UPDATE 2-China signs deals worth $80 mln with new ally Chad

Fri Jan 5, 2007 6:16am EST

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(Adds comment on Darfur, rebel comment, background)

By Betel Miarom

N'DJAMENA, Jan 5 (Reuters) - China has signed a series of loan, debt relief and economic cooperation agreements worth $80 million with Chad, less than six months after the oil-producing central African country restored diplomatic ties with Beijing.

Chad became the latest African country to cut its ties with Taiwan last August, switching allegiance to China as the Asian giant pushes to secure access to Africa's vast reserves of minerals and oil to feed its booming economy.

"The total value of these deals is estimated at around 40.5 billion CFA francs ($81 million)," Chad's foreign ministry said in a statement following a visit by China's Foreign Minister Li Zhaoxing.

China has been offering low interest loans, debt relief and other incentives from cheap sandals to football stadiums in a bid to increase its economic and political influence on the world's poorest continent.

Chad's move to drop Taiwan in favour of China was a diplomatic coup for Beijing, which is a major ally of neighbouring Sudan, supplying it with everything from oil industry equipment to arms.

Chadian President Idriss Deby accuses Sudan of backing rebel groups who are seeking to overthrow him and also blames Khartoum for cross-border raids into eastern Chad launched by militia fighters from Sudan's war-torn Darfur region.

"China's foreign minister was pleased by the Chadian government's attitude towards preserving good relations with Sudan and reassured his Chadian counterpart that he was available to help resolve the crisis in Darfur," the Chadian government statement said.

HUMAN RIGHTS

The Chinese government, which demands exclusive recognition for a "one China" policy that refuses sovereignty to Taiwan, is using its fast-expanding economic clout to offer lucrative trade and investment deals to African states with no strings attached.

Li was in Chad as part of a tour of Africa in which he has so far struck trade and aid deals with Benin, Equatorial Guinea and Guinea-Bissau. He is due to move on to Central African Republic, Eritrea and Botswana over the next few days.

The deals with Chad included 16 billion CFA ($32 million) in debt relief, a 13 billion CFA loan, the abolition of import duties on certain Chadian goods sold to China, economic cooperation agreements and medical donations.

They come days after China forgave $75 million of debt owed by Equatorial Guinea, one of the continent's fastest growing oil producers but ranked the ninth most corrupt nation in the world last year by graft watchdog Transparency International.

China says its economic support to Africa helps fill a financing gap and is less prescriptive than Western aid. Critics say it undermines efforts by other lenders to root out corruption by attaching conditions to their loans.

Some trade officials say China's willingness to provide cash to African leaders such as Zimbabwe's Robert Mugabe or Sudan's Omar Hassan al-Bashir whittles away at Western efforts to promote human rights and economic reforms as governments denied loans by the IMF and World Bank turn to Beijing for help.

"Economic interests should not be put above human rights," said Makaila Nguebla, a spokesman in Dakar for the National Rally for Democracy (RND), one of the Chadian rebel groups seeking to end Deby's 16-year rule.

"We can't accept a great power which says it is a member of the (U.N.) Security Council restoring diplomatic ties and undermining our struggle for democracy," he told Reuters. (Additional reporting by Nick Tattersall in Dakar)

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