Select Committee on European Union Minutes of Evidence

Examination of Witnesses (Questions 280-299)

Mr Nicholas Grono, Mr Gareth Evans AO QC and Mr Romit Jain

21 MARCH 2006

  Q280  Lord Hannay of Chiswick: . . . and the EU, you meant the Commission?

  Mr Grono: Yes.

  Q281  Lord Hannay of Chiswick: So to some extent it is also a reflection of the fact that the intergovernmental aspects of the EU are not being properly meshed with the more supranational aspects.

  Mr Grono: It is a big problem. We have raised it in Nepal, where you have an EU delegation and you have a number of Member States, where the effectiveness of the EU—and I am talking there of the EU in the grand sense of Member States and the institutions—is undermined by the fact that there is a complete lack of co-ordination. Sometimes it is because there are different interests, understandably, and that will be very difficult to prevent; sometimes it is just because there is a lack of effective co-ordination. The latter can be addressed much more easily than the former.

  Q282  Chairman: I think you said that you will not resolve all those sorts of issues, but in so far as they can be resolved presumably they have to be resolved within the Council by the Member States. You cannot just suggest that it is all the EU in general. That is where the political will will come, is it not?

  Mr Grono: Yes, ideally that is where it is resolved, perhaps in some of these issues. As I said, I am identifying Guinea because it is somewhere I am engaged with quite actively at the moment. However, perhaps by more publicly expressing the Council's view—if there is a risk of a coup or a risk of transition and the Council or Solana comes out and says, "This is the Council's position. This is the approach that we favour", which supports that espoused by civil society in Guinea, or by the political parties themselves, that perhaps makes it more difficult for Member States to pursue a path of their own; but only to a certain extent.

  Q283  Chairman: You are saying that there is a reluctance on the part of the Council to do that?

  Mr Grono: No, I am not saying that. I do not know. On Togo there was a fairly clear position from the Council. I do not know if it was expressed as clearly as that. On Guinea, we have not got there yet. Certainly Javier Solana is pretty active in all of this, but there are always political constraints. Then you are running into the institutional constraints.

  Q284  Lord Hannay of Chiswick: Looking at this worldwide as the ICG does, how would you rate the EU and its Member States' performance in Africa compared with other parts of the world? Is it better? Worse? Or much the same? In this respect, of pulling this act together?

  Mr Grono: These are the kinds of issues you run across in most places. In Africa you have particular problems, because there can be very close ties between the British Government and former colonies, the French and former colonies, and a perception of the spheres of influence in a more overt sense than you might get elsewhere. Looking at Afghanistan or Nepal, it is more a lack of co-ordination there. There are not completely divergent interests; although, for instance, the British have a much more active role because of their historical ties there. So that does perhaps become an issue. I think that you see it more glaringly in Africa because there is heavier engagement and because of the closer ongoing ties.

  Q285  Lord Lea of Crondall: What about non-European? Nepal—you might mention India and the United States. Are we just talking about the EU countries?

  Mr Grono: No, you are talking about everyone. In Africa, something that you really have to look at when you are looking at strategy and so on, is China's growing role. China is very actively engaged in Africa in two very interesting capacities. One is the search for resources, whether it is oil, gas or minerals. The other is in creating markets. China's role is something that is beginning to get a lot of attention and has all sorts of implications for development strategy, because China is actively engaged; it has made it quite clear that it has a different approach to African states than perhaps the EU does—for instance, it does not believe in conditionality. I was in Côte d'Ivoire the week before last. China had just built the cultural centre; China had just built the national assembly; it is in the process of building the presidency. It is very active engagement, in a way that is often much more welcome to African leaders than EU engagement and conditionality. China is very actively involved in Sudan, in the oilfields, in a way that European and North American countries probably cannot be. Canadian companies pulled out of the oilfields in Sudan; China very happily got very actively engaged. China is very actively engaged in Nigeria. It is very interesting dynamic and something that I think will increasingly play a prominent role in Africa.

  Q286  Lord Lea of Crondall: Do you have any numerical way of—

  Mr Grono: No, we do not. It does not mean that there is not stuff out there, but there has not been a lot of research done on it.

  Q287  Lord Lea of Crondall: What is your feel of it?

  Mr Grono: My feel is that it is going to change dynamics.

  Q288  Lord Lea of Crondall: Is it half as big as Europe and growing, or is it one-tenth? Is this big cheese?

