• Business Day (South Africa): Emerging markets

finance from Venezuela to produce generic low-cost treatments for a chronic degenerative disease that people in a per capita GDP $7,000 setting can afford. This (imaginary) consortium won't have to fight against Pfizer and Merck, nor will it assimilate to their rules. It will simply route around them to create its own pharmaceutical economy, which will be profitable to its firms and beneficial to its customers.
Concurrently, the World Without the West is developing its own channels for the distribution of information and the sponsorship of discourse. In February of this year, Wen Jiabao was credited with an article in the official People's Daily newspaper responding to calls for political reform in China. The Washington Post led the next day with the headline: "China's Premier Calls Democracy A Distant Goal." Meanwhile, Al-Jazeera declared that, "China's Wen urges more reforms." With the explosion of alternative sources of information and media, it is becoming increasingly difficult for Western narratives to penetrate the developing world-whether they are about Iraq, terrorism or trade. Al-Jazeera's principal rival for the Middle East market is the Saudi government-financed AlArabiya, not CNN or the BBC. Baidu, the prominent Chinese Internet search engine, is the fourth most trafficked website in the world and-despite its heavy censorship by government authorities, its placing of advertising as a higher priority than search results and its ongoing battles over links to copyright-violating music sources-it commands over 60 percent of the first-chosen searches in China and continues to gain market share. If the ability to shape narrative is one of the most important power resources in international politics, the World Without the West now controls its own channels.
What should the United States do about this?
THE FIRST step in Grafting a sensible and forward-looking policy is to see these developments for what they arenot for what we wish them to be or what we fear. This means acknowledging two uncomfortable but profound and interconnected realities of the late twentieth century that set the stage for today's power transitions. The first is that the "Western liberal idea" never penetrated deeply into the psychology and politics of much of the world. The second and closely connected reality is that the dirty little secret of globalization is anything but little: At least half the world's population simply did not benefit meaningfully from sixty-plus years of Western-led economic growth and technological change. For those outside the West who did benefit, the vast majority attribute their advancement not to liberal ideology, the beneficence of the West or the post-World War II American-led order, but to state-directed capitalism and resource nationalism run by illiberal states.
So re-surfacing an American commitment to post-World War II style multilateralism with post-World War II institutions is no longer meaningful; in the eyes of the World Without the West it is not much more than a slogan. In any case, the United States has lost many of the old forms of leverage that worked in that setting.
We must face head-on and lean into, rather than away from, the real choices that we confront. Some are gut-wrenching in the sense that they will force us to make truly hard compromises among sets of values, preferences and expectations that we don't want to trade-off. That is no excuse to ignore or hide from those choices.
Here are three conceptual options. They are not exhaustive, but are representative of the kind of thinking we believe is necessary.
The United States can seek to aggressively block the further development of the World Without the West. One way to do that would be to try to deprive the major rising powers of the material resources that have empowered these developments. That would mean an economically gut-wrenching reversal of American dependence on the Chinese industrial production machine and non-Western sources of petroleum. Another option would be to force a set of military engagements and thus divert the energy of this alternative world system toward direct security competition with the West. Either is conceivable, but the costs and risks are likely to be judged prohibitive.
