While you were gone...

Dearest Readers: I apologize sincerely for the rather embarrassing lack of posting in recent days (or has it been weeks, already?). I have several writing projects on my plate at the moment (not to mention the mammoth beast that is the PhD), all of which have served to hamper my desire to blog when I manage to steal away some ever-fleeting moments of spare time. That said, I have not abandoned you and will continue to post in this space when I can (hopefully more frequently going forward!).

Now, let's get back to business, shall we? It seems that among the golden rules governing the IR world is the ever-wise maxim, "don't blink or you'll miss it." Much has happened in the way of Sino-African relations since I last wrote. To that end, I've collected a not-so-brief list of stories which have surfaced during my absence, and which I deem especially worthy of note:

• The FT last week ran a special report on Kenya. Whilst many "special reports" of such a nature have previously been written, I found this one especially well crafted and comprehensive, covering issues ranging from the country's leadership crisis to its extreme (and extremely fickle) climate
• Always sharp, always informative, Elizabeth Dickinson asks whether China's Guinea deal is for real. Emerging evidence suggests that the deal may actually amount to nothing more than wishful thinking on the part of the Guineans, though given the shroud of secrecy under which the Chinese (and by and large Guineans) operate, the actual reality of the matter is anyone's best guess. I find it perfectly typical, though: Guinea is embroiled in turmoil and gross human rights violations; the international community is ready to impose sanctions; and China is soldering on with its oil and investment deals. Where have we seen this before?
• Unsurprisingly, an increasing body of experts are calling for heightened transparency in China's Africa investments. I wouldn't be surprised if Beijing will over time begin declassifying a select pool of documents surrounding its African activities - not because it will have suddenly decided to operate within the international regulatory framework, but for the very reason that by appeasing Western demands in this regard it will be able to continue doing as it pleases. Give a little, take a lot seems to be the name of the game.
• In the name of fairness, however, if one is to be critical of the Chinese for their African oil investments, one should seemingly be equally condemnatory of the Bush family....
• A sad twist of irony in our technologically advanced world: phones appear to be more widespread than food. Might we - in our constant pursuit of all things bigger, better and faster - be losing sight of the basic needs of the world's poor? Food for thought (no pun intended)
• An interesting glance into the DRC's 2009 budget (HT: Texas in Africa). As Texas in Africa aptly notes, the best thing about the budget is how easy it is to see where the money is being stolen. The whole thing reads quite like a satirical novella. Well, almost.
• The 2009 Forum on China Africa Cooperation is due to take place in Egypt on 8-9 November. I look forward to reading the newly revised China Africa strategy which, I'm quite certain, will read exactly like the old one
• A most harrowing account of human rights violations in North Korea from The Economist. While North Korea is generally discussed solely in terms of its nuclear ambitions and contentious behavior on the international stage, one often forgets of the country's population, which is suffering under the most atrocious and deplorable conditions
• On the near-eve of the 20th anniversary of the fall of the Berlin Wall, Brahma Chellaney puts 1989 in global comparative perspective: Europe got freedom, Asia got rich. And, twenty years later, China's authoritarian capitalism stands to challenge the global spread of democratic values. How much happens in such a short period of history.

Noteworthy...

• CNOOC wants a stake in Ghana's oil field. So does Exxon Mobil. A showdown in the making...
• Anti-Chinese sentiment appears to be escalating in the DRC. The Chinese firm Sinohydro suffered an attack earlier this month by unidentified gunmen. This is unfortunately one among a growing number of such instances in the DRC
• "Conservative Egyptian lawmakers have called for a ban on imports of a Chinese-made kit meant to help women fake their virginity and one scholar has even called for the 'exile' of anyone who imports of uses it." And here you thought China was engaged in resource extraction alone...
• Yet another reason why I'm skeptical that China will ever do anything about North Korea. *Sigh*
• Last week the Mo Ibrahim Foundation released its annual index of governance in Africa. You can find the rankings here, and several of Elizabeth Dickinson's reflections here
• China is in a push for Guinea's resources - minerals and [the hope of] oil. Guinea is one of the poorest states in West Africa, with a seriously dubious human rights and governance record.
• The Gates Foundation is exploring securitizing aid. Securitization seems to be a dirty word these days, but Gates may be onto something...

