China's New Colonialism

China has sought to differentiate itself from the West in Africa, investing in development instead of relying on the old donor schemes. But the effects of what it's planning -- most recently, in the iron-rich country of Gabon -- will be just as devastating as anything the West has done there.

The resource-based corruption and international greed that has typified so much of the West's interactions with African countries has now arrived in the tiny and impoverished West African country of Gabon. Only this time, the external predator, working in tandem with a venal, autocratic local ruler, isn't the West -- it's China. And the tactics are new as well. China, instead of following in the West's footsteps and setting up donor relationships with cash-strapped African states, is trading development revenue for natural resources, pouring more than $29.3 billion since 2002 into the continent through development projects geared at the exploitation of finite resources, financed by China's state-owned export-import bank China Exim. This barter system doesn't just allow China to differentiate itself from the colonialists; it has also redefined Africa's foreign investment risk profile, leading to a 2007 agreement between China Exim and the World Bank to collaborate on investment via construction projects. But don't be fooled: China's goals in Gabon are no less selfish -- and the potential outcome is no less disastrous -- than any misguided colonial project of the past.

Until 1960, Gabon was a French colony, a focal point of France's "Africa" policy of Françafrique, composed of secretive defense agreements, multinational corporations, and handpicked governors. Since independence, the country has existed in a state of forced peace, maintained by France's Marine infantry battalion, which remains stationed in the capital city of Libreville. But class-based conflict is always a potential threat: Gabon's per capita GDP is relatively high, at $14,000, but the political elite hoard the wealth and keep everyone else in poverty. Seventy percent of the population lives under the poverty line, and state services ranging from health care to sanitation do not exist. Gabon has little to no infrastructure: Only 10 percent of the roads are paved, with 80 percent of the land forested.

It's this forested region, in the Ogooué-Ivindo province, that is at stake today. Iron ore, billed as one of the world's last remaining major untapped deposits, was discovered there in 1885. The remote area is estimated to hold 1 billion tons of ore, with iron content of 64 percent. In 2006, Gabon's then-lifetime dictator, Omar Bongo, awarded a $3.5 billion mining deal to a Chinese consortium. The project, wholly financed by China Exim, includes the $790 million Belinga mining facility; two hydroelectric dams designed to electrify the mine, Grand Poubara and Kongou Falls (the latter with a price tag of $754 million); a 350-mile railway; and a deep-water port at Santa Clara engineered to transport resources from northeast Gabon to the Atlantic -- and, of course, on to Beijing. The first shipments are scheduled to leave for China in 2011, with an estimated 30 million tons to be extracted each year.

According to the secretive development agreement, China received a 25-year tax holiday, despite profits projected within the first eight years; 90 percent of the profits thereafter; and some regulatory exemptions, including environmental ones such as alleged cheapened access to forested regions and rivers, as well as significant control over the country's infrastructure, which the Chinese are to develop.

Earlier this year, Bongo died and his son, Ali-Ben Bongo Ondimba (also known as Bongo Jr.), was elected president at the end of August, an event that will probably just grease the wheels for Chinese investors. Even Bongo Jr.'s personal assistant is Chinese. And Gabon is clearly excited to get its hands on some of China's money. The country is one of sub-Saharan Africa's top five oil producers, with oil accounting for 80 percent of its export earnings, but its reserves are dwindling. Production is down from 351,890 barrels per day (bpd) in 1998 to 270,000 bpd now. Gabon holds just 2 billion barrels in proven reserves, not much compared with Nigeria's 32.6 billion.

Belinga is the country's great hope for the future. But Gabon is not likely to make as much profit from the mining deal as it would like -- and the costs will be dear. Profits from finite resources are largely derived from taxes and royalties (mineral taxes levied on extracted resources), but with China's 25-year tax holiday, that money won't materialize for some time. Meanwhile, the promised 26,850 jobs seem similarly fantastical because China tends to export its own labor, except labor for within the mines themselves. The electrification that is a major part of China's plan will likely bypass towns and villages in favor of mining facilities, given the high cost of hydroelectric transmission lines.

Finally, the proposed Kongou Falls dam, situated in the Ivindo National Park -- Gabon's rain forest, inhabited by unique and endangered species such as the forest elephant and the lowland gorilla -- would be disastrous for the local ecology and the lives of Gabon's indigenous people, directly dependent on ecosystem services such as fisheries. China shows no sign of being invested in the region's environment. Long before environmental-impact assessments were conducted, China began paving a 26-mile road to Kongou Falls, facilitating poaching, wildlife trafficking, and the logging of one of the world's last remaining ancient rain forests, part of the Central African rainforest that, along with the Amazon, is a major carbon sink, absorbing 20 percent of the world's carbon emissions each year.

Ironically, the loans financing Gabon's socioeconomic and ecological degradation violate China Exim's own social and environmental guidelines. And the bank is being held accountable, at least to a certain extent. Belinga has inspired a network of local civil society groups called Environment Gabon and headed by Brainforest, a Gabon-based NGO, to rise up. Due to their efforts, China Exim appears to have postponed financing the project until China National Machinery and Equipment Import and Export Corporation, China's largest state-owned firm handling foreign trade and the leader of the Belinga consortium, is investigated for alleged ecological violations. And concessions initially marked at 5,000 square kilometers have been reduced to the actual size required: 600 square kilometers.