second, the United States can try to reduce the attractiveness of the World Without the West. One effective way to do that would be to compete for the allegiance of states that are "in play"-those that have not yet de facto chosen sides. The challenge here is to re-engineer the liberal world order so that it actually and visibly serves the interests of a large, developing, democratic and proudly nationalist country like India, rather than just proclaims that it is its goal to do so eventually. The same could be said for a number of countries in the developing world, including Indonesia, Brazil and South Africa. Consider then, for example, the very different (and domestically difficult) proposals Washington would have to put forward in discussions about the Doha Development Agenda. The end of agricultural subsidiestoday. Licensing of significant protected molecules to generic drug manufacturersin the short term. An equitable arrangement for opening trade in services that levels the playing field for developing countries in areas like telecommunications and finance. Pursuing this type of strategy will require an enormous degree of compromise, even sacrifice, in American domestic politics.
Third, the United States can accept the World Without the West for what it is. There may be some, perhaps many, issue areas in which the United States and the West are simply prepared to let the World Without the West go it alone. In this "live and let live" scenario the task would be to define the red lines beyond which that is not acceptable-and then to focus on controlling the points of connection, the bridges between the two worlds, the places where interdependence is high and unavoidable. Climate change and international terrorism probably fall into that category; energy supplies and human rights may not. Choosing a "live and let live" strategy would entail the United States backing down, as never before, on some of its democratic liberal ideals.
The crux of U.S. policy in this latter option would be to manage to our benefit the points of interdependence. And to do so without indulging the belief, tempting though it will be, that those points should be manipulated to undermine the viability of the alternative order. It is true that any notion of world order strains to incorporate the diverse interests of the many players that it wishes to attract. The World Without the West is, of course, no more a monolithic bloc than is the West itself. The two could engage in comparable efforts to heighten each others' internal lines of cleavage. Going down that road pulls us back into something like a traditional bipolar confrontation. But this bipolarity would pit the West against an increasingly pragmatic bloc of countries led by an economic powerhouse, rather than the Cold War's coerced bloc led by an economically frail and ideologically strained hegemon. It might not end in war, but it also might not end with a Western "victory."
Doing nothing-or pretending that there is nothing other than inevitable conflict or assimilation for which we need to prepare-is simply no longer a responsible foreign-policy agenda.
Will it be marked by convergence toward deepening cooperation, stability, and peace or by deterioration, leading to increasingly open competition, and perhaps even war? By this logic, the high level goal of American foreign policy is to structure the choice facing rising powers so that integration and assimilation are heavily favored, while hedging against the possibility of conflict, without allowing the hedge to become a self-fulfilling prophecy.
Copyright National Interest, Inc. Jul/Aug 2007 | Naazneen Barma and Ely Ratner are Ph.D. candidates in political science at the University of California, Berkeley and research fellows at the New Era Foreign Policy Center. Steven Weber is a professor of political science and director of the Institute of International Studies at the University of California, Berkeley.
Document NLIN000020070724e37100006
Letter From Chad

