China buys in to Iraqi, Afghan end-games

I’ve been thinking more about the recent announcements of massive new Chinese investments in both Afghanistan and Iraq. These announcements really do signal the beginning of a completely new phase in international affairs: the phase in which China, cautiously, steps in to start cleaning up the mess created in these crucial world areas by the reckless policy of the late-phase American empire, and thereby becomes a significant power in its own right in both Central Asia and the Persian Gulf.
From one perspective, these two large Chinese investments– $3.5 billion to develop Afghanistan’s Aynak copper field and $3 billion to help develop a new oil-field in Iraq– might be seen as driven simply by China’s need for increased access to the resources in question. But nothing is that simple. Oil and copper resources can be developed in many places around the world.
By making these massive investments in these two countries China is also quietly signaling that when the international community becomes involved– as certainly, sooner or later, it must– in the search for a broad and effective resolution of the thorny challenges they pose, Beijing will be occupying a substantial seat at that table.
I’ve been trying to get some figures to indicate what proportion of the new external investment in each of these two countries, these Chinese deals represent. It’s been really hard, because there really hasn’t been much external investment on any similar scale, in either of them, at all.
Regarding Afghanistan, in this March 2008 study (PDF) Oxfam’s Matt Waldman wrote (p.3) that since 2001, “Just $15 billion in aid has so far been spent, of which it is estimated a staggering 40% has returned to donor countries in corporate profits and consultant salaries.” So over seven years, about $9 billion in external non-military aid of all kinds– relief, reconstruction, and ‘development’– has ended up being disbursed inside the country. That’s about $1.29 billion per year.
Interestingly, the table on p.27 of that PDF indicates that China has disbursed $41 million of official development aid in that period, and has pledged to disburse a further $84.15 million by February 2011. Compared with all those figures, for China to sink $3.5 billion into development of the copper field– and the associated power plant and rail line– will be HUGE.
How much of the $3.5 billion will go into paying and training Afghan workers, and buying goods from Afghan sub-contractors– and thereby, help to stimulate the Afghan economy directly, long before the first copper ingot is pressed? This is a crucial question, that I hope the Chinese get right. (In many places where China does development projects, they do them on a turnkey basis that by all accounts is incredibly impressive and efficient, but that does almost nothing to provide livelihoods and training to indigenes of the countries concerned.)
… In Iraq, the general picture– and the associated concerns about the design and local economic effects of the project– are broadly similar. (Though, since Iraq already has a massive labor-pool of highly trained oil technicians, engineers, and administrators, the training needs will be completely different, though the livelihood-provision needs are equally important.)
I looked for information about external investments of all kinds in non-military projects in Iraq, and that was hard to find and quantify, too. However, this website for the “International Reconstruction Fund Facility for Iraq” proudly (or not) notes that “So far 25 donors have committed about $1.84 billion to the Facility.” IRFFI, as it is known, is a collaboration between the World Bank, the UN, and the Government of Iraq.
In the cancer-like proliferation of different agencies, “facilities”, and the like that have grown up around the US-led project to “reconstruct” (or deconstruct) Iraq, there is also something called the “International Compact for Iraq”, run by the Swedish government but including, I think many of the same people who contribute to IRFFI. (Do they get double credit for their “donations”, I wonder?)
China is not recorded as a donor on this IRFFI list of (small-bucks) donors.
If you want to see how mind-bogglingly bureaucratic, goobledy-gookish, and colonialist the ICI seems to be, look at pages like this (PDF) one on their website. Your eyes will glaze over, guaranteed.
Okay, back to China. Evidently these two new investments are a huge deal for the two countries being invested in. And certainly not solely at the economic level.
Think about the challenges the Chinese engineers will face in Afghanistan. Not just the technical (and environmental-protection) challenges, which are huge enough. But also the political and security challenges. Some of these are described in the well-reported Eurasianet article by Ron Synovitz linked to above.
This article by Times Online’s Jeremy Page is also informative. He writes, intriguingly,

It was here, in the Aynak valley, that al-Qaeda trained and planned for the 9/11 attacks that triggered the US-led invasion of Afghanistan in 2001. And it is here, seven years on, that Afghanistan – with the help of British geologists and a Chinese mining company – will lay the foundations of a new economy in the next few weeks…

