South Africa's Cowardly Lion

From kissing Qaddafi to stiffing the Dalai Lama, what's happened to Nelson Mandela's Rainbow Nation?

It is, by now, a familiar sort of headline: "South Africa Dithers Over Dalai Lama." Dithering, it seems, has become South Africa's default gesture on foreign policy. A few months ago, the dithering was over Libya. After breaking with its emerging-market counterparts Brazil, China, India, and Russia to throw its weight behind the U.N. resolution mandating a no-fly zone to support the rebels fighting Col. Muammar al-Qaddafi, South Africa almost immediately recoiled from that support, slamming the resulting NATO campaign, balking at releasing billions of dollars in assets to the rebels, and complaining about the unceremonious way Qaddafi was chased out of Tripoli. The West "undermin[ed] the African continent's role in finding a solution," griped South African President Jacob Zuma.

Before Libya, it was the Burma question. South Africa has released occasional statements calling for Nobel Peace Prize laureate Aung San Suu Kyi's release -- but when it came to a Security Council vote in 2007, its U.N. representative voted against a resolution calling on Burma's military junta to free its political prisoners. Then, last week, the South African government refused to say whether it would give the Dalai Lama a visa to attend the birthday party this Friday, Oct. 7, of South Africa's own human rights hero, Archbishop Desmond Tutu. On Tuesday, fed up with waiting, the Dalai Lama canceled his trip.

What's going on here? Why has South Africa -- ground zero for the idea that a society based on freedom and human rights is the only acceptable society -- so hesitated to advance this notion internationally? Is the Rainbow Nation abandoning its identity as a moral torchbearer to rush to the side of whoever happens to be holding the biggest butter dish? Qaddafi lavished South Africa with money; he owned the gold-tinted, luxury Michelangelo Hotel soaring over Johannesburg's financial district and was rumored to have helped bankroll Zuma's legal defense in a 2006 rape trial.

In the Dalai Lama flap (the second time in two years South Africa has failed to grant him a visa), observers suspect Chinese pressure. Last week, just as it emerged that officials had never responded to the Dalai Lama's visa application at all, South African Deputy President Kgalema Motlanthe popped up in Beijing to announce a $2.5 billion investment deal between South Africa and China. Tutu suggested his old freedom-struggle compatriots now running the country were slipping into the evil habits of their former white oppressors, comparing their foot-dragging to "the way authorities dealt with applications by black South Africans for travel documents under apartheid." When asked by reporters why he couldn't just ask his old friends to grant the Tibetan spiritual leader a visa, Tutu tsk-tsked that things have changed such that a human rights drumbeater like himself is no longer the South African elite's "blue-eyed boy."

In truth, though, much of the pressure producing this kind of mixed-signals foreign policy comes from within, not from outsiders dangling cash. South Africa's current foreign policy is a kind of stress response to the clash between its two identities on the global stage: the moral beacon, the conscience of the world, and its human rights campaigner; and the emerging regional superpower, the "S" newly added to the end of the Goldman Sachs designation for the world's new rising powers, the "BRICS" -- Brazil, Russia, India, China, and now South Africa.

Initially, after its democratic transition, South Africa defaulted into its first identity. Insofar as the African National Congress (ANC), the Nelson Mandela-headed liberation movement that became the ruling party in 1994, had any foreign policy before it took power, it was aligned with Moscow, which supported it against the nominally anti-communist white government. But by the early 1990s, of course, that alliance was no longer as relevant. So how would the ANC proceed to make its foreign-policy choices once it was in power?

There was an obvious answer. Freedom for all people was so explicitly the new nation's first principle, so fundamentally the idea that was to direct the government's domestic behavior, that it seemed it could not but be the principle that would direct its actions outside its borders, too. A 1993 foreign-policy document drafted by the ANC put it simply: The "struggle to end apartheid was a global one," and South Africa should honor its history by embarking on a "worldwide Human Rights campaign." The ANC's foreign-policy guiding star would be its "belief in," indeed its "preoccupation with, Human Rights." In 1996, in keeping with this principle, then-President Mandela personally welcomed the Dalai Lama on a visit he paid to the South African Parliament.

