Emerging powers news roundup

Launch of Newsletter
The Fahamu Emerging Powers in Africa Programme is pleased to announce the launch of its newsletter. It aims to serve as a platform to discuss and analyse developments between the emerging powers and Africa, while also serving as a hub of useful information and resources on the topic. We encourage contributions from CSOs based on experiences on the ground, and implementation of projects within this area as we seek to develop a lively and active debate that promotes advocacy and enables informed perspectives on this important subject.
Issue 1, September 2010 available here

General
Trade: It’s the End of the Export-Led Growth Model, Says UNCTAD
While the recovery from the financial and economic meltdown remains fragile in especially the developed world, the outlook for Africa inspires optimism, according to UNCTAD. The agency also believes the crisis might be the death-knell for the export-led economic growth model—especially African countries should leave it behind. With the major industrial countries not being able to consume as much as before, export-led growth – mainly by encouraging investment in cheap labour-intensive industries – has no future. Developing countries, especially in Africa, should therefore boost domestic consumption and allow wages to increase in line with productivity growth, according to UNCTAD (United Nations Conference on Trade and Development). The findings are contained in the agency’s Trade and Development Report 2010, entitled “Employment, Globalisation and Development, which went public on Sep 14.
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AfDB will consider more funding for Eskom – Kaberuka
African Development Bank (AfDB) president Donald Kaberuka at the weekend said that the financial institution would consider stumping up further funding to South African power utility Eskom, and that there was "no doubt" that the Grand Inga hydropower project would happen "soon". AfDB had already loaned $1,6-billion to Eskom for the construction of the Medupi coal-fired power station in Lephalale, in Limpopo province, and had "full confidence in the financial sustainability of Eskom", Kaberuka told Engineering News Online.
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Land-grabbing, a new form of sharecropping?
"Land-grabbing can rein in the global economic growth of the host nations since these projects are directed away from them (as products destined for export), and this reinforces their food dependence and gives no stimulus to local activity. In fact the privileged agro-industrial model is based on capital, monoculture, and technology, which creates little employment and excludes the local farmers. Faced with an agriculture which is far more productive than their own, if measures are not taken, the local farmers have no choice but to abandon their land and to work for the agricultural companies, often in very poor conditions." Some models of action exist, for example in Ecuador, and there is urgent need to extend them to other regions of the world.
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China in Africa
Chinese Loan Underwrites Lake Turkana Destruction
NGOs are outraged after confirmation that the world’s largest bank will finance the destructive Gibe 3 hydropower dam. The Industrial and Commercial Bank of China (ICBC) is underwriting a $500 million contract awarded May 13 to Dongfang Electric Corporation for the dam’s turbines and electro-mechanical works. Although ICBC has not publicly announced the loan, an official confirmed September 8 by email that the financial agreement between ICBC and the Ethiopian government was signed in July. The funding undermines ICBC’s efforts to build a global reputation as a socially and environmentally responsible lending institution.
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Legal forum under Forum on China-Africa Cooperation opens
The second legal officials' forum under the framework of Forum on China-Africa Cooperation (FOCAC) opened in Beijing Thursday. At the opening ceremony, Han Zhubin, president of the China Law Society, proposed the two sides strengthen law-related exchanges, expand cooperation fields, enhance the role of laws and enrich the forum with more content. Han expressed the hope that law societies of the two sides will strengthen mutual trust and understanding, and give full play to laws in promoting people's livelihood and regional cooperation.
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Nation to hike SEZ spending in Africa
China is willing to accelerate investment in special economic zones (SEZs) in Africa under a partnership with the World Bank, top officials and analysts said on Tuesday. "SEZs and infrastructure construction are among fields that can best reflect features of Chinese economic development since reform and opening began more than 30 years ago, and have contributed to the country's growth greatly," said Wang Jun, vice-minister of finance, at the opening ceremony of the third China-Africa Experience-Sharing Program held by the Chinese government and the World Bank in Beijing.