Aynak, Ground Zero for major geopolitical change. Who knew?
Aynak is a valley that, according to my Google map is, located a lot closer to Kandahar than to Kabul (which was what Page had written…. On the other hand, he was writing from there, so I guess he must know?) If the Chinese really are also going to build a rail line that comes from western China, through Tajikstan, down through Afghanistan (including Aynak,) and through Pakistan to Karachi, then that is extremely significant.
I think the China-Tajikstan connector is already underway…
But the whole project, when completed, will have huge benefits:

* for China, in its continuing drive to bring economic development to its far-west regions,
* for Tajikstan and the other landlocked former-Soviet Stans, who have pretty good Soviet-era railway systems– but so far, most of them connect to the outside world only through Russia. This new connector would give them new outlets, to both China and the Arabian Sea.
* for Pakistan, which gets access to a whole new hinterland and trading bloc there in Stanistan, and finally–
* for Afghanistan, which gets its first ever long distance rail line— and one that connects, moreover, to such a lot of other interesting and potentially lucrative places. It also thereby gets a way to start exporting not just the massive amounts of copper said to exist in Aynak but all the rest of its currently barely scratched-at wealth of mineral resources.

Win-win-win all round, I’d say. And not just because I’m a committed ferrophile.
But — and this is a huge but– how can the security of the people who work on these projects in Afghanistan be assured? All the more pressing of a question since the Aynak-Karachi segment of the line will have to pass through some prime Taleban heartland.
Worth noting that China has always had considerable influence in Pakistan. If (or as) it goes ahead with the whole Aynak project, the task of steering the Pakistani state off its current path toward implosion will be very important indeed.
Anyway, security. That has been the biggest problem for all the (admittedly much smaller scale) “development” projects that the US and its allies have tried to launch during the lengthy and crushingly unsuccessful years of occupation — in Afghanistan, as in Iraq.
Obviously, the Chinese must be discussing this exact question with the Afghan government. It is probably a huge advantage to the Chinese that they are not Americans, and not associated with NATO. On the other hand, Beijing does have its own considerable problems with hard-line Islamists among its citizens, who almost certainly have some connections with counterparts in Afghan movements, including the Taleban. So the Chinese security experts will have to work closely with the Afghan authorities to craft a plan that avoids arousing the opposition of the Taleban— or perhaps, that even cuts them into the deal in some way?
Karzai has been known in the past to have favored using some form of ‘big-tent’ approach to reaching out to the Taleban, though until now, his suggestions to that end have all been firmly squashed by the Americans.
Maybe now, with this Chinese deal in hand, he can have more ability to stand up to the Americans and do what he thinks is best for his country?
One thing seems certain, though. The Chinese will most likely be very wary indeed of having the US Special Forces “terrorist killers” (or baby-killers, depending who you believe) operating anywhere near their worksites. So Karzai will have to start constricting the Special Forces’ areas of operations considerably, once the project gets underway. (Or, boot ’em out of the country completely. Probably the best solution all round.)
NATO? Well, perhaps the Chinese and Afghan security people could hire them to provide some security services. (!) Who knows?
… Similar socio-political and security considerations may well come into play with regard to China’s new investment in southern Iraq. More on that, later.
But for now, suffice it to say that while most Americans have been looking at the minutiae of the “game” of US presidential politics, the world outside our borders has been undergoing rapid shifts. And not just (indeed, not even mainly) in Georgia.
No, the biggest shifts have been those announced not with the rumbling of Georgian and Russian tanks but with the quiet signatures of Chinese business executives, bankers, and government officials on these massive contracts with two governments that the US itself created, from scratch, and put into power by force.
If these deals go ahead as Beijing plans (and hard to see what can stop them now?) then vroom, Central Asia and the Persian Gulf: things will be changing fast in both strategic regions, over the five years that lie ahead!
… And the air will also thereby be let out of the over-inflated balloon of America’s global control-system. We Americans can return to being a normal– hopefully friendly– nation among nations rather than trying to control and dominate everyone else around the world. And here’s the most important point: This transformation has a good chance of being achieved through the efforts of contract lawyers, civil engineers, oil, mining, and rail technicians, and solid police work (to assure security)– not through military power and violence.
Now that’s what I call good news.