Strate­gic Al­liance: Amer­ica or China

The Guardian (Nigeria) - - OPINION - By Olu­mide Ijose

NIGE­RIA is a lead­ing coun­try in Africa. More high-level in­tel­lec­tual cap­i­tal is re­posed in Nige­ri­ans than any other coun­try on the con­ti­nent. This in­clude doc­tors, en­gi­neers, sci­en­tists, fi­nance ex­perts, man­age­ment ex­perts and pro­fes­sors deeply en­gaged and work­ing in ad­vanced western coun­tries. As the most pop­u­lous African coun­try, Nige­ria holds a high po­ten­tial for lead­ing the eco­nomic eman­ci­pa­tion of the con­ti­nent. How­ever, Nige­ria needs a mas­sive in­fu­sion of fi­nan­cial cap­i­tal to play the lead­ing role, it po­ten­tially can. This es­say ex­plores how Nige­ria can lever­age the strate­gic in­ter­est of Amer­ica to at­tract that in­flow.

Clearly, gov­er­nance is a lead­ing in­di­ca­tor of at­trac­tive­ness and the es­say presents an anal­y­sis that is de­void of the im­pact of the qual­ity of gov­er­nance in Nige­ria. In essence, it is gov­er­nance qual­ity neu­tral and fol­lows ev­i­dence from South Korea, Tai­wan, Sin­ga­pore, China and Saudi Ara­bia, coun­tries where for strate­gic rea­sons, Amer­ica in­vested mas­sively at a time, when none was a lib­eral free mar­ket democ­racy. In essence, it is a fact, that Amer­ica makes in­vest­ments that fur­ther its strate­gic in­ter­est, across time di­men­sions.

Af­ter World War II, Amer­ica in­vested mas­sively in Western Europe and Ja­pan and cre­ated a global trade and gov­er­nance sys­tem, de­signed to limit the pos­si­bil­ity of an­other hor­ri­fy­ing world war. Amer­ica un­der­stood that shared pros­per­ity had to be the ful­crum for peace among coun­tries that had the tech­no­log­i­cal ca­pac­ity to make and use weapons of mass de­struc­tion and that its lead­er­ship was es­sen­tial to make a sys­tem lim­it­ing their use stick. Amer­ica has since wielded the lead­er­ship with great suc­cess!

Cap­i­tal­ism and com­mu­nism are the two great­est philoso­phies that have shaped global po­lit­i­cal and ul­ti­mately, eco­nomic sys­tems and stan­dards of liv­ing, in the last 200 years. Cap­i­tal­ism a western phi­los­o­phy, is posited on com­pe­ti­tion and in­no­va­tion based on the in­di­vid­ual own­er­ship of the means of pro­duc­tion. Com­mu­nism the po­lar op­po­site that is based on the com­mu­nal own­er­ship of the means of pro­duc­tion and the shar­ing of out­put and ex­tended into an eco­nomic sys­tem, se­verely lim­its com­pe­ti­tion, in­no­va­tion and cre­ativ­ity and sti­fles eco­nomic growth as wit­nessed in the de­funct Soviet Union and com­mu­nist China’s de­ci­sion to run a cap­i­tal­ist style eco­nomic sys­tem.

Amer­ica shed pre­cious blood and trea­sure to fight off com­mu­nism in South East Asia and to pre­vent coun­tries in this re­gion from fall­ing like domi­noes into com­mu­nism, given the ex­pe­ri­ence of China un­der Mao and the de­ter­mi­na­tion of the de­funct Soviet Union to spread the phi­los­o­phy in this re­gion. This in­cluded mas­sive fi­nan­cial, man­age­rial and other re­source in­vest­ments in Sin­ga­pore, South Korea and Tai­wan as well as pre­cious blood in coun­tries like Viet­nam, Cam­bo­dia and Laos dur­ing the Viet­nam War.

More re­cently, Amer­ica has in­vested tril­lions of dol­lars and again shed pre­cious blood into de­feat­ing Is­lamic ex­trem­ism in the form of Al Qaeda and Is­lamic State. In essence, Amer­ica has over-and-over, demon­strated, a pro­found com­mit­ment to the main­tain­ing of its way of life and by so do­ing im­proved the wel­fare of peo­ple all over the world. Un­der­stand­ing the na­ture and char­ac­ter­is­tics of this com­mit­ment has im­por­tant sig­nif­i­cance for Nige­ria, if it wishes to at­tract a heavy in­fu­sion of western cap­i­tal and re­sources into its econ­omy.