It's the oil, stupid

Following on yesterday's post about China's pursuit of Nigerian oil, the CS Monitor today has an interesting piece on why China is unlikely to support sanctions on Iran - even if today's US-Iran talks go badly (which many suspect they will). The bottom line: oil, of course! China imports nearly 15% of its crude oil from Iran, and has recently started selling refined gasoline to Iran. What's more:

Chinese state-owned oil companies have signed three multi-billion dollar deals with Iran this year to develop oil and gas fields there, in a bid to establish a strategic hold over resources not under the control of Western oil firms.

"Iran has bountiful energy resources, its natural gas reserves are the second largest in the world, and all are basically under its own control," former Chinese ambassador to Tehran Sun Bigan wrote in the latest issue of "Asia and Africa Review," published by a prominent government think tank.

China also became a partner this year in a proposed pipeline carrying gas from Iran to Pakistan. Since India dropped out of the project, the pipe is now due to carry gas north from Pakistan into China, indicating Beijing's strategic vision of its future energy supplies.

As I've noted on countless previous occasions, China is in many respects the classic textbook case of realist politics, with primacy placed on its national interests and security over all other matters and considerations. It comes as little surprise, then, that Beijing remains unwilling to crack down on Tehran: Tehran has what Beijing wants and needs, and the Chinese will be damned if anything gets in the way of that. If you're waiting for Chinese sanctions on any oil-exporting country, you may be waiting a while...

China goes after Nigeria's oil

Via Tom Burgis writing in the FT:

A Chinese state-owned oil company is in talks with Nigeria to buy large stakes in some of the world’s richest oil blocs in a deal that would eclipse Beijing’s previous efforts to secure crude overseas.

The attempt could pitch the Chinese into competition with western oil groups, including Shell, Chevron, Total and ExxonMobil, which partly or wholly control and operate the 23 blocks under discussion. Sixteen licences are up for renewal.

Most prominently, CNOOC is hoping to buy 6 billion barrels of oil, equivalent to one in every six barrels of proven reserves in Nigeria. While the overall value of the offer has not been disclosed, some sources suggest that it caps somewhere around the $50 billion mark. Another issue yet to be disclosed is that of how the Nigerian government plans to allocate equity in the oil blocks; some suspect that it may involve forcing western groups to relinquish their stakes. Bring on the fireworks.

Noteworthy...

My goodness, where to begin? ....

Harvard (yes, that Harvard) is branching out beyond the world of academia to establish its own 'preppy' fashion line. I suppose it's quite safe to say that the university's economic woes must truly be taking a toll...

Adam Hothchild's "Rape of the Congo" from this edition of the NYRB. Quite apropos given Secretary Clinton's current visit there

Iran and China have just signed a $3 billion oil deal, wherein which China is to help develop Iran's refinery capacity in Abadan and the Gulf. Nearly one-fourth of Iran's petroleum exports already go to China

Buying mines in Africa and the question of China's soft power. Alternatively titled: Chinese adventures in the African resource market, as told by Sheishi (whoever she may be)

Slightly tardy (on my end), though nevertheless most worthwhile: via Aid Watch a review of Michaela Wrong's book, It's Our Turn to Eat: The Story of a Kenyan Whistle-Blower

Over-exaggerated Asian scrambles and praise-worthy Angolan management on a Monday morning

Chatham House released a new report today which provides a comparative study of the impact of Asian oil companies on Nigeria and Angola - the two leading oil-producing companies in sub-Saharan Africa. While the report considers Indian, South Korean and Japanese national oil companies, the primary focus is on Chinese oil strategy. Specifically, the report considers why Chinese oil strategy has been - and remains - so successful; how it is that Angola emerged as the second largest supplier of oil to China in 2008; how Chinese companies negotiate deals; and how such deals benefit Angola and Nigeria, respectively.

Among the more interesting findings emanating from the report is that which suggests that Angola does not fit the stereotype of a weak African state being exploited by the resource-hungry Chinese. Indeed, the Angolan government has been quite successful in managing its relationships with China and its oil companies, as well as handling its own version of the oil-for infrastructure scheme. The case of Angola is contrasted with Nigeria, where the Obasanjo government largely failed to manage the scheme:

While Nigeria was playing politics with its Asian partners, Angola was driven by economic necessity to quickly access funds to finance its reconstruction [...]

[...] The scale of corruption, mismanagement and non-execution of projects in the Obasanjo years has sent shockwaves through Nigeria. [...] His intentions were good but officials failed to spell out the full implications of the scheme. And many used the scheme for private profit.