It is striking, then, how drastically the language surrounding foreign policy -- and particularly the language surrounding policy decisions with a human rights component -- has changed in 15 years. Earlier this year, South African political commentator Eusebius McKaiser conducted interviews with dozens of high-ranking diplomats and politicians on the country's response to the Libyan crisis: "None of my interviewees articulated moral values or principles as the basis of our foreign-policy behavior," he reported.

"It is clear to me," he concluded, "that we do not have a moral foreign policy."

Even the South African political opposition skittered away from framing their critique of the government's Dalai Lama dawdling in terms of human rights or moral leadership. It cast the government's behavior not as a piece of moral cowardice but as a failure of realpolitik: "As a BRICS partner with the Chinese," an opposition spokesman declared last week, "we must view our relationship with them as equals, not subordinates."

Part of this may be a hangover from Iraq, an example of overreach that seems to have powerfully affected South African policymakers even from a distance. Adam Habib, a Johannesburg political scientist, says that as soon as South Africa voted to support the no-fly zone in Libya, the government felt anxious about advocating for "regime change" on moral grounds and worried about "how to prevent Iraq."

But it also reflects South Africa's desire to grope its way toward a new style of foreign policy and, indeed, of national behavior. It's telling that the South African political opposition invoked the country's place in the BRICS -- the increasingly formal group of emerging economies that in late 2010, with an official letter from Chinese President Hu Jintao, invited South Africa to be its fifth member. The anointment was felt to be incredibly important in South Africa. It was a hint the country was on its way to becoming known for something other than the release of Mandela and the Truth and Reconciliation Commission, that it was beginning to write a story other than the one interminably retold in sentimental movies like Invictus.

By sheer numbers alone, South Africa didn't deserve to join BRIC. Its GDP and rate of economic growth rank it below other emerging economies like Indonesia and Argentina. The anointment reflected, rather, its promise and its regional importance as the biggest player on a turbulent continent perceived to be on the rise. South Africa now has to live up to the promise to manifest alpha-dog independence and channel the special mindset of its region. A little like Turkey, it's looking for ways to show it sets the rules now, instead of following them.

Designing a model for this new, out-in-front-of-the-pack style is a bigger problem, though. What does it mean to lead from a "Global South" or African perspective? What are the principles that will give rise to the right decisions? Obviously, South Africa, with its overtures to China, exhibits a keen awareness of the world's likely future power dynamics.

But South Africa's motivations for drawing nearer to China aren't merely pecuniary. (Although China's investment in South Africa is growing, Europe and the United States are still major trading partners.) China, rather, represents a country that developed aggressively "on its own terms," as I've heard several South Africans put it, not on terms dictated by the World Bank or the International Monetary Fund. The South African government is increasingly embarrassed by the levels of poverty that persist so long after the end of white-minority rule, and last year, on a trip to Beijing, Zuma praised China's "political discipline" as a potential "recipe" for his country's heretofore elusive "economic success."

South African observers looking for new, non-Western models even found things to admire in Qaddafi's Libya. Mandela himself was a Qaddafi fan, even going so far as to name his daughter after him. A businessman I recently spoke with, who'd done work in Tripoli, put into words the envy I've heard from other South Africans over Qaddafi's social welfare system, something the ANC has strived, but often failed, to create in post-apartheid South Africa: "Every household gets a television set which is renewed every third year and a laptop every fourth year," he marveled. (At least, the government had told him so.) "And a house when you get married."

Post-apartheid South Africa is still a teenager, young on the world stage. Its reluctance to stand firm on moral issues stems not only from a desire to curry favor with wealthy pariahs, but from a deeper sense of tension over what kind of country it wants to be, both inside (should every household have a television set?) and as an external actor. Some in South Africa's civil society still exhort the government to embrace a destiny as the world's conscience: The popular news website Daily Maverick invoked the example of Mandela in pleading for the government to extend "a hand of friendship" to all oppressed peoples and welcome the Dalai Lama. But the new generation of South African leaders is not content to occupy a niche on morality like Bhutan's niche on happiness, in which South Africa's primary export remains a kind of Gross National Blamelessness. This core of leaders yearns for the space to act as unabashedly "pragmatically as the Chinese," explains Habib, the political scientist, so South Africa can grow into the regional-big-macher role suggested by the country's new status as Africa's China or its Brazil.

