American products. So I think the many Chinese companies are jealous of the brand values that many American companies have in many areas, of course I mentions food companies, Coca Cola, Pepsi, McDonalds. Even in other products, software, iPhones and iPads and so forth, there are still large markets out there.

The big difference between American foreign policy and Chinese foreign policy, and I’ve studied both for several decades now, is that the Chinese always have long term strategy and they don’t allow short term stumbles to affect long term direction. The U.S. rarely has a long term strategy and its strategy towards Africa changes with every administration. Sometimes the rhetoric is very good. As you know, paradoxically, the one man who surprised everybody by being so geneorous to Africa was George Bush. He came, he went; what happened to his policy after that?

So it’s important for the U.S., in dealing with the rest of the world now, to match the Chinese in developing a long term strategy and say, “Where does the U.S. want to be in Africa, especially, 10, 20 years down the road. And frankly you know when you look at the protests over the film, in so many Islamic countries where you have the burning of the American flag and so on and so forth. I think a lot of this hate and anger can be diffused, but you have to have a long term strategy.

Well, I think that the Chinese recognize that their creditability is on the line and if their products, like steel products fail then the damage is very real. And by the way, incidentally, the Chinese people themselves often complaining about a Chinese product when they get it home, I mean, the quality of milk powder in china is under a lot of suspicion and the Chinese know what price they pay when the consumers lose faith in a product. So just like the Chinese have to clean up their act at home, they’ll have to clean up their act in Africa too.

Well I think there’s no doubt that in the first wave of Chinese investment in Africa, that the Chinese seemed to demonstrate confidence in African workers or African processors and brought everything to Africa, their own workers, their managers, their own food suppliers and so on and so forth. But I think over time, they’re learning that this creates a lot of resentment in African and are gradually starting to turn around and beginning to engage more with the African states. So this is part of the learning process that theyre undergoing and of course it varies from country to country. In some countries, they still have to bring in their labor because they may not be the kind of sophisticated construction laborers you need sometimes to put up some of the very sophisticated buildings and lay down some railway lines and so on and so forth. So sometimes you do need to have a sophisticated labor forces.

I think the most important message I have especially for American audiences is be very wary when you read a Western news report on what China is doing in African because the Western news reports always give you the negative incidents and of course there are many negeative incidents, but they never give you the positive ones. I would say you should try to look overall objectively at the overall level of Chinese investment in Africa, the overall amount of trade between China and Africa. And they should also observe when China holds a Africa- China summit meeting, how many African heads of state go to China voluntarily – they’re not forced to go by the way. And then observe how many African go when a Europeans hold a meeting. Why do so many more of them choose to go, voluntarily more than them, to go to China over Europe? What is the signal that is being given there?