On the other side, is Nige­ria it­self. The in­di­geni­sa­tion de­cree of the early 1970’s, an un­en­vi­able record of mil­i­tary takeovers and the will­ing­ness of mil­i­tary dic­ta­tors to use au­thor­i­tar­ian meth­ods to sub­ju­gate peo­ple with­out sig­nif­i­cant in­ter­nal op­po­si­tion can be con­strued as neg­a­tive sig­nals. How­ever, Nige­ria is a free mar­ket democ­racy and the hu­man cap­i­tal leader of a con­ti­nent with an abun­dance of the strate­gic me­tals and min­er­als that en­able the mod­ern elec­tronic driven dig­i­tal econ­omy.

Th­ese re­sources in­clude cad­mium, zinc, cop­per, baux­ite alu­mina and po­ten­tially huge deposits of rare earth min­er­als – and are cen­tral to the in­no­va­tion and pro­duc­tiv­ity that is the base of the mod­ern in­dus­trial econ­omy and jobs in ad­vanced economies. The rise of China as an eco­nomic power has in­creased de­mand and com­pe­ti­tion for th­ese min­er­als and me­tals, as the coun­try works to in­crease pur­chas­ing power and stan­dard of liv­ing of at least 400 mil­lion poor Chi­nese.

Built on a po­lit­i­cally com­mu­nist sys­tem, China is now well on the way to cre­at­ing par­al­lel in­sti­tu­tions and global trade and in­vest­ment rules that chal­lenge the sys­tem of trade and in­sti­tu­tional gov­er­nance rules – the Bret­ton Woods sys­tem - crafted by Amer­ica and its al­lies af­ter World War II. China has also emerged as a sig­nif­i­cant chal­lenge to the eco­nomic dom­i­nance of Amer­ica and other western democ­ra­cies in Africa.

In­creas­ing global pur­chas­ing power in a man­ner that Amer­ica busi­nesses can cap­ture is a vi­able so­lu­tion to the pres­sure on wages that has chal­lenged Amer­ica’s labour and work­ing class over the last 25 years. With over 900 mil­lion needy peo­ple with pent up de­mand, Africa is clearly the mar­ket with the most catch­ing up to do but over the last 20 years, China has built a huge pres­ence on the con­ti­nent.

This has two ef­fects: One, China may cap­ture a dis­pro­por­tion­ate amount of any in­crease in pur­chas­ing power from Amer­i­can in­vest­ment rel­a­tive to the ac­tual fi­nan­cial and man­age­rial in­vest­ment China has made on the con­ti­nent and two, African coun­tries, pri­mar­ily Nige­ria, may replace Amer­ica and western democ­ra­cies in the use of African re­sources in mak­ing in­ter­me­di­ate goods. Ei­ther out­come could re­sult in ma­jor job losses in Amer­ica and the economies of its main strate­gic part­ners.

Nige­ria has to con­vince Amer­ica that work­ing with Nige­ria to fa­cil­i­tate a mas­sive in­flow of cap­i­tal and man­age­rial ex­per­tise will cre­ate Amer­i­can jobs and is in its geopo­lit­i­cal strate­gic in­ter­est. The work of ex­iled mem­bers of the Na­tional Demo­cratic Coali­tion (NADECO) af­ter the an­nul­ment of the June 12,, 2001 elec­tion and dur­ing the regime of Gen­eral Abacha, demon­strates a ca­pa­bil­ity to be suc­cess­ful in lob­by­ing Washington DC for mu­tual ad­van­tage.

That ef­fort led to a new con­sti­tu­tion, the elec­tions and the emer­gence of Olusegun Obasanjo as pres­i­dent. In­di­rectly, it eased the en­try of global telecom­mu­ni­ca­tions firms into the coun­try sub­se­quent to com­mit­ments made to fa­cil­i­tate trade in telecom­mu­ni­ca­tion ser­vices af­ter the com­ple­tion of the Uruguay round of World Trade Or­gan­i­sa­tion ne­go­ti­a­tions. The tran­si­tion to civil­ian rule also cre­ated the po­lit­i­cal frame­work for ne­go­ti­a­tions that led to the for­give­ness of $20 bil­lion of sov­er­eign for­eign debts by the Paris of ma­jor cred­i­tor na­tions and the Lon­don Club of pri­vate cred­i­tors in 2005. The telecom­mu­ni­ca­tions revo­lu­tion had a pro­found im­pact on the ease of do­ing business and was cen­tral to re­vis­ing GDP from N42.4 tril­lion to N80.2 tril­lion ($509 bil­lion) in 2013. The low debt to GDP ra­tio re­sult­ing from the for­give­ness of sov­er­eign debts is sup­port­ive of rais­ing Eurobonds, at­tract­ing For­eign Di­rect In­vest­ment and job cre­ation.

Lob­by­ing Washington DC is a daunt­ing propo­si­tion. Is there an al­ter­na­tive? Ijosewrote­fromthe­unit­ed­state­so­famer­ica.

Newspapers in English

Newspapers from Nigeria

© PressReader. All rights reserved.