Best of the Week
Most Popular
1. US Housing Market House Prices Bull Market Trend Current State - Nadeem_Walayat
2.Gold and Silver End of Week Technical, CoT and Fundamental Status - Gary_Tanashian
3.Stock Market Dow Trend Forecast - April Update - Nadeem_Walayat
4.When Will the Stock Market’s Rally Stop? - Troy_Bombardia
5.Russia and China Intend to Drain the West of Its Gold - MoneyMetals
6.BAIDU (BIDU) - Top 10 Artificial Intelligence Stocks Investing To Profit from AI Mega-trend - Nadeem_Walayat
7.Stop Feeding the Chinese Empire - ‘Belt and Road’ Trojan Horse - Richard_Mills
8.Stock Market US China Trade War Panic! Trend Forecast May 2019 Update - Nadeem_Walayat
9.US China Trade Impasse Threatens US Lithium, Rare Earth Imports - Richard_Mills
10.How to Invest in AI Stocks to Profit from the Machine Intelligence Mega-trend - Nadeem_Walayat
Last 7 days
Johnson Vs Gove Tory Leadership Contest Grudge Match Betfair Betting - 17th June 19
Nasdaq Stock Index Prediction System Is Telling Us A Very Different Story - 17th June 19
King Dollar Rides Higher Creating Pressures On Foreign Economies - 17th June 19
Land Rover Discovery Sport Tailgate Not Working Problems Fix (70) - 17th June 19
Stock Market Outlook: is the S&P today just like 2007 or 2016? - 17th June 19
US China War - Thucydides Trap and gold - 16th June 19
Gold Stocks Bull Upleg Mounting - 16th June 19
Gold Price Seasonal Trend Analysis - Video - 16th June 19
Fethiye Market Fruit, Veg, Spices and Turkish Delight Tourist Shopping - 16th June 19
US Dollar Gold Trend Analysis - 15th June 19
Gold Stocks “Launch” is in Line With Fundamentals - 15th June 19
The Rise of Silver and Major Economic Decline - 15th June 19
Fire Insurance Claims: What Are the Things a Fire Claim Adjuster Does? - 15th June 19
How To Find A Trustworthy Casino? - 15th June 19
Boris Johnson Vs Michael Gove Tory Leadership Grudge Match - Video - 14th June 19
Gold and Silver, Precious Metals: T-Minus 3 Seconds To Liftoff! - 14th June 19
Silver Investing Trend Analysis - Video - 14th June 19
The American Dream Is Alive and Well - in China - 14th June 19
Keeping the Online Gaming Industry in Line - 14th June 19
How Acquisitions Affect Global Stocks - 14th June 19
Please Don’t Buy the Dip in Nvidia or Other Chip Stocks - 14th June 19
A Big Thing in Investor Education is Explainer Videos - 14th June 19
IRAN - The Next American War - 13th June 19
Boris Johnson Vs Michael Gove Tory Leadership Grudge Match Contest - 13th June 19
Top Best VPN Services You Can Choose For Your iPhone - 13th June 19
Tory Leadership Contest Betting Markets Forecast - Betfair - 13th June 19
US Stock Market Setting Up A Pennant Formation - 13th June 19
Which Stocks Will Lead The Cannabis Rebound? - 13th June 19
The Privatization of US Indo-Pacific Vision - Project 2049, Armitage, Budget Ploys and Taiwan Nexus - 12th June 19
Gold Price Breaks to the Upside - 12th June 19
Top Publicly Traded Casino Company Stocks for 2019 - 12th June 19
Silver Investing Trend Analysis - 12th June 19
Why Blue-Chip Dividend Stocks Aren’t as Safe as You Think - 12th June 19
Technical Analysis Shows Aug/Sept Stock Market Top Pattern Should Form - 12th June 19
FTSE 100: A Top European Index - 12th June 19
Gold Surprise! - 11th June 19
How Forex Indicators are Getting Even More Attention in the Market? - 11th June 19
Stock Market Storm Clouds on the Horizon - 11th June 19
Is Your Financial Security Based On A Double Aberration? - 11th June 19
What If Stocks Are Wrong About Interest Rate Cuts? - 11th June 19
US House Prices Yield Curve, Debt, QE4EVER! - 11th June 19
Natural Gas Moves Into Basing Zone - 11th June 19
U.S. Dollar Stall is Good for Commodities - 11th June 19
Fed Running Out of Time and Conventional Weapons - 11th June 19
Trade Wars Propelling Stock Markets to New Highs - 11th June 19
Best Travel Bags for Summer Holidays 2019, Back Sling packs, water proof, money belt, tactical - 11th June 19
Betting on Next British Prime Minister Tory Leadership Betfair Markets Forecast - 10th June 19
How Can Stock Market Go Up When We’re Headed Towards a Recession? - 10th June 19
If You Invest in Dividend Stocks, Do This to Double Your Returns - 10th June 19
Reasons for the Success of the Dating Market - 10th June 19
Gold Price Trend Analysis - Video - 10th June 19
US Stock Markets Rally Hard – Could Another Big Upside Leg Begin? - 10th June 19
Stock Market Huge Cosmic Cluster Ahead: Buckle Up! - 10th June 19
Stock Market Higher To Go? - 10th June 19
The Gold Price Golden Neckline… - 10th June 19
Gold Price Seasonal Trend Analysis - 9th June 19
The Fed Stops Pretending - 9th June 19
Fed Rate Cuts Soon; Bitcoin Enthusiasts Join Wall Street in Bashing Gold - 9th June 19
1990s vs. 2010s - Which Expansion Will be Better for Gold? - 9th June 19
Gold Price Trend Analysis, MACD, Trend Channels, Support / Resistance - 8th June 19
Gold Surges Near Breakout - 8th June 19
Could Gold Rally Above $3750 Before December 2019? - 8th June 19
5 Big Lies About Precious Metals Investing Exposed - 8th June 19