Enter China, the Giant

Junger, Sebastian

6,223 words

1 July 2007

Vanity Fair

GVAF

126

Issue 563; ISSN: 07338899

English

Copyright (c) 2007 Vanity Fair Magazine Provided by ProQuest Information and Learning. All rights Reserved.
Desperate for Africa's oil, China has been investing hundreds of billions of dollars in pariah regimes-most controversially, Sudan-then selling them the weapons to stay in power. But outrage over the Darfur genocide may change Beijing's bottom line
The rebels came out of the eastern desert in a column of pickup trucks a hundred vehicles long and were not spotted until they had crossed most of Chad. The trucks were rumored to have come from a Chinese oil base, and the rebels carried Chinese weapons and were backed by a country-Sudan-that got most of its revenue by selling oil to the Chinese government. By the time American spy satellites picked them up, the rebels-calling themselves the Front Uni pour le Changement (FUC)-were 60 miles outside the Chadian capital of N'Djamena and closing fast. Mirage jets, part of a French stabilization force, fired warning shots at the advancing column, but nothing would slow it down.
Each truck carried 55-gallon drums of water and spare fuel in the back and could operate across a thousand miles of desert unaided. Pouches of rocket-propelled grenades hung from the sides, and belt-fed machine guns were bolted to the rooftops. Five men rode inside the cab, and another 5 or 10 men rode in the back along with the bedrolls, ammunition, fuel drums, and spare tires. Some trucks were plastered with mud to blend in with the desert, and others had their windshields punched out to allow for an additional machine gun on the dashboard. Outfitted like that, there was virtually nowhere in the Sahara they couldn't go.
Around four a.m. on April 13, 2006, a Chadian Army commander spotted the rebel column on the outskirts of N'Djamena and radioed in to his headquarters, "We are face-to-face." Moments later, the first rockets came in. The FUC commanders had expected Chadian officers to switch sides as soon as the column arrived, but, instead, the rebels found themselves surrounded in the center of town and getting shot to pieces. By midmorning the corpses of scores of FUC fighters had been dumped in front of the new National Assembly building.
The coup had been thwarted, but the fact that rebel forces could get anywhere near the capital was troubling to foreign investors, and Chad's fledgling oil industry was not yet self-sustaining. Facing the combined might of China and its client state Sudan, Chadian president Idriss Deby did what-in African politics-could only be considered the obvious: he made FUC leader Mohamat Nour his minister of defense, and he invited the Chinese government into Chad to drill for oil.
In addition to supplying oil money and weapons to Sudan, China has adamantly defended the country against any international criticism over Darfur, the region of southwestern Sudan where militias, supported by the Islamist government in Khartoum, have killed hundreds of thousands of tribal Africans. The war has spilled into Chad, causing an immense amount of suffering and destabilizing the entire region. Yet, in the year since the attack on N'Djamena, the Chinese have made astonishing inroads into Chad-a country that could easily consider China an enemy. It is the particular brilliance of Chinese foreign relations in Africa, however, that they seem to be able to conduct business with both sides of a raging war without alienating either party.
The groundwork for Chinese involvement in Chad was laid in 2000, when the World Bank lent the African nation $37 million to help build a pipeline from its Doba Basin oil fields, through Cameroon, to the Gulf of Guinea, where it terminated in an offshore loading platform. Chad's portion of the oil revenue was expected to run into hundreds of millions of dollars annually-an enormous boon for a country that ranks at the very bottom of the world's poverty list. In an attempt to break the endless cycle of corruption that so many African countries are known for, the World Bank stipulated that 80 percent of those revenues be spent on social programs. The problem was that the World Bank conditions-though well intentioned-restricted President Deby's military spending so drastically that Sudan was able to outspend him by 50 to 1, which made the outcome of the war almost inevitable. In October 2005, Deby declared that he was no longer abiding by the loan agreement, and within months the World Bank ended all loan payments to Chad.
In the world of international development, there was a huge amount riding on the Chad-Cameroon pipeline. Over the past century, Western companies have extracted trillions of dollars' worth of oil, gas, minerals, and timber from African countries that were simply incapable of investing the revenue in a responsible way. The countries were too young, too fragile, too riven by tribal tensions, and, frankly, led by men who were too greedy to put the money to good use. The elaborate system of loan conditions and monitoring mechanisms set in place by the World Bank was one of the first major attempts to avoid this trap, and by all rights it should have worked. It was innovative and forward-thinking and could well have provided Africa with a way out of poverty.
