Masisi in China: A renewed impetus for economic diplomacy
Bakang Ntshingane | Friday September 21, 2018 13:44
In addition, the governing Botswana Democratic Party’s close ties with the Chinese Communist Party make them strange bedfellows. Yet China was President Mokgweetsi Masisi’s first choice for a state visit since assuming office a few months ago. This signals an improved and more pragmatic approach to Botswana’s foreign policy in contrast to former president Khama’s ‘megaphone-style’ diplomatic approach. Masisi seems to be more interested in economic diplomacy: he wants to intensify the employment of both state and private business apparatus to support business, trade and investment promotion between Botswana and the rest of the world.
However cringe worthy China’s internal politics are, you can’t deny the impact that this rising powerhouse has on the rest of world. Wherever the Xi Jinping bandwagon is heading in the next decade, we will need to jump on it.
As Masisi flew out to Beijing, he had a number of items on his to-do list; firstly, to meet with China’s President Xi Jinping to ‘hold bilateral talks,’ secondly, to officiate the Botswana-China Business forum and lastly, attend the Forum on China-Africa Cooperation (FOCAC).
Botswana and China have a longstanding economic and political relationship dating back to the 1970s. They’ve had an average trade relationship and the numbers speak to that. China is currently the third largest consumer of Botswana diamonds as well a top market for raw hides.
In 2017, Chinese exports to Botswana were at around $60 million while Botswana exports to China stood at US$16.15 million. Chinese state-owned companies have been awarded contracts to build roads, dams, power stations and airports in Botswana. On a broader context, China has been Africa’s largest trade partner since 2008. But there has been a stark imbalance in the composition of the trade. From Africa flows raw, unprocessed materials and from China flows manufactured, cheap goods to the majority of African countries. Overall China-Africa trade stood at over a $100 billion in 2016, and Botswana only accounts for a tiny fraction of that trade.
There are many opportunities that exist to expand trade and investment between the two countries, and Masisi’s trip was the perfect launch-pad to renew prospects for a deeper cooperation. China wasn’t always the ‘dragon on the rise’ country that we know today. Underplaying the need for stronger Sino-Botswana relations would be a costly miscalculation. In the same breadth, we must tread carefully and aim for a more balanced relationship with China.
Like any other friendship, Botswana and China’s relationship has had its ups and downs, most notably during fhama’s term in office when Botswana’s foreign policy was mostly characterised by occasional bouts of outspoken media statements. For example, Botswana has publicly called out China for its tussle with smaller states in the South China Sea, expressing its displeasure by hinting that China was using its size to bully all other countries involved. Botswana and China also had a diplomatic fallout when Tibetan spiritual leader, Dalai Lama was set to speak at a human rights conference in Gaborone. Beijing was visibly displeased, labelling the move as a ‘challenge [to] the core interest of China and the dignity of Chinese people’ and that Botswana should not ‘harm such a true friend and reliable development partner as China.’
But Sino-Botswana relations haven’t been rocky just because of diplomatic disagreements. Chinese companies and businesses have had a bad streak of poor quality infrastructure projects. China’s presence in Botswana and the rest of Africa has been generally met with mixed reactions. Like everyone else, many Batswana are wondering if they would be victims of China’s supposed ‘debt-trap’ narrative and all the Sino-phobic remarks that have made the rounds.
China has remained a strategic ally for Botswana. The Asian giant’s rise and its position as a formidable player in international affairs and Botswana’s central location in southern Africa makes the two countries important development partners.
A key takeaway from FOCAC is that China seems to be committed to cultivating good faith in its relations with Africa. China recently announced that it would exempt the Government of Botswana ‘from payment of the three interest free loans’ that amount to almost $8 million. This signals a refreshing new moment for Botswana-China relations. But will it be enough? It is unlikely.
Botswana-China relations have not and will never be perfect. It is important that President Masisi’s dealings with China are as transparent and result-oriented as possible.
