The Development of the Modern-Mauritian State
Staff writer, Sal Cerrell, examines the economic success behind the modern-Mauritian state.
The small island nation of Mauritius is one of the world’s top destinations for a luxury vacation. Its natural beauty makes it a hot spot for the wealthy communities of Europe and Asia alike; an appeal that draws in around 1.4 million people every year, or about 110% of the country’s population (World Bank). Visitors of Mauritius, lacking any political research, will likely be unaware that the country represents a positive rarity in African politics: a relatively well-functioning democracy. Freedom House, a think-tank that measures democracy around the world, gives Mauritius and 86 out of 100 on their scoring of the country (100 being a full democracy, and 0 being fully undemocratic) (Freedom House). It has perfect civil liberties score and has all but 4 points to have perfect political rights. Its impressive score makes it the most democratic country in Africa, and even ahead of well-recognized democracies such as South Korea and the United States. The country also has the third highest GDP per capita in Africa, at roughly $23,000 (World Bank). Its political system is characterized by a competitive system with regular elections and a respect for, or at least a tolerance of the rich ethnic diversity that the island possess. The country’s credentials are impressive but are both underappreciated and under reported. This paper will not only attempt to highlight their successes, but also argue that they are the causes of a strong political system that has consistently promoted and adopted policy that has burgeoned economic growth, and used its revenue to expand the political system, all while preserving and expanding political rights for ethnic minorities. I will also argue that relics of the Mauritian colonial structure, while most certainly impeding the country’s political, social, and economic development by subjecting the population to tyrannic rule that fostered a system of slavery and oppression, did nonetheless serve as a foundational starting point, from which the country’s government and economy flourished.
Mauritian history is much like that of the rest of colonial Africa. Initially established as a Dutch trading port in 1598 (Lange), it was quickly deserted and found itself under the rule of French colonialists. Much of French rule was characterized by a rapid economic development of the island. Sugar production, a staple of colonial trade, was expanded massively. Plantations were created, which led to the importation of slaves from continental Africa. France established Mauritius as key colony in the production of sugar, which led to its transfer of ownership from the French to the British, in the Treaty of Paris in 1814 that ended the Napoleonic Wars. When the British abolished slavery on the island, as it took similar steps in many of its other colonies, the country’s economy still required laborers to work on the ever-growing sugar plantations that gave Mauritius its economic importance. To solve this problem, the British imported indentured workers from its colonies in India and China, who were effectively slaves as they lacked basic political and civil liberties and were sent to Mauritius against their will. Nevertheless, their arrival on the island in the hundreds of thousands forever changed the demographic makeup of the country (Lange).
As Britain and much of Europe decolonialized in the aftermath of World War II, Mauritius too gained its independence from the British on March 12th, 1968. The country almost immediately adopted a Westminster-like parliamentary form of government, with the position of Prime Minister serving as the head of government, and the more ceremonial role of President serving as the head of state. The legislative body had 70 elected seats. The country’s constitution granted all people equal political representation regardless of their ethnic background, a key facet in establishing the country as a democracy given the diversity in the country. The country’s political system was reflective of this constitutional detail, as well as the country’s diversity, as it established several political parties that represented its various groups. None has been influential in the politics of the country then the Mauritian Labor Party, which was initially formed to represent agricultural workers in wage negotiations with the British. The government has historically maintained a strong social safety net that has prevented poverty and has limited inequality. This system has several functions that make it effective. For the elderly, the government provides a comprehensive pension program that roughly equates to 70 dollars a month. The program is incredibly popular amongst Mauritians, and politicians have been punished electorally for threatening to gut the program (Osei-Hwedie). The Mauritian government also provides free healthcare for all its citizens and pays for both primary and secondary schooling for its children. This keeps kids in school until they are at least 16 years old. The country has two institutions of higher education to serve those with higher academic pursuits. Mauritian students also frequent top schools in Europe and the United States. The plethora of social programs offered by the Mauritian government is made possible by an ever-growing economy that provides much of the funding for the national government (Mehta).
The country’s economic development ran parallel its political development. Given the country’s natural beauty, tourism emerged as a large segment of the country’s economy. What started with just 1,000 visitors annually at the end of decolonialization, swelled to around 600,000 in the late 1980’s and currently stands at over a million every year. While tourism flourished, the Mauritian government continued its former colonial exportation of sugar, this time leveraging its strong relationships with France and Britain to negotiate fixed purchasing prices that were higher than the market rate. In addition to an inflated purchase price, Mauritius also levied a roughly 20% tariff on the export, furthering their revenues from the crop . This helped maintain low-skilled labor jobs. Mauritius also expanded into textile production, specifically producing sportswear. This furthered their integration with European markets and served to diversity the economy (Sandbrook). The government established an Export Processing Zone (EPZ) which provides companies with a cheaper means of importing machinery for their goods. The economy has since diversified into banking and businesses and has begun investing in continental African firms (Industrial Free Zones Boost Mauritius' export-led manufacturing).
Mauritius owes its success to many different factors. The first of which is the strong relationship between its government and its economy. The country has had a fluid relationship between its political and economic institutions, that has been relatively free of corruption. The Mauritian government has exercised its authority on economic matters well, implementing tariffs and negotiating fixed prices for goods, both of which benefited the country’s economy. Additionally, the country’s system of government was designed to be inclusive. The electoral system encourages the nomination of minority candidates to ensure that the island diverse ethnic groups are represented in politics. The system goes as far as to appoint eight loosing candidates to the legislative branch to ensure representation is maintained. The government also required that parties in the legislative branch form coalition governments. Since each party traditionally represented specific ethnic groups in the country, the coalition requirement functioned to erase the ethnic differences between each party.
Additionally, the Mauritian governmental structure under colonial rule was much different than the rest of British-controlled Africa. Unlike other colonies in Africa, Mauritius had a much more developed system of governance that included a strong bureaucratic structure. As such the government had 4 times as much state revenue, 3 times as many police officers, and 10 times as many judges as the average British-governed African colony. They had a generally system of state infrastructure, that mimicked Singapore’s government, which too was a post-colonial success. The British also allowed Mauritians to participate in this government, with around 60% of workers in the Mauritian government being Mauritian. Once independence was achieved, Mauritians inherited a much stronger political system then their continental African counterparts. Though colonialization most certainly harmed Mauritian economic and political development, the form of government Britain established made it easier for the country to begin its process of independent political advancement.
Another reason Mauritius found political and economic success was the division of land that took place in and around its independence. As sugar plantations were dissolved as colonial bosses left the country, the land was reclaimed by the local inhabitants, forming strong village communities. This empowered local leaders, who now possessed land from which they could harvest sugar and lead more productive lives. It also served as the foundation for the development of local political parties, which served to diversity and expand the reach of the Mauritian political system (Lange).
In conclusion, the development of the modern-Mauritian state is rooted in a strong political system that catered to the needs of the economy, creating a strong flow of revenue that was used to fund social programs.
Works Cited
“BTI 2022 Mauritius Country Report.” BTI 2022, https://bti-project.org/en/reports/country-report/MUS#pos2.
“GDP per Capita (Current US$).” Data, https://data.worldbank.org/indicator/NY.GDP.PCAP.CD.
“Industrial Free Zones Boost Mauritius' Export-Led Manufacturing.” UNIDO, https://www.unido.org/stories/industrial-free-zones-boost-mauritius-export-led-manufacturing.
“International Tourism, Number of Arrivals - Mauritius.” Data, https://data.worldbank.org/indicator/ST.INT.ARVL?locations=MU.
Lange, Matthew. “Embedding the Colonial State: A Comparative-Historical Analysis of State Building and Broad-Based Development in Mauritius.” Social Science History, vol. 27, no. 3, 2003, pp. 397–423. JSTOR, http://www.jstor.org/stable/40267814. Accessed 24 Feb. 2023.
“Mauritius: Freedom in the World 2022 Country Report.” Freedom House, https://freedomhouse.org/country/mauritius/freedom-world/2022.
Mehta, Rani. “Ethnicity, Ethnic Relations and Development of Mauritian Society.” Indian Anthropologist, vol. 45, no. 1, 2015, pp. 47–60. JSTOR, http://www.jstor.org/stable/43899415. Accessed 24 Feb. 2023.
Osei-Hwedie, Bertha Z. “Successful Development and Democracy in Africa: the Case of Botswana and Mauritius.” Il Politico, vol. 65, no. 1 (192), 2000, pp. 73–90. JSTOR, http://www.jstor.org/stable/24005439. Accessed 24 Feb. 2023.
Sandbrook, Richard. “Origins of the Democratic Developmental State: Interrogating Mauritius.” Canadian Journal of African Studies / Revue Canadienne Des Études Africaines, vol. 39, no. 3, 2005, pp. 549–581. JSTOR, http://www.jstor.org/stable/25067498. Accessed 24 Feb. 2023.
