Resource Rich Countries

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unlikely. Thus, having to decide between the PRC and the ROC, Tanzania’s decision in siding with its chief supporter, the PRC, came with no surprise.

The nature of relations between Tanzania and the PRC has evolved over time.

Current Sino-Tanzania relations have been characterized by significant economic interactions, in contrast with the 1960s and 1970s period which was essentially defined by ideological and political alignment between the two states. Today, Tanzania is the PRC’s biggest trading partner in East Africa and the number of business between the two countries continues to flourish. Through FOCAC and the intensification of high level official visits, Beijing has pledged the construction of several infrastructure projects, trade incentives, and to partially cut Dodoma’s debt, thus further strengthening Sino-Tanzania ties. Therefore, although the nature of this union might have changed considerably, Tanzania relations with the PRC seem to have maintained its significance.

Tanzania has never established relations with the ROC and the chances for a shift in the foreseeable future are near impossible. Apart from the Tanzania’s natural inclination in siding with Beijing evidenced since its independence, another possible aspect further explaining this fact might also lie in Beijing’s capacity to promote Dodoma's interests.

During Nyerere’s presidency, the PRC highly approved and supported the socialist path being adopted by the Tanzanian leadership. Presently, the considerable amount of trade between the two states and the benefits arising for Tanzania from its participation in FOCAC, have made this relationship even more valuable to be put at stake by establishing relations with the ROC.

5.2.1 Resource Rich Countries

Sub-Saharan Africa is endowed with abundant natural resources. The richest region in minerals, metals and energy resources is southern Africa, an area stretching from Congo-Angola to South Africa. This region is also considered geopolitically strategic due to the Cape route. However, it is the Gulf of Guinea which draws the greatest interest from the world oil industry due to its proven oil reserves of 132.1 billion barrels, that is, nearly ten per cent of the world’s oil reserves (Verma, 2012). As for the eastern region, reserves of

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important natural resources, although existent, are not as abundant as the ones present in the Gulf of Guinea and central and southern Africa.

In this context, oil and gold have a prominent role, especially taking into account the following assumptions: gold, due to its high market value and its reserve value in the economic system; and oil, which is the world’s main energy source and central in the majority of states’ geopolitical strategies (Verma, 2012).

Sub-Saharan Africa holds 52% of known oil deposits on the continent. Nigeria, Angola and Sudan account for the bulk (86%) of that share (Alves, 2011).

The existence of natural resources in sub-Saharan Africa, whose potential has been known by both the PRC and the ROC for many years, has never played a direct role in their competition for diplomatic allies on the continent. However, its importance is nowadays undeniable and a factor which can be helpful in further explaining why resource rich states located in this region have tended to side with Beijing at the expense of Taipei.

The PRC’s engagement with Africa in the last few decades has assumed different dimensions. Unlike the ideological foundations which characterized Beijing’s relations with the continent during the Cold War, a multifaceted engagement encapsulating essentially trade and related economic ties have become the prominent feature of this relationship. In this regard, the PRC’s search for natural resources explains the tremendous increase in the PRC’s trade and in investment on the continent (Enuka, 2010; Taylor, 2006). Among the most important natural resources present in sub-Saharan Africa attracting the PRC's interest are oil, copper, aluminum, diamonds, uranium, iron ore, timber and bauxite. Of these, oil makes up 65% of the total of African exports to the PRC, with Angola supplying nearly 50% of the total, followed by Sudan supplying 25%, the DRC 13%, Equatorial-Guinea 9%

and Nigeria 3% (Enuka, 2010). In 2012, the PRC was the main destination for sub-Saharan exported crude oil, with 22% of its total (Fig. 3).

In contrast with the PRC, the ROC’s imports of natural resources from sub-Saharan Africa are minimal. According to the U.S. Energy Information Administration (EIA) the ROC imports about 85% of its crude oil from countries in the Persian Gulf and smaller portions from Angola and other countries (EIA, 2013). Despite the exploratory and production operation undertaken by the Chinese Petroleum Company (CPC) in Chad, Taipei’s major exploratory and production activities have been conducted in North America

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(US), Latin America (Venezuela and Ecuador) South East Asia (Indonesia) and the Pacific region (Australia) (CPC, 2013).