The report further suggests that Western fears about an Asian takeover in the Nigerian and Angolan oil sectors are highly exaggerated:

Except for Japan, [Asian oil companies] only acquired equity participation in both countries in the last five years. More important, the [western] oil majors remain the leading players in both countries. They dominate production and hold the majority of reserves.

While Western oil companies do, indeed, still own much of Africa's oil reserves, the Chinese scramble for African soil should not be downplayed. As the report itself notes, Angola is now the second largest supplier of oil to China, with Nigeria, the Congo, Kenya, and other oil-producing states not too far behind. In 2005, China imported nearly 701,000 bpd of oil from Africa - approximately 30% of its total oil imports. This figure has been rising in recent years, and is estimated to reach some 40-50% in the next decade.

The full report - Thirst for African Oil: National Oil Companies in Nigeria and Angola - may be found here.

What's wrong with this picture?

Via Joshua Keating we learn that China's Economic Observer has put together the following map of overseas expansions by CNOOC, CNPC and Sinopec - China's three major oil giants. Click here to access the interactive version, which provides (only some) added information:

Now I don't know about you, but I find this map to be highly inaccurate, and not just because the African countries have been mislabeled. The map grossly under-represents China's oil ventures in Africa; it's quite laughable, really! As Keating aptly observes, Sudan, where CNPC has extensive and very controversial holdings is absent. So is Niger, Gabon, Ethiopia (Sinopec is especially active in both); my goodness, where is Angola? Or Chad, for that matter? Kenya, Equatorial Guinea, and Algeria are all conspicuously absent as well. I really could go on. And while I'm not especially well-versed in China's energy holdings and exploration activities in Latin America, I'd venture to guess that the map greatly underestimates its ventures there, as well.

To be perfectly honest I feel as though I must be missing something; as though the map is intended to highlight specific cases of China's overseas oil activities, for instance, or perhaps is otherwise well outdated. Unfortunately, neither appears to be the case. There's no indication of any singling out of countries, and the sentence which begins "With China's recent $7.2 billion acquisition of oil explorer Addax Petroleum...." indicates that this map is very recent (Sinopec bought Addax in June of this year). So why in the world would the Observer put together such a misguided map? Is the Chinese public so unaware of its country's overseas activities, or do they think we are?

Don't cry for me Latin America. Yet.

While this blog is mostly devoted to issues surrounding the Sino-African partnership, one must not forget that China is similarly active in other regions of the world, most recently Latin America. China's strategies in Latin America seem to differ little from those employed in Africa, with 'oil-for-infrastructure' deals, tech investments, extensive bilateral trade agreements, and the influx of cheap Chinese goods as the wooing tactics of choice. Trade between China and Latin America soared from $10 billion in 2000 to $140 billion in 2008.

As is true of Africa, Beijing's main interest in Latin America is the guaranteeing of access to the region's raw materials - oil, soybeans, copper, iron ore, etc. - to fuel its continued rapid growth. Yet as is also true in Africa, China's ambitions are also grandly geopolitical. According to Tyler Bridges:

China is beefing up its embassies throughout Latin America, opening Confucian centers to expand Chinese culture, sending high-level trade delegations throughout the region and opening the door for ordinary Chinese to visit Machu Picchu, Rio, and other tourism hot spots.

Aiping Yuan came to Rio de Janeiro from Beijing in 1997 on a lark, fell in love with the city, and decided to stay. She studied Portuguese, and when Brazilian President Luiz Inácio Lula da Silva made his first visit to China in 2004, she opened a small school in Rio to teach Mandarin.

She began with six students and today has 300, including senior executives at Petrobras, the country's biggest oil company, and Vale do Rio Doce, the biggest mineral producer. Both have growing business with China.

"Chinese is the language of the future for Brazil," Yuan said with a big smile.

Chinese will be the language of more than just Brazil if Beijing's leaders have anything to do with it. As Bridges aptly observes, China is buying zinc from Peru, copper from Chile, and iron ore from Brazil. It's shipping equipment to Brazil, buses to Cuba, clothes to Mexico and cars to Peru. Chinese tech giants Huawei and ZTE are likewise grabbing business from established telecom suppliers across the continent, most prominently in Argentina, Chile and Colombia. Yet while China seemingly has a Latin America strategy (or perhaps a 'developing world' strategy more generally; it's hard to tell), Latin America doesn't appear to have a China strategy.