With the ascension of Masisi to office, the new administration seems to be moving on. Masisi’s choice for his first state visit as Head of State is symbolic of this commitment. There are stark differences between all the other diplomatic engagements Botswana has had and this particular mission.
What was outstandingly visible was how the new administration has embraced both traditional and new media as important tools for public diplomacy. Drawing the curtain on diplomatic and foreign engagements was long overdue. The image of the President conducting an interview in Setswana while aboard a Chinese bullet train was a perfect juxtaposition of the two nations’ relations. The symbolism from that image alone was impressive. Masisi’s objective in China seems to have been a definitive approach that places economic diplomacy at the centre. The President’s soundbites were characterised by repeated calls for partnerships with Chinese businesses, attracting investors to Botswana, knowledge exchange initiatives, a shift towards industrialisation, etc.
Botswana can learn a lot from China’s economic development story. When it comes to Special Economic Zones (SEZs) as a tool for attracting FDI and spurring export driven growth, the China example stands out.
China’s SEZs are amongst the top three most successful in the world. As Botswana also wishes to go the SEZ route, it would be a worthwhile venture to invest time using Chinese expertise on zone and hub development. Masisi’s attendance of the Forum on China-Africa Cooperation (FOCAC) signalled further commitment to multilateralism. Through FOCAC, African leaders and their Chinese counterparts meet every three years, and this is where China announces how much money will flow to Africa through aid, investments and loans. This year, China’s President Xi Jinping announced $60 billion in various types of aid and loans to the continent. Botswana needs a piece of that pie.
Due to rising challenges of climate change, health, poor infrastructure, unemployment on the continent, African countries are always in need of funding. The wave of Bretton Woods institutions has declined and China has stepped in with its ‘no strings attached interest free loans’ to ‘help out.’ When it comes to debt, Botswana has a relatively healthy debt-to-GDP ratio, so it is safe to say that the government hasn’t been irresponsibly burdening its citizens with debt.
In the spirit of ‘developing friendly relations and economic and technical cooperation’ the Chinese Government has historically provided grants amounting to at least $10 million; interest-free loans and soft loans amounting to $175.5 million to the Botswana government, especially since the 2008 global financial crisis. As he returned from China recently, Masisi indicated yet another financial package from China that will be flowing into Botswana’s transport and infrastructure projects. China has offered Botswana a P340 million ($31 million) grant.
In general terms, Masisi’s trip was a successful one. Foreign policy is almost always synonymous with government, but bringing along a business and media delegation was a much needed icebreaker for a multi-stakeholder driven foreign policy. It also sets a brilliant precedent for future administrations. Botswana could gain more from cultivating a healthy relationship with China especially in the era of China’s ‘Marshall Plan’, ‘The Belt and Road Initiative’ (BRI).
China’s ‘no strings attached’ soundbite with regards to its loans to African countries is a little wishy-washy, even for a sincere development partner. What will China want in return? Besides the obvious, my guess is they want political loyalty to mainland China. China needs international backing for its “One China” policy. In addition, the more it controls the narrative around the Dalai Lama, Tibet, etc, the more attention it will draw away from its domestic politics. China will continue to expect that African countries maintain their stance on the One China policy and who knows what any other favour they will call-in in the future.
On the other hand, loans from China carry expectations. In particular, the current Chinese policy of requiring that every loan should go to a project that is built by a Chinese company continues to subject African countries including Botswana to shoddy infrastructure work by unvetted companies.
At the end of the day, China says it wants a win-win from African cooperation but frankly, that isn’t going to happen. The burden lies on African leaders to ensure that we get more wins from the win-win. Botswana must gear up to hold China’s feet over the fire with regards to President Xi Jinping’s promises at FOCAC. Masisi’s administration must be ready to take advantage of trade facilitation programmes offered by China, prepare a policy response to the rising potential of e-commerce in trade and development and finally, initiate a conversation of a free trade agreement with China for select industries.
*Bakang Ntshingane is a Masters candidate in Economics & International Trade at Chonbuk National University in South Korea. He writes on politics, trade and foreign policy