Economic cooperation without jobs creation is a very dangerous affair

John Mashaka

  Amid global thirst for energy and natural resources, Tanzania and Africa is the new frontier attracting global economic giants in the name of partnership and friendship. Africa’s natural resources are being siphoned out in exchange for nothing that would haul its people out of poverty Former Chinese President Hu Jintao landed in Tanzania in 2009, to promote economic cooperation. He was followed by his successor President Xi Jinping, who signed various economic cooperation agreements with Africa’s resource rich nations including Tanzania

   In what was viewed as tactic to counter Chinese growing influence, President Obama, early last month, led a high powered American business delegation into Tanzania for an economic exploration mission, in which he promised a new chapter that would bring to an end the country’s foreign aid reliance, while enabling it and the rest of Africa to be more self-reliant. President Obama dubbed his trip as a trading partnership mission. Hundreds of millions of Chinese are living below the poverty line. It is, therefore, natural for their government to cater for their needs before thinking of Africans; rather, China is singing a very sweet but costly love song to the authorities across the continent; financial and economic cooperation tune, in which the Chinese are infusing in excess of $14.7billion dollars annually, but at what cost?

     Made in China goods, and Chinese workers have literally taken over Tanzania’s market; many businesses are either stocking Chinese “hazardous” products, or are being run by semi-literate Chinese experts. China is exporting and dispersing its poorest nationals across the continent. They are everywhere within Tanzania competing with small scale traders trying to put food on the table. They are driving Tanzania’s small scale traders out of business due to their financial advantage; small loans provided by their government. They are killing domestic innovation with their cheap imported goods, along with those that are illegally manufactured in residential makeshift factories. An extremely costly affair.

    Chinese financed infrastructural projects in Tanzania are performed by Chinese nationals, and so are the major construction contracts. Nonetheless, all the construction materials come from China; which means all Chinese aid money (loans) goes back to China. All this notwithstanding, China’s export from Africa is primarily natural resources ranging from natural gas to industrial raw materials. It is the winner takes it all situation. After many years of America’s foreign aid to Tanzania, President Obama announced a new model that would bring about economic revolution; energy revolution that will see the darkest parts of the country light-up. Power to drive the economic engine, power to enable Tanzania stand on its own; Power to setup factories that will give equal economic opportunities to every Tanzanian

     Many hope and believe that the $7billion announced by President Obama will not be a backdoor strategy to strip the continent of its resources. It will, I suppose, create value for American companies while at the same time creating jobs and manufacturing factories across Tanzania. It will enable Tanzania companies, and their finished goods penetrate into the American market. This is what trade is all about. Colonial regimes focused on finding and exploiting the most profitable natural resources in each territory.In mineral-rich colonies, the emphasis was placed on mining. In other territories, they sought agricultural products that were sought-after in Europe. In either case, the priority was on developing the resources for their home countries, not for local use or consumption.

    Profits from the export of natural resources and other raw materials were also sent to Europe. And that is exactly what is happening in Africa today. From Tanzania to Angola, the problem is the same. Africa is being stripped of its potential; potential for industrial revolution, and the dream for economic prosperity. Tanzania and the rest of Africa need American and Chinese financial-economic cooperation to enable it build its own capacity that will create jobs for millions of youth looking for work, and not for the resettlement of landless and jobless Chinese.  

   China’s “potentially explosive” population raises a concern for leaders who are envisioning many years ahead without jobs and sufficient land, and Africa seems to be a viable option to ease social, political and economic storm on the horizon; Modern-day economic colonisation and exploitation, likely to ignite another dangerous chapter of confrontation between the jobless and the settlers in Africa. Foreign direct investment is meant to enable a country expand its foreign markets access, increase government revenues, boost research, and facilitate development of local know how and resources. Foreign investors and multinationals are often welcomed to create jobs, not to eliminate or compete for jobs. Thus, economic partnership we are forging today will be pitting Tanzania population into a dangerous collision course in the near future.