Market Oracle FREE Newsletter

Gold Price Trend Forecast Summer 2019

America's New Africa Strategy

Politics / GeoPolitics Jan 10, 2019 - 04:45 PM GMT

By: Dan_Steinbock

Politics

Recently, the White House released its new U.S. Africa strategy, which seeks militarization and portrays China as a threat. Both are misguided. Africa can greatly benefit from Chinese and U.S. economic development.

On December 13, 2018, U.S. National Security Adviser John Bolton gave a speech in the conservative Heritage Foundation about the Trump administration’s new “Africa strategy,” based on Trump’s ‘America First’ foreign policy doctrine.

In the United States, the media focus was on Bolton’s attack against U.S. adversaries and American aid. Specifically, Boston accused Russia and China of “predatory practices” in Africa.


In practice, the Trump administration’s Africa strategy implies militarization of U.S. activities in Africa to undermine Chinese economic contribution, which has effectively supported modernization and growth in the continent.

Militarization of U.S. Africa Strategy

In 2017, the United States had a $39.0 billion in total goods trade with Sub-Saharan African countries and a trade deficit of $10.8 billion. America’s largest export markets were South Africa, Nigeria, Ghana, Ethiopia and Angola. In imports, Cote d’Ivoire and Botswana played a role as well.

In the past, U.S. Africa strategy focused mainly on economic cooperation and aid, and secondarily on military cooperation. In the new strategy, the focus areas have been reversed. The ‘America First’ Africa strategy purports to address three core U.S. interests in Africa:

First, advancing U.S. trade and commercial ties with nations across the region to the benefit of both the United States and Africa… Second, countering the threat from Radical Islamic Terrorism and violent conflict… And third, we will ensure that U.S. taxpayer dollars for aid are used efficiently and effectively.

While the first core interest ostensibly involves economic dealings, it actually doesn’t. The Trump administration “wants our economic partners in the region to thrive,” but it downplays all economic efforts to boost African prosperity.

It is the second principle that's the key to the new U.S. strategy. According to Bolton, “ISIS, al-Qaida, and their affiliates all operate and recruit on the African continent, plotting attacks against American citizens and targets.” The new strategy sees Africa mainly as a base of Islamic terrorism, which must be defused in the continent so that it will not threaten American interests.

Third, the new strategy will no longer support “unproductive, unsuccessful, and unaccountable U.N. peacekeeping missions.”

Moreover, the ‘America First’ stance portrays as adversarial the Chinese efforts to boost global economic integration through the One Road and Belt initiative in emerging and developing economies. China’s economic contribution is mainly an effort to “dominate the world.” As Bolton puts it: “[China’s] predatory actions are sub-components of broader Chinese strategic initiatives, including ‘One Belt, One Road’ - a plan to develop a series of trade routes leading to and from China with the ultimate goal of advancing Chinese global dominance.”

