Protectionism; What Africa And The 3rd World Might Just Be Needing.

                                                                    Photo Courtesy.

The New York Times in June this year explains how Hambantota Port in Sri Lanka was handed over to the Chinese for a period of 99 years. This, as a result of the enormous Chinese debt it has accrued. Sri Lanka, is not the only Country whose debt to China is always on the increase – Others like Djibouti, Zambia, Pakistan, Maldives, Montenegro, among others have their debts at alarming ratios.

Looking at the geographical position of Hambantota, anyone with keen eyes cannot fail to see what is going on. But first, a little bit of a background. China has embarked on an ambitious mission to  not only connect to the World, but to also become the Worlds largest economy. With this regard, it started it’s ONE BELT, ONE ROAD initiative. A project aimed at building trade routes from China, across Asia into Europe, and then across Countries located along the Indian and Pacific oceans.

To become the largest economy in the World, and thus a super power in essence, one does not need a big economy alone, a strong military backing is equally of importance. And because conventional wars are fought on land, the sea, and the air, you can never overrule why big Countries are obsessed over strategically located ports. Hambantota Port, as feasibility studies would show, was never economically viable to Sri Lanka – and to make it worse, the figures put forth for its construction was equally unsustainable. But because their then President accepted bribes, as The New York Times put and equally received financial funding in his campaigns, he had to meet his end of the bargain. Sign a deal to receive an over inflated loan from the China EXIM bank, then have Chinese companies construct the Port.

Now, why does China give a huge loan to a Country whose credit score is terrible, and the risks so high? A number of reasons. One, they then offer the loan at very high interest rates. It’s business remember? Two, Chinese companies get to benefit. Three, because they have Political players in their pockets, they continue arm twisting them to the point of taking over a Port for a period of 99 years. If China needs 99 years to manage the port, why couldn’t it give Sri Lanka the 99 years for it to repay on its own? This arm twisting can continue – and actually will continue as geopolitical pundits put it – to a point where China will want to have it’s Military base positioned at Hambantota. Remember apart from Economic dominance, Military presence is of essence. And since ONE BELT, ONE ROAD strategy is to connect China to the Indian and Pacific oceans, a quick look at a map should show you the strategic location of Sri Lanka in the Indian Ocean.

This Sri Lanka example should demonstrate to Africa, and the third World what is actually happening. To a large extent, it is not about saving the 3rd World, it is about dominating the World by using the 3rd World as stepping stones. Chances are that at the end of it all, the third World would be worse off than it was before.

History documents how territories have been subjugated. From use of the sword, to the gun, to atomic bombs, to loans, to aid, and now debt.

African ‘leaders’ whenever they meet for their conferences, they always ask how at independence some of their Countries were at the same economic level with Countries such as Singapore, yet today they are Worlds apart. How a Country like Congo Zaire was, in terms of GDP per capita, well above Indonesia?

The answer is simple, what China is doing today rapidly and on a large scale, the West did too, and still does to maintain their dominance but on a different fashion.

South Korean Ha Joon Chang in his book Bad Samaritans, tries to explain why third World Countries in the 60’s and 70’s enjoyed a per capita income which was better than what they enjoyed in the start of the 21st Century, and some, if not most, have not recovered to date. In Africa, for instance, only a select few like Botswana seem to be on track. Other pundits have tried to explain on how after the 2nd World War, Europe will only receive AID for a period of five (5) years before standing on its feet. How Countries in the Asian tigers league only received AID for a short period of time, and stood on their feet. How then does Africa, and the 3rd World seem bent to be dependent on AID for eternity?

Ha Joon Chang points out one fundamental error. Free Trade! That the West have always tailored all trade arrangements to treat Africa and the 3rd World as nothing else but markets. You want help? Open your markets for our products. You want AID? Open your markets for our products. You want the IMF to save you from your bad credit score? Remove tariffs for imports, and privatize everything. And it goes on and on and on. To a point where today, Africa and the 3rd World cannot produce anything of value. It even imports oil that it is freely on its own lands.

The technological transfer that has always been preached, now seems a far fetched dream.

In his book Bad Samaritans, Ha Joon Chang demonstrates how Japan would develop Toyota to a point of producing luxury cars such as LEXUS. Toyota started by manufacturing a not so competitive cars. They would even export to the US without much success. For almost twenty (20) years, no profit. It was suggested that Japan opens its market for American brands like FORD to invest. In essence absorbing Toyota. The rationale? It will create employment, bring profits and generate revenues for the Government. Japan would refuse such a suggestion, persevere to a point where they produced quality cars for the global market. Today, Japan’s giant economy is as a result of its robust manufacturing of among other things, quality cars. If Japan had opened its markets for America to invest, today probably Japan would only act as America’s workshop as all profits move to America. That which is happening in Africa and the 3rd World even now.

Further examples show how Countries like the US itself and Britain developed by protecting their own markets, and working on them till they grew for global markets.

Now, opening markets is not entirely a bad thing. Trade is a give and take, and not a take and take, the way the West have done to Africa and the 3rd World. Today the African leaders are all over conferences talking about TRADE NOT AID. Yet they themselves don’t have the capacity to produce anything of value. They have freed there entire markets, privatized everything so that foreign entities own anything of value. And because they continue sinking themselves in more and more debt, as long as they run to the West for assistance, they still don’t have a chance. For these leaders, most are just more obsessed with illicit monies they receive both from the West and China to hide in their offshore accounts.

Speaking of offshore accounts, UK Prime Minister Teresa May, in her visit to Kenya this year, promised to repatriate illicit monies from Kenya back. Most Western Countries visiting Africa usually put this narrative in their bilateral agreements, but most of the time its just talk. Why can’t some of these monies held in Western Countries be used to ease some of the debt burdens of poor Countries? For instance, a Country like Kenya whose debt to China is on the increase, has to rush to the IMF to negotiate terms that will continue keeping it’s shilling steady – Why can’t the UK, which is among Countries that can influence institutions such as the IMF, use the illicit monies stashed in her Country to cushion Kenya from terms that end up hurting the poor Kenyan?

Africa, and the 3rd World is on it’s own. And it is high time to consider protectionism before it is too late in the day. Lest they will act as stepping stones for the next two (2) Centuries to come.

It is not right, at all, for a Country like Kenya, that has good lands that can grow cotton – which it used to – , has the ability to run textile industries – which it used to – , to allow her greedy leadership to embark on missions of mass importing cloth materials from China. Just recently, a proposition was put forth for all Kenyan School going kids to wear the same school uniform. And the first thing that ran into the minds of many people was… “Has the leadership again negotiated with the Chinese to mass import School uniforms?” before the dust could even settle, Kenya has considered changing the uniform of the Police service – which the Kenyan people took to Social Media for almost two days mocking how the colours resemble that of Chinese Police. At a time when Zambia is also said to be admitting Chinese into her Police force. Apparently to protect Chinese ‘interests’

And lastly, Africa, and the 3rd World need to watch carefully the debt trap. The people themselves need to be on the watch since their leaders are always accomplices. They need to question and interrogate every trade agreements soberly without stupid political sycophancy. Both local and international systems need to be put in place to check the debt trap. Like the one’s being proposed in this tweets from some lawyers in Kenya.

Bad loans negotiated by greedy leaders, with kickbacks as the incentives, should not be repaid by any poor Country. A poor Country should not accept to, or allowed to, sink deeper into poverty due to agreements that are intentionally meant to exploit it.

And moving forward, discussions on how protectionism can be achieved to greater prosperity should be the only acceptable conversation until these poor Countries rise from their poverty. Only then, will trade be free and fair, a give and take as it is supposed to be.