  Mr Grono: We are talking about tens of thousands of Chinese employees in Africa. We are talking about significantly impacting on markets. If you go to Zimbabwe, there is a very heavy presence of Chinese manufactured goods there. Robert Mugabe has talked about looking East instead of looking West—partly through necessity. Yes, a very big impact and a growing one. China's Foreign Ministry has identified Africa as a critically important place for it to be engaged in. You have had high-level visits over the last couple of years to Africa by the Chinese Foreign Minister, the Chinese Premier, that you have not had upon that scale before. So I think that there are very interesting developments going on there.

  Q289  Lord Lea of Crondall: You think that it is undermining, if not setting out to undermine, and playing on the African resentment of too many sticks and carrots, saying "We can be the alternative"?

  Mr Grono: I do not think that there is any particular intention. I just know that if you are an African state and you have China prepared to build your roads, either at cheaper cost or with fewer conditions, less concern about environmental impact studies, and perhaps fewer concerns about the response by civil society to these kinds of projects, then there is a great temptation to engage. If you look at things like the Chad oil pipeline—

  Q290  Lord Lea of Crondall: They are cleverer than the Russians were, are they, in the old days?

  Mr Grono: I do not know. I have not followed the Russian engagement; but it is a very systematic, increasingly prominent engagement.

  Q291  Chairman: We are identifying a problem here. Do you have any solution?

  Mr Grono: No. The beginning of a solution is an awareness of the problem. I have not looked into this, so I cannot tell you. There are advantages to European engagement, I would think, that might not be present with Chinese engagement. I have talked about some of the benefits to African countries of Chinese engagement, but there are also detriments. Chinese products are undermining domestic capacities. Someone was talking to me in Côte d'Ivoire when I was there recently about indigenous cloth production using indigo and cotton cloth; about how there had been Chinese investment in one of their factories, basically to learn the skills of the indigo dyeing process. They were then going to bring in Chinese synthetic material, which could be sold much more cheaply in Africa, thereby undercutting both the market and having other impacts. So there has been a bit of an examination of this. Of course, there are impacts at the lower level, the consumer level, and then there is the impact on leadership. I do not know if the negative impacts at the lower level might impact sufficiently on leadership to make that an unattractive proposition.

  Q292  Chairman: Given your particular interest, this is a sort of economic involvement. There is no suggestion that they may be offering military support to regimes. I do not mean in terms of troops, but supplying—

  Mr Grono: They are a very active arms supplier, as is the US, as is Europe. There is Chinese engagement in Sudan. It does have conflict implications. If you are seeking to influence Sudanese behaviour by, among other things, imposing sanctions, you can have problems at various levels. One is that at the political level, starting at the UN, there may be a reluctance on behalf of China to agree to sanctions in Sudan—which has been quite clearly evident in the past. Also, political pressure can be undercut by very active engagement. From a Chinese perspective, of course, they have different interests. However, to the extent that western development policy is conditioned on this ongoing engagement, including conditionality and including incentives, I think that Chinese engagement will complicate that process and it is something that you need to be conscious of.

  Q293  Lord Hannay of Chiswick: It strikes me that it is almost axiomatic that the Europeans will continue to take a more conditional approach than the Chinese will. You will not persuade the Chinese to take the same sort of conditional approach as the Europeans, since often enough it is based on human rights criteria which the Chinese are as bad at observing as the Africans they are helping are. So you are not going to win on that. Nothing can stop the Chinese throwing large amounts of their money, of which they have a huge amount now in their reserves, in such a way that it is very attractive to the Africans. What is the solution? I suppose if you talked more with the Chinese about African stability, African growth and so on, you could hope to develop somewhat more common ground in this, since after all it is in China's interest that Africa should grow economically and should not all the time be collapsing in a heap in a civil war, and so on. So I suppose you could hope to establish a bit more common ground. I cannot think of anything else, frankly. It is our old friend dialogue, is it not?

  Mr Grono: Yes, I think that your options are limited. You can hope to influence Chinese behaviour as it becomes a more international player, but I do not know if that is a short-term option.

  Q294  Lord Hannay of Chiswick: You are not going to win on any of the hardball issues, are you?

  Mr Grono: No. However, having said that, there is lots of room to engage in Africa. There is an awful lot required. China is not going to corner the market. China may well look at cornering a market in terms of resource-rich countries. My concern is that there might be a rush to lowest common denominator standards. If China is prepared to splash money around in Mauritania, then western companies that are engaged in Mauritania will be competing with an engagement with minimal standards. So if you are looking at investing money as a minerals company there or elsewhere, and the Chinese are actively speaking to figures in authority, it will be very difficult for you to say, "We'll engage in a particular way, because we have certain obligations and so on"—whether it is corporate social responsibility, whether it is environmental standards—when China is saying to those who are handing out the concessions, "This is what we will give you and this is what we require or do not require".

