When Zambians go to the polls on Sept. 20, their decision on which box to tick won't be based on traditional election issues such as good governance, security or service delivery. Their votes will revolve around one key question: Are they for or against China's heavy investment in their country?
Weeks of electioneering have left no doubt that incumbent President Rupiah Banda and his Movement for Multiparty Democracy believe Zambia needs China to drive its economic growth. Banda's main rival, Michael Sata, leader of the largest opposition party, Patriotic Front (PF), sees things differently. Chinese investors are "taking over" Zambia by exploiting its natural resources and workforce, he says.
Chinese investment in Africa's leading copper producer topped $1 billion last year and came with the promise of 15,000 jobs as well as an additional $5 billion investment over the next few years. Almost all of the money is plowed back into Zambia's copper-mining industry, with only 10% invested in construction, agriculture, retail and manufacturing.
It is perhaps understandable that in a southern African country the size of Texas, where almost two-thirds of the 13 million citizens live under the poverty line of $1.25 a day, economic growth is the government's priority even if that growth comes at a cost. The elections will show if Zambians have begun to realize that "economic growth has not translated into significant poverty reduction," as the latest World Bank country assessment states.
Although 10 political parties have fielded presidential candidates for the election, it will practically be a two-man race between Banda and Sata, who during previous elections already accused Chinese investors of gross exploitation and whose nickname King Cobra speaks for his aggressive, populist politicking. Banda, whose election campaign is rumored to be funded by China (an accusation he denies while refusing to disclose who his financial backers are), has been promising "stability, security and prosperity" through "cementing the warm and strong relationship" between the two countries. If he gets a second term, Banda will ensure that the foothold the Chinese have in Zambia will become even stronger.
He knows he owes them: when international copper prices dropped steeply in early 2009 because of the global financial crisis, Western mining corporations retreated from Zambia, leading to the closure of mines and the loss of thousands of jobs. Chinese investors stepped in and rescued the sector.
By 2010, Zambia's copper industry was competitive again. Exports totaled $7.2 billion in 2010, mainly due to rising production and higher prices. With that, copper responsible for 70% of Zambia's export earnings largely contributed to the country's whopping 7.6% economic growth in 2010.
Banda's critics complain that those revenues hardly benefit all Zambians. Opposition parties, unions and watchdogs note that most profits are taken out of the country instead of being reinvested in much needed infrastructure, hospitals and schools. There are also widespread allegations of Chinese firms ignoring environmental and labor laws to reap higher profits and of the government turning a blind eye. Banda, however, insists business relationships with China are a "win-win situation" for both countries, creating economic stability in Zambia, while Chinese Deputy Commerce Minister Chen Jian told the Associated Press that "Chinese investors have brought not only capital and technology but also job opportunities and tax revenue" to Zambia.
"The government lets Chinese investors act above the law," laments Edward Lange, coordinator of Southern Africa Resource Watch in Zambia. "Corruption is rife. We have lost control over our resources." China's grip on Zambia's economy pinnacled in August when China opened a branch of its Bank of China in Zambia's capital, Lusaka. There, customers can deposit yuan without having to go through foreign exchange a first in Africa.
The PF promises to put a stop to political favoritism. "We want an equitable taxation system in the mining industry to ensure that foreign direct investment trickles down to all citizens," says Given Lubinda, the party's chair for local government, environment, tourism and housing. With the Copperbelt being a traditional PF stronghold, Lubinda believes party leader Sata will have the support of tens of thousands of mine workers and their families, who are growing increasingly disgruntled with Chinese-run mining operations. Previous protests against low pay and poor working conditions have shown few results, only worsening tensions among workers and managers. During a strike in April, Chinese managers shot and wounded eleven protesters. Although two Chinese nationals were charged with attempted murder after the incident, Banda defended their actions, saying that people are "shot at every day" in Zambia, not only by Chinese. "Let's be careful that we do not single out people," he said.
"We are discontent with the political and economic situation," confirms Charles Muchimba, research director of the Mineworkers' Union of Zambia. While Chinese investors have reaped massive profits, workers have borne the brunt of Zambia's free-market economy and suffered salary cuts of up to 40% during the recession, he says.
Political analysts are predicting a tight race for the presidency. Banda shows a few points' lead in the latest opinion polls, partially due to the recent breakdown of an alliance between the two most influential opposition parties, Sata's PF and the United Party for National Development, led by Hakainde Hichilema. "As much as Zambians are disenchanted with the government's poor performance in delivering services, so they are disillusioned with the opposition's failure to offer any united front against the ruling party," says Judy Smith-Höhn, a senior researcher at the Institute for Security Studies.
Among all that disillusionment are Chinese promises of economic growth and prosperity. Come election day, Zambians will have to decide if they are willing to give up control of their natural resources in exchange.