Chinese Resources-For-Infrastructure Swaps: An Escape from the Resource Curse?
This paper discusses whether resources-for-infrastructure (R4I) swaps employed by the Chinese government and companies reduce or increase the risk that a resource-rich country will fall prey to the resource curse.
This paper discusses whether resources-for-infrastructure (R4I) swaps employed by the Chinese government and companies reduce or increase the risk that a resource-rich country will fall prey to the resource curse. A review of academic literature shows two opposing views. Some scholars argue that rapid infusion of unconditional Chinese investment and financing strengthens a political structure that allows an elite to use resource wealth for unproductive and self-serving ends. Others argue that R4I swaps have a positive impact on economic development, act as an effective agency of restraint on the part of African governments and mitigate the threat of corruption.
A short overview of the resource curse debate and related policy responses is provided. China’s emergence in Africa’s natural resource sector is described, the workings of an R4I swap is explained and an overview of R4I swaps between 2001 and 2011 is provided.
The basis for the research is a comparative analysis of case studies of R4I swaps in Angola, the Democratic Republic of the Congo, Gabon, Ghana and Nigeria, and field research conducted by the author in Ghana.
The findings from the case studies do not support either of the opposing views. R4I swaps do not inherently exacerbate the resource curse nor are they a panacea for its ills. The developmental impact of R4I swaps depends on the capacity and willingness of African governmental institutions to harness the opportunities and mitigate the risks of R4I swaps.