“Why Africa's Island-States Are Generally Freer.” The Economist, The Economist Newspaper, https://www.economist.com/middle-east-and-africa/2021/06/26/why-africas-island-states-are-generally-freer.
“BTI 2022 Mauritius Country Report.” BTI 2022, https://bti-project.org/en/reports/country-report/MUS#pos2.
“GDP per Capita (Current US$).” Data, https://data.worldbank.org/indicator/NY.GDP.PCAP.CD.
“Industrial Free Zones Boost Mauritius' Export-Led Manufacturing.” UNIDO, https://www.unido.org/stories/industrial-free-zones-boost-mauritius-export-led-manufacturing.
“International Tourism, Number of Arrivals - Mauritius.” Data, https://data.worldbank.org/indicator/ST.INT.ARVL?locations=MU.
Lange, Matthew. “Embedding the Colonial State: A Comparative-Historical Analysis of State Building and Broad-Based Development in Mauritius.” Social Science History, vol. 27, no. 3, 2003, pp. 397–423. JSTOR, http://www.jstor.org/stable/40267814. Accessed 24 Feb. 2023.
“Mauritius: Freedom in the World 2022 Country Report.” Freedom House, https://freedomhouse.org/country/mauritius/freedom-world/2022.
Mehta, Rani. “Ethnicity, Ethnic Relations and Development of Mauritian Society.” Indian Anthropologist, vol. 45, no. 1, 2015, pp. 47–60. JSTOR, http://www.jstor.org/stable/43899415. Accessed 24 Feb. 2023.
Osei-Hwedie, Bertha Z. “Successful Development and Democracy in Africa: the Case of Botswana and Mauritius.” Il Politico, vol. 65, no. 1 (192), 2000, pp. 73–90. JSTOR, http://www.jstor.org/stable/24005439. Accessed 24 Feb. 2023.
Sandbrook, Richard. “Origins of the Democratic Developmental State: Interrogating Mauritius.” Canadian Journal of African Studies / Revue Canadienne Des Études Africaines, vol. 39, no. 3, 2005, pp. 549–581. JSTOR, http://www.jstor.org/stable/25067498. Accessed 24 Feb. 2023.
“Why Africa's Island-States Are Generally Freer.” The Economist, The Economist Newspaper, https://www.economist.com/middle-east-and-africa/2021/06/26/why-africas-island-states-are-generally-freer.
Capital Over Country: Challenges of International Investment Arbitration in Latin America
Contributing Editor Nate Laske examines the issues related to investment arbitration in Latin America.
The return of democracy in the 1980s and 1990s experienced by most Latin American states after decades of military rule coincided with a pivot to market-oriented economic policies, encouraged by the collapse of the Soviet Union and the perceived failure of state-led economies. To attract foreign investment, states implemented an array of budgetary and trade policies: austerity measures meant to reduce hyperinflation were introduced and Bilateral Investment Treaties (BITs) were negotiated to reduce the risks for foreign investors investing in Latin American countries. Under these treaties, investors were to be granted most-favored nation (MFN) status to compete on a level playing field with local and international competitors and granted protections against expropriation, broadly defined as measures which deprive the investor of the economic value of its investment. Investors gained the right to pursue claims against host countries due to unfair or unequal treatment at international arbitration organizations like the International Center for the Settlement of Investment Disputes (ICSID) rather than in the courts of the host government.
The negotiation of BITs came in response to a series of 10 market-oriented policy prescriptions recommended by the United States to developing economies to promote economic growth known as the Washington Consensus: including legal security for property rights and liberalization of foreign direct investment (FDI). Development economists posited the free flow of FDI through countries with untapped natural resources and labor pools would result in the development of new markets, poverty reduction, and greater integration with the world economy. While some scholarship has suggested a link between FDI and the achievement of these goals, a growing body of research has linked a larger share of FDI in a developing country’s economy to greater inequality and weaker domestic industries unable to compete with foreign firms.[1] [2] Furthermore, the attainment of the United Nations 2015 Sustainable Development Goals (SDGs) which encourage sustainable and inclusive development by taking into account the social, environmental, and political factors which most concern the citizens of the host country has become complicated as states, especially those in Latin America and the Caribbean, have sought to renegotiate their international obligations in pursuit of these goals.
States seeking to expropriate foreign investments fueled by populist rhetoric and electoral promises to reassert national sovereignty over domestic resources have clashed with aggrieved investors armed with the power of contractual legal commitments demanding compensation for allegedly violating agreements signed by their predecessors. This article will first outline the current Latin American investor-state arbitration landscape, then proceed to outline three primary approaches states have taken to avoid costly arbitration awards, and conclude with a recommendation that BITs should be renegotiated to grant greater stakeholder participation in the process of FDI if investors wish to maintain a healthy business environment and lessening the risk of sudden hostile takeovers by a resurgent political left.
2 The Current Latin American Investor-State Arbitration Landscape
Latin America is notable for its considerably higher percentage of arbitration decisions which ruled in favor of investors when compared to other regions. For example, investment arbitration decisions in the Latin American and Caribbean (LAC) ruled in favor of the state 29.7% of the time, compared to other middle and low-income regions at 42.9% and the United States, Canada, and Europe at 50%.[3] In 2012, the International Center for the Settlement of Investment Disputes (ICSID) tribunal awarded Occidental Petroleum $1.77 billion in a case against the Republic of Ecuador due to alleged breaches of the US-Ecuador BIT, the largest award ever issued by an ICSID tribunal.[4] The 2001-2002 convertibility crisis in Argentina and subsequent ICSID claims made by investors showed that politicians are more likely to answer popular demands to expropriate from the electorate rather than follow through on their BIT obligations.[5] However, the region’s largest and most populous country, Brazil, has yet to ratify a single BIT and serves as a useful point of reference for evaluating the efficacy of such agreements in achieving their goals. The high rate of successful treaty-based arbitral claims filed against LAC countries can be explained in part due to (1) the commodity-driven and extractive nature of the region’s economy and (2) the political volatility of the region.
2.1 Criticisms of the International Center for the Settlement of Investment Disputes
Bolivia was the first to denounce and withdraw from the ICSID in 2007 under socialist president Evo Morales, citing issues of national sovereignty over the country’s vast natural resources. Having rewritten the country’s constitution in 2009, Morales also started the process of denouncing and renegotiating all of Bolivia’s BITs. However, this has not stopped ICSID claims against Bolivia from being filed regarding investments made both before and after the withdrawal from the convention due to survival clauses in the previous agreements.[6] Furthermore, in 2009 Ecuador withdrew from the ICSID Convention under leftist President Rafael Correa but as of July 2021, newly elected moderate President Guillermo Lasso has since re-ratified the convention in hopes of bringing new foreign investment to the country. In 2012, Venezuela denounced and withdrew from the ICSID Convention, after it was made to pay hefty awards to oil companies which the Chavez government had expropriated.[7] When governments oscillate between their levels of commitment to their international treaty obligations, investors become weary.
2.1.1 Argentina and the ICSID
While Argentina remains a party to the ICSID Convention, it has displayed little willingness to comply with its international obligations. The nation tops the list of most frequently sued states; it refuses to comply with some of its arbitral decisions, opting instead to shift decision-making to domestic courts where it hopes for a more favorable outcome may be reached. Creditors’ lobbying efforts in the United States were successful when the U.S. withdrew trade benefits extended to Argentina and voted down World Bank and Inter-American Development Bank loans for the indebted nation. President Obama stated, “it is appropriate to suspend Argentina’s designation as a GSP beneficiary developing country because it has not acted in good faith in enforcing arbitral awards in favor of United States citizens or a corporation, partnership, or association that is 50 percent or more beneficially owned by United States citizens.” After making an example of Argentina using coercive monetary policy, Argentina eventually settled some of its disputes with disgruntled investors, leading to the reestablishment of GSP relations in 2018. As of 2022, hyperinflation caused by the devaluation of the peso as foreign investors pulled out during the pandemic, combined with a decline in commodity prices and a high level of indebtedness to international financial institutions and investors has crippled an already fragile economy.[8]
Argentina exemplifies the plight of many lower and middle-income countries in Latin America who in the 1990s adopted structural adjustment reforms to liberalize their markets and attract foreign direct investment through the signing of bilateral investment treaties. Neoliberal policies were successful in creating economic growth for the middle and upper-class elite, yet demanded cuts to social safety nets, public healthcare expenditures, and exacerbated inequality in what is already the world’s most unequal region.[9]
Considering that (86%) of investor claimants in international arbitration courts are from high-income countries and the majority (66%) of cases are brought against lower and middle-income countries, the status quo created by bilateral investment treaty agreements asserts that a multinational corporations’ right to make profit supersedes a state’s national sovereignty to enact reforms demanded by its democratically elected government.[10] Therefore, such BITs need to be renegotiated to reassert sovereignty of host nations to protect the environment, fund desperately needed social programs, maintain a sovereign monetary policy, and create a mutually beneficial relationship between FDI and the state.
