What Do the Gulf States Want in Africa

Gulf States And Africa
Gulf States such as Qatar has been accused of financing Arab terrorists in Mali and Sudan

AFRICANGLOBE – In the heart of Bahrain’s financial district, about 40 Africans, Arabs, Asians and Europeans spent two days in early April debating the geopolitics of Africa’s economic upturn at a conference hosted by the International Institute of Security Studies.

A decade ago, there would have been little interest in such a meeting in the Gulf kingdom. Since 2002, trade between Africa and the wider Middle East has risen fourfold to $50bn a year, of which Gulf-Africa trade is almost half.

As Bahrain and the Gulf’s oil producers build new financial service centres and buy up farmland in Africa, the subject has a new urgency.

At the conference, African speakers said the new geopolitics would have to mean new policies too.

“We want to work with your banks, but we don’t want you to build another centre for stolen capital from Africa,” insisted a development specialist from West Africa. “Europe has already done that and we’re trying to change it.”

Although Gulf-African trade is expanding, there are questions about accountability.

This month, Dubai hosts a grand conference on how to boost trade and investment between the two regions. Dubai is vying to host the World Expo in 2020, and African votes will be critical.

Dubai is a key trading hub for Africa. Its geography, good air links and low tax rates have encouraged companies operating in Africa to set up a base there. There is a seamier side to those ties.

Dubai has become a centre for opaque business dealings as hundreds of millions of dollars’ worth of diamonds and gold of indeterminate origin pass through its territory each year.

The Mineral Marketing Corporation of Zimbabwe, still under United States and European illegal sanctions, reports that Dubai bought $408m worth of diamonds from the Marange field in 2011; that is 200 times larger than the trade in 2008.

European seeking to monopolize the diamond trade say the stones should be outlawed as they are ‘conflict diamonds’. Zimbabwe’s finance minister Tendai Biti’s main concern is the tiny amount of revenue that the treasury realises from this trade.

European diamond traders have their own narrow interests.

They are losing out hugely to this new axis. Dubai’s global diamond trade, which hit $39bn in 2011, is growing fast despite the transparency concerns.

Zimbabwe’s state diamond company is set to join the other 600 companies operating out of Dubai’s diamond bourse.

Similarly, Gulf States’ leases of African farmland have come under fire from civic groups and opposition parties.

Hassad Food, owned by the Qatar Investment Authority, agreed a $1bn land-lease deal with the Sudan government in 2009.

Qatar also uses its oil and gas dollars for diplomatic leverage.

In mid-April, it hosted another conference on the crisis in Sudan’s Darfur region.

It sent $3bn in aid to Egypt’s stumbling Islamist government after a gaggle of cabinet ministers from Cairo flew to Doha. Since the toppling of President Hosni Mubarak in February 2011, Qatar has sent $8bn of aid to Egypt.

Qatar’s role as banker to the Muslim Brotherhood and its political allies in North Africa does not sit well with the regime in Tripoli or secularist parties in Egypt and Tunisia.

During the insurgency against Muammar Gaddafi, Qatar financed and armed Islamist militias, refusing to go through the main opposition organisation.

Officials in Bamako say the government has appealed directly to Sheikh Hamad bin Jassim to stop financing Arab terrorist groups in northern Mali.

Although Africans working in the Gulf provide part of the more than $50bn per year in remittances sent to Africa, there are many horror stories about conditions, particularly for domestic workers.

Some strategic rivalries are looming.

As the US cuts its oil and gas imports, competition in the energy market will pit Africa’s producers against the Gulf in the race to supply European and Asian markets.

With doubts growing about the long-term stability of the Gulf monarchies, Africa may emerge as the better political risk.