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China’s big push into Africa worries the small island of Mauritius

Reuters | Monday, May 26, 2008

China’s big push into Africa worries the small island of Mauritius

By Ed Harris

TERRE ROUGE, Mauritius: Sitting under a pair of mango trees and sipping coconut water, Toolsy Poorun, 87, said he thought he would live in Terre Rouge forever. But then Chinese investment came to this part of Mauritius.

Poorun, who lives in the suburbs of Port Louis, the capital of this Indian Ocean island, now finds himself caught up in Beijing’s African push. China has poured billions of dollars into the continent in an attempt to lock in access to rich resources, including oil and minerals.

The investment rush in Africa has produced tensions with former colonial masters and international donors. Chinese workers have sometimes clashed with local residents angered at foreigners taking jobs. And some Africans have questioned what the flow of money will mean for China’s role in internal politics.

Some of these tensions are visible in Mauritius, where China plans to open a trade development zone for more than a dozen Chinese firms in Terre Rouge, at a cost of around $730 million, making it the largest foreign direct investment in the country.

Details of what exactly will be in the Shanxi Tianli Enterprises business park are still sketchy, but Mauritian officials say it will act as a launching pad for Chinese operations in the region.

As a member of trade blocs like the Common Market for Eastern and Southern Africa, or Comesa, and the South African Development Community, or SADC, Mauritius offers a gateway to African markets comprising half a billion people.

But some of the 1.3 million people on this palm-fringed island are wary of what is known as the Tianli project.

Poorun is among them. He settled in Terre Rouge in 1960 and is one of 106 farmers who have been told to leave their farms and homes to make way for the Tianli zone.

"It was a big shock," he said. "Where should I go next?"

Beyond the plight of the farmers, who will be compensated, there are other broader concerns about the Chinese plans and some doubts that the project will ever actually go ahead.

It is one of those projects that "looks too good to be true," said Tim Taylor, a former chief executive of Rogers, one of Mauritius’ largest companies, with interests in tourism and logistics. "They need quite a lot of water, power, what have you. That is going to put a strain on the infrastructure."

Government officials appear to have no doubts, however.

"This is an investment of approximately 20 billion rupees over a five-year period that would create direct, indirect or induced jobs of about 40,000," Finance Minister Rama Sithanen told reporters this month. That investment is the equivalent of $734 million.

It is a large project for a $9 billion economy with a workforce of just 550,000. Sithanen said the Chinese zone would also create exports worth an estimated 6 billion to 7 billion rupees per year, almost 10 percent of Mauritius’ total last year.

But while officials are happy to rattle off the headline figures, they are less comfortable discussing the division of benefits and labor between China and Mauritius.

"We will give priority to local people but we know that we have an acute shortage of skills, so in some cases obviously we will need to recruit people from outside," Sithanen said.

Around half of all foreign workers in Mauritius are Chinese. Unemployment on the island was 7.2 percent at the end of 2007.

Mauritius has no mineral resources, but it is stable, strategically located, has preferential trade access to African markets and is seen as having a strong business environment.

It also offers a cultural link to China. Chinese traders first came to Mauritius in the 17th through 19th centuries, and the Chinese account for about 2 or 3 percent of the population.

Mauritius’ first prime minister visited China in 1972, four years after the island’s independence from Britain. Since then, Mauritius has consistently backed Beijing’s policy on Taiwan, while China has provided financing for airport construction, a sports stadium and low-cost housing.

This month, Mauritius asked for another $380 million to build a bridge and expand its congested airport.

Chinese textile firms, mainly from Hong Kong, had a major presence in Mauritius until the end of the Multi-Fiber Arrangement in 2005, which led to the loss of 25,000 Mauritian jobs. This was compounded by high oil prices and the loss of trade preferences for sugar exports to Europe.

The desire to improve the business environment prompted Mauritius to begin changes in 2006 to open and diversify its economy by boosting industries like seafood, tourism and financial services.

The Tianli project was initially billed as an industrial hub, centered on textiles, but the focus has shifted to business services, said Ken Poonoosamy, senior manager at Mauritius’ Board of Investment.

"A lot of the Chinese operators who would want to go to Madagascar, for example, they would prefer to have their administrative offices housed in" the Tianli economic zone, he said, citing Mauritius’ business climate.

Since the regulatory changes, organizations like the World Bank and the Heritage Foundation, a rightist Washington-based research group, have ranked Mauritius as Africa’s top country for economic freedom, ease of doing business and good governance.

The International Monetary Fund said in March that Mauritius’ economy was growing about 7 percent a year. Per capita gross domestic product is about $6,700, one of the highest in Africa.

It is not yet known which Chinese companies will be setting up in the Tianli site, which is managed and part-owned by the Shanxi Tianli Group. Officials from Shanxi Tianli declined to comment on the project for this article.

So far the only visible signs of the project in Terre Rouge - the prime minister’s district in Parliament - are signboards in English and Chinese, some Chinese workers and a small compound in the middle of a sugar field.

It is not clear when construction will begin. Sithanen said it would start very shortly. However, some business leaders are skeptical, and questions over the whole basis of the project are being asked.

"Must our future be linked so closely to a country which tolerates atrocities in Darfur?" said an opinion piece in the broadly pro-government newspaper L’Express.

China has been criticized by Western governments and rights groups for supplying oil to Sudan, which has been accused of abuses in Darfur, where international experts say about 200,000 people have been killed in a five-year conflict. Khartoum says the figure is about 10,000.

L’Express likened the Tianli project to "a voluntary colonization" and asked what measures China might take to protect its commercial interests, noting Mauritius’ small army.

The uncertainty is widespread.

"We don’t know what there will be in there," said Jacques de Navacelle, former president of Mauritius’ Joint Economic Council. "Will there be factories, offices, housing?"

The farmers who have grown sugar and vegetables for decades on the Terre Rouge site, which covers 211 hectares, or 521 acres, have now been asked to leave. They say they have received some compensation but are worried about the future.

"We are too small to fight the government," said Ravin Bijloll, a planter. "We do not want to stop the project, but we would like to get better compensation.

"Tianli will bring his own people, because in China, labor is cheap," he said. He does not expect to get a job.

As for Poorun, he has no idea what he will do next. He says the government has given him some land, but on a lease.

"The government took the land and gave us money," he said, sitting on a plastic chair next to an enormous field of sugar cane. "But that money is already finished."

 source: IHT