Writing in his excellent blog, Tom Pellman cites David Shambaugh who notes:

Latin America is acting toward China's expansion in the world in a reactive, disorganized or ad hoc fashion. When I asked Itamaraty (Brazil's foreign ministry) about its strategy on China, I got blank stares. There is no strategy.

Such a lack of strategy indubitably works to the detriment of Latin American states - as it does African nations which similarly lack much in the way of a policy of engagement with the eager Chinese - who stand to gain from Chinese investment. In Latin America, as much as in Africa, there are many benefits to be accrued from recent Chinese interest. Yet without a plan of action, it seems that China will walk away as the sole beneficiary when all is said and done.

On China as Africa's biggest arms dealer

I'm currently working on a paper examining Sino-Zambian relations, focusing especially on Chinese activity in Zambia's mining sector. I've been sitting on this project for quite some time, and finally managed to overcome what had been a most serious case of writer's block with the help of a lovely glass of Bandol (Tempier). Ok, fine, two glasses. In any event, while doing a bit of extra desk research, I happened upon an interesting piece in the recent edition of the Jamestown Foundation's China Brief. Author Richard Bitzinger writes:

China is now, on average, the world’s fifth largest arms exporter, after the traditional leading suppliers: the United States, Russia, France, and the United Kingdom. In fact, in 2007 it was fourth in terms of global arms transfer agreements, ahead of France, Germany and Spain.

Nearly all of China’s arms transfers are to developing countries, and in this arena the Chinese defense industry is emerging as a formidable competitor. In fact, China ranked third in terms of arms deliveries to the developing world in 2007. China's largest markets are in Asia, the Middle East, and particularly Africa. In fact, during the period 2004-2007, China was the single largest seller of arms to Africa; and its major customers include Pakistan, Egypt, Bangladesh, Iran, Zimbabwe, and Zambia.

Leading Chinese weapons exports (to Africa) include:

• The K-8 trainer jet: China has exported nearly 250 of these lightweight trainer/attack jets since 2000, according to the Stockholm International Peace Research Institute (SIPRI) database on arms transfers. Its biggest client has been Egypt, which bought 120 K-8s, most of which were assembled locally from kits, between 2001 and 2008. Other customers include Ghana, Pakistan, Sri Lanka, Sudan, Zambia, and Zimbabwe, while Venezuela is in negotiations to purchase up to 24 K-8s.
• The F-7MG fighter jet: This aircraft is the export version of the People's Liberation Army (PLA) Air Force’s F-7E, itself an upgraded adaptation of the MiG-21. The F-7MG features a larger wing and, reportedly, a British radar. China has sold more than a hundred of these fighters to Bangladesh, Namibia, Nigeria, Pakistan, and Sri Lanka, according the SIPRI Arms Transfers database, since the mid-1990s.
• The WZ-551 armored personnel carrier: Although not a particularly high-tech system, the WZ-551 is notable for being sold widely around the world, including countries like Argentina, Gabon, Kenya, Kuwait, Nepal, Oman, Sri Lanka, Sudan, and Tanzania

It remains difficult to gauge how successful China will be in the global arms marketplace, with countries like the U.S. and Russia out-exporting the country by rather wide margins (in 2007, for example, Russia exported $4.6 billion worth of arms - four times as much as China. Even Germany out-exported China by 60%). Yet China's foothold in the African marketplace appears to be quite favorable. In Zambia, for instance, China's North Industries Corp. (NORINCO) is allegedly in talks to upgrade Zambia's T-59 tanks engines, armor and fire control systems. The Nigerian air force has been eyeing China's K-8 trainer aircraft (Nigeria imported Chinese J-7 fighters in 2006). Zimbabwe is equipped with Chinese K-8 trainers and J-7 fighters, and in early 2009 was negotiating the purchase of one squadron of FC-1 fighters from. Chinese arms now equip Angola, South Africa, Sudan, Algeria, Egypt, Kenya... the list goes on and on.

