By Douglas Burton
February 10, 2023Updated: February 10, 2023
The 170 carat pink
diamond recovered from Lulo, Angola, on July 27, 2022. (Lucapa Diamond Company
via AP)
For years The Republic of
Angola has been called Africa’s “richest poor
country,” chock full of oil and diamonds, but wasted by 40 years of proxy wars
and looted by native kleptocrats.
After a bloody civil war
ended in 2002, the government looked for international investors, and in two
years bankers from the Chinese regime arrived in Luanda with the message,
“We’re from Beijing, and we’re here to help.”
Yet, nearly 20 years of
Chinese state-backed projects later, Angola is on the hook for $21 billion owed
to China despite the fact that Angola has
negative growth, and more than 50 percent of its population is desperately
poor.
That’s the case presented
by a panel of subject experts assessing Angola’s predicament at the Hudson
Institute in Washington on Feb. 7.
Chief among them was
journalist and anti-corruption activist Rafael Marques de Morais, 52, joined by
Hudson economist Thomas J. Duesterberg, Jenai Cox, an executive with
International Republican Institute, and Nate Sibley, a Hudson research fellow.
The “Odious Legacy of
Chinese Development Assistance in Africa: The Case of Angola,” is the position
paper jointly authored by Marques and Duesterberg.
Much of Africa is plagued
by “debt distress” due to China’s practice of debt-trap diplomacy, the
Hudson scholars argue.
Angola is a cautionary
tale, in the telling of Marques. Regardless of the intentions of the Chinese
lenders, who operated from shell companies that were proxies for the Peoples
Republic of China, the projects China has completed were poorly built, and
substantial funds lent for Angolan development were actually paid to the family
of Angola’s corrupt dictator, according to Marques. Therefore, he recommends
that the repayment of the loans should be renegotiated.
“We calculate that 50
percent of Angola’s national debt is not owed by the government but by a
handful of [Angolan] private citizens,” Marques said. “The Angolan citizens
should not have to pay for the debts of these private citizens. We still don’t
know how much of the borrowed funds went for infrastructure and how much was
stolen,” he added.
What happened in Angola
is part of a broader pattern of Chinese investment in Africa, according to
Hudson Research Fellow Nate Sibley.
Throughout Africa where
there is a corrupt collaboration between African leaders and Chinese funders,
“China is the senior partner,” Sibley said.
Angola rejected a lending
engagement with the International Monetary Fund in 2002, because Angolan
officials rejected conditions of transparency, according to Marques, whereas
Chinese lenders don’t require those conditions, leaving room for bribes. Nor
does China reveal the terms of repayment, or whether nations risk forfeiture of
national assets in case of non-payment.
“They are aggressively
promoting a different development model. Sovereign-to-sovereign lending has
changed to lending to private firms with quasi-governmental status. But if that
private company fails, the [African] government inherits the debt,” Sibley
said.
China began investing
heavily in developing countries 30 years ago, choosing to prioritize nations
that had poor records of rule of law, Sibley said. “China’s miraculous growth
in the 1990s happened because of wild speculation and risk-taking which didn’t
necessarily help development just as long as they helped the political agenda
of the Chinese Communist Party (CCP).
“Trillions of dollars
went into countries that couldn’t absorb them, and projects were poorly made,”
he said.
China’s vaunted Belt and Road Initiative in Africa,
financed by more than a trillion dollars, is a conveyor belt of CCP control,
according to Marques. China’s Foreign Minister Qin Gang met with Angolan
President João Lourenço on Jan. 12 to mark the 40th anniversary
of China’s diplomatic relations, but he didn’t come empty-handed.
“Just recently we were
visited by China’s foreign minister, who announced a new loan of $250 million
for broadband coverage,” Marques told the audience at Hudson.
Angola’s finance
minister, Vera Daves, told one media outlet: “this is ‘more favorable’ for
Angola than market conditions with a maturity period of up to 20 years and
without associated collateral.”
“Yet, has Angola done a
proper risk assessment?” Marques asked.
“This project could be a
Trojan horse, as there is considerable risk of surveillance,” Marques told the
group.
“And we already owe China
$21 billion, with the result that close to 50 percent of the national
government’s budget is needed to service this debt. Why is Angola taking on
more loans? ” Marques asked.
China’s investment in
Angola is paralleled by its vast economic development projects in nearby
Nigeria, the most populous and richest nation in Africa. Foreign Minister Gang
dropped into Lagos on Jan. 23 at the debut of China’s $1.5 billion deep
seaport, 75 percent of which China owns, which he said will be a “game changer”
for the Nigerian economy. The logjams of ships seeking to unload cargoes into
Lagos will be relieved, true.
At the same time, Lagos
is expected to be the container hub not only for Nigeria but for all of Africa.
Critics frequently note
that conditions on Chinese loans often stipulate that a high percentage of
Chinese nationals will be employed by the resulting project. Large investments
in Angola have seen the low-skilled jobs performed by Angolans at the lowest
wage scales with high-wage paying employment handed to Chinese contractors.
It isn’t known how many
of the thousands of jobs said to be created at the deep seaport in Nigeria or
Angola’s broadband installation will go to citizens of those two nations, yet
China’s position in Africa’s great game surely
has advanced.
https://www.theepochtimes.com/how-corrupt-chinese-development-loans-captured-angola_5044020.html
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