But Gabon's president remains determined to carry on his father's wishes: As Bongo Sr. said in 2007, "Whatever happens and whatever anyone says, Belinga will go ahead." Meanwhile, China has been dispatching its predatory investors to other African countries, pushing the construction of megadams in Sudan and Mozambique, $2 billion in oil-backed loans in exchange for development projects in Angola, and a $3.5 billion investment deal allocated to Zambia's Copperbelt province. Hopefully the dangers posed by Belinga will inspire NGOs and activists across the region to resist such exploitative deals with a new breed of colonialists before it's too late.



Courting Disaster in Honduras

When Zelaya came back, he rendered all things uncertain except one: The crisis is moving from the negotiating tables to the streets.

When the deposed president of Honduras, Manuel Zelaya, unexpectedly showed up in the Brazilian Embassy in Tegucigalpa Monday, he dramatically altered the dynamics of the ongoing political crisis in the Central American country. Zelaya's cheerfully triumphant return will quickly be met with a sharp reality: The president's presence in Honduras will almost certainly shift the conflict from the negotiating table to the streets.

Up to this point, crisis moderators have focused on the planned Nov. 29 presidential election -- and the legitimacy of its result, particularly if Zelaya is not reinstalled prior to the vote. But now that Zelaya is back in town, his priority will be to show that he enjoys the kind of massive popular support within Honduras that would warrant his return, an open question throughout this crisis. And unless the current government authorities, led by de facto President Roberto Micheletti, unwisely decide to contain pro-Zelaya demonstrators with naked force (a move that would further erode their already precarious international position), their best option will also be to mobilize their own supporters onto the streets. Thus, a cycle of demonstrations and counterdemonstrations in the capital looms. In a polarized country awash with guns, it is impossible to know where such a cycle may lead, but one can imagine unpleasant results. At this point, the immediate focus of the international community will have to shift from crisis resolution to simply preventing violence from engulfing Honduras.

This very frightening distraction makes reaching a political settlement ever more difficult. Some elements of the previous San José agreement, shaped by Costa Rican President Oscar Arias during settlement talks this summer, are still very relevant. Already-agreed-upon tenets such as the blanket amnesty for the illegal actions of both sides and some kind of power-sharing agreement between now and the elections make sense. But other elements, such as the immediate reinstatement of Zelaya to the presidency, may have to be rethought. As a matter of principle, restoring an ousted president makes perfect sense. In context, insisting on Zelaya's comeback risks thwarting any negotiation from even beginning.

With just two months to go before the election, international pressure alone is unlikely to force Micheletti to relinquish the presidency and allow Zelaya to take the reins. Honduras' donors, friends, and allies could crank up the pressure by refusing to accept the results of the Nov. 29 election as legitimate. This is precisely what quite a few countries -- notably the United States -- have threatened to do.

Acting on those warnings, however, would be a serious mistake. However imperfect, the election still offers the best route to restore some kind of normality in Honduras, so that the country's democratic breakdown is not complete. Unless evidence emerges that the current authorities in Honduras are engaging in systematic harassment against opposition leaders or the press, evidence of which so far has been scant, there is no reason to deny diplomatic recognition to the winner of November's poll. The electoral process was well underway before the coup, the electoral calendar has followed the law scrupulously, and the election is fully open to international observers.

Without a doubt, semi-authoritarian thugs like Hugo Chávez and Daniel Ortega will cry foul no matter the election result since their man in Tegucigalpa never returned to power. But for serious countries such as the United States and Brazil -- countries that wound up accepting the results of the recent election in Iran -- turning the winner of a free and fair election in Honduras into a pariah would not just be an act of immense hypocrisy but also of foolishness. It is a surefire way to prolong this crisis indefinitely into the future. The price of this would be paid, as usual, by the poorest of the poor in Honduras.

This is not to say that the world should spare Honduras' post-election government a scolding. The current and future authorities in that country, and indeed the region, must understand that democratic free lunches are not available anymore. They must be told, either by U.S. Secretary of State Hillary Clinton, Arias, or Brazil's President Luiz Inácio Lula da Silva (now that he has also been dragged, via his embassy, into this mess) that there will be much democratic debt to repay if the world is to recognize election results and turn a blind eye to the coup. The next president will have to form an inclusive government and commit himself to a wide-ranging process of national dialogue, under international supervision, in which zelayista sectors and Zelaya himself must have a prominent role. If they want the elusive prize of legitimacy, there must be an explicit commitment by the two leading presidential candidates, former Vice President Elvin Santos, and former Congressman Porfirio Lobo, to observe both conditions.

Such a national dialogue process should lead to a thorough revision of the Honduran Constitution, a very peculiar document whose rigidities are at the root of the current crisis. It should also make room for the adoption of certain social reforms that could help reduce the massive inequities that render a populist temptation unavoidable in Honduras. In this scenario, Zelaya would not get back the presidency that is rightfully his, but he could end up achieving something very similar to the constituent assembly he tried to set in motion a few months ago, thus triggering  this dispute.

This is just one possibility. And what's needed most right now are ideas that expand the current range of negotiated solutions. To insist with blind stubbornness on the same options that have failed so far is to court disaster. Throughout this sorry episode, many commodities have been conspicuous by their scarcity, both inside and outside Honduras: Leadership, responsibility, and realism are the most obvious ones. That has to change fast if a tragedy is to be avoided. Because now, the scarcest commodity of all in Honduras is time.