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China Telecom Europe's Dubai Operation to Expand into North Africa
The Dubai-based Middle East regional headquarters and network hub of China Telecom Europe (CTE) is to be expanded to cover North Africa as the giant international wholesale telecommunications carrier continues to enlarge its network and services between the EMEA region, China and the wider Asia Pacific market. "Dubai has been an important and highly successful part of our network from the outset and we have decided to utilise it for our growth into North Africa," said Ou Yan, Managing Director of China Telecom (Europe) Ltd.
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EDF, China Guangdong May Partner on South Africa Nuclear Plant, Echos Says
Electricite de France SA may partner with China Guangdong Nuclear Power Group Co Ltd. in a bid to develop a nuclear plant in South Africa, Les Echos reported, citing people it didn’t identify.
No decision has been taken on which reactor will be used for the EDF bid and whether the French utility should promote versions other than the EPR, developed by Areva SA, such as the Chinese CPR-1000, the newspaper said.
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China makes inroads into Zim bank sector
A Chinese bank has snapped up a major stake in the Infrastructure Development Bank of Zimbabwe (IDBZ) in the latest sign of the booming Asian nation’s growing stranglehold on the resource-rich but cash-strapped southern African country. The China Development Bank (CDB) and the IDBZ – formerly the Zimbabwe Development Bank – have entered into a deal that will see the injection of fresh capital into Zimbabwe's energy, transport and infrastructure development sectors.
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Seeking proof of China's ancient trade with Africa
A little to the north of the popular tourist town of Malindi — one mile by foot along the white sand beach, six miles by car along the potholed inland road — is Mambrui. It is the suspected site of an ancient Swahili kingdom, home of the sultan of Malindi and destination of Zheng He, a 15th century Chinese admiral, merchant, emperor’s emissary, explorer and eunuch. “Malindi is a very important point between China and Africa trade,” said professor Qin Dashu of Peking University’s School of Archaeology and Museology who is leading a team of nine Chinese and six Kenyan archaeologists. China’s government is spending $3 million on the three-year long project.
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PetroSA in talks with China on refinery
South Africa's national oil company PetroSA said it held fruitful talks with China's oil group Sinopec and was speaking to other potential investors as it seeks partners for a new $10 billion refinery. Chairwoman Linda Makatini said PetroSA was looking to sell up to a 30 percent equity stake in the planned 400,000 barrels-per-day refinery, which would be among the largest in sub-Saharan Africa and reduce South Africa's reliance on imports.
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Zambia eyes Chinese funds for power plant
Felix Mutati, Zambia's trade minister, said he was hopeful of finalizing Chinese funding for a new $1.5 billion power station in the southern African country. The leading Zambian politician spoke following talks in Beijing with senior figures from Sinohydro Corporation. It was revealed last month that the Chinese State-owned company is set to be part of a joint venture with Zesco Corporation, Zambia's leading power utility, to build the new 600-megawatt Kafue Gorge Lower power plant.
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We need to sell grain to China - Pieter Mulder
"China (People's Republic of China) and South Africa could find each other in terms of the export of grain and oil seeds in the interest of both countries," Dr. Pieter Mulder, deputy minister of Agriculture, Forestry and Fisheries said. Dr. Mulder was addressing a dinner which was held in Johannesburg for a Chinese Sinograin delegation which is currently visiting South Africa . Sinograin is a Chinese company which purchases and distributes grain and oil seeds on behalf of the Chinese government. The chief executive officer of the company is a member of the Chinese State Council which is the equivalent of the South African Cabinet.
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Sundance signs CHEC to design port
Iron ore miner Sundance Resources Ltd says it will work with China Harbour Engineering Company Ltd (CHEC) to design a bulk materials port at Lolabe in the Republic of Cameroon. WA-based Sundance says it will work with CHEC to establish the scope, cost and delivery of the Port, which will support a planned output of 35 megatonne per annum of iron ore from mines in Cameroon and the Congo.
