On September 18, 2007, China announced that as part of its proposed $20 billion loan package to the African continent, it has authorized a $5 billion loan to the Democratic Republic of the Congo [1]. According to the agreement, $3 billion will be set aside for strategic road and rail projects linking interior mining areas to port cities, while the remaining $2 billion will be used to “revive the once-mighty mining sector” [2] as well as to finance new hospitals, health centers, housing units, and two new universities for the Congo [3]. Repayment of this huge sum will be made through Chinese access to exclusive Congolese mining contracts, as well as toll money to be generated by the new roads [4].

While the loan has the possibility to create great opportunities for the Congolese government and people, it is also capable of maintaining the DR Congo’s current economic and social stagnation. Government awareness of possible opportunities and pitfalls is essential to avoid a negative outcome. As such, the IIJD offers several caveats to be considered with the acceptance of this loan. First, an economy that relies on the exportation of raw materials, like many in Africa, is neither sustainable nor beneficial to growth in the long term. Raw materials will eventually run out, leaving a population of low-skilled workers. Further, the export of raw materials is not cost-effective, as it is not a value-adding industry that is really capable of generating income. Granting exclusive mining contracts to China is an endeavor that could be more harmful than helpful in the long term. Regardless of the potential success of the Congolese mining industry, if China is given exclusive access it is China who stands to gain, and the Congo to lose. The Congolese government should make certain that this is not merely an exercise in neo-colonialist style investment, which could eventually leave the Congo in a worse state than it is in now.

On the other hand, there are many ways in which the Congo could benefit from this interaction with China. For a country as young as the Congo, which attained independence in 1960, any movement toward infrastructure development is a step in the right direction so long as it is maintained after the Chinese have left. Also, new roads have the potential to further unite the country and to encourage trade with neighboring states. And perhaps most importantly, these large construction projects could inject a lot of money and job opportunities into the DRC. And it is important that the Congolese population be involved in the construction of these infrastructure projects so that the knowledge and training necessary to sustain these projects long after the Chinese loan is repaid is maintained locally. Unless they are sustainable, these infrastructure developments are not worth the debt they will incur.  And, considering that it will be Congolese mining labor which is used to pay back this debt, it is important that local workers also be involved in the projects that these loans are financing. And since Chinese contractors are currently serving a major role in other large construction projects on the continent [5], care will have to be taken to ensure that the money from these loans is not funneled through Chinese contractors back into China.

This loan and the relationship it creates with China also hold a good deal of promise for the Congo’s political standing. If the Congo is able to stand up to China in ensuring that its best interests are served, the Congo has the opportunity to gain some political power in the international forum as well [6].

Thus, in order for this venture to be successful for both parties involved, the IIJD encourages the Congolese government to work on accomplishing four directives in regards to this loan. First, the Congo should make sure that this loan serves as a means to unify and encourage growth in all regions of the country, not just the ones involved in the mining industry. Secondly, it would be much more advantageous if the construction for these projects was completed by local contractors and workers rather than Chinese, in order to inject more money and jobs into the economy. Third, the IIJD references the recommendations from its 2006 International Conference on the State of Affairs in Africa in regards to its concerns on the sustainability of an economy dependent on the exportation of natural resources. According to recommendation three of the conference findings, the IIJD recommends that states that heavily export natural resources, like the Congo, should use the wealth that these resources generate in order to “…create viable post-natural resource economies; and also that they work toward enhancing technology-building economic linkages, and encouraging re-investment in Africa, especially in the areas of manpower training, engineering, and fabrication yards”. This will ensure that the Congo has a skill-based labor force, capable of generating income when mining is no longer an option.  Finally, it would behoove the government of the Congo to make sure that the terms of the loan repayment do not give a foreign nation undue power over or monopoly access to a domestic industry. The IIJD does not stand in favor of or in opposition to this loan in and of itself, but is more concerned about the way in with the Congo handles itself and its relationship with China. If attention is paid to these issues, the IIJD believes that this loan could be very beneficial for the growth of the Congo.

[1] BBC News Online. “China opens coffers for minerals”.

[2] Reuters. “China to lend Congo $5bn in latest Africa foray”.

[3] Reuters. “China to lend Congo $5bn in latest Africa foray”.

[4] AFP Online. “China loans DR Congo five billion dollars”.

[5] Reuters. “China to lend Congo $5bn in latest Africa foray”.

[6] BBC News Online. “China opens coffers for minerals”.