The impact on governance
Contrary to widely held beliefs, there is no evidence that the emerging partners have worsened corruption in Africa (Box 6.8). In fact, there are signs that it may improve national control over the development agenda in some instances.
Kragelund (forthcoming) discusses the impact of the changes of recent years on African ownership over development policies. Ownership is taken to mean using resources to fund a country’s own priorities rather than those of donors (UNCTAD, 2007).26 A first step in the process is forming national strategies that specify clear targets, key policy instruments and effective monitoring mechanisms. Ownership is also linked to the notion of “policy space”, which essentially refers to the ability of a state to define its own tailor-made development goals that reflect specific challenges and the availability of resources to attain these goals (UNCTAD, 2007). The new modes of finance and co-operation offered by the emerging partners and the growth-engine effect resulting from eastward and southward shifts in the global economy’s centre of gravity both have a positive impact on control over the national agenda.
Box 6.8. Governance indicators: no evidence of worsening as China steps up its engagement
A widespread concern, especially among traditional partners, is that emerging partners – especially China – might harm good governance in resource-rich African countries, and by extension their ability to turn the resource curse into a boon. There is no such evidence when looking at how two of the best known indicators have evolved over the last decade.
When comparing the 2002 and 2009 scores of the Kaufmann, Kraay and Mastruzzi’s Governance Indicators on i) corruption and ii) regulatory quality for all 16 sub-Saharan African countries defined by the IMF (2007) as hydrocarbon or mineral rich, she finds:
- Mauritania is the only country that scored significant negative changes on both indicators – but China has not been very involved in the country’s resource industry.
- In Nigeria, where resources have attracted substantial Chinese engagement, the change in regulatory quality is positive.
- In all other countries, neither a positive nor negative change has been seen.
The Mo Ibrahim Index measures the delivery of public goods and services to citizens. It lists Angola and the DR Congo among the six countries with the biggest positive change in their score between 2001/02 and 2008/09. The largest increase is reported for Angola and Liberia (+ 15.9 points), Sierra Leone (+ 8.9 points), Burundi (+ 8.1 points), Congo-Brazzaville (+ 6.7 points) and DR Congo, and Zambia (+ 5.5 points). The strong increase for Angola and DR Congo are particularly noticeable, as both countries concluded huge resource-for-infrastructure deals with China.
Source: Wolf (forthcoming)
Co-operation with emerging partners is sometimes described as having “no strings attached” and perceived to increase the policy space of African governments through the funds and increased competition among donors. Some subtle form of conditionality exists in Chinese aid, nonetheless. Chinese aid for infrastructure is often tied to the use of Chinese contractors, inputs and labour. But while economically tied, development co-operation by emerging partners is not explicitly bound to policy conditionality. Even though no simple picture of the relationship between emerging partners and policy space can be drawn, on the whole emerging partners contribute more to the opening of policy space for resource rich, creditworthy African countries (Kragelund, forthcoming).
Positive impacts from the emerging partners’ investment flows include making domestic resource mobilisation easier for resource-rich African economies through the commodity boom (OECD and AfDB, 2010). This can help important public investment by reducing the cost of finance, paving the way for greater policy autonomy. Besides, emerging partners’ own development experiences point to a multiplicity of potential routes thereby enlarging the pool of paradigms and options that African governments can choose from.
Co-operation with emerging partners is popular among African nations as the infrastructure, government buildings and stadiums are more visible, are built faster and are perceived to be more cost-effective, and less bureaucratic than aid from traditional donors. This report’s country note for Benin shows emerging partners targeting the needs identified by the country itself, with faster turnaround than other partners. Similarly, the country note for Burundi reports fast aid disbursement from China. Following a Chinese pledge in November 2006 to build 30 hospitals in Africa, Burundi submitted a request. Work on a first hospital started in May 2009 and was completed in 18 months. In Guinea-Bissau, the AEO reports that China supplied ready-made projects and delivers faster than traditional partners. Authorities consider bilateral co-operation with emerging partners to be less administratively burdensome than with traditional partners, a statement with which the country note for Malawi concurs.
The availability of additional funds is used by African governments to increase policy space, rather than switch between donors, barring a few exceptions such as Zimbabwe. The Burundi country note in this report indicates that new partners such as China have given the government more flexibility in its dealings with donors. For instance, while most partners stopped their co-operation and repatriated their representatives during the 1993-2005 civil war, China stayed on, giving Burundi breathing space during this difficult period. China and Angola have intensified relations, highlighted by several oil-backed loans and credit from China Exim Bank and China Development Bank after 2002. But China has not monopolised Angola’s foreign policy. Angola uses its growing economic power to negotiate with other actors (Tan-Mullins et al., 2010). In a similar vein, the Democratic Republic of Congo government has sought to renegotiate its agreement with international actors based on an accord with China Exim Bank to finance infrastructure (Henderson, 2008; UN OSAA, 2010). According to Gabas (2009), the power of African negotiators to renegotiate the Cotonou Agreement with the European Union has been boosted by the presence in Africa of countries such as China.
Emerging partners tend to give priority --and with it, ownership over development policies-- to the president’s office rather than dealings with line ministries (Figure 6.12; see also this report’s notes on Burkina Faso and Morocco). By contrast, traditional partners have generally dealt with ministers and high-level officials. While the Poverty Reduction Strategy Paper era started a process of decentralising ownership within African countries, the emerging partners may have initiated a reverse process towards centralisation. In Lesotho, the AEO reports that the civil society organisations view China’s approach to aid with suspicion, especially noting a lack of transparency. In Chad, complaints were heard about the opacity of the deals.
Figure 6.12: To what extent is each local stakeholder involved in the partnership with emerging partners? (average score)
The positive effect of emerging partners on African policy autonomy is greatest for resource-rich countries, which benefit from significant investment flows and the ability to renegotiate existing deals with traditional partners (Kragelund, forthcoming). Since emerging partners’ dependence on African imports is increasing rapidly – faster than that of traditional partners (UN OSAA, 2010) – primary commodity-exporting African countries may gain further policy space, which could increase their negotiating power vis-à-vis traditional partners. But rising commodity prices are not all good news. First, although the demand-led commodity price boom – the so-called “super-cycle” – may continue for a long time (UN OSAA, 2010), commodity prices still tend to fluctuate which reduces policy autonomy (Akyüz, 2008). Second, the commodity boom may postpone necessary reforms. Third, while the availability of cheap loans with relatively long grace periods may finance crucial investments, these loans still have to be repaid.