Instead, Chad's war with Sudan got in the way. Four months after the attack on N'Djamena, President Deby severed diplomatic relations with Taiwan and invited the Chinese into his country to drill for oil. To many experts it seemed a bald attempt to bribe China into easing its support of Sudan. Once in Chad, China didn't waste any time. Last January, the Canadian company EnCana announced the sale of its 50 percent share of a vast, undeveloped oil field, named Block H, split between the northern and southern parts of the country, to the China National Petroleum Corporation. The company then quickly partnered with another Chinese petroleum firm to buy up the rest of the block. With that purchase, the Chinese held oil interests in a swath of troubled, politically repressive countries stretching from the Red Sea to the Gulf of Guinea.
I arrived in N'Djamena just before the one-year anniversary of the April 13 attack. Despite some skirmishes and a Sudanese air raid near the town of Bahai, things were quiet inside the Chad border. There were rumors that Sudan's militias were going to make another attempt on the capital, but there was nothing anyone could do about it except wait and see.
With a population of around one million, N'Djamena is a city of low cement buildings and long boulevards that could never be traversed without the huge shade trees that the French planted a hundred years ago. Chad is a country of almost biblical harshness: kiln-like heat and droughts and locust plagues and deadly scorpions that ride atop the monstrous camel spiders found in the eastern deserts. Refugees from Darfur don't fare well on foot in eastern Chad.
With the discovery of oil there have been some improvements, however. There are now paved roads to the oil fields, a couple of new high-rises in N'Djamena, and the amazingly ghastly National Assembly building that the Chinese slapped together out of steel and beige tile. Farther out of town, beyond the earthen berms of the French military base, the government is building a housing development for the influx of people they expect once the oil money hits town. The site is 143 acres of bone-dry gully and hardpan that had to be filled and graded and laid out in a huge, well-drained grid. An American company put in a bid for the job but never had a chance against the Chinese.
"Not only are the Chinese cheaper, but they said they could do the job in three months," the project director explained to me as we drove around the jobsite. It was around 120 degrees, and workers were moving slowly through the heat and the dust, preparing the roadways for hardtop. The laborers were all Chadian, but everyone else on the job-engineers, drivers, architects, crew bosses-was Chinese. "They don't have limited hours; all they do is work," the director says of them with admiration. "And they are not paid well-no insurance, nothing. They're fast, cheap, and they don't argue. That's why they got the job."
According to experts, Chinese construction firms regularly underbid Western rivals by importing cheap Chinese workers and slicing their profit margins to as little as 3 percent. As a result, American companies lose one construction contract after another in Africa. Even in small business ventures, the Chinese are hard to compete with. A Taiwanese restaurant owner in Chad named David Wu, whose parents immigrated to Angola when he was young, admits that he hires Chinese workers because they are so cheap. "I would rather take Taiwanese workers, but I can't," he explains. "They take a month vacation every six months and want to be paid $2,000 a month. The Chinese don't take vacations and will work for $700 or $800 a month. Chinese merchants are everywhere now-in Angola, in Niger, in Congo. They're able to undercut locals because all their goods come from China."
I asked an American military officer with long experience in the region how the Chinese can be so successful doing business in one of the poorest and most unstable parts of the world. The man's answer came out in one long rush. "The Chinese say to these countries, 'Look, roads will help your economy, so let's build a road, and we'll provide most of the money for it,'" he said. "The rest of the loan is then provided by Chinese banks and secured against future oil revenues from the country. The road-building contracts go to Chinese construction firms with Chinese engineers, workers, and equipment. All of this comes in a package. Why internationalize something when you can do it yourself? The construction materials come on Chinese ships and are moved on Chinese trucks and Chinese equipment that use Chinese-made rubber gaskets. The Chinese Embassy in Chad is totally self-contained-they even grow their own vegetables. The U.S. government can't plan past six months from now. The Chinese think a hundred years in advance."
China's relationship with Africa started in earnest in the late 1950s, when its support-along with the Soviets'-for rebel leaders like Zimbabwean president Robert Mugabe helped overthrow colonial administrations all over the continent. It has been in only the last 10 or 15 years, however, that China has entered Africa with bulldozers, engineers, and construction crews. With foreign-currency reserves topping $1 trillion and an economic-growth rate of 11 percent a year, China is both desperate for natural resources and in a position to spend enormous amounts of money to get its hands on them. Oil is of particular concern. Chinese oil needs are rising 10 percent annually-by far the fastest of any nation in the world-and if those needs are not met, their economic expansion will collapse. That has sent them to Africa.
