Chinese FDI and Zambian Development: A Critical Evaluation of the its Relevance through key Socio-Economic and Political Indicators

Dunkin, Cameron (2012-03)

Thesis (MA)-- Stellenbosch University, 2012.

Thesis

ENGLISH ABSTRACT: Since 2000, Chinese FDI in Zambia has steadily increased. Focused predominantly on resource extraction, China is now the third largest investor in Zambia, after only the United States and South Africa. As the title suggests, this FDI is recognized as relevant to Zambia’s developmental discourse. However, with general development indicators, there is challenge in establishing immediate causality between (Chinese) FDI and development. To address this, this study employs Capability Approach development theory, which utilizes a framework to evaluate social and political realities. Utilizing this framework, key indicators are used to look more deeply into the discussion around China’s FDI for Zambia’s development. There has been a great deal of speculation as to potential costs and/or benefits Chinese FDI may offer Zambia. As China offers Zambia a partnership of non-domestic interference, unique from Zambia’s traditional western syndicates, debate is raised as to what influence it will have on Zambia’s developmental progress. With challenges including limited information, numerous potential indicators to utilize, and a large number of contributing voices, the debate thus far lacks a means for evaluating the substance of claims made within the context of national trends. This study reviews and evaluates the debate within the framework of seven key socioeconomic and political indicators. While within economic growth and infrastructure expansion Chinese FDI are shown to indicate a conduciveness to development, FDI is not shown to be conducive for market diversification, challenging corruption, or strengthening institutions. The study therefore shows that trends of Chinese FDI’s relevance to Zambian employment and state dependency to be mixed and that assessments will need to disentangle various Chinese activities and will also need to consider contradictory effects.

AFRIKAANSE OPSOMMING: Sedert die jaar 2000 het Chinese direkte buitelandse belegging (DBB) in Zambië stelselmatig begin toeneem. Die groei is hoofsaaklik gekonsentreer in die hulpbron ontgunnings sektore. China is tans die derde grootste belegger in Zambia naas die Verenigde State van Amerika en Suid Afrika. Soos die titel van die tesis aandui, word DBB beskou as relevant tot Zambië se ontwikkelings dialoog. Aangesien die oorsaaklikheid tussen DBB en ontwikkeling nie maklik vasgestel kan word nie, word sleutel aanwysers gebruik om dieper in die gesprek rondom Chinese DBB ten opsigte van Zambiese ontwikkeling in te kyk. Tans is daar 'n groot mate van spekulasie aan potensiële risikos en/of voordele van Chinese DBB vir Zambië. China bied Zambië ‘n venootskap sonder inmenging in binnelandse beleid, anders as Westerse finansiering wat gekoppel word aan voorwaardes, en dit is wat die vraag lig; wat gaan die uiteindelikke invloed en effek wees op Zambiese ontwikkeling in die toekoms. Met uitdagings soos beperkte inligting, vele moontlikke aanwysers en ‘n groot aantal opinies, kort die debad tot dusver die vermoë om die waarde van argumente te evalueer binne die konteks van nasionale tendense. Hierdie studie evalueer die debat binne die raamwerk van sewe sleutel sosio-ekonomiese en politiese aanwysers. Chinese DBB word bevind om bevorderlik te wees ten opsigte van ontwikkeling in die infrastruktuur ontwikkeling- en ekonomiese groei sektore; dit word egter nie bevind as bevorderlik in terme van mark-diversifikasie, die teenkanting van korrupsie, of in die versterking van politieke instellings nie. Chinese DBB se invloed op indiensneming en op die afhanklikheid van die Zambiese staat toon gemengde resultate, en dat assesering verskeie Chinese aktiwiteite sal moet ontrafel en ook teenstrydigge effekte in gedagte moet hou.

Please refer to this item in SUNScholar by using the following persistent URL: http://hdl.handle.net/10019.1/20234
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