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China shakes Europe's dominance in African trade
African trade with China is growing, but its imports and exports with other major global markets are either flat, or on the decline, according to a new report from the African Development Bank (AfDB). The Africa-China trade represents more than 10 per cent of the continent’s trade. In value terms, it represents $114 billion — $52 billion in exports and $62 billion in imports. Africa has a trade deficit with China of about $10 billion, according to AfDB’s report, Chinese Trade and Investment Activities in Africa.
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India in Africa

Navies from IBSA countries conducting exercises off Durban
International waters off Durban are currently abuzz with combat manoeuvres with 11 warships as well as several aircraft and helicopters from India, Brazil and South Africa engaged in a complex trilateral naval exercise. Intensive anti-air and anti-submarine warfare, visit-board-search-seizure operations and anti-piracy drills are being conducted in the IBSAMAR exercise, which brings together navies from three democracies on three different continents in a unique strategic endeavour.
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India ups training slots for Africans
India has substantially increased the number of slots for training African nationals in this country's institutions, Foreign Secretary Nirupama Rao said here Wednesday. 'We have substantially increased the number of ITEC (Indian Technical and Economic Cooperation) slots for Africa,' said Rao at a function to mark the ITEC Day here Wednesday evening. ITEC is a programme administered by the external affairs ministry to allow nationals from other developing nations to be trained in short-term courses at premier Indian educational institutions.
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Bharti Airtel to sell African towers to arm
Bharti Airtel will sell the mobile phone towers of its African operations to arm Bharti Infratel, raising badly-needed cash and taking a big step towards replicating the outsourced business model that has underpinned its growth in India. The deal is expected to be sealed for Rs 12,000-15,000 crore by December 2010, two persons with direct knowledge of the proposed transaction said, adding that Bharti Infratel will in turn raise money by selling stakes to sovereign and private equity funds.
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India a hit with African patients
India seems to have become the most-favoured destination for patients from African countries. Earlier they moved to the West, UK, US, and even Singapore, but now they are coming in huge numbers to India. Sagar Hospital alone gets around 30 to 40 African patients each month and is all set to launch its first information centre in Nigeria. This hospital has signed MoUs with hospitals in West Africa and also the government.
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India sends 80% of AIDS drugs to poor nations
A new study published on Tuesday has established that Indian generic manufacturers supplied more than 80% of donor-funded AIDS medicines to developing countries in the last seven years, confirming India's status as the pharmacy of the Third World. The study -- A lifeline to treatment: the role of Indian generic manufacturers in supplying antiretroviral medicines to developing countries -- was done by UNITAID, an international facility for the purchase of drugs against HIV/AIDS, malaria and TB founded in 2006, Boston School of Medicine and the Center for International Development, Harvard Kennedy School of Government.
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Indian firms look to team up with SA peers in African assault
India and South Africa would be looking to form cooperative ventures and advancing those partnership businesses into the rest of Africa, business leaders from the two countries said last week. Speaking after the India-South Africa CEO Forum, in Johannesburg, Ratan Tata, chairperson of India’s largest industry group, Tata, said that the two emerging economies had an opportunity to form partnerships to grow into Africa.
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South Africa's Health Insurer Discovery eyes Indian Market
South African health insurer Discovery could target fast-growing India eventually as it explores opportunities in Asia, its chief executive told Reuters. The company on Thursday reported a 24% rise in full-year profit and said it was positioned for further growth. “The two countries that I think are exciting for us are India and China,” Adrian Gore told Reuters on Thursday following Discovery’s full-year earnings.
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In other Emerging Powers News

Scrambled in Africa
When ICBC, the world's biggest bank by value, paid $5.5 billion for a 20% stake in Standard Bank in 2007, bankers around the world sat up and took notice. The deal with South Africa's largest lender suggested Africa was no longer a curiosity but a potentially big source of profits. Some elements of the continent's vaunted financial blooming have since wilted: Nigeria's banks, which had briefly seduced Western investors, suffered a crisis (see article). But the main business logic-that Africa's growing trade links with other emerging markets have raised its strategic importance in banking-is intact.