3 Towards Solutions
Political upheaval brought about by acute social and economic inequality, the region’s relationship with international institutions and creditors, and the crippling impact of the pandemic fundamentally reshaped the political opportunity structure in many states: the region has been more vulnerable to democratic backsliding, more willing to rewrite existing laws and constitutions, more desperate for international investors, and more dependent than ever on high commodity prices to keep their fragile economies intact. In 2019, Latin America was the only region to register zero economic growth, and experienced the largest economic contraction due to the pandemic. Countries face the following non-mutually exclusive policy options in pursuit of a post-pandemic recovery: (1) settle ongoing arbitration cases to boost investor confidence (2) renegotiate or withdraw from BITs and ICSID conventions, or (3) boost foreign capital inflows through greater Chinese foreign direct investment.
References
[1] Herzer, Dierk, Philipp Hühne, and Peter Nunnenkamp. 2012. “FDI and Income Inequality - Evidence from Latin American Economies.” Review of Development Economics 18 (January). https://doi.org/10.1111/rode.12118.
[2] Tuman, John P., and Craig F. Emmert. 2004. “The Political Economy of U.S. Foreign Direct Investment in Latin America: A Reappraisal.” Latin American Research Review 39 (3): 9–28.
[3] Remmer, Karen L. 2019. “Investment Treaty Arbitration in Latin America.” Latin American Research Review 54 (4): 795–811. https://doi.org/10.25222/larr.154.
[4] ICSID. n.d. “Occidental v. Ecuador (II) | Investment Dispute Settlement Navigator | UNCTAD Investment Policy Hub.” Accessed March 19, 2022. https://investmentpolicy.unctad.org/investment-dispute-settlement/cases/238/occidental-v-ecuador-ii-.
[5] Remmer, Karen L. 2019. “Investment Treaty Arbitration in Latin America.” Latin American Research Review 54 (4): 795–811. https://doi.org/10.25222/larr.154.
[6] Kluwer Arbitration Blog. n.d. “Life after ICSID: 10th Anniversary of Bolivia’s Withdrawal from ICSID.” Accessed March 19, 2022. http://arbitrationblog.kluwerarbitration.com/2017/08/12/life-icsid-10th-anniversary-bolivias-withdrawal-icsid
[7] “International Arbitration Tribunal Orders Venezuela to Pay ConocoPhillips $8.7 Billion for Unlawful Expropriation of Company’s Oil Investments.” n.d. ConocoPhillips. Accessed March 19, 2022. https://www.conocophillips.com/news-media/story/international-arbitration-tribunal-orders-venezuela-to-pay-conocophillips-8-7-billion-for-unlawful-expropriation-of-company-s-oil-investments/.
[8] González, Enric. 2021. “Argentina’s Perpetual Crisis.” EL PAÍS English Edition. March 5, 2021. https://english.elpais.com/usa/2021-03-05/argentinas-perpetual-crisis.html.
[9] Baer, Werner, Pedro Elosegui, and Andrés Gallo. 2002. “The Achievements and Failures of Argentina’s Neo-Liberal Economic Policies.” Oxford Development Studies 30 (February): 63–85. https://doi.org/10.2139/ssrn.279383.
[10] Samples, Tim. 2018. “Winning and Losing in Investor-State Dispute Settlement.” SSRN Scholarly Paper ID 3233704. Rochester, NY: Social Science Research Network. https://papers.ssrn.com/abstract=3233704.
How African Women Navigate Urban Geographies Through Radical Incrementalism
Contributing Editor Caroline Skye Grossman explores a critical feminist approach to navigating urban informality on the African continent through radical incrementalism via employing two case studies of urban informal sector social network and activist groups in Nairobi, Kenya and Durban, South Africa.
According to the World Bank, the urban informal sector anchors economic activities across the African continent, accounting for nearly 80% of jobs for African urban dwellers. These are especially pervasive for youth in cities between the ages of 15 and 24, with over 90% of them being women (Guven & Karlen, 2020). The sector itself is difficult to miss among a conventional African urban geography that embodies modernity and thus, urban dynamism. Street merchants and vendors are crucial to ensure food security across the city; craftsmen, manufacturers, and repairers of goods and services, and those who work in the transportation of goods and services keep the world-class city and the economy rapidly moving, among several other tasks that are integral to maintaining urban landscape. In terms of what specifically is meant by the ‘urban informal sector,’ though difficult to define succinctly by several scholars and economists, statistics clearly suggests that it is defined as merely the residual difference between a nation’s total economic activity and the well-recorded economic activity of the formal sector. The informal sector is neither taxed nor monitored by any form of government and absorbs the city’s unemployed population. Persons employed by the urban informal sector typically work a variety of ad hoc jobs that vary across cities, resulting in low wages and substandard living conditions (Fukuchi, 1998, pp. 225-56). The urban informal sector cannot be considered without women as they heavily contribute to the trading and transportation of food and clothes across the city (Kanyinjui, 2014, pp. 1-3). Low productivity and earnings are fostered by the urban geographies of rapidly urbanizing or world-class cities in Africa, which champion spaces that operate on higher-value markets, such as markets that are worth more to customers than commodity products like technology, information, tourism, analytics etc. In turn, the informal sector is pushed to the periphery of the city and is financially excluded from the market. This results in the physicality of urban informal settlements or “slums.” Slums typically consist of human-constructed, sub-standard settlements that lack access to basic services like water and electricity (Ranganathan, 2019).
Workers of the urban informal sector build human capital or useful attributes in the informal sector production process. Human capital is present under social protections as informal sector workers can prevent the sale of productive assets in the event of shocks as well as the promotion of savings to build resilience. But not all urban dwellers are granted social protections; informal sector businesses are excluded from the formal sector and hindered from making reliable business transactions, accessing credit for productive investments, and accumulating savings for unanticipated risks. With no social protections and little to no savings, the unadulterated economic downsides emerging from the COVID-19 pandemic have annihilated many of the livelihoods of African workers in the informal sector. Nonetheless, the role of Africa’s informal sector is only estimated to grow at exponential rates as not only Africa’s population itself increases, but as urbanization persists (Guven & Karlen, 2020). Therefore, African cityscapes are likely to thrive, but most of their residents will not. Perhaps the city will boom as private sector actors like urban planners, who have autonomy over governing the city, rely on the informal sector agents or those who work for the informal sector. Yet private sector actors have no interest in investing in social protections of the millions of informal sector agents living in the cities they construct.
According to Mary Njeri Kinyanjui, a key contributor to the political and social dynamics of the informal economy in Africa, notably on the East African coast, are social networks emerging from friendship and kinship. These close social networks are important in reinforcing the strength of their businesses through emotional support, advice, skill-sharing and training, business start-ups, information, social protection, and rotational credit services. Social networks within the informal economic sector have been documented as especially important among poor women. The informal sector is where intersecting networks of trust, kinship, ethnicity, marital status, among several other facets present themselves and promote the development of social networks.
Evolving from social networks are collective organizations, which are an important aspect of the operations of the African informal economy. Kinyanjui emphasizes that they enable the scaling up necessary to promote the potential for political intervention. This modality would be particularly strategic for the informal sector because it differs from less comprehensive approaches to the sector that are primarily focused on structural and welfare-based interventions (Kanyinjui, 2014, pp. 99-101). Despite the stigmatization and subordination of female urban informal workers, they are crucial to the urban economy and the ecology of the city. Thus, to facilitate their integral roles, female informal workers have collectively self-organized in a multitude of ways across African urban landscapes to permeate their Indigenous market work in the city.
Chapter 8 of Kinyanjui’s book details the types of social networking among women specific to Nairobi’s informal sector. She indicates that informal workers, namely women, collectively organize themselves in what is referred to as vyama. This is a level of solidarity used for organizing among women in the informal sector. Typically, vyama involves bolstering both economic and social action. Its fundamental principle rests on the notion that urban marketplaces are vicious and patriarchal environments. Thus, social and economic networks and interactions like vyama among women promote their survival in the marketplace (Kanyinjui, 2014, p. 105). In a case study conducted on Taveta Road traders in Nairobi, women are seen joining collective organizations in search of solidarity, to find a sense of identity, and a sense of belonging to a community. The female subjects of the study iterate that the chama, an investment in social capital, is what reinforces their belonging in vyama. The conclusion is that on an individual level without notions of vyama or the chama, there is less incentive for these women to engage in their work in the city due to a lack of economic and social support (Kanyinjui, 2014, p. 102).
