Kigali, 20/11/2007 (Agence Europe) - Debate over foreign direct investment (fdi) in ACP states (Africa, Caribbean and Pacific) at the Joint ACP-EU Parliamentary Assembly (JPA) in Kigali, Rwanda, resulted on Monday 19 November 2007 in barbed comments being exchanged between MEPs and their ACP counterparts. At stake were criticisms about Chinese investments in Africa voiced by Luxembourg EPP-ED MEP Astrid Lulling, joint rapporteur for a resolution to be voted upon by the JPA on 22 November. The resolution is expected to urge the EU to help ACP states attract greater fdi. It will call for the creation of an investment facility or investment guarantee fund under the Tenth European Development Fund (EDF) for investment in ACP states, as set out in Article 7(4) of the Cotonou Agreement. The MEPs and the ACP agree, when it comes to inviting EU member states to agree on a collective trading framework, to stimulate investment in ACP states, encouraging the generalising of bilateral agreements (like those signed by Germany, Belgium, France and the Netherlands). However; the ACP parliamentarians say that the JPA is not the right place to criticise Chinese investment. Backed by various PES, GUEs and Greens/EFA MEPs, the ACP parliamentarians ensured that any reference to China's direct economic investment policy in Africa was deleted from the draft resolution - to the huge disappointment of Astrid Lulling. She explained that as joint rapporteur, she regretted that the vote by the economic, financial and trade committee had removed a crucial part of the report. She said it was well-known to everyone, including many experts and NGOs, and it was fortunately also well known in many countries in Africa and at the European Commission, that China has been making use of weak, repressive and corrupt regimes in certain countries in Africa in order to get hold of natural resources. She said she was dismayed that her report had been 'castrated'.
Unlike the EU's strategy for Africa, China takes a non-intervention line in its policy towards Africa. Astrid Lulling said this looked good at first sight but was totally incompatible with the principles to which the EU is attached, namely democracy, respect of human rights, transparency and corporate responsibility from the companies committing themselves to Africa. She said she was certain that China's non-intervention policy was of course also very profitable to the Chinese companies in Africa which are subject to very few rules in terms of labour conditions and can therefore reduce their production costs to the minimum.
The Luxembourg MEP said that China was taking a predatory approach, making massive investment in farms that are true industrial enterprises to ensure security of supply for China and also to be able to re-export to Western markets, particularly in Europe.
She accused this massive agribusiness, controlled by Chinese capital, of destroying fledgling African processing industry through unfair competition from identical Chinese products. Not to mention the fact, said Lulling, that Africa is gradually turning into a dumping ground for common low-quality consumer products exported by China.
To back up her arguments, the Luxembourg MEP quoted research carried out by the European Commission into China's policy with regard to accessing raw materials and energy in sub-Saharan Africa, which concluded that China's devastating pragmatic policy was undermining European efforts for Africa. Hence Astrid Lulling's desire for the EU to look in more detail at the role of all countries investing in ACP states and China: 'We have nothing against cooperation between ACP states and China, but we need a level playing field for all investors,' she explained.
Speaking on behalf of joint rapporteur Timothy Harris (a parliamentarian from St. Kitts and Nevis), Mr L.B. Lebeta, a Botswana parliamentarian, calmly replied that when two elephants fight, the grass suffers. He added that it was not in the interest of ACP states to attack Asian countries, that the joint ACP-EU parliamentary assembly was not the right place to pick this fight, and that this point of view had been discussed in committee and was a collective ACP viewpoint.
He said the important thing in his view was that fdi and technology transfer could aid ACP states' development and integration into the global economy, if the ACPs managed to grow a prosperous private sector and governance that would favour investment. Lebeta concluded that external fdi could never replace local investment. (A.N.)