Since economic facts do not support the Trump administration’s narrative, it relies increasingly on ideological trashing.

Chinese Economic Cooperation in Africa

Since the mid-2010s, Washington has accused China of “neocolonialism” in Africa. The misguided narrative seeks to reframe the eclipse of the commodity super-cycle, which caused a drastic fall in commodity prices, as another Chinese plot.

In 2016, the value of China-Africa trade was $128 billion, almost three times bigger than U.S. trade with the continent. The largest African exporters to China comprise Angola, South Africa and the Republic of Congo, whereas the largest buyers of Chinese goods include South Africa and Nigeria. The Sino-African trade increased rapidly some two decades until the fall of the commodity prices since 2014, when the bilateral trade peaked at $215 billion. Since then, the value of African exports to China has been penalized, even as Chinese exports to Africa have remained steady.

Meanwhile, U.S. investment in China has collapsed. U.S. FDI into Africa grew through the Bush years, when the White House still hoped to benefit from the impending industrialization in several African economies. But as the Obama administration presented its Africa vision in the early 2010s, U.S. FDI first plunged and then collapsed (Figure).

Figure          Chinese FDI and US FDI to Africa (flows), 2003-2015



Source: UNCTAD; China Statistical Yearbook; Difference Group

When the administration began its attack against Chinese initiatives last fall, these outbursts were preceded by President Xi Jinping’s speech in the 2018 Forum on China Africa Cooperation (FOCAC) where Xi pledged $60 billion to the continent in loans, grants, and development financing.

The new U.S. Africa strategy is largely dictated by the concern that a has become Africa’s largest economic partner. In contrast to Bolton’s fearful images of Chinese negative impact in Africa, leading business consultancies, including McKinsey, offer very different accounts. The former is based on ideological bashing without facts. The latter reflects simple economic analysis:
                   



Bolton on the U.S. Africa Strategy:

McKinsey on China in Africa:

China uses bribes, opaque agreements, and the strategic use of debt to hold states in Africa captive to Beijing’s wishes and demands. Its investment ventures are riddled with corruption, and do not meet the same environmental or ethical standards as U.S. developmental programs

The Chinese “dragons” - firms of all sizes and sectors - are bringing capital investment, management know-how, and entrepreneurial energy to every corner of the continent - and in so doing, they are helping to accelerate the progress of Africa’s “lions,” as its economies are often referred to.

In the past two decades, Africa-China trade has been growing at some 20% per year. FDI has grown twice as fast in the past decade. McKinsey estimates China’s financial flows to Africa are 15% higher than official figures when non-traditional flows are included. China is also a large and fast-growing source of aid and the largest source of construction financing, which support Africa’s ambitious infrastructure developments.

But is Chinese infrastructure investment in Africa a threat to U.S. interests, really?

U.S., China, and Africa: Two Scenarios

Ever since the release of the U.S. administration’s new 2017 National Security Strategy, China has been perceived as America’s “adversary” rather than a partner: “For decades, U.S. policy was rooted in the belief that support for China’s rise and for its integration into the post-war international order would liberalize China.”

The new Africa strategy is actually based on the old neoconservative Wolfowitz Doctrine, which in the early ‘90s deems that the American goal must be “to prevent the re-emergence of a new rival, either on the territory of the former Soviet Union or elsewhere that poses a threat.” That's why the White House sees its China ties mainly in win-lose terms.

But there is another future scenario that sees the multipolar world economy as a strength rather than a liability. It is predicated on more stable, global prospects as developing economies focus on economic development, instead of militarization. Unlike the U.S. Africa strategy, the multipolar scenario would not foster “major power competition” in Africa. Rather, it supports a win-win scenario, in which both America and China would trade and invest, and provide development aid to African economies. That would accelerate modernization and industrialization across the continent and thus living standards. With rising prosperity, terror would diminish.

The multipolar scenario would fulfill the three U.S. core interests in Africa and foster triangular economic ties among the U.S., China and Africa, while intensifying modernization in the continent.  In contrast, the old new U.S. Africa strategy has potential to undermine such futures.

Dr Steinbock is the founder of the Difference Group and has served as the research director at the India, China, and America Institute (USA) and a visiting fellow at the Shanghai Institutes for International Studies (China) and the EU Center (Singapore). For more information, see http://www.differencegroup.net/

© 2019 Copyright Dan Steinbock - All Rights Reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

Dan Steinbock Archive

© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

6 Critical Money Making Rules