As a part of the MA thesis at the Chinese Diplomatic Academy. -Luka Durovic https://sg.linkedin.com/pub/luka-durovic/102/238/86

2. “To end poverty, first build a road”

3. Structure
I. WHY THIS TOPIC?
II. BACKGROUND
III. THE MODEL
IV. ANGOLA CASE STUDY
V. NIGERIA CASE STUDY
VI. CRITICISM
VII. CONCLUSION
*RESEARCH QUESTION
*RESEARCH PERSPECTIVE

4. Why this topic?
 30% of World resources
 Media focus
 Economy an integral part of IR/Diplomacy.
 Resource curse

5.  1) Currency appreciation, 2) vulnerability to the instability of the global
market, 3) and adverse effects on the governance of the country
(patronage politics)
Resource curse

6. Background
 CHINA’S HISTORICAL INTERACTION WITH AFRICA
 Since 1970s: Replacing ideology with emphasis on economic co-operation.
, focus on domestic development and on a non-interference policy.
 1975 speech by Prime Minister Zhou Enlai in which he outlined “Four
Modernizations”.
 THE INFLUENCE OF JAPAN ON CHINA’S FOREIGN ASSISTANCE PERCEPTION
 1970s- trade agreement ( loans for resources)
 CHINA REFORMS ITS FOREIGN ASSISTANCE APPROACH
 In need of resources to meet the needs of its economy.
 2002 - “Zou Chuqu” = Go Out and seek resources/markets.

7. The Model
 China builds infrastructure, receives resources in return.
 Actors: Two governments, policy banks (EXIM, CDB) a Chinese company
for building the infrastructure, a company for extracting the resources.
 Funds go directly to the companies performing the constructions.
“The Infrastructure for Resources model is like borrowing a fishing boat
instead of building it yourself”
-China’s ambassador to Liberia Zhou Yuxiao

8. EXIM
BANK
EXTRACT.
COMPANY
CONSTR.
COMPANY
BENEFICIARY
COUNTRYCHINA 2) FUNDS
3)FUNDS
1) AGREEMENT
CHINESE
GOODS
AND
WORKERS
USES INFRA.3) CONSTRUCTS
1) Agreement
2) Transfer of funds
3) Transfer of funds, resources and
construction of infrastructure

11. Angola
 HOW IT FUNCTIONS IN ANGOLA
 2004: the “framework agreement for new economic and commercial co-
operation”, led to the formation of the Angola model.
 political framework (MPLA, Dos Santos, 1975->)
 30% guarantee
 ISSUES
 Subcontracting due to the 30% guarantee
 A larger share of Chinese content than agreed

15. Nigeria
 HOW IT FUNCTIONS IN NIGERIA
 Depends on which President is in power: Obasanjo, (2001-2006, C),
Yar’Adua (2007-2010, M), Goodluck Jonathan (2010-2015, C), Buhari
(2015-> , M)
 OBSTACLES
 religion, ethnic division
 4 main reasons for failures (political elites, government officials,
multinational oil companies, election cycle)

18. “When it comes to ‘oil for infrastructure’, I think the Angolans
understood that you either get the infrastructure or the money. The
Nigerians thought you get both. But it turns out that, forced to choose, in
the end the Nigerians want the cash. Remember, the political elite works
on a short-term, four-year basis, dictated by the electoral cycle..”
- Western diplomat

19. Criticism of the Model
 Moral responsibility (China’s involvement hinders democratic progress.)
 The model seems to perform best where the executive has a strong, long-
lasting, control over the resources sector. Applicability limited to countries
that did not follow up with requirements of Western institutions and
curtailed the influence of the executive.

20. RELIANCE
ON OIL
INF. FOR. RES.
MODEL
INFRASTR. MANUFACT. RES. CURSE

21. Conclusion
 Benefits for China: stable long term sources of resources & a long term
mutual development (future market for products).
 Benefits for Africa: The Infrastructure for Resources model can subdue
the resource curse through the construction of infrastructure.
 Goes against Western political thought, but is a rational choice for such
resource rich African countries.
 An agreement that fulfils the self-interests of both sides.

22. Thank you!
Questions?