Fig. 3 Sub-Saharan Africa’s Exports of Crude Oil by Destination in 2012

Source: http://www.eia.gov/pressroom/presentations/howard_08012013.pdf

Asserting that sub-Saharan resource rich countries have based their decision to recognize the PRC instead of the ROC based on trade and investment factors would be a mistake. However, it is important to highlight that the advantages arising from the relationship with the PRC have brought benefits that would hardly be attained if these states had official ties with the ROC.

Severing official ties with the ROC is a necessary precondition for a state to do serious business with the PRC. In its White Paper on Africa disclosed during the FOCAC summit in 2006, Beijing asserted that if African states choose to accept the ‘one China’

principle as the potential foundation for the establishment and development of Beijing’s relationship with African states, the PRC will coordinate positions on major international and regional issues and stand for mutual support on major issues concerning state sovereignty, trade, territorial integrity, national dignity and human rights (Pant, 2006;

FOCAC, 2006).

Since it became a net oil importer in 1993, the PRC’s hunt for resources, with special emphasis for oil, has escalated massively as it is reflected in Beijing’s increased presence in sub-Saharan Africa’s oil industry (Taylor, 2006). Despite the competitiveness

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of its oil landscape, the PRC has been quite successful in securing important oil and other resources assets in the region. In this regard, Beijing holistic approach encompassing political support, trade deals, debt relief, foreign aid, financial packages, infrastructure projects together in a “business is business” and “no strings attached” fashion have helped Beijing in beating out competition (Kong, 2011). The PRC’s bilateral relations with these states are undeniably important concerning its approach towards these states. Yet, through FOCAC ministerial and heads of state summits, Beijing has strengthened its overall relationship with Africa which has also been quite helpful in further promoting its relationship with resource rich countries located in sub-Saharan Africa.

For sub-Saharan states’ governments, the PRC’s quest for natural resources in their countries has been quite welcomed for a number of reasons. First, it is helpful in driving the prices of these state’s oil and other raw materials; second, it strengthens their bargaining position as resource providers vis-a-vis the traditional western companies; third, Beijing’s non-interference approach in host countries’ domestic politics, allows host governments to perpetuate their governance practices and political life style; fourth, no conditionality so long as states recognize the ‘one China’ principle, which prioritizes economic gains over normative concerns in host nations; and finally, when employed, the ‘projects for oil’ case tend to shorten public administration costs required to process the loans and provide these countries with critical infrastructures which have been neglected by both western countries and financial institutions over time (Kong, 2011).

For the aforementioned reasons, the PRC’s approach towards sub-Saharan resource rich countries has been very much appreciated and a factor which has prompted both parties in engaging in an even closer relationship. This convergence of interests has allowed the PRC to become an essential partner that states endowed with natural resources in the region might not want to lose. Thus, the establishment of diplomatic relations with the ROC’s by this group of countries seems to be very unlikely, as the benefits they can obtain from the PRC would hardly be matched by the ROC. This might explain why the current diplomatic allies of Taipei in sub-Saharan Africa are all poor in natural resources with the exception of Sao Tome e Principe²³.

23Sao Tome and Principe has considerable proven oil and gas reserves but exploration is yet to start. Its economy it is still highly dependent on agriculture. In 2012, Cocoa accounted for more than 90%of the Island Nation’s exports (Macauhub, 2013).

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The case of Angola can be helpful in confirming this trend. Angola is Africa’s top oil exporter to the PRC and the PRC is Angola’s main trading partner. This has resulted in a close relationship between the two countries involving not only economic, but also political aspects, a fact which has conferred almost no space of maneuvering for the ROC to court the administration in Luanda to establish diplomatic relations with Taipei at the expense of Beijing.