Caught between these poles, South Africa has taken to blaming the confusion on bureaucratic foul-ups and misinformation. After an outcry from human rights activists about the Dalai Lama, the government suggested, incredibly, that the monk himself had screwed up on his visa application. Similarly, after backtracking on its support of the no-fly zone over Libya, South Africa claimed its diplomats hadn't entirely understood what the U.N. resolution's language meant.

Such excuses are increasingly embarrassing -- and unsustainable. South Africa may be a vacillating teenager now, but sooner or later it will have to decide what it wants to be when it grows up. As several commentators have pointed out, this won't be the last time someone invites the Dalai Lama to South Africa.

Ronaldo Schemidt/AFP/Getty Images


The Not-So-Great Game

Why is the Pentagon handing over Afghanistan's riches to the Chinese?

In about a week, the Afghan Ministry of Mines will announce that the China National Petroleum Corp. (CNPC) -- the largest state-owned Chinese company -- has won the rights to develop and explore several oil fields in the Amu Darya basin in northern Afghanistan.

How was CNPC able to win a tender for such a strategic resource in a country where the United States wields tremendous influence? Amazingly, one reason is that the U.S. Defense Department, whose Task Force on Business and Stability Operations, which is charged with resuscitating the economies of Afghanistan and Iraq, designed and oversaw a tender process that played to the strengths of Chinese state-owned companies over Western private ones.

The Chinese government has been actively pursuing various natural resources in Afghanistan for years. In 2007, a consortium of Chinese state-owned companies won the only other major natural resources tender in Afghanistan to date, for the massive Aynak copper deposit, thought to be worth as much as $80 billion. Over the last decade, China has sought to lock down as many natural resources as possible throughout Central Asia to fuel its skyrocketing demand for minerals, oil, and gas.

It was in this broader context that the task force took control of the oil tender in northern Afghanistan. Since 2006, the task force has been encouraging private investment, industrial development, and energy development in Afghanistan and Iraq in a bid to build sustainable economies that can survive the looming drawdown of international forces and reduction in foreign assistance in both countries.

Natural resources are an important pillar of this mission because they hold the promise of generating meaningful revenues for the cash-starved Afghan government. In 2009, the task force commissioned the U.S. Geological Survey to conduct a comprehensive review of Afghanistan's geological riches, the preliminary results of which were announced in 2010 and showed that Afghanistan might contain more than $1 trillion in mineral wealth. This story was reported in news outlets worldwide and stoked considerable interest in Afghanistan. The task force then set out to design a process by which these resources should be tendered by the Afghan government, embedding myriad advisors -- ranging from energy experts and financial consultants to lawyers -- within the Afghan Ministry of Mines.

The Amu Darya tender was the first real test case. The tender covered an area of roughly 4,500 square kilometers between the towns of Sar-e-Pol and Sheberghan in northern Afghanistan, with five known fields containing an estimated 80 million barrels of crude oil -- about enough to supply 11,000 barrels per day for 20 years.

Our firm assisted a Western oil and gas company that participated in the tender, but lost to CNPC. We saw firsthand how the commercial terms that would govern the development of the oil as well as the procedures for selecting the winning bidder made it all but impossible for a Western company to win the tender against CNPC.

The terms offered by the Afghan government -- and designed, in large part, by the task force -- did not reflect realities on the ground in Afghanistan. The key term in any production-sharing contract is the profit split, which identifies what share of oil produced belongs to the government and what share belongs to the oil company. This split is based on a variety of factors, including the quality and quantity of the oil, the technical challenge of recovering the oil, the quality of local infrastructure, and the security and political risk of the region where the oil is located. Where there is less overall risk -- such as when there is plentiful, high-quality oil that is easy to access and move in a safe environment -- the government receives the lion's share of the profit oil. As risk increases, however, oil companies demand more profit oil to ensure an adequate rate of return on the capital invested.