Moreover, the chama cha soko, the street market association, is the first level of social and economic collective organization among female informal sector workers in Nairobi. In essence, it is a bridge between the city council and the informal sector and requires daily contributions from its female members. Contributions include security maintenance, cleanliness of business premises, coordination of trade affairs, dispute resolution, and handling of the opening and closing of business premises. The chama cha soko is reinforced by a tangible constitution in which rules and regulations for traders are enforced. It differs from informal economy associations in Latin America or South Africa, for instance, in that the chama cha soko is less likely to counteract government agendas.
Rather, the intent of the chama cha soko is to ensure that the interests of informal sector workers are not pushed aside for private sector interests on behalf of actors governing the city. When necessary, the chama cha soko mobilizes its constituents to the means necessary to achieve justice for the informal economy. Further, among its constituents, the chama cha soko promotes a nature of toughness. Those within this level of the collective organization who do not abide by the trading rules are subject to k̃uhandwa, or “being brought to the ground level.” In other words, an individual who breaks or bends trading rules can be subject to expulsion from the market (Kanyinjui, 2014, p. 105).
In Durban, South Africa, an emerging world-class city known for its influences from colonization and India, navigation of urban informality takes an activism approach. The film, A Place in The City/Trying to Find A Voice, investigates slum residents’ efforts to speak out against agendas that trump private property rights over the livelihoods of urban informal. In recent years, residents of the Foreman Road and Motala Heights slums have been confronted with the war of attrition, which is the prolonging of a war or conflict period in which each actor attempts to defeat the other through small-scale behaviors. City planners have also executed a world-class city in Durban. The implementation of the astronomical Moses Mabhida soccer stadium in 2009 for the 2010 World Cup intended to displace slum dwellers from Foreman Road and Motala Heights. To forward this aim, Durban’s governance agenda has been depriving its periphery and ultimately, slum dwellers, of electricity. Informal settlements also lack other basic sanitation services or accounts in the market despite their presence on state property. According to the film, in Durban, about 40% of working-age adults are unemployed or unaccounted for in the market (Morgan, 2008).
Amidst this unadulterated inequality, urban informal residents of Foreman Road and Motala Heights have mobilized themselves into an activist group known as the Abahlali, to confront the state’s agenda with hopes for a more just urban informal environment. The residents identify the call-to-action in which they desire from the governance actors of city planning. They identify the following as key needs: housing that actually supports the families in settlements (e.g. houses with more than two bedrooms to accommodate a family) and stagnancy of informal settlements, specifically in Motala Heights, as opposed to relocation to Nazareth. According to female residents, staying in Motala heights would provide them with opportunities to learn trading and entrepreneurship skills necessary for work in the marketplace (Morgan, 2008).
Abahlali activists are comprised of slum residents in Durban that have evolved from a local development committee. In the film, activists emphasize that though they are fighting for justice and a place in the city, the bedrock of their theory of change is to assert that they are poor. They contend that even when given a house by the government, it should be sold and that they will ultimately return to their shack in the periphery of the city (Morgan, 2008). They do so to push against the stigma of informality, proving that it is not impossible to live in a slum. Within the Abahlali activist group, though including both men and women and spearheaded by a male, S’bu Zikode, women have made courageous strides at exercising the heart of the movement.
Due to their critical role in the informal economy and the interminable burdens they face compared to their male counterparts, they have had to sacrifice things in both physical and economic ways. For instance, Mariet Kikine, an Abahlali activist, describes how despite her nonviolent protesting, she was shot six times by the police (Morgan, 2008). This reveals the intersectionality of police violence against African women in the urban landscape of post-apartheid South Africa. In an interview with several female Abahlali activists in Motala Heights inquiring why they would not prefer to relocate from their current settlements to Nazareth, they explain the opportunities to learn trading and entrepreneurship and the social stability they have in Motala Heights (Morgan, 2008). Several women have raised their children in Motala Heights and thus, have a sense of stability, social networking, and are aware of the procedures of marketplace activities in place.
Moreover, radical incrementalism as a theory of change in an urban context is best understood by South African sociologist, Edgar Pieterse, in his book, City Futures: Confronting the Crisis of Urban Development, as the notion that the drive of urbanity is to promulgate radical change amidst all the idealistic aspects of ‘the city.’ Simultaneously, the necessary austerity and burdens of incremental change stand in contempt of radical change. Thus, it is the only way to intervene in a vicious microcosm of hyper-capitalism and modernity (Pieterse, 2013, p. 134). Through both the social networking and collective organizing of women in Nairobi and the mobilization on the ground in Durban, both radical and incremental theories of changes are invoked to promote justice in urban informal settlements.
The chama cha soko’s communication with the government to promote social protection for the urban informal sector conveys that this group has organized communication with governance actors, especially their private sector counterparts. It conveys adaptability and acceptance of the urban dynamics in place. However, their by-the-means-necessary approach to resistance against the government especially parallels Pieterse’s notion of radical incrementalism. This is because they have not adopted a more violent approach to seeking justice and protection. If they had, they would have deemed contention a larger part of their agenda.
The Abahlali activists invoke a radical incrementalism theory of change through community mobilization of nonviolent protesting of both women and men. A notable example of demonstrations by the Abahlali activists, especially the women from Motala Heights, is their rejection of displacement or even a home. In part, they claim that this is from the lasting social networks and familial roots they have established there. Considering their rejection of displacement or houses from the government, they embrace the structure of informal settlements, ultimately pushing back on perceptions that slums are insurmountable. In doing so, they have accepted the capitalist system in place that enables urban informality. Female Abahlali activists also exemplify resilience in their nonviolent activism yet are still targeted by hyper-capitalist forces like the police system. For example, Mariet Kikine, who was shot six times by an officer at a demonstration that became violent due to police action, was overpowered by a capitalist entity at that moment.
Though calling-to-action different ways to bring about justice in the urban informal sector, women from both the Abahlali and the chama cha soko exhibit a level of solidarity with one another to promulgate their agendas. Both agendas emphasize the importance of social protection over their environments in different ways yet work within a broader system to foster small change. They also push back on conventional perceptions and rhetoric regarding slum resistance as neither of the women in these groups exercised violence on their capitalist counterparts unless it was declared necessary to do so. Unsurprisingly, this is when a capitalist force has intervened in a group’s organizing or demonstration.
Fundamentally, through examining the chama cha soko of Nairobi and the Abahlali activists of Durban, the female urban informal sector workers adopt a radical incrementalist theory of change. The chama cha soko exercises collective organizing to ultimately show hybridized reforms between capitalist entities and the informal economic sector. Moreover, the Abahlali activists in Durban foster community mobilization to form demonstrations in order to communicate with governance actors and capitalist entities, with female activists exhibiting particular resilience against such overpowering actors and entities.
A conclusion that can be deduced from these radical incrementalism theories of change is the notion that urban informality is not a product of inherent disorder. Instead, it is a product of governance actors’ and capitalist entities’ inability to construct models to fit the schema of disorder. In turn, women subordinated and marginalized by these urban outcomes on the African continent have been challenged with the interminable impacts of informality. Instead of overt radical resistance, they are working within a system that has consistently worked against their favor. Avenues for further research may extrapolate beyond these two cases of the Abahlali activists and the chama cha soko to discover a greater understanding of radical incrementalism among women in the informal sector. Perhaps another theory of change may be invoked when analyzing additional approaches from African women in their promulgation of social protections over their urban informal environments.
References
Fukuchi, T. (1998, September). A Simulation Analysis of the Urban Informal Sector:
Introduction. In The Developing Economies. (pp. 225-256)
Guven, M., & Karlen, R. (2020, December 3). Supporting Africa's Urban Informal sector:
Coordinated policies with social protection at the core. Retrieved from
https://blogs.worldbank.org/africacan/supporting-africas-urban-informal-sector-coordinat
Ed-policies-social-protection-core
Kinyanjui, M. N. (2014). Women’s collective organizations and economic informality. In Women
and the informal economy in urban Africa: From the margins to the centre (pp. 99-117).
London, UK: Zed Books.
Morgan, J. (Director & Producer), & Grey Street Films. (2008). A Place in The City/Trying To
Find A Voice [Video file]. Retrieved from https://www.youtube.com/watch?v=-NG2v9On4h4
Pieterse, E. A. (2013). City futures: Confronting the crisis of urban development. London, UK:
Zed Books.
Ranganathan, M. (2019, March). "Liberal" Urban Planning. Lecture presented at Guest Lecture
in World Politics Course in American University School of International Service,
Washington, DC.
The Future of the Inter-American Development Bank is in Trouble
Design and Marketing Editor Anthony Manuzzi argues that the Trump Adminstration’s appointment of Mauricio Claver-Carone as President of the Inter-American Development Bank reflects a broader administration tone of hostility to regional institutions and regional autonomy in pursuit of great power competition.
The Inter-American Development Bank (IDB) is rarely the world’s premier diplomatic spectacle. However, the recent election of the institution’s new incoming president proved to be yet another realm of conflict between the hardline administration of President Donald Trump and Latin American nations seeking greater autonomy over their own affairs.