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Cnooc Interest in Brazil Assets Driven by China Need for Energy, Chemicals
China Petrochemical Corp., the nation’s second-biggest energy company, and Cnooc may offer at least $7 billion for Brazilian oil assets and a stake in OGX Petroleo & Gas Participacoes SA of Rio de Janeiro, two people with knowledge of the matter said on Sept. 10. Cnooc shares rose to the highest in more than two years this week on speculation it may bid for valuable properties in Latin America’s biggest economy.
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Brazil's huge new port highlights China's drive into South America
Reputedly the largest industrial port complex of its type in the world, Açu is also one of the most visible symbols of China's rapidly accelerating drive into Brazil and South America as it looks to guarantee access to much-needed natural resources and bolster its support base in the developing world. When Acu opens for business in 2012, its 10-berth pier will play host to a globetrotting armada of cargo ships, among them the 380-metre wide ChinaMax – the largest vessel of its type, capable of ferrying 400,000 tonnes of cargo.
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Cameroon hopes Brazil project will boost cocoa output
Cameroon plans to use genetically modified seedlings developed in Brazil in an effort to more than double its cocoa production by 2015, the central African nation's cocoa development body SODECAO said on Monday. The world's fifth-largest supplier of the main ingredient in chocolate officially produced just under 200,000 tonnes during the 2009-10 season which ended in July, down from 205,000 tonnes in the previous season.
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Iran-Africa trade meeting begins
In an opening speech to the Iran-Africa summit on Tuesday in Tehran, President Ahmadinejad said Iran and Africa share similar ideals, “Rich culture, a history full of ups and downs, and an aspiration for a bright future for the human kind are part of commonalities of Iran and Africa.” The two-day Iran-Africa summit is aimed at exploring ways of expanding political and economic ties between Iran and African states. The Iranian chief executive said that his country and the African nations call for a new world order based on "justices, respect for nations' rights and dignity, and brotherhood." Representatives from governments and private sectors of over 40 African nations including the presidents of Senegal and Malawi are attending the conference.
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Blogs, Opinions, Presentations and Publications
Position Paper of the People's Republic of China At the 65th Session of the United Nations General Assembly
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Remarks for the High-Level China-Africa Experience-Sharing Program on Special Economic Zones and Infrastructure Development
Robert B. Zoellick, President, The World Bank Group
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Speech by the Minister in The Presidency: National Planning Commission, Trevor A Manuel, MP, at the opening of the China – World Bank 30th Anniversary Conference, Beijing
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Why Decoupling is (Mostly) a Good Thing
Tarun Khanna is Jorge Paulo Lemann Professor at HBS and co-author of Winning in Emerging Markets: A Road Map for Strategy and Execution (Harvard Business Press, 2010). Ian Bremmer is president of Eurasia Group, a political risk consulting firm, and author of The End of the Free Market: Who Wins the War Between States and Corporations (Portfolio: 2010). This is the second installment in a discussion (conducted via e-mail) revolving around the two books.
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Aubrey Matshiqi and Francis Kornegay: Change, or be just another Bric in the wall
Presdident Jacob Zuma has concluded an ambitious round of economic diplomatic visits to all the Bric (Brazil, Russia, India and China) countries. All of these emerging economic powers are in favour of SA joining Bric. But at a time when there may be growing scepticism about Bric, its cohesion and staying power as a forum, what are SA’s prospects for achieving Bric status in real and substantive terms beyond the prestige of political inclusion? Where does SA stack up as a potential member of this powerful quartet, and will its domestic politics give it credibility in such a grouping?
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* Compiled by Hayley Herman, programme officer at Fahamu’s Emerging Powers in Africa programme based in South Africa.
* Please send comments to [email protected] or comment online at Pambazuka News.