In Central Asia, the norm is for the government to receive roughly one-third of the profit oil and for the oil company to receive the remainder. Yet in Afghanistan -- one of the riskiest countries in Central Asia, with incomplete geological data and the near absence of key infrastructure -- the task force pushed for a profit split that would give the Afghan government the majority of the profit oil. This was in addition to royalties and several other taxes included in the agreement, all of which are entirely atypical in Central Asia.

We provided the task force with several examples of contract terms in other Central Asian countries and repeatedly asked the task force to identify which countries served as the model for the unattractive commercial terms offered for the Amu Darya tender. The task force refused to answer our question, and the terms remained unchanged, resulting in virtually no interest in the tender among serious Western oil companies. The terms did not deter CNPC, however, which is willing to make investments in Central Asia that are not strictly profitable for the purpose of capturing resources and extending China's political influence.

The other problem was the process, under which the company that bid the highest royalty would be designated the winner of the tender so long as it met the basic technical requirements for executing the project. It was clear from the beginning that CNPC would bid the highest royalty (especially given that the terms were unattractive to Western companies). Indeed, according to industry experts we consulted, it is common knowledge that CNPC typically bids $5 to $7 per barrel more than other interested bidders in oil tenders in which it participates. So this selection process all but guaranteed that China would win the tender.

There are other selection processes that would have been fairer to Western companies. Notably, a system that allocated a certain number of points for the royalty rate, but then also allocated points for technical qualifications, environmental track record, past performance, quality of the proposed work program, investment in the local community (including hiring of local staff), and other such factors, would have provided far more opportunity for Western companies to showcase their strengths and compete against CNPC. The task force ignored such alternate approaches -- even though they were expressly permitted under Afghan law.

We urged the task force to make the terms and the selection process fairer to Western bidders, but the task force (and other branches of the U.S. government) declined to do so for two reasons. First, the task force stated that it was neutral as to the outcome of the tender; so long as the process was transparent, they did not care whether the winning company was American or Chinese. This is shocking, given that U.S. troops in Afghanistan require a steady supply of refined petroleum products to sustain their operations and that placing these resources under the effective control of the Chinese government poses a threat to these ongoing operations. In addition, the presence of Western companies in Afghanistan would help strengthen U.S.-Afghan ties and would inculcate respect for the rule of law, transparency, and other related Western business values that are important to Afghanistan's development. Chinese companies, by contrast, are known to have a very bad track record in these areas, as well as in the employment of locals (Chinese low-wage laborers are imported).

Second, the task force argued that its main goal was to ensure that the tender generated quick revenue for the Afghan government, and CNPC offered more generous commercial terms than Western bidders. There is no doubt that the United States has a strategic interest in generating revenue for Afghanistan so that the country can become less dependent on the largesse of Western donor countries, but it also has strategic interests in promoting U.S. companies and in preventing China from capturing valuable resources. In addition, even if it were appropriate for the task force to focus singularly on generating revenue, a victory by CNPC -- which is known to break contractual commitments regarding payments to host governments, move slowly in developing resources, and use subpar technologies -- will not accomplish this goal. These considerations recently led the government of Kazakhstan to turn down various CNPC bids even though the commercial terms of those bids, on their face, appeared more attractive than those of other bidders. But the tender process designed by the task force did not allow the Afghans to take such considerations into account.

The Task Force on Business and Stability Operations did a disservice to Afghanistan and the United States by mismanaging the Amu Darya tender. It is, moreover, improper for the task force to spend taxpayer funds -- $20 million, in total -- to help China tighten its stranglehold over Afghanistan's natural resources and, by extension, the country's economic development. The troubling announcement that will be made this month is the perfect occasion for senior Pentagon officials and members of Congress to re-examine the activities of the task force and ensure they better align with U.S. interests.

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