  Q295  Lord Lea of Crondall: Does not China have aspirations to be part of all the bits of the world system? I do not think China would have signed up to the Extractive Industries Transparency Initiative, for example; but where is the agenda? Who is talking to the Chinese about how they take things on board? I was a trade union official and there was a big debate then about the ILO. Where do you think China is in this? It has not been part of our agenda, but it is an extremely important factor. Are there not pressures for them to join the world system?

  Mr Grono: There are, and a lot of the developments have been positive: Chinese accession to the World Trade Organization and their implementation, and as it has more actively engaged with Europe, for instance. You can have the EU-China dialogue as a means by which you can talk about these issues, I assume. China has pursued a policy of much greater engagement internationally over the last decade or so than it has historically, compared to the 1960s and 1970s. It was then often a force of disruption, supporting revolutionary movements. It clearly does not do that now. It is much more a force for the status quo. Look at Nepal: China is one of the friends of the regime in Nepal, the king, even though it is a "Maoist" movement that is challenging the authority of the royal government there. I think you have to hope, yes, as it becomes a more active partner and a much more significant player—because of its economic weight and of its growing military prowess—that it will see an interest in being a force for good.

  Q296  Lord Lea of Crondall: They would quite like to undermine India though, would they not?

  Mr Grono: I do not know. I think that we are seeing a more mature relationship between China and India, at least on the surface; but I am no expert there.

  Q297  Lord Hannay of Chiswick: On the issue of governance, human rights and so on, in Africa, to what extent do you think that the African Union instruments, the Peer Review system and so on, have any robustness at all? Do you think that the Europeans, through their strategy, can help to strengthen that by giving rewards to countries that go through the process and implement it, and disincentives to countries that refuse to? Do you think that is a fruitful way forward?

  Mr Grono: I do not know that much about the Peer Review Mechanism. I have not looked at it.

  Q298  Lord Hannay of Chiswick: Because you are mainly concentrated on security issues.

  Mr Grono: Yes. But I am a believer in effective conditionality. The little I have looked at NEPAD and the APRM, the crunch will be when there are negative assessments that countries are called upon to rectify. I saw that Rwanda has just been through a Peer Review process. I would be very interested to see what that says about democracy and political party participation.

  Q299  Lord Hannay of Chiswick: They apparently immediately came and asked the Europeans to help them implement it, which is a very good thing—so we were told earlier today.

  Mr Grono: Taking your question more broadly, the trouble with addressing behaviour of African states that does not meet good governance standards is that there is often no incentive, in fact there are negative incentives, to the ruling elite to change. They have captured the machinery of state. They remain in power. It is a generalisation but, on failed and failing states, or shadow states, they remain in power by patronage; they depend on access to resources which they control through the institutions. To address that behaviour it is not good enough to say, "You have signed up to these mechanisms and we expect you to engage in good governance reforms", because the cost of such reform is too great, especially when there is often this total lack of diversity of political power. If you are in power you have captured the whole state; if you are out of power, you have lost everything. I am talking about, say, Côte d'Ivoire—right in the middle. This conflict, on which we have done some analysis, is distressing but quite interesting when you analyse it. Côte d'Ivoire is essentially divided in half at the moment. The government controls the southern half; there was an attempted coup which failed and the rebels retreated to the north, and they have control of the north. Côte d'Ivoire is the world's major cocoa producer; it is still relatively wealthy. Both sides in power are doing very well out of the civil war. The rebels are doing quite nicely. They extract taxes; they get some money from timber. It is a duty-free zone essentially, so there are incentives there. The government controls much of the cocoa revenue in the south and to a certain extent the status quo is very beneficial to the elites on both sides; but of course absolutely devastating to the ordinary citizen. The EU is very heavily engaged in Côte d'Ivoire; the UN is very heavily engaged; but the real challenge is changing the incentives for President Gbagbo and addressing the fact that those in power fear that, if you have multi-party democracy and so on, they risk losing everything, because if the other parties take power there will be no room for them. To approach a problem like that and say, "We need governance reform" or "We need to address issues of corruption" is very difficult, because the costs of losing are so high.

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