Africa-Press – Zambia. A group of Zambians argue that Africa has been exploited for too long by rich countries that have consigned it to supplier of raw materials for their continued industrialization and other use while Africa imports finished goods from them. They contend, China is doing exactly the same thing to Africa. It exports manufactured goods to the continent while Africa exports raw materials to China. Zambia exports more primary commodities to China than it does manufactured goods while China exports more manufactured goods than it does with primary commodities. And, they say this must stop by African countries trading with each other.
The truth is that this exploitation goes beyond rich countries, China or other external partners. Within Africa itself, South Africa exports more manufactured goods to other African countries including Zambia than it does with primary commodities. This is because that is what South Africa has. On the other hand, African countries including Zambia exports to South Africa more primary commodities than manufactured goods because that is all they have.
If they had manufactured goods, of course they would gladly export. So, is it the fault of rich countries, China or South Africa that they export manufactured goods to African countries in exchange for primary commodities? Trade is about comparative advantage. I export products in which I have strengths and import those in which I have weaknesses to produce. So, with structural weaknesses in the production of exportable dynamic products, in particular manufactured goods, Africa and Zambia can only export primary commodities largely in their raw form. Zambia exports raw copper because it has no machinery, human skills and infrastructure to produce it. The argument that rich countries have neglected us and that they perpetuate our dependence to produce raw materials while they export processed goods to us is flawed.
Vietnam has overtaken Africa in exports of manufactured goods to the world. Bangladesh, a least developed country in Asia has overtaken Africa in exports of textiles and clothing products to the world. If both of them are exploited by rich countries, perhaps it is in another sector, not in exports of manufactured goods. Why are Africans and Zambians always blaming someone else for their own misfortunes? Viet Nam was almost obliterated from this world by atomic bomb war. Yet, it exports more manufactured goods to China than Africa. Viet Nam exports more manufactured goods to the US and the EU. To the US, its exports stood at $72.6 billion manufactured goods and only $4.1 billion primary commodities in 2020. To the EU, exports of manufactured goods stood at $35.8 billion compared to $$4.2 billion primary commodities.
Since independence, Africa or Zambia have had no war with external adversaries to cause the hardship suffered by Viet Nam. Yet, they’re full of excuses or blaming someone else for their underdevelopment. If Viet Nam blamed the US, the world was not aware. But one thing for sure is that Viet Nam replaced blame or excuse by hard work. Viet Nam has used foreign direct investment and international trade to develop. Some Zambians argue that Zambia can develop on its own. Some Africans too contend that Africa can develop itself. It is no insult that Africa is puniness therefore will take many years to develop on its own. The world is interdependent. That is why those with products collect wealth from other countries through trade. They also collect foreign direct investment from those who have it. They don’t invest their resources in blaming others or giving excuses.
As Figure 1 below shows, Africa’s exports of primary commodities to China totaled about $50.1 billion relative to only $2.6 billion manufactured goods. If rich countries exploited Africa for many years by importing only raw materials, and failing to support the continent to process its goods, why is Africa and Zambia allowing China, without guns as was the case during colonialism, to do exactly the same thing scot-free? If the European model was characterized by unfair partnership, why are we allowing the Chinese who don’t use guns to kill our fragile and uncompetitive industries, kill jobs and create more hunger for our people?
Perhaps China’s biggest shopping mall near the Makeni shopping mall makes a lot of money coming from Zambians who buy these manufactured goods. But look at the public toilet that the mall offers its clients? Those who have been there will know that this is the way some Chinese investors in our country grade us as human beings. And PF leaders have been allowing them. I hope the new dawn government will give us sanity and respect for our human rights. If we pay you by buying from you, especially so much money, surely, we deserve the right to large and clean toilets with clean water.
It is lopsided and hugely warped that China’s exports of manufactured goods to Africa totaled about $107.2 billion or double the primary commodities shown in Figure 2 below what Africa exports to China. But it is also the reality. If you form a trade partnership with unequal partner, you have to accept that you will be the loser while the other will be the winner. It’s even made worse when Zambia benefits from another segment of the partnership completely different from trade. China is supporting Africa and Zambia in infrastructure-building and other non-trade matters such as finance, etc.
There seems to be a silent agreement that what China exploits of Africa or Zambia will be compensated by these non-trade support measures. That agreement seems to be something like, “China is giving us non-trade help; hence we cannot complain about the trade unevenness.
Those who have negotiated international trade agreements like me for many years will understand that it is difficult if not impossible for Africa to acquire in the agreement with rich countries a provision to support processing of exports. I negotiated in the World Trade Organization (WTO) for almost ten years as a diplomat, on behalf of Zambia and Africa and least developed countries but ended my tenure without any success. In the WTO for example, there are some clear provisions that speak about rich countries helping least developed countries to acquire technology transfer but are never implemented.
I don’t know about Viet Nam and the US. But I do know about the US regional trade agreements with other countries. I have not seen any mandatory commitment in any that will require the law to take course in case the US failed to implement that provision. If there’s any such provision, and more importantly, it is being implemented and that partner is obtaining technology transfer from the US to transform its economy from exporting primary commodities to manufactured goods, I’m the first to apologize. The Southern African Development Community or Southern African Customs Union may contain provisions for industrialization of smaller members. But none is industrializing. Exceptionally, the EU is implementing provisions to help its poorer members to integrate and export manufactured goods.
The point I make here is that it will be an illusion for Zambia or Africa to think that it will negotiate with rich countries to provide technology transfer or value addition in exchange for importing copper or other raw materials from Africa. It has not happened for any country. It will not happen. Part of the reason why the WTO agreement was finally signed after many days and years of disagreement is that rich countries promised quid pro quo. They asked developing countries to sign because they would offer them technology transfer and foreign direct investment. They asked them to sign the agreement on services and make binding offers in return for foreign direct investment. Two decades later, that investment is still awaited. They said signing the trade related aspects of intellectual property (TRIPS) would bring technology transfer. Today when challenged, rich countries argue that technology transfer is not a government matter. It is a private-owned matter and governments cannot interfere.
Africa and Zambia should stop engaging in self-aggrandizing or self-approbation when dealing with their rich partners. They will not give us what we need most in trade. What we need most is to export manufactured goods to them. They did not give Tunisia whose world exports of manufactured goods in total is about 80%, Bangladesh 95% and Morocco 72%. These countries did not send a long list of excuses or complaints to rich countries. In the WTO, Africa is renown for nothing but complaining. Africa thinks that industrialization will come from WTO.
But no one in WTO ever hears the voice of diplomats from Viet Nam complaining or speaking. They are there to take advantage of the market access provided by WTO. Africa has to find export value addition by itself. By that, I mean by engaging with rich countries in foreign direct investment and growing their anemic private sectors. Africa should learn from Viet Nam, China, Bangladesh, Thailand and other emerging developing countries in Asia whose many things they have in common. It is more productive to have an economic Embassy in Viet Nam, to learn manufacturing only than some prestigious ones where we get nothing. I maintain my position that like Asian countries, African countries should create wealth from rich countries through exports of manufactured goods and foreign direct investment. Let us blame ourselves.
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