Chinese arms deals appear to be part and parcel of the "oil-for-infrastructure" deals China continues to strike across the continent. In Angola, for instance, arms are sold in exchange for the country's oil. In Zambia, copper is the currency of choice. While some argue that Chinese arms sales to Africa will drop once China acquires a satisfactory supply of natural resources, such claims are highly dubious. What constitutes a "satisfactory supply" for a country with massive energy demands? What's more, it's rather doubtful that China will be so foolish as to bypass a booming export market. If nothing else, the Chinese are exceptionally savvy businessmen, and arms sales to Africa is a brilliant business opportunity. While China may not be supplanting or joining the U.S. and European states as a large supplier of sophisticated arms on a global scale anytime soon, they have seemingly already done so - and continue to do so - in Africa.

Iraqi oil goes to China

Via Forbes we learn that a week after China was granted a license to develop Iraq's largest known oilfield, CNPC, Sinopec and CNOOC - three major Chinese oil companies - are already warming up to bid for 11 other oil and gas field contracts in Iraq that will be auctioned off later this year:

Chinese oil giants have turned to Africa and other developing countries to explore oil. With 115 billion barrels in proved remaining recoverable reserves, about 10% of the global total, Iraq has the world’s third-largest oil reserve after Saudi Arabia and Iran, and is China’s latest investment target.

To avoid unnecessary political pressure and to increase their chances to win the unprecedented oil projects, China Daily said Chinese companies might team up with foreign companies to form consortia to bid in Iraq’s second auction, continuing the strategy they used in the first round.

All the three Chinese major oil enterprises, paired with different overseas partners, took part in the bidding for all six oilfields and two gasfields contracts last Tuesday at Iraq’s first auction since the U.S.-led invasion.

More on international land purchases (and what to do about them)

Further to last week's post on international land purchases in developing countries (mainly in Africa, really), an interesting piece in today's VoxEU suggests that such purchases could be good news "if the objectives of the land purchasers are reconciled with the investment needs of developing countries." Quite an obvious statement, really, but how does one go about ensuring that this is the case?

According to authors Denis Drechsler and David Hallam:

Apart from improving the conditions of land deals, several looser contractual arrangements should also be considered. In fact, the purchase and direct use of land resources is only one strategic response to the food security problems of countries with limited land and water. A variety of other mechanisms can offer just as much – or even higher – security of supply, such as contract farming and out-grower schemes, bilateral agreements including counter-trade, and improvement of international food market information systems.

Investment could be in much-needed infrastructure and institutions that currently constrain agriculture in developing countries, especially in Sub-Saharan Africa. This, together with efforts to improve the efficiency and reliability of world markets as sources of food could raise food security for all concerned through an expansion of production and trade possibilities.

What Drechsler and Hallam are effectively proposing is a "binding code of conduct" which would govern land purchases, as well as a thorough search for alternatives, as noted above. What neither they nor anyone else have been able to tease out, however, is what a regulatory framework will look like, should there be one. Will each recipient state have the authority to establish its own guidelines, or will they be enforced through an agency like the UN FAO, for instance?

While many questions abound, it's heartening to see that the debate on land purchases and food security is finally being brought to the forefront, where it arguably should have been several years ago.

A regulatory framework for international farmland deals in Africa

It would seem that I have inadvertently been placed on Columbia University's Vale Center mailing list. Yet unlike other mailing lists from which I generally unsubscribe as quickly as is humanly possible, I think I'll stick around on this one. The Center's most recent publication is both quite interesting and timely, speaking as it does to the issue of international farmland deals in Africa. An excerpt:

Trends in foreign direct investment in land for agriculture reflect deep global economic and social transformations, with potentially profound implications for the future of world agriculture. The role of food in human consumption makes it fundamentally different from other commodities. In many parts of the world, land is central to identity, livelihoods and food security, and decisions taken today will have major repercussions for many, for decades to come. While bilateral negotiations are unfolding fast, there is a need for vigorous public debate in recipient countries, so as to base decisions on strategic thinking about the future of agriculture, the place of large and small-scale farming within it, and the role and nature of outside investment.

This couldn't be more on the mark. As I've noted in earlier posts (see here and here), 'land grabs' by foreign entities are becoming a growing threat to the (often customary) land rights of citizens, and in many cases fail to provide any benefit to the host communities - economic or otherwise. In light of this, it behooves recipient governments to establish regulatory frameworks governing such transactions. The costs of not doing so are too high.

Well done, Vale Center. I look forward to receiving more updates.

PS. Further to the issue of 'land grabs,' it would appear that Tsvangirai's niece is trying to pull off one of her own ...

