China is establishing a formidable presence in Namibia.
In the last few years it has moved in large numbers of people as well as taking
up numerous business opportunities. In the capital city Windhoek, for example, Quingdao Construction recently put up a huge
sign indicating that it has been contracted to construct another section of Namibia's
new state house, the country's new national icon and the subject of much controversy
as a result of the foreign capital which is building it. On each incoming daily flight from Johannesburg to Windhoek there arrive typically between five and eight nationals of Chinese origin, all of whom are
obviously greeted by their families and not by tour operators. In the Oshikango
region in the north of Namibia,
the number of Chinese shops increased four-fold between 2004 and 2006; they have been accompanied by the opening of "China
Town" and "China Village"
In parallel to this apparent "bottom-up" strategy, China is also buying its way into Namibia by giving grants and interest-free loans to the nation. In 2007, China loaned N$1bn (€83m) to Namibia in order to buy Chinese software to use across Namibian public service organizations. Is it a case of conquering Namibia, along with the rest of Africa? Undoubtedly, China has become a major player in the competition for African resources across the continent. It is giving a several billion US dollar credit line to Angola, an oil-rich country. And as in Namibia, this is accompanied by Chinese construction firms rebuilding roads, schools and clinics.
Chinese influence on Namibia
is not a novelty. In the covert war of the 1970s and 1980s, when the South West
African People's Organisation (SWAPO) fought for liberation from South Africa, China
provided weapons, money and moral support to Namibia. This has not been forgotten
by SWAPO, the ruling party in Namibia
since its independence in 1990. Perhaps Namibia is repaying old debts by
allowing this enormous influx of Chinese people and investment. Namibia's
Ministry of Home Affairs has allegedly issued about 20,000 work permits for
Chinese citizens in a country with a total population of just over 2 million
and an official unemployment rate of more than 40% (Grobler, 2006:2). The
effect of such measures is already being felt by local business and the local
population. Civil work in Namibia,
which has predominantly used local labor, is largely carried out through
Chinese construction firms bidding at 30% below current market prices. This
undercutting is driving local firms out of business, thus increasing
unemployment in a sector which traditionally provides work for the most
vulnerable people in the community.
The nature of the investment is also troublesome. Looking at the situation on a macro-economic level, evidence shows that almost all Chinese exports are manufactured goods - appliances, clothing and other light manufacturing, whereas Namibian exports to China are fish, ores and minerals. One may add uranium to that list, a resource high on China's wish list for the future. Early in 2008, China acquired a 12 percent stake in the Australian-based Rio Tinto group, which has a 69 percent interest in Namibia's major uranium mine, Rössing Uranium. The conclusion to be drawn from analysis of the import-export trade is that China exports labour-intensive, value-added products to Namibia and imports goods from Namibia that are mainly non-sustainable commodities, creating few, if any, jobs for Namibians in the process.
The Namibian President Hifikepunye Pohamba has publicly declared that he is very keen to develop bilateral cooperation in an effort to bring benefits to both countries. China is clearly benefiting from access to scarce resources, but what is Namibia's share in these deals? Whilst China - in urgent need of natural resources for its growing economy - is fiercely battling out the contest for Namibia's and Africa's resources, one thing is clear: ultimately, this new "scramble" is doing little to enhance Africa's overall development.
Christiane Doerner was Senior Lecturer in Business Administration at The Polytechnic of Nambia in Windhoek until 2008. She has also served as Advisor to the World Bank and Sales Manager at ABB in India and Germany and is currently working as Executive Search Consultant in Germany. She holds a postgraduate degree in business administration from Cologne University.
Related Material from the Atlantic Community:
- Sonja Davidovic: China's Energy Policy in the Geopolitical Context
- Andrew D. Bishop: Is China the New Japan?