How the United States can woo Africa away from China

On December 13, 2018, US National Security Advisor John Bolton, while speaking at the Heritage Foundation, highlighted the key aims and objectives of ‘Prosper Africa,’ which shall probably be announced at a later date. The emphasis of this policy, according to Bolton, would be on countering China’s exploitative economics unleashed by the Belt and Road Initiative, which leads to accumulation of massive debts and has been dubbed as ‘Debt Trap Diplomacy’. A report published by the Centre for Global Development (CGD) (2018) examined this phenomenon while looking at instances from Asia as well as Africa.

During the course of his speech, Bolton launched a scathing attack on China for its approach towards Africa. Said the American NSA:

bribes, opaque agreements and the strategic use of debt to hold states in Africa captive to Beijing’s wishes and demands.

Bolton, apart from attacking China, accused Russia of trying to buy votes at the United Nations through the sale of arms and energy.

Bolton also alluded to the need for US financial assistance to Africa being more efficient, so as to ensure effective utilization of American tax payer money.

The BUILD

It would be pertinent to point out that the Trump administration, while realizing increasing Chinese influence in Africa, set up the US IDFC (International Development Finance Corporation), which will facilitate US financing for infrastructural projects in emerging market economies (with an emphasis on Africa). IDFC has been allocated a substantial budget — $60 billion. In October 2018, Trump had signed the BUILD (Better Utilization of Investments Leading to Development) because he, along with many members of the administration, felt that the OPIC (Overseas Private Investment Corporation) was not working effectively and had failed to further US economic and strategic interests. Here it would be pertinent to mention that a number of US policy makers, as well as members of the strategic community, had been arguing for a fresh US policy towards Africa.

Two key features of IDFC which distinguish it from OPIC are, firstly, deals and loans can be provided in the local currency so as to defend investors from currency exchange risk. Second, investments in infrastructure projects in emerging markets can be made in debt and equity.

There is absolutely no doubt that some African countries have very high debts. Members of the Trump administration, including Former Secretary of State Rex Tillerson, had also raised the red flag with regard to the pitfalls of China’s unsustainable economic policies and the ‘Debt Trap’.

According to Jubilee Debt Campaign, the total debt of Africa is well over $400 billion. Nearly 20 percent of external debt is owed to China. Three countries which face a serious threat of debt distress are Zambia, Republic of Congo, and Djibouti. The CGD report had also flagged the precarious economic situation of certain African countries such as Djibouti and Ethiopia.

US policy makers need to keep in mind a few points:

Firstly, Beijing has also made efforts to send out a message that BRI is not exploitative in nature, and that China was willing to address the concerns of African countries. Chinese President Xi Jinping, while delivering his key note address at the China-Africa Summit in September 2018, laid emphasis on the need for projects being beneficial for both sides, and expressed his country’s openness to course correction where necessary. While committing $60 billion assistance for Africa, the Chinese President laid emphasis on the need for a ‘win-win’ for both sides.

African countries themselves have not taken kindly to US references to debt caused as a result of China. While Bolton stated that Zambia’s debt is to the tune of $6 billion, an aide to the Zambian President contradicted the US NSA, stating that Zambia’s debt was a little over $3 billion.

At the China Zhejiang-Ethiopia Trade and Investment Symposium held in November 2018, Ethiopian State Minister of Foreign Affairs Aklilu Hailemichae made the point that Chinese investments in Ethiopia have helped in creating jobs and that the relationship between China and Ethiopia has been based on ‘mutual respect’. The Minister also expressed the view that Ethiopia would also benefit from the Belt and Road Initiative.

During the course of the Forum of China-Africa cooperation in September 2018, South African President Cyril Ramaphosa had also disagreed with the assertion that China was indulging in predatory economics and this was leading to a ‘New Colonialism,’ as had been argued Malaysian Prime Minister Mahathir Mohammad during his visit to China in August 2018.