A Break with Precedent
Established in 1959 by the Organization of American States (OAS), the IDB has grown to include some 48 sovereign nations, with 26 of them borrowing states (which the bank lends to) which primarily consist of Latin American countries.The IDB is the largest multilateral financier of the Latin America and the Caribbean region, and coordinates various policies to combat income inequality, climate change, and other challenges facing the continents.
Historically, the process of selecting a leader for the bank has been a compromise between the U.S. and the countries of the region. While the U.S. is endowed with 30 percent of the voting power in the assembly, the Latin American nations possess just over 50 percent of the voting power and it has been a long standing precedent that the president of the body is from Latin America (and the executive vice president is usually American). In fact, since the organization’s inception, the president has always come from a Latin American country. As Michael Shifter and Bruno Binetti write, “Selecting a Latin American as president has been a way of respecting regional autonomy and giving other governments involved a sense of ownership in the institution.”
In a Trump Administration preferring coercion to cooperation in the region, there has never been any place for this precedent. For example, in June of this year, without any prior consultation with IDB members, the White House announced that it intended to nominate Mauricio Claver-Carone to be the next president of the body. Not only would Claver-Carone be the first American president of the IDB, he also brings historically little experience to the table. Claver-Carone notably has zero experience in a federal central bank or even in the finance industry at all. He is neither an economist nor a politician, but rather a lawyer by trade, who has served as a lobbyist and member of the board of directors for the hard-right lobbying group Cuba Democracy Advocates and briefly as an adjunct professor at George Washington University. Claver-Carone’s complete history of governmental service adds up (chronologically) to a brief stint on the Trump transition team, a year as an adviser at the Treasury Department, five months as the acting U.S. representative to the International Monetary Fund (IMF), then finally less than two years as a Latin America advisor on the National Security Council (NSC). In comparison, the first president of the IDB- the Chilean Felipe Herrera- was a former finance minister of his country, general manager of its central bank, and Executive Director of the IMF before his election to the presidency (and he was later a nominee of the Salvador Allende government for United Nations Secretary-General). The second president, Mexico’s Antonio Ortiz Mena, led the Mexican social security office and finance ministry for almost two decades prior to his presidency. The two successive presidents served extensively in the private banking sector, and then later as central bankers or finance ministers (with Claver-Carone’s predecessor serving also as Ambassador to the United States of Colombia) before assuming the presidency. In addition to breaking the geographic precedent, Claver-Carone’s selection represents a clear break from the typical occupational profile of an IDB president.
These twin precedents- of Latin American heritage represented and relevant occupational experience- have long formed the backbone of this particular project of regional integration and multilateralism. It was in defense of these norms that this nomination was condemned by a plethora of different states with differing relationships with the United States, as well as dozens of former prime and foreign ministers and Obama-Biden Administration officials. The European Union and Canada called on the body to delay the vote until after the American presidential election, while Argentina, Costa Rica, Mexico, Peru, and the majority of voting nations (but not vote share) opposed the nomination and sought to have it delayed indefinitely. Even the staunchly conservative government of Chile characterized Claver-Carone’s election as “clearly inadequate” and deemed his criticism of dissenting nations as needlessly “aggressive.”
Domestically, while most Congressional Democrats have opposed the nomination (chiefly Sen. Patrick Leahy-VT ), Cuban and Venezuelan hardliners like Sen. Bob Menendez (D-NJ) and Sen. Marco Rubio (R-FL) endorsed Claver-Carone. They were joined internationally by a myriad of Trump-aligned governments, including Bolivia, Brazil, Colombia, El Salvador, Guyana, Haiti, Japan, and Paraguay. In the end, Costa Rican and Argentine candidates withdrew and Claver-Carone won election to the presidency despite the strong opposition movement, which will surely loom even larger should Joe Biden win the White House in the middle of Claver-Carone’s allotted five-year term.
What Would a Claver-Carone Presidency Look Like?
The IDB is by no means a perfect organization. Its financial support for the Camisea natural gas project in Peru, responsible for mass destruction of the Amazon and the violation of the rights of indigenous peoples, is one example of its service to private interests and manipulation by capital. A region long plagued by gross inequalities is now embroiled in a struggle with the twin terrors of the coronavirus and the climate crisis and cries out for public investment and aid. Claver-Carone’s proud embrace of the Trump Administration’s combative, belligerent, and punitive Latin American policy risks derailing these future aid efforts. As a public intellectual and an NSC staffer, he has been the face of a right-wing campaign to reinstate draconian sanctions on Cuba on top of the existing U.S. embargo. This is in reaction to the Obama Administration’s “Cuban thaw” that broke with the strategy of punishment that has been condemned routinely by the United Nations and has deprived Cubans of vital medicine and food, all while enacting no political change on the island. At the NSC, Claver-Carone attempted to apply the very same “maximum pressure” tactics to the dictatorships in Venezuela and Nicaragua with similarly disastrous results. His exceedingly ideologically narrow conception of American interests and power in the region, as well as of the region’s problems, has amounted to punishment for punishment’s sake.
Within the context of the history of American intervention in the region, Claver-Carone’s appointment makes sense. But that is not a compliment. From the 1901 Platt Amendment that proclaimed legitimate the American occupation of Cuba by subjecting the island to permanent policy vetoes from the American sugar companies’ representatives in Congress to the Reagan Administration’s full-throated support for anti-communist death squads that committed war crimes in El Salvador and Guatemala, American foreign policy in the region has been weaponized without constraint on behalf of commerce. Fetishization of capitalism on America’s side has led the U.S. to betray its principles, compelling it to overthrow democratically-elected governments to create the so-called “banana republics” so that American produce companies could sell cheap fruit. Cold War groupthink led the U.S. to support “S.O.B.s” like Rafael Trujillo, Anastasio Somoza, Roberto D’Aubuisson, Augusto Pinochet, and Jorge Rafael Videla even as they presided over heinous massacres. The IDB was one of the last areas of U.S.-Latin America relations in which the U.S. reserved some degree of autonomy for the region, seeking to rule by consent, not coercion. Indeed, in negotiating the outlines of the IDB and its predecessor (the Inter-American Bank), the Roosevelt and Eisenhower administrations agreed to a substantial minority share of the vote and a concessional lending program in the IDB to counter any allegation of financial domination.Yet the Trump Administration, with its antiquated policy paralleling the Monroe Doctrine and forged by its former figurehead and Claver-Carone’s mentor, John Bolton, is dead set on instead turning the IDB into yet another sphere of American hegemony and rule by fiat.
A New Cold War? Or a Failure to Learn the Lessons of the First One?
Furthermore, Claver-Carone, Trump, and Secretary of State Mike Pompeo have made clear their intentions to turn the IDB and other Latin American fora into areas of protracted great power competition in a contrived “new cold war” with China. Since 2001, Chinese economic and political influence in the region has grown tremendously, in tune with broader trends of increasingly salient Chinese soft power worldwide. Chinese and Latin American officials have often exchanged visits while Argentina, Brazil, Chile, Costa Rica, Ecuador, Mexico, Peru, Uruguay, and Venezuela have inked “strategic partnerships” with China in recent years. Some 19 countries, furthermore, are participating in the Chinese Belt and Road Initiative (BRI), which is centered around infrastructure investment.
Trade between China and the region has increased from $17 billion to over $300 billion since 2002 while U.S. aid to the region, aside from a temporary increase during the Obama Administration, has largely declined. The Trump Administration, rather than helping the people of Haiti rebuild their infrastructure, ensuring the Colombian peace accord holds, or supporting anti-corruption efforts throughout the region, instead cut aid to Central American countries with large numbers of asylum seekers and threatened military action against Venezuela. Diplomatically, China is also seeking to isolate Taiwan internationally by persuading remaining Caribbean and Latin American countries that recognize Taiwan to flip. Panama, the Dominican Republic, and El Salvador have all flipped from Taiwan to the PRC in recent years.
While it is clearly true that China’s influence is growing in Latin America, the strategy of weaponizing the IDB in some sort of essential bipolar power struggle badly misreads both history and the present. It is important to note amid the discussion of a second Cold War that even in the first Cold War, a plurality of the region’s states were members of the Non-Aligned Movement, rebuffing both superpowers. Similarly, many Latin American countries today (like El Salvador, Mexico, and Brazil) prefer to maintain good relations with both Washington and Beijing. Urging them to take sides and reduce all ties with China is unlikely to work and needlessly antagonizes a fellow IDB member (in China) whose cooperation is necessary to combat the climate crisis, one of the most crucial tasks of the IDB.