China's place in the international aid architecture

Deborah Brautigam has a truly great and thought-provoking article on the ways in which China is challenging the international aid architecture (with significant focus on sub-Saharan Africa). According to Brautigam, it's not as doom and gloom as one might be inclined think:

... unlike the West, which buys oil in places like Angola without much caring how the government uses the revenue generated, Beijing buys Angola's oil while ensuring that the purchase price goes to pay its companies to build infrastructure. This is the essence of "win-win," as proposed by the Chinese in their African engagement.

While China's development program is indubitably flawed in many ways, it appears to be quite right in many others. What's more, Chinese foreign aid - largely in the form of oil-for-infrastructure contracts - is an attractive alternative for recipient states which are in dire need of infrastructure (and likewise tired of the Western ways of doing things). As Brautigam aptly observes, China's development aid reflects, among other things, its understanding and assumptions about the road out of poverty. As such, it stands as a challenge to the traditional aid architecture.

A global ban on plastic bags?

An idea to ponder:

Single-use plastic bags, a staple of American life, have got to go, the United Nations' top environmental official said Monday.

Although recycling bags is on the rise in the United States, an estimated 90 billion thin bags a year, most used to handle produce and groceries, go unrecycled. They were the second most common form of litter after cigarette butts at the 2008 International Coastal Cleanup Day sponsored by the Ocean Conservancy, a marine environmental group.

"Single use plastic bags which choke marine life, should be banned or phased out rapidly everywhere. There is simply zero justification for manufacturing them anymore, anywhere," said Achim Steiner, executive director of the U.N. Environment Programme. His office advises U.N. member states on environmental policies.

Bans on the use of plastic bags are already quite mainstream in other parts of the world. In the UK, for instance, Marks & Spencer charges customers 5p for each plastic bag they use, with the money raised going to an environmental charity. Evidence from China likewise suggests the positive waste-eliminating effects of banning plastic bags. Perhaps it's time for other countries to jump on the BANdwagon, too (sorry, I couldn't resist).

Photo credit: Indigo Shire Council

Raising the bar on corporate social responsibility

In 1995, Nigeria's authorities executed Ken Saro-Wiwa, an environmental activist and a member of the Ogoni ethic group in the Niger Delta, whose land was being targeted and destroyed by the oil extracting activities of Royal Dutch Shell. At the height of his non-violent campaign, Saro-Wiwa was arrested along with nine other anti-oil campaigners. All were tried by a military tribunal and hanged by the Nigerian military government of General Sani Abacha. The charges were entirely politically motivated. 

This devastating human tragedy provoked much outrage and raised many important questions, the most crucial of which had to do with the human rights responsibilities of multinational corporations, especially when working in conjunction with corrupt national governments. In 1996, relatives of the nine executed campaigners brought a case to hold Shell accountable for alleged human rights violations in Nigeria, in Ogoniland in the Niger Delta in particular. The case accused Shell of being complicit in murder, torture and other abuses by Nigeria's former military government against campaigners in the region.

While the case was set to go to trial at the beginning of this month, Shell on Monday agreed to pay $15.5 million to settle the case. Shell continues to deny any wrongdoing, touting the settlement as a "humanitarian gesture" meant to compensate the plaintiffs for their loss and to cover a portion of their legal fees and costs. Regardless, the settlement indubitably brings a long-awaited peace to the families of the victims. Ken Saro-Wiwa Jr., son of the executed activist, had a moving piece in yesterday's Guardian in which he wrote: 

Nothing about this has come or will ever come easy. Every word, every phrase and every comma has been weighed, scrutinised and debated. These are life and death matters. Head versus heart. The case has been freighted with all kinds of agendas that it cannot possibly satisfy. In the end a settlement is a compromise; both parties agree to settle their differences by meeting in a so-called middle. That middle is a matter of perspective of course. To some this must be bewildering. To others it was too long in coming. In the end it is only those who are intimately involved, who have everything to lose and everything to gain that have to make a decision that will not satisfy everyone.

History will show that this was a landmark case. Multinationals now know that a precedent has been set, that it is possible to be sued for human rights violations in foreign jurisdictions.

Indeed, the significance of the settlement lies precisely in the fact that the bar for corporate social responsibility has been firmly set, sending multinationals a clear signal that their activities vis-a-vis local populations in the regions in which they work will be under close scrutiny. Surely a step in the right direction.