Washington DC needs to understand the fact that Beijing will always have an advantage given the fact that there are no strings attached to it’s financial assistance. To overcome this, it needs to have a cohesive strategy, and play to its strengths. Significantly, the US was ahead of China in terms of FDI in Africa in 2017 (US was invested in 130 projects as of 2017, while China was invested in 54 projects). Apart from this, Africa has also benefited from the AGOA program (Africa Growth and Opportunity Act), which grants 40 African countries duty free access to over 6000 products.

Yet, under Trump, the US adopts a transactionalist approach even towards serious foreign policy issues (the latest example being the decision to withdraw US troops from Syria) and there is no continuity and consistency.

US can explore joint partnership with allies

In such a situation, it would be tough to counter China, unless it joins hands with Japan, which has also managed to make impressive inroads into Africa, in terms of investments, and has also been providing financial assistance, though it is more cautious than China and has been closely watching the region’s increasing debts. Japan and India are already seeking to work jointly for promoting growth and connectivity in Africa through the Africa-Asia Growth Corridor. The US is working with Japan and India for promoting a free and open Indo-Pacific, and can work with both countries for bolstering the ‘Prosper Africa’ project.

Perhaps, Trump should pay heed to Defence Secretary Jim Mattis’ (who will be quitting in February 2019) advice where he has spoken about the relevance of US alliances for promoting its own strategic interests.

There are of course those who argue that US should find common ground with China for the development of Africa, and not adopt a ‘zero-sum’ approach. In the past both sides have sought to work jointly.

Conclusion

African countries will ultimately see their own interests, mere criticism of China’s economic policies, and the BRI project, and indirectly questioning the judgment of African countries, does not make for strategic thinking on the part of the US. The key is to provide a feasible alternative to China, along with other US allies, or to find common ground with Beijing. Expecting nuance and a long term vision from the Trump Administration, however, is a tall order.

Afternoon Tea: “Independent Indians and the U.S.-Mexican War”

This cross-border conversation had a broad and tragic context. In the early 1830s, following what for most had been nearly two generations of imperfect peace, Comanches, Kiowas, Navajos, and several different tribes of Apaches dramatically increased their attacks upon northern Mexican settlements. While contexts and motivations varied widely, most of the escalating violence reflected Mexico’s declining military and diplomatic capabilities, as well as burgeoning markets for stolen livestock and captives. Indian men raided Mexican ranches, haciendas, and towns, killing or capturing the people they found there, and stealing or destroying animals and other property. When able, Mexicans responded by attacking their enemies with comparable cruelty and avarice. Raids expanded, breeding reprisals and deepening enmities, until the searing violence touched all or parts of nine states.

This is from Brian DeLay, a historian at Cal-Berkeley. Here is a link.

Eye Candy: the five largest cities in each American state, as constellations

Yup, you read that correctly. Behold:

NOL map 50 states constellations
Click here to zoom

RCH: America and Russia use to be friends

It’s true, and it’s the subject of my latest Tuesday column over at RealClearHistory. Check it out:

The two future superpower rivals had more in common than mere future greatness, though. Both were expanding rapidly, gobbling up huge swaths of territory at the expense of isolated polities like the Khiva Khanate and the Sioux confederacy, and hapless autocracies like Mexico and the Ottoman Empire. Russia and the United States also shared common foes – France and the U.K. – due mostly to the fact that American and Russian expansion was beginning to step on French and British toes. Both empires – one democratic, the other autocratic – also had looming labor crises that overshadowed everything they did in international affairs: slavery and serfdom.

Yes, I’m writing about the widely-ignored Crimean War. Please, read the rest, and don’t forget to tune in Friday for ten cool facts about the Crimean War!

