Behind IMF’s Resentment of Congo-Chinese Deal

The war stricken, resource rich state, The Democratic Republic of Congo took many by surprise in 2007 when the government clicked the $9 billion deal with China, which is meant to lay down the infrastructure that the country needs badly to get its economy ticking. Under this deal, Exim Bank of China has promised to finance major infrastructure, which includes ‘about 2,400 miles of road, 2,000 miles of railway, 32 hospitals, 145 health centres and two universities’ as well as other electricity and water supplies. In exchange, the Chinese will establish a joint mine venture with Congolese miners, 68 % of which they will obtain to put their hands on the copper, coltan and cassiterite that their high tech industry is starving for.

Since the start, the agreement has been viewed with scepticism, especially by Western donors and lenders, mainly International Monetary Fund (IMF), which asserts that the deal will augment DR Congo’s debt hill. Some development partners even go farther by claiming that what the Chinese government is trying to achieve is neo-colonialism. On the contrary, some critics claim ‘that kind of colonization might be worth thinking about’ considering how the planned infrastructure could change lives in Congo. Recently, the Congolese government announced that they will go on with the deal in spite of IMF’s threat that it will suspend its programs in the country with the implication that Congo will not receive any debt relief.

IMF appears concerned that such a deal will further complicate Congo’s situation by piling on to its already rooftop debt. There is, however, a reasonable doubt if this is IMF’s real interest or if it is a cover for its attempt to protect the chances of Western multinationals from loosing their grip in accessing Congo’s resources. It is no secret that IMF’s interest in Africa is far from developing the continent but rather opening holes to ‘Western penetration and increase exports of primary goods to wealthy nations’, as Asad Ismi puts it. This has been so obvious recently through the failed Structural Adjustment Programs (SAPs) and Poverty Reduction programs that have pushed the poor Africans to worst conditions.

The case in Congo projects the worst case. Congo’s land is the largest reservoir for precious minerals, including 80% of the most sought after mineral in our era of technology –namely Coltan, which is essential in the making of cell phones, computers, VCRs and so on. The increase in demand for such minerals has fuelled the devastating war in DR Congo that has been consumed the lives of many civilians and put the future survival of the country in a big question mark. The civil war, enflamed by neighbouring countries Rwanda and Burundi, has been one of the least covered crises in the media. Why? Ali Malau’s critical analysis of why Congo has come to be what it is today in an article The Case for Congo answers the question as follows:

…over the past five decades, ….countries, (including supposed champions of the rule of law like The United States, Canada, Australia, the United Kingdom, Belgium, France and South Africa), have allowed their mining companies (like Banro, Freeport-McMoran, Anglo American, DeBeers, and others) to enter into odious contracts with corrupt elements of the leadership in Kinshasa, and worse, with murderous warlords, and near-genocidal militias, unhindered, and unpunished. Furthermore, several of these very countries and their corporations have provided the military [with] logistical and ideological support to the secessionist regimes in the 60’s and 70’s, Rwanda, Uganda, Angola, their proxy militias AND/OR their rival militias, thus destabilizing and creating a de facto partition of the country, and further guaranteeing maximized profits through cheap/slave/child labor under warlords.

This makes it clear why IMF is not happy with the Chinese-Congo deal. It is an unhidden secrete that the prioritized mission of IMF is to keep the interest of the United States and its allies, which is manoeuvred by creating conditions that benefit Western companies and governments. United States has been the number one coltan importer, followed by China. If China’s deal with Congo works out well, the copper, the coltan and the cobalt will boost China’s high-tech industry, posing an unbeatable risk for its Western competitors.  The West doesn’t like this. So, the IMF has to hamper the deal, first appearing as the caring ‘development agent’ for the impoverished African nation. And now, the ‘care’ has changed to a threat. ‘If you go on with the deal, no debt relief for you!’

On the part of the Congolese officials, they explain that they chose to do business with the Chinese simply because the later proposed what seems to be a ‘win-win’ agreement, which will give Congo the infrastructure it needs for the exchange of its minerals.  In a recent interview, the President of Congo, Joseph Kabila explained that none of the Western governments and loaners including the IMF couldn’t come up with the amount of the money that they need to lay down the very infrastructure that they need desperately. The IMF will give them the loan, but just enough for survival, not a substantial amount that would guarantee a sustainable change. At this point, Kabila stated, Congo needs both the debt relief and the Chinese deal to get out of her problems.

The intentions of the Chinese investment in Congo are yet to be understood in the future. Yet, labelling it as a new colonial quest on the part of the Western rivals is farfetched specially considering that the work on the promised infrastructure will begin as soon as the deal is signed and 80% percent of the human power to be used is Congolese.  But the challenges are many, including how the plan will fit in the middle of the crisis, corruption and foreign meddling. The other issue that the Congolese people should look out for is the quality of the work the Chinese would deliver, considering that Chinese constructions in Africa tend to start cracking even before they are used.

Yohana Otite

Yohana Otite is the co-founder of BornBlack and writers on issues that revolve around the intersection of race, gender and class. Yohana also manages the Hamilton DiverseCity onBoard program at Hamilton Centre for Civic Inclusion.

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