New research on Sino-Timorese relations

A new report on China's relations with East Timor by Loro Horta has recently been published by France's Institut de Recherche sur l'Asie du Sud-Est Contemporaine (Research Institute on Contemporary Southeast Asia). The report traces the alleged successes and limitations of China's strategy in East Timor and hopes to:

[...] shed some light not only on the intricacies of relations between the two countries, but also on China’s relations with other small, poor but resource rich countries like Timor-Leste. Finally it is the hoped by the author that the current article may give a modest contribution to the study of China’s foreign relations and its diplomacy in the developing world.

The report is written from quite an IR realist perspective, though does well to highlight several consistencies in China's "go out" policy and the nature of its bilateral relations with developing states, particularly insofar as its oil and energy, infrastructure, and technology investments are concerned.

More on contemporary land grabs: the case of the DRC

A brief follow-up on my previous post, if I may.

While it is true that the vast majority of farmland investments in Africa are those of foreign entities, this is not always the case as an interesting piece in the WSJ makes clear:

[South African farmers] are scrambling to get on board an ambitious venture to reclaim farmland in Congo's interior and help relieve that country of a reliance on food imports. Already some 70 farmers have booked a Congo tour and more than 3,000 have expressed interest, said Agri-SA, the South African farming group organizing the venture.

... According to a draft memorandum of understanding, Congo is willing to sign long-term leases and provide tax breaks and waivers on duties of imported supplies for approved projects. The South Africans in turn would build infrastructure, employ locals and instruct them in modern farming techniques. People familiar with the matter say the initial focus will be on restarting state-owned farms abandoned in 1992.

... South African commercial farmers, mostly the descendants of Dutch and French pioneers who began settling the continent's southern tip centuries ago, are renowned for their ability to coax food out of African soil. Eager for their expertise and capital, African countries from Ghana to Nigeria have offered them incentives to set up shop. South African farmers have turned Mozambique into a banana powerhouse. Zambia became self-sufficient in maize after welcoming farmers from Zimbabwe and from South Africa.

As with foreign (i.e. non African) land investments/grabs, such programs are equally controversial, as they raise the very same issues of land tenure, colonialism, and eviction as do those by China, the United States, Saudi Arabia or any other countries. According to the contract governing the investment, South African farmers will enjoy a five-year holiday on corporate tax and the dismantling of taxes on the import of agricultural inputs such as seeds, fertilizer and machines. The farmers will be allowed to take all their profits out of the country and are under no obligation to sell their output on the domestic market. Oh dear.

[HT: The Meaningfulness of Little Things]

Land grabs in poor countries: blessing or curse?

Apologies for my recent absence: I dashed off to Nantucket for the Memorial Day weekend and - to be perfectly frank - postponed my return to the 'real world' (for me part of which entails blogging) for as long as humanly possible thereafter. It was such a lovely time! Alas, one can only put off the inevitable for so long, so here I am: back at long last.

While doing a bit of sunbathing on the beach over the weekend, I happened to stumble across an excellent overview of the issues surrounding present-day land grabs (or "outsourcing's third wave") in last week's Economist. I wrote about this matter earlier this month when a similar story appeared in Canada's Globe & Mail, though I feel the Economist does a much better job of teasing out the issues at stake.

As the Economist piece aptly observes, land grabs are particularly common among countries that export capital but import food (think the U.S. and China, for instance). Countries such as these outsource their farm production to countries that need capital but have land to spare; the vast majority of which are found in Africa (see map). And while investments in foreign farms are not a new phenomenon, there are several factors that differentiate today's 'land grabs' from those of the past, foremost among which is the scale (in Sudan, for instance, South Korea has signed deals for 690, 000 hectares! Before, a 'big' land deal use to be around 100,000 hectares) and the fact that the investors are no longer private entities alone: governments (and their state-run enterprises) have now likewise taken to investing in global farmland. China, for instance, has set up 11 research stations in Africa to boost yields of staple crops, and has secured several large deals across the African continent.

Duncan Green writes: 

The obvious motives for the deals are the spike in food prices and the subsequent decision of governments in several key producer countries to restrict their exports, threatening the food security of food importing countries such as the Gulf states, China and South Korea (the main participants in the deals). However, water shortages are another, hidden driver. Peter Brabeck-Letmathe, the chairman of Nestlé, claims: “The purchases weren’t about land, but water. For with the land comes the right to withdraw the water linked to it, in most countries essentially a freebie that increasingly could be the most valuable part of the deal.” He calls it “the great water grab”.

