Is China's Guinea deal for real?

Earlier this month, news surfaced that the military junta in Guinea had secured a $7 billion deal with a Chinese firm for mineral exploitation and other economic exchange. The news came at an odd time to say the least; just two weeks earlier, the junta presided over what can only be termed a massacre of the opposition, with over 150 protestors killed. As the international community threatened sanctions, Guinea's junta leaked the China deal to the press as if to say, 'we don't need you, world.' The investors were reported to be the China International Fund Ltd (CIFL), a Hong-Kong-based firm.

Yet many have doubted the veracity of the deal, given the timing, and the fact that $7 billion is almost twice Guinea's GDP. The Chinese Embassy in Guinea denied the project. And other skeptics cried fowl. "China has a reputation of ignoring a lot of things, but they do want to protect their investments," an international NGO worker told me when the deal was announced (she could not be identified for her safety in Guinea). "I know the Chinese ambassador and I think he would agree with me." 

Turns out, what is likely the contract for the deal was posted online back in June, meaning that the deal has been in the works for years, not months or even days, as the Guinean announcement this month seemed to suggest. The contract, between the Guinean government and the CIFL, lays out conditions for the creation of a "Chinese-Guinean Development Organization" (my translation from French), which would oversee investments and development in the energy, water treatment, electricity, road, airline, habitat and aluminum mineral extraction sectors. The organization would be funded mostly by CIFL up front, to be reimbursed in part by the Guinean government when profits began to turn. The accord is dated June 12, 2009. 

Whether this is in fact the deal, it is being treated as such, says Congressional Research Service analyst Alexis Arieff, who recently wrote a report on the situation in Guinea. The details also align with the statements of Guinean ministers who have spoken about the contract to the press. 

Why does this matter? The implications are several fold: 

First, if the initial contract was indeed signed in June, it raises further questions about why the junta would announce it immediately after the September massacre. "[T]he opinion of the international community effects [Moussa Dadis Camara, the junta leader]," the international NGO worker told me. There are signs that the already mentally fragile junta leader was hit hard by the massive drop in international opinion that followed the events of September. 

Second, the agreement tells us something very interesting about China's investment in Africa, and the complex web of companies that are involved therein. The China International Fund Ltd is part of what the U.S.-China Economic & Security Review Commission recently termed the "88 Queensway Group," named for an address in Hong Kong at which numerous Chinese companies are registered. The group has also invested heavily in Angola and has unclear links to the Chinese state itself. "Although the 88 Queensway Group is portrayed to the public (and accepted publicly) as a private Hong Kong-based company with no government affiliation, some evidence suggests that several of the Group’s personnel are connected to the Ministry of Public Security or the Ministry of State Security," the July 10 report concludes. In other words, while "China" might not be investing in Guinea, companies related to government interests might be. 

Finally, there are still gaping holes in the story here about whether the contract will actually be acted upon, given the recent turn of violent events, and how funds would be dispersed. The Guinea government is completely broke; the small, resource-rich African country depends almost solely on Bauxite exports for its revenue. And for now, the junta is running on fumes. 

What is certain is that Guinea's October announcement of their big, whopping deal with China, is wishful thinking. Just how concrete their wishes are is anyone's best guess.

Photo: GEORGES GOBET/AFP/Getty Images


Is Obama passive-aggressive toward Turkey or just bad with dates?

Turkish Prime Minister Recep Tayyip Erdogan is currently in Tehran with his "friend," Mahmoud Ahmadinejad, as the two leaders discuss ways to bolster the bilateral ties between their two countries. While Turkey's realignment towards Iran and Syria is by now familiar, it is possible that the Obama administration might be more annoyed at this development than it has let on publicly.

Obama recently sent an invitation to Prime Minister Erdogan to meet with him in Washington D.C. on October 29. That just happens to be the Turkish equivalent of the Fourth of July -- the anniversary of the dissolution of the Ottoman Empire and the creation of the Turkish republic. Erdogan, placed in a bind over the need to be in Turkey on this national holiday, was forced to turn down Obama's invitation and reschedule, likely for a date in December.

This seems like a canny way for Obama to superficially appear to be continuing his philosophy of "engagement," while at the same time extending an invitation that he knew Erdogan would not be able to accept. And really, it's hard to believe that a prospective visit by the Turkish leader wasn't first cleared with a Turkey expert at the State Department, who could have pointed out the obvious conflict. 

However, it could just be that the administration is bad with dates. It wouldn't be the first time: remember, Obama announced the US decision to abandon its missile defense plans in Eastern Europe on the anniversary of the Soviet invasion of Poland.