RCH: The United States and the Middle East

My latest for RealClearHistory is all about ‘Murica and the Mideast. An excerpt:

2. The Iranian Regime. During the Cold War, the U.S. government supported a number of regimes that were illiberal in the name of fighting communism. The necessity of such tactics are beyond the scope of this article, but the Pahlavi “dynasty” of Persia was one such illiberal regime. The Pahlavis were anti-Communist and pro-Western, which meant that women could dress how they pleased and go to university, and that religion was pushed to the sidelines of political life. This made the Pahlavi’s enemies of not only the socialist reformers of Persia, but also the majority of the conservative religious clergy. One Pahlavi was ousted by a joint British-Soviet invasion in 1925, and his son was deposed in the 1979 revolution that turned Persia into Iran. After the British-Soviet invasion, the United States became heavily involved in Persia and supported the secular autocrat almost blindly, which is why the anti-Shah revolution of 1979 was also anti-American.

Please, read the rest.

Eye Candy: garbage versus trash (American dialects)

NOL garbage versus trash USA

I’ve always said “garbage,” but down here in Texas they use the word “trash.” I have no idea where I found this, and I can’t verify the source, but it looks right to me.

Any contrary arguments about this map?

The Real Cost of National Health Care

Around early August 2018, a research paper from the Mercatus Center at George Mason University by Charles Blahous made both the Wall Street Journal and Fox News within two days. It also attracted attention widely in other media. Later, I thought I heard sighs of satisfaction from conservative callers on talk show radio whenever the paper came up.

One figure from the study came and stayed at the surface and was quoted correctly many times (rare occurrence) in the electronic media. The cost of what Senator Sanders proposed with respect to national health care was:

30 trillion US dollars over ten years (actually, 32.6 over thirteen years).

This enormous number elicited pleasure among conservatives because it seemed to underscore the folly of Senator Bernie Sanders’ call for universal healthcare. It meant implicitly, federal, single-payer, government-organized health care. It might be achieved simply by enrolling everyone in Medicare. I thought I could hear snickers of relief among my conservative friends because of the seeming absurdity of the gigantic figure. I believe that’s premature. Large numbers aren’t always all they appear to be.

Let’s divide equally the total estimate over ten years. That’s three trillion dollars per year. It’s also a little more than $10,000 per American man, woman, child, and others, etc.

For the first year of the plan, Sanders’ universal health care amounts to 17.5% of GDP per capita. GDP per capita is a poor but not so bad, really, measure of production. It’s also used to express average gross income. (I think that those who criticize this use of GDP per capita don’t have a substitute to propose that normal human beings understand, or wish to understand.) So it’s 17.5% of GDP/capita. The person who is exactly in the middle of the distribution of American income would have to spend 17.5% of her income on health care, income before taxes and such. That’s a lot of money.

Or, is it?

Let’s imagine economic growth (GDP growth) of 3% per years. It’s optimistic but it’s what conservatives like me think is a realistic target for sustained performance. From 1950 to 1990, GDP per capita growth reached or exceeded 3% for almost all years. It greatly exceeded 3% for several years. I am too lazy to do the arithmetic but I would be bet that the mean annual GDP growth for that forty-year period was well above 3%. So, it’s realistic and probably even modest.

At this 3% growth rate, in the tenth year, the US GDP per capita will be $76.600. At that point, federal universal health care will cost – unless it improves and thus becomes more costly – 13% of GDP per capita. This sounds downright reasonable, especially in view of the rapid aging of the American population.

Now, American conservative enemies of nationalized health care are quick to find instances of dysfunctions of such healthcare delivery systems in other countries. The UK system was the original example and as such, it accumulated mistakes. More recently, we have delighted in Canadian citizens crossing the border for an urgent heart operation their nationalized system could not produce for months: Arrive on Friday evening in a pleasant American resort. Have a good but reasonable dinner. Check in Sat morning. Get the new valve on Monday; back to Canada on Wednesday. At work on the next Monday morning!

The subtext is that many Canadians die because of a shortage of that great free health care: It nice if you can get it, we think. Of course, ragging on the Canadians is both fair and endlessly pleasant. Their unfailing smugness in such matters is like a hunting permit for mental cruelty!