According to a newly released report by the International Fund for Agricultural Development and the Food and Agriculture Organization of the UN, farmland investments in the past five years total approximately 2.5m hectares - equal to about half the arable land of the UK. Other estimates posit the total farmland investments in Africa, Latin America and Asia at over 15m hectares, about half the size of Italy. While supporters of such deals argue that they are a tool for development, providing new seeds, techniques and money for agriculture, mounting evidence suggests they produce quite the opposite effect, driving out local farmers and in many cases depriving poor people of access to land, water and other resources.

Among the many underlying problems is that of the conflict between customary and statutory laws in the countries where the investments are transpiring. Writes the Economist:

Host governments usually claim that the land they are offering for sale or lease is vacant or owned by the state. That is not always true. “Empty” land often supports herders who graze animals on it. Land may be formally owned by the state but contain people who have farmed it for generations. Their customary rights are recognised locally, but often not accepted in law, or in the terms of a foreign-investment deal.

So the deals frequently set one group against another in host countries and the question is how those conflicts get resolved. “If you want people to invest in your country, you have to make concessions,” says the spokesman for Kenya’s president. (He was referring to a deal in which Qatar offered to build a new port in exchange for growing crops in the Tana river delta, something opposed by local farmers and conservationists.) The trouble is that the concessions are frequently one-sided. Customary owners are thrown off land they think of as theirs. Smallholders have their arms twisted to sign away their rights for a pittance.

The mechanisms for averting such losses would entail measures such as respect for customary laws, stable property rights, and increased transparency surrounding the land deals (among countless others, to be sure!). The trouble is that the majority of the countries which are party to today's land investments lack these very mechanisms and have been struggling with them for quite some time; in many cases decades. A potential solution might be the formulation of some international code, though I'm not quite sure as to what that would look like or what, exactly, it would entail. It would appear that our best option presently remains one of 'wait and see.'

P.S.  I doubt that this falls into the category of 'land grabs,' but the story does speak to the increased prevalence of the phenomenon of giving away land: touched by Biden's speech to the Bosnian parliament last week, a local farmer and war veteran offered Biden a piece of his land as a gift. Go figure.

Lula in Beijing to "defend a new economic order"

Brazilian President Luiz Inacio Lula da Silva arrived in Beijing today where it is expected that he and President Hu will strengthen bilateral relations between their two countries, promote oil contracts, strike deals on the sale of Embraer aircraft, and negotiate meat exports and biofuel for cars, among other top agenda items.

Already in March, China surpassed the U.S. as Brazil's biggest trade partner, and the trip seems to signal even further shifts in the global economic arena: namely, the U.S. out, China in. Or, perhaps more realistically - the U.S. down, but not (yet?) out; China up, and rising: 

"I think the trip that I am about to embark on... is one of the most important I am going on to defend a new economic order and a new commercial policy in the world," Lula told reporters before leaving Brazil.

Roberto Jaguaribe, a Brazilian foreign ministry official, said last week the trip represented a "reorganisation of the international scene" in which the top emerging economies were playing a bigger role in world affairs.

Among the more curious agenda items to be discussed between Lula and Hu is Lula's proposal that the countries conduct bilateral trade through each nation's currency, removing the U.S. dollar as an intermediary. Silva has been urging the end of the use of the American dollar in South American trade for some time now, suggesting such a move would reduce transaction costs for both exporters and importers, especially those operating on a smaller scale. Brazil and Argentina have agreed to trade with each other using their own currencies, and China and Argentina have likewise agreed to establish a 70 billion yuan ($10.24 billion) currency swap system that will enable trade between the two nations to be settled in Chinese currency. Might we be witnessing the gradual usurping of the U.S. dollar as the world's currency reserve by the Chinese yuan?

Such a reality may still be some way off, but the Chinese are slowly laying the ground for the yuan's ascendance, one bilateral negotiation at a time.

Chinatown, Angola

A superb video from Current TV examining the growing presence of Chinese in Angola. While the video's focus remains largely on China's infrastructure projects across the country, it nevertheless does a great job touching upon the variety of sectors in which the Chinese have become quite active. The video itself is somewhat lengthy, but certainly worth a viewing for those seeking to gain a better sense of 'China in Africa' (or Angola, as the case may be):

HT: Africa is a Country