Specifically, during his campaign for the presidency, Claver-Carone argued that he would further capitalize IDB Invest, the private sector lending group for the bank. This focus on private sector investment, intended to counter the BRI and similar Chinese investments, works to strengthen private enterprise and compete with China even as governments of all stripes in the region cry out for public investment in public health infrastructure and social spending to combat inequality. This strategy would only further entrench inequality and extend the needless suffering of the region’s people to do little more than stick it to another member of the IDB whose cooperation on the principle issue of our time is necessary.
Conclusion
Though the history of American intervention in Latin America and the Caribbean is checkered, previous administrations understood the need for Latin American autonomy as a prerequisite for the multilateral legitimacy of institutions created with the assistance of the U.S. Yet today in the name of America First, the Trump Administration, through the selection of Claver-Carone, has sought to assert American dominance. Yet if this dominance has to be imposed from the top down, by decree rather than consent, it may be vulnerable to organized resistance from within the organization.
Prosperous for Whom? Development as a Vehicle of Foreign Policy
Managing Editor Madison Mauro examines the usage of foreign aid as a mechanism for foreign policy on the African continent.
In April 2019, the United States’ (U.S.) development finance institution (DFI), the Overseas Private Investment Corporation (OPIC), signed a memorandum of understanding with the European DFIs and FinDev Canada. In it, they promised to provide viable “alternative[s] to unsustainable state-led models.” That same day, the Malaysian government revived the Chinese rail project with the state-owned China Communications Construction Company, fueling criticisms against China’s “debt-trap diplomacy.”
Similarly, the U.S. recently unveiled a new strategy towards African countries with the announcement of “Prosper Africa,” an initiative designed to increase two-way trade and investment between the U.S. and Africa. Former National Security Advisor John Bolton remarked that the policy was a national security strategy to ensure that “all U.S aid on the continent will advance U.S. interests” and counter “the predatory practices pursued by China and Russia.” The U.S. has since downplayed such comments, instead focusing on the ‘mutual benefits’ the initiative advances, from expanding trade and investments to support the region’s information and communications technology sector.
It might be a familiar sight to some: a humanitarian jostle where leaders praise each other for their compassion, foreign aid inflows increase, and politicians accuse each other of using aid for strategic gains. This might appear to be a description of the new geopolitical landscape, but the dynamics observed today are deeply rooted in Cold War development practices, when the Soviet Union (USSR) and the U.S. attempted to gain international prominence and influence countries with the usage of foreign aid.
Some argue that the Prosper Africa initiative may be promising for U.S. agencies attempting to escape the institutional silos surrounding trade and international development. However, beyond it being an oblique attempt to use Development* as a vehicle for foreign policy, it is an earnest and flawed response to surging competition within the region from actors such as China and the E.U.
China’s Presence in Africa
Unlike Western constructions of modern development geographies, China has actually been present in the region since the 1950s, when it signed its first bilateral trade agreement with Algeria, Egypt, Guinea, Somalia, and Sudan. It wasn’t until the 2000s, however, that stronger alliances began to emerge: China’s growth created demand for natural resources and employment while a resource-rich Africa offered a plethora of commodities and a need for infrastructure. China has since become Africa’s largest trading partner in 2012, surpassing the U.S. and traditional European partners. Between 2000 and 2014, Chinese financiers provided $86.3 billion to African governments and state-owned enterprises, becoming the largest creditor in the region. This dynamic has led some to criticize China as a rogue donor enticing African nations into “dept-trap diplomacy.”
In the face of stagnating U.S. involvement in Africa, Chinese investment has increased exponentially. As a McKinsey report on China-African relations found, China has catapulted itself to the regional stage, becoming the top partner for Africa in trade, investment stock and growth, infrastructure financing, and aid. China’s presence in the region has become even more pronounced since the unveiling of the Belt and Road Initiative (BRI), an unprecedented policy initiative to connect China to Central Asia and Europe through infrastructure, trade, and investment links.
Despite China insisting that its development partnerships are “mutually beneficial,” Chinese aid is often tied—China’s foreign aid often requires governments to use Chinese goods, services and labor for infrastructure projects—and has followed political motivations similar to that of the U.S. and Soviet Union during the Cold War. As researchers Andreas Fuchs and Marina Rudyak find, Chinese foreign aid is often used as a political tool to advance domestic and foreign policy goals. Using data from 2000 to 2012, research lab AidData claim that if African countries in the United Nations voted with China an extra 10 percent of the time, they would on average get an 86 percent increase in official aid. In the context of “common development,” Chinese foreign aid can instead perhaps be best interpreted as an effort to establish a more favorable environment for China’s own development and support the country’s ascension as a global power.
E.U. Presence in Africa
As the United States Trade Representatives (USTR) commented on in its 2019 National Trade Competitiveness report, E.U. agreements (EPAs) have been challenging the competitiveness of U.S. investment and trade with African countries. Importantly, as Brookings’ Witney Schneidman and Jay Ireland note, “the proliferation of the [EPAs] provide E.U. goods, services, and companies with tariff advantages with more than 40 African countries.”
E.U.-Africa relations are at a crossroads; the Cotonou Agreement—a treaty between the E.U. and African, Caribbean, and Pacific groups—expires in 2020 and leaves a unique space for the E.U. and African nations to renegotiate their positions. Such an opportunity aligning with the renewed interest in investment and trade within Africa marks an important turning point to which the E.U. will likely attempt to ‘push’ out its competitors, such as the U.S. and China.
U.S. Presence in Africa
Foreign aid programs emerged in response to the Cold War and were based on motives that were what scholar Keith Griffin calls “always more political than economic.” The USSR and the U.S. used international development assistance as a tool to encourage political alliances. In the middle of the U.S.’s competition with the USSR, countries would leverage their newfound power to benefit from ideologically driven foreign aid. While the USSR may have disappeared from the world stage, international development as a practice of perpetuating a nation’s objectives has not.
The U.S. has suspiciously looked at China’s BRI and involvement in Africa as a thinly veiled attempt to expand China’s geopolitical presence. As the relationship between China and the U.S. is tinged with trade tensions and accusations that both are attaching political significance to their development assistance programs, it’s predictable that cooperation between the U.S. and China in the region will be limited. But China only highlights a waning U.S. presence in an increasingly important region.
Since the 2000s, U.S. foreign aid has focused primarily on the health and education sectors while proving inconsequential in Chinese-dominated sectors. While previous endeavors, such as PEPFAR, had a substantial impact in the region, other dimensions of U.S.-African cooperation have diminished. For example, despite the U.S.’s enactment of the African Growth and Opportunity Act, commercial engagement with African nations resulted in only $39 billion in trade in 2017, while trade between China and Africa amounted to $148 billion. Because the U.S. is the continent’s largest investor, its trade presence should be substantial, but it has found itself unable—or unwilling—to fully leverage its financial presence. Parallel to this, the U.S.’s diplomatic presence has weakened, as European and Asian nations attempt to penetrate the continent with diplomacy, holding countless summits while President Trump has yet to set foot on a single African nation.
While U.S. investment in Africa since 2017 has been on an upward trend, there has been long-term competitive issues for U.S. trade in Africa as nations such as Russia, China, and notably the European Union’s Economic Partnership Agreements (EPAs), have begun to intensify.
Prosperous for Who?
By the end of the century, Africa will be home to 40 percent of the world’s population and provide 42 percent of the global working-age population. In testimony before the U.S. House of Representatives Subcommittee on Africa, Global Human Rights, and International Organizations, Brahima Coulibaly testified that “as healthy and productive members of the global economy, the [African] workforce will significantly expand global economic opportunities” and is incredibly important to the success of all nations.
The inauguration of the Prosper Africa initiative marks a significant policy shift intended to perpetuate neoliberal market mechanisms using development as a vehicle to do so. Such a strategy is additionally borrowing from Cold War policies to counter what the U.S. considers its global competitors. Attaching geopolitical significance to development initiatives while engaging in a larger global contest for power is a common tactic obscured by benevolent narratives of ‘development’ and ‘cooperation’ and one that must be either be deconstructed or rightfully ignored.
The success of Prosper Africa is, as some suggest, dependent upon its ability to ‘unleash’ the potential of the region through its commercial policies and the project’s ability to increase the magnitude of commercial flows between the U.S. and African nations.
In examining initiatives such as Prosper Africa, it becomes obvious that the ‘scramble’ for African nations has become a salient instance of a global jostle for power. Importantly, similar to the non-aligned countries during the Cold War, the rivalry may allow nations to leverage their importance to improve their own socio-economic and political status. This premise is one that has been attached to Development for decades: by appropriating or accepting narratives and beliefs of what exactly a ‘successful’ country entails—from its institutions to its economic practices—nations can obtain resources offered by development actors attempting to improve their global influence. However, the continued injection of geopolitical considerations into the development sphere will likely result in projects similar to those that emerged from the Cold War: of dubious value.