In fact, though, my fellow conservatives don’t seem to make much of an effort to find national health systems that actually work. Sweden has one, Denmark has one; I think Finland has one; I suspect Germany has one. Closer to home, for me, at least, France has one. Now, those who read my blogging know that I am not especially pro-French or pro-France. But I can testify to a fair extent that the French National Healthcare works well. I have used it several times across the past fifty years. I have observed it closely on the occasion of my mother’s slow death.

The French national health system is friendly, almost leisurely, and prompt in giving you appointments including to specialists. It tends to be very thorough to the point of excessive generosity, perhaps. Yes, but you get what you pay for, I can hear you thinking – just like a chronically pessimistic liberal would. Well, actually, Frenchmen live at least three years longer on the average than do American men. And French women live even longer. (About the same as Canadians, incidentally.)

Now, the underlying reasoning is a bit tricky here. I am not stating that French people live longer than Americans because the French national healthcare delivery system is so superior. I am telling you that whatever may be wrong with the French system that escaped my attention is not so bad that it prevents the French from enjoying superior longevity. I don’t want to get here into esoteric considerations of the French lifestyle. And, no, I don’t believe it’s the red wine. The link between drinking red wine daily and cardiac good health is in the same category as Sasquatch: I dearly hope it exists but I am pretty sure it does not. So, I just wish to let you know that I am not crediting French health care out of turn.

The weak side of the French system is that it remunerates doctors rather poorly, from what I hear. I doubt French pediatricians earn $222,000 on the average. (Figure for American pediatricians according to the Wall Street Journal 8/17/18.) But I believe in market processes. France the country has zero trouble finding qualified candidates for its medical schools. (I sure hope none of my current doctors, whom I like without exception, will read this. The wrong pill can so easily happen!)

By the way, I almost forgot to tell you. Total French health care expenditure per person is only about half as high as the American. Rule of thumb: Everything is cheaper in the US than in other developed countries, except health care.

And then, closer to home, there is a government health program that covers (incompletely) about 55 million Americans. It’s not really “universal” even for the age group it targets because one must have contributed to benefit. (Same in France, by the way, at least in principle.) It’s universal in the sense that everyone over 65 who has contributed qualifies. It’s not a charity endeavor. Medicare often slips the minds of critical American conservatives, I suspect, I am guessing, because there are few complaints about it.

That’s unlike the case for another federal health program, for example the Veterans’, which is scandal-ridden and badly run. It’s also unlike Medicaid, which has the reputation of being rife with financial abuse. It’s unlike the federally run Indian Health Service that is on the verge of being closed for systemic incompetence.

I suspect Medicare works well because of a large number of watchful beneficiaries who belong to the age group in which people vote a great deal. My wife and I are both on Medicare. We wish it would cover us 100%, although we are both conservatives, of course! Other than that, we have no complaints at all.

Sorry for the seeming betrayal, fellow conservatives! Is this a call for universal federal health care in America? It’s not, for two reasons. First, every country with a good national health system also has an excellent national civil service, France, in particular. I have no confidence, less than ever in 2018, that the US can achieve the level of civil service quality required. (Less in 2018 because of impressive evidence of corruption in the FBI and in the Justice Department, after the Internal Revenue Service).

Secondly, when small government conservatives (a redundancy, I know) attempt to promote their ideas for good government primarily on the basis of practical considerations, they almost always fail. Ours is a political and a moral posture. We must first present our preferences accordingly rather than appeal to practicality. We should not adopt a system of health delivery that will, in ten years, attribute the management of 13% of our national income to the federal government because it’s not infinitely trustworthy. We cannot encourage the creation of a huge category of new federal serfs (especially of well-paid serfs) who are likely forever to constitute a pro-government party. We cannot, however indirectly, give the government most removed from us, a right of life and death without due process.

That simple. Arguing this position looks like heavy lifting, I know, but look at the alternative.

PS I like George Mason University, a high ranking institution of higher learning that gives a rare home to conservative American scholars, and I like its Mercatus Center that keeps producing high-level research that is also practical.