China now gets 31 percent of its oil from Africa and is the top trading partner for several major oil-producing African countries. Chinese trade with the continent has quadrupled since 2000 and is expected to triple again by 2010, blowing past the United States to hit $100 billion a year. To top it off, China has canceled more than $1 billion worth of African debt. On a continent as mired in poverty and corruption as Africa, that kind of money will buy you a lot of friends.
"China's primary goal is to import from Africa those key raw materials that will sustain its booming economy," says David Shinn, former U.S. ambassador to Ethiopia and Burkina Faso and currently an adjunct professor at George Washington University. "That's oil, but it's also minerals and timber. The Communist Party is more or less predicating its future on maintaining booming economic growth, and if it should stumble, then I think the party is in danger of losing power."
Africa arguably needs all the foreign investment and debt relief it can get. But as European and American governments are beginning to realize, unregulated development often produces more-not less-poverty in Africa, and that leads to instability and corruption in the very countries where Western companies are trying to do business. The restrictions on the World Bank loan to Chad were an attempt to avoid that trap, but China is willing to completely ignore those issues. That puts them in an unbeatable negotiating position.
"The Chinese are financing a dam project in Sudan, and there are reports of communities being displaced as a result," a World Bank official in Africa explained to me. "With the World Bank, there would be consultations with the affected populations, along with compensation to people whose land was lost. But China offers [a no-strings-attached] approach that many countries would understand to be simpler, faster, and cheaper."
Giving money away in Africa is good business: it's a continent rich in resources and desperately lacking in everything else, and once an industrialized country is in there, it can insert itself into almost every part of the economy. Let's say that China lends an African country a billion dollars that will be secured by future oil revenues. To produce those revenues, the Chinese stipulate that the oil infrastructure-pipelines, wells, offshore rigs, roads-must be built by their firms, which either have been written into the loan contract or can underbid everyone else because they are effectively state-owned. (Bids from Chinese construction firms regularly come in at 25 percent below those of Western rivals.) The construction work is also financed by oil revenues, but it hardly matters to China whether the original loan is paid off, because it now owns a huge chunk of the country's future oil revenues-a much more lucrative enterprise than simply calling in loan payments.
In addition, China now has a client for the kinds of huge infrastructure projects that African governments love, as well as a huge, new, untapped market for its cheap manufactured goods. It's not good for the country, necessarily, but since many African governments are breathtakingly corrupt, there is usually a high-level minister-if not the president himself-who will see the deal through.
China's relationship with Sudan has received the most scrutiny because of the ongoing atrocities in Darfur sponsored by the Sudanese government. In the 1990s, China spent hundreds of millions of dollars building pipelines to serve Sudan's southern oil fields. Those investments gave China a 41 percent stake in the country's main refinery and access to as much as 80 percent of the oil coming out of that country. It was a great investment-except that Sudan has a history of civil war and terrorism that goes back decades.
In 2003, ethnic African rebel groups in Darfur began agitating for more power, and when Sudanese president Omar al-Bashir, an Islamist from the country's North, refused to give it to them, they began attacking government troops. The rebels were better fighters than the Sudanese Army and started to rack up an alarming string of successes. In one famous battle, the rebels attacked a Sudanese base with the morning sun at their backs at a time when the Sudanese were expecting a night patrol to come back in. By the time the defenders realized what was happening, rebel trucks had overrun half their positions.
Unable to counter this new threat with his regular army, al-Bashir began arming Arab nomads known as janjawid to do the job for him. In exchange for driving African tribesmen out of Darfur, al-Bashir allowed the janjawid to take any goods and livestock that the fleeing villagers left behind. Over the next few years at least 200,000 civilians were killed in Darfur, and approximately a quarter-million refugees spilled across the border into Chad. Most of the victims were black Africans, and most of the attackers were Arab tribesmen who fought on horseback or camelback. Often the janjawid were backed up by government helicopters or bombers so that the rebel groups would be unable to offer a defense.
The government eventually began to gain the upper hand in the war, in large part because 80 percent of its oil revenue was now devoted to buying arms. The bulk of those arms came from the Chinese, which meant that the Chinese were spending almost $2 billion a year on Sudanese oil and then immediately making much of it back on weapons deals. (Amnesty International has also recently accused Russia of selling attack helicopters to Khartoum.) And the weapons were being used to suppress a rebellion that, in part, was about power sharing in government and access to oil profits. It was a neat circle of economic interests that started to break down only when the rest of the world got involved.
"As the Chinese look around the world to see where they can