Development projects such as Prosper Africa, the EPAs, and the BRI are poorly veiled attempts to use Development as a vehicle of foreign policy. Development in this manner evokes a static image of nations evolving from ‘unproductive’ to ‘productive’ entities be included within the global system and its economic markets. As such, there can be no recommendations that derive from the premise of Development as it currently stands—a mechanism to create or perpetuate hegemonic norms of how an economy, nation, or people should function. This is, of course, a reality impossible to ignore in the current state of international development.
As such, in a Foreign Policy article, J. Peter Pham and others argue that for nations, “Chinese loans are neither inherently good nor bad—they will be whatever…nations choose to make of them.” Similar to how they did during the Cold War, nations can take advantage of the recent entries to the development ‘market’ to create a better environment for themselves.
Instead of projects designed for African nations by non-African countries, leaders and nations across the continent should take advantage of their renewed importance. Though necessary to institute internal mechanisms to prevent crystallization of inequality and despotism as seen during the Cold War, countries in Africa should use the renewed global competition in Development contexts to strengthen their institutions, economies, and own global presence in a manner conducive to their self-defined development.
*To note, “little d-development” refers to social, economic, and political change occurring ‘naturally’ within a capitalistic model. Conversely, “capital D-Development” implies intentional or deliberate economic, social, and political projects and subsequently change as engineered by nations and development actors.
China’s Belt and Road Initiative and America’s Response
Guest Writer Morven Sharp elucidates the implications of China’s Belt and Road Initiative for American Foreign Policy.
In the last 30 years, China’s economy has developed at a record breaking pace. According to the CIA, in 2015 92 countries counted China as their largest trading partner compared to only 57 countries counting the United States at the same rank. China has gone from the world’s largest recipient of World Bank loans in the 1980s and the 1990s to, in recent years, loaning more to developing countries than the entirety of the World Bank. China’s economic rise has supplanted the nation as a pillar of leadership in a globalized world, and China has only accelerated its dramatic rise to superpower status with its Belt and Road Initiative (BRI). The initiative seeks to ambitiously launch long-term land and maritime transport links between China, Europe, Asia, and the Middle East. With Italy becoming the latest and largest nation so far to join China’s BRI, the United States be cognizant about the BRI’s potential to elevate China’s economy to new heights and should strengthen economic alliances with nations that are increasingly looking to China as a major development partner.
Global Scope
China’s Ministry of Foreign Affairs envisions a set of maritime and land-based economic routes that links China to 71 countries in Central Asia, Europe, Africa and South Asia. Touted as “the most significant and far-reaching initiative China has ever put forward” by Wu Jianmin, member of the Foreign Policy Advisory Committee of the Chinese Foreign Ministry, the BRI includes infrastructure projects like the Yiwu-London railway and a bridge over Croatia’s Mali Ston Bay to strengthen economic and non-economic elements of China’s relationship with recipient countries.
The majority of the funding for the Global Belt and Road Initiative will come in the form of loans, meaning that if the recipient country cannot pay back its loans the Chinese government could own the infrastructure projects they are funding. While some posit the BRI as a challenge to the “liberal international order” the United States has pioneered over the last fifty years, China facilitating more trade, especially in developing nations, reduces the likelihood of interstate conflict and war. Even if war is less likely under a system where China is a leading partner with most of the important economies of the world, the United States realizes that it will be difficult to impose the will of the United States, like sanctions and counterterrorism measures, on countries that are now economically dependent on China. Chinese government sources maintain that the One Belt, One Road is compatible with the five principles of peaceful coexistence as laid out in the United Nations Charter: mutual respect for sovereignty, mutual non-aggression, mutual non-interference in each other’s internal affairs, equality and mutual benefit, and peaceful coexistence. Xi Jinping stated that these connectivity networks across Africa, Asian, and European continents are likely to tap market potential, promote investment and consumption, create job opportunities, enhance cultural exchanges, and enable trust, harmony, peace, and prosperity. The Ministry of Foreign Affairs also believes that One Belt One Road will accelerate the development of western Chinese provinces that lag behind eastern China industrially and infrastructurally. The Chinese consensus rejects notions that China plans to take complete control of existing global financial institutions as the United States did with the Marshall Plan immediately following World War II; Chinese sources in the Global Times delineate between the Marshall Recovery Program that excluded pro-Soviet European countries and the Belt Road Initiative which welcomes all countries to join regardless of their allies, their doctrine, or their past relationship with China.
In the last decade, Chinese foreign policy began to utilize soft power as a method to obtain economic and political goals, and cooperation rather than coercion as a foreign policy tool by China should concern a United States that has traditionally been the world’s foremost hegemon. Soft power scholars believe that because China has such a drastically different government from most of the Western world and developed economies, it has difficulty shifting the international narrative away from its focus on issues of human rights and repressive political system. While previous attempts at Chinese soft power, like Confucius Institutes which have been accused of compromising academic integrity, and Chinese think tanks, that rarely endorse ideas differing from official Chinese Communist Party ideology, recipient countries typically embrace Chinese grant aid. The most effective manner in which China can spread soft power and spur other nations to work towards China’s goals is through what the BRI claims to do, addressing economic needs of developing countries. A Singaporean senior foreign policy official explained that China’s appeal to Southeastern Asian nations over the United States comes from gifts like multibillion-dollar investment aid packages.
American Concerns
The BRI drew disdain from the West due to Chinese willingness to pump money into dictator-run countries, like Zimbabwe, Niger, Angola, and Burma, that have poor human rights records without aid conditionality of changing authoritarian government practices. Despite America’s enormous military strength and reputation as the pinnacle of innovation, the Asian Infrastructure Investment Bank (AIIB) represents an concerning trend to Americans that the BRI follows. They are both noteworthy international financial structures that include many trusted American allies but exclude United States financial hegemony. The AIIB also supports the idea that American financial institutions are ill-equipped to adequately deal with the rapid rise of developing Asian economies. South Korea, a long-term ally of the United States, turned to China as its most important trade partner to rival Japan. The decision of President Trump to go behind South Korean leadership to meet with Kim Jong-Un and end large-scale joint military exercises with South Korea has also strained relations. As the United States finds themselves no longer alone as the sole superpower in the world, many American allies experience internal contradictions and friction within one another that complicates their relationship with the United States. Contrasting preemptive military interventions into Iraq and Afghanistan that have incensed regional conflicts and made American visions of “global peace, security, and stability” seem insincere, the official Chinese ideology behind the BRI is to sponsor peaceful infrastructure and economic development. China’s discourse of “peaceful development” may ultimately win the hearts of nations that grow wary of the Americanized doctrine of “security.” Herrero and Xu uncover that the Belt and Road Initiative would drastically reduce both railway and maritime costs for trade between European Union countries, especially landlocked countries, who are historically American allies.
The BRI is critical to transforming China’s self-identity from an East Asian country to a central country of Asia that includes the North, South, and the West; this reinvigorates China’s image into a world superpower that rivals the United States. What will drastically improve Chinese soft power is the feature of the BRI that allows for an open and inclusive commerce involving countries along the route that are not China, as introduced by Xi Jinping in the 2015 Boao Forum. The BRI fosters a new era of Chinese economics and foreign policy that encourages intensive cooperation and builds on win-win diplomacy endorsed by Deng Xiaoping throughout the 1980s and 1990s to ensure a peaceful environment where China could grow economically.
At best the BRI benefits every country that is willing to partake in a mutually beneficial trade arrangement and at worst the BRI is a nefarious, ideological plan to win over American allies and whose economic benefits are conditional on political requirements and military cooperation. Either scenario should be concerning towards the American policymakers who wish to solidify America as the world’s foremost economic hegemon. Western officials also worry that Chinese development money undermines governance standards of lending institutions like the World Bank, especially if that money goes towards China’s own companies or environmentally damaging projects. The argument that the Belt Road Initiative will better account for the experiences and interests of emerging economies than existing financial institutions like the World Bank does not necessarily need to be true to worry American policymakers either; the AIIB and BRI may bolster China’s global reach as a complement to existing financial mechanisms. Funneling money towards infrastructure, business, and educational opportunity throughout Western China can help assuage relations with China’s ethnic minorities, which takes away a key talking card by Western governments about China’s alleged human rights violations.
Effectiveness of American Countermeasures
In 2015, the BRI was expanded to encompass 70 percent of the global population and 55 percent of the world’s GDP. In 2015, China allocated a $40 billion fund solely dedicated towards funding almost 900 BRI projects, but recently China was estimated to increase total investment on BRI projects to $1.2-1.3 trillion by 2027.
American countermeasures emerged from China’s recent and rapid expansion of infrastructure. Rising anxiety in the American government about China’s assertive development abroad led to Secretary of State Mike Pompeo laying forth the “Indo-Pacific Economic Vision” to combat China’s rise. Pompeo also elucidated President Trump’s Indo-Pacific counterstrategy with a trilateral investment agreement among the United States, Japan, and Australia. The Indo-Pacific Economic Vision will funnel money into Southeast Asia through the US International Development Finance Corporation, which doubles the global spending cap for loans private companies can use for development projects to 60 billion USD. Pompeo’s language was far less combative and aggressive than Vice-President Mike Pence’s language in 2018 at the Hudson Institute that stressed a Chinese campaign undermining support for “our nation’s most cherished ideals.” Pompeo even offered an avenue for collaboration for China when stating “our Indo-Pacific vision excludes no nation.” Brian Hook, Pompeo’s senior policy advisor, implied that American efforts to expand US technology exports to the region and store energy resources by developing infrastructure would ensure “that America’s model of economic engagement is the healthiest for nations in the region.” These American initiatives still do not even scratch the surface of the billions of dollars of investments China is transferring into Southeast Asia.
The American response to the Belt Road Initiative under the Trump administration has flirted with bolstering ties with relevant allies in the Asian-Pacific region and has taken issue with China’s economic interactions with other Asian countries. While there are little doubts in the international community about America’s ability to uphold military commitments, investment in Southeast Asian countries could strengthen America’s image as upholding economic and political alliances especially after trust among Southeast Asian countries dwindled after President Trump incurred a withdrawal from the Trans-Pacific Partnership. The Trans-Pacific Partnership was an opportunity for the United States to strengthen its trades relationships with relevant Southeast Asian countries in the pivot against China, and the AIIB represents China’s largely successful response to the TPP with major economies like Brazil, India, Russia, France, and the United Kingdom joining membership. In July of 2018, the American government also streamlined funding to prevent the termination of the Overseas Private Investment Corporation, an agency that offers political risk insurance and financing towards American companies interested in international development projects. Representative Ed Royce (R-CA) labeled Chinese development assistance as “predatory development finance models” citing the specific example of China acquiring a major port in Sri Lanka due to Sri Lanka’s inability to pay back China’s loans. Royce’s quarrel with China has more merit than it used to; Chinese loans are nearing up to 5 percent when they used to only be 2.5 percent.
The Belt Road Initiative can also be seen as proof that China is deeply cognizant of America’s “pivot” to Asia, implying a stronger commitment US military, trade, and development assistance to American allies to counterbalance China’s rise. Major General Qiao Liang stated that the BRI is a “hedging strategy against the eastward move of the U.S. pivot to Asia.”
Conclusion
Despite Chinese sources proclaiming altruistic goals, the BRI is first and foremost a tool to promote Chinese economic development by heightening exports, enriching access to natural resources, and providing support to domestic industries that experience overcapacity within China’s economy. China also stands to benefit from strengthening ties with Central Asian autocratic governments that have an abundance of energy resources and to reduce tensions among China’s western ethnic regions. China would not undertake such a grandiose project if it did not have the potential to propel China into the world’s most important economic power.
It is hard to deny that the BRI does provide China a valuable avenue in shaping the preferences of other nations in a manner that benefits China. Chinese sources will under-exaggerate and Western sources will exaggerate the difficulty of the BRI’s profitability with many nations that have underdeveloped economies, high levels of corruption, and limited knowledge on the project. The United States should also feel more at ease at the fact that coercion of nations involved in the BRI would result in political counterculture that would denigrate China’s soft power and destroy Xi Jinping’s new ideal for China.
While the American military is by far the most formidable force in the world, American supremacy of the economic realm is more at question currently than it has since before the Bretton-Woods Institution. The Institute for China-America Studies, China’s only DC based think-tank, argues that the West’s best option regarding the BRI is simply to accept and attempt to shape the potential $1 trillion bestowed upon the geo-economic stage. Either option of joining the BRI as a partner and using America’s premier economic influence of the last 50 years to exert political ideologies or remaining outside the BRI but bolstering economic and political support to Asian Pacific allies in our pivot against China is preferable to questioning the value of our alliances. Any approach by the Trump administration that ignores trends of globalization and free trade, like abandoning multilateral trade deals or questioning burden-sharing in alliances, is doomed for failure.
Who Does Foreign Aid…Aid?
Contributing Editor Deborah Carey critiques framing foreign aid as an endeavor for power.
In the midst of terrorist attacks and domestic economic debates, foreign aid and its implementation has not been a prioritized talking point in America’s election this upcoming November. However politicians on both sides of the aisle have stated the importance of foreign aid throughout recent history. In April, even rock star Bono appealed to the senate, encouraging senators to increase foreign aid expenditure. So is foreign aid really that important? If so, why has it been minimally discussed in debates for the presidential bid this year?
In the broadest sense of the phrase, foreign aid is defined as “assistance (as economic aid) provided by one nation to another”. Throughout history is has allowed the United States to have a stake in the political decisions of other countries, curb global epidemics, create wealth in other countries, among other results. It is no secret that the amount of aid the US gives to each country often directly correlates with our interests there. We have also engaged in humanitarian foreign aid to build relationships with other governments. In their article, Benjamin Goldsmith, Uysaku Horiuchi, and Terence Wood argue that foreign public opinion is favorable toward the United States when we “do good” in other countries, which benefits Americans abroad and our foreign policy in the long run. However while foreign aid can be a great tool and demonstrates the American values of creating a more prosperous, free world, it is also a topic of large contention.
Foreign aid is not always used effectively. In 1987, Ronald Reagan made a speech opposing the mismanagement of foreign aid funds, stating “with this money we bought a yacht for Haile Selassie”. Since this time, more safeguards have been instituted to ensure the responsible spending of foreign aid funds. To increase transparency in foreign aid spending, a new official government website reports all foreign aid data expenditures and breaks down funding by country and type of aid assistance. Development projects have also been increasingly contracted out to third party organizations that have greater oversight capacity to manage projects funded by foreign aid. So while there is still a margin of error and room for improvement, foreign aid spending has become much more responsible since Reagan’s speech in 1987.
Regardless of these changes in implementation, foreign aid is a highly unpopular concept. In 2014 the US gave a total of 32 billion dollars in foreign aid to other countries. While this sounds like a large amount, it was only 0.19% of the US national income. The US gives the most foreign aid in dollar value, however we fall short of generous on a global scale in percent of national income. Sweden gives the most percentage of foreign aid, with 1.1% of their national income. In reality the US is average in its foreign aid expenditure, relative to national income. However Americans do not perceive aid this way. The Kaiser Family Foundation polled Americans and found that on average they believed 26% of our federal budget goes to foreign aid—more than all of military spending, education, transportation, and veteran’s benefits put together.
Considering these misconceptions about foreign aid, it is easier to understand why an important topic like foreign aid, so capable of shaping international opinion of the US, has not been a greater priority in election 2016. Both candidates address their foreign aid positions on their websites. Hillary Clinton refers to foreign aid as a component of her formula for “smart power” in her statement “we have to use every pillar of American power – military might but also diplomacy, development aid, economic and cultural influence, technology, and the force of our values, that is smart power.” Donald Trump directly mentioned aid in his bid announcement when he stated “It is necessary that we invest in our infrastructure, stop sending foreign aid to countries that hate us and use that money to rebuild our tunnels, roads, bridges, and schools […].” By “countries that hate us”, Trump is referring to Pakistan and Egypt, two of the largest recipients of foreign aid. However most—almost half—of the aid we give to each of these two countries is categorized for “peace and security”. That is what can be so confusing about foreign aid. There is no specification within the term for what is given in military aid, and what is given in humanitarian and infrastructure assistance.
President Obama has proposed that foreign aid should be combined with the defense budget, since the multifaceted wellbeing of other nations and their citizens is vital to America’s national security. With this assertion by our sitting president and the statements made by both president-elects of America’s two largest parties, we can conclude that aid cannot be supported by the American people unless it is framed as a power-inducing factor to America’s national security. To revisit my initial question regarding foreign aid’s nonexistence in presidential debates this past election, what I least expected in starting this research has seemed to be true—foundationally, foreign aid is a nonissue in this election, with both candidates viewing it as a similar tool, from different sides of the aisle.
It could also be the case that recent events in Paris, Brussels, San Bernardino, and Orlando, and the nativist sentiments that followed, do not allow for discussion of spending more money on aid that would not directly result in greater safety for Americans. However Bush’s support of PEPFAR to reduce the AIDS epidemic, Obama’s “Power Africa” program, America’s support of other countries after national disasters, and funding to make elections in budding democracies more transparent are efforts that do not go unnoticed globally. By framing foreign aid as solely an endeavor for power, we may miss out on opportunities to make deeper partnerships, greater developmental advancements, and participate in the successes of lesser-developed nations. While it is strategic to use foreign aid to make America more powerful, it is just as beneficial in the long run to use our power to promote—and fund—aid projects that reflect American founding ideals of life, liberty, and the pursuit of happiness beyond our own borders. To our president-elects, it may be time to debate aid, and all categories of it, more in-depth. After all, foreign aid matters, and not just to those who vote for you.