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“Macau has great possibilities to replace Dubai as a center for diamonds”

Carol Law

A specialist says that Angola and China are renewing their relations and points to Macau as one of the regions that could benefit, especially with regard to the diamond market.

Professor Rui Verde, from the Center for African Studies at the University of Oxford, in the United Kingdom, was the guest of the Rui Cunha Foundation for the lecture “China and Angola: Understanding a complex relationship in times of world polarization”, which took place last Monday -fair. During the debate, Rui Verde underlined that “Angola is the mirror of China’s foreign policy in Africa” and that the two countries are carrying out a “reassessment, renewal of the relationship”.

China and Angola, it should be noted, officially established diplomatic relations in 1983 and earlier this year both countries celebrated their 40th anniversary. Angola is also China’s second largest trading partner in Africa, after South Africa, and according to Rui Verde, the two nations have been in contact since Angola’s independence war in the 1970s, when both the China and the Soviet Union supported local parties in their struggle for independence. However, after Angola’s independence, the country became involved in a civil war and relations with China were not very close until 2002, when the clashes ended, by which time China had already joined the World Trade Organization. Rui Verde also revealed that the then president of Angola, José Eduardo dos Santos, did not want his country to be controlled by US money and therefore made a strategic friendship with China, leading to a rapprochement between the two, with the push of some “intermediaries”.

“(At that time) a national reconstruction was needed for Angola,” he added. “It was the right idea, at the right time, in the right place. Because there was a country to build and another country with a lot of money that wanted to put a part of it in foreign countries.”

However, according to data from the SAIS China Africa Research Initiative, Chinese loans to Angola fluctuated between 2000 and 2019, with the highest number in 2016, worth US$19 billion, but falling sharply the following year to US$2,500. millions. The decline continued in 2018, with Chinese loans to Angola totaling just US$405 million and US$106 million in 2019.

Rui Verde said that when the current Angolan leader João Lourenço visited China in 2018, after taking office, he only received a loan of US$2 billion, instead of the US$11 billion that others expected, which led to some critics assumed that relations between China and Angola had deteriorated in recent years. However, in Rui Verde’s opinion, this did not mean that relations had deteriorated, but rather that they were being “renewed”.

The expert also pointed out that when Chinese money entered Angola, there was also a problem of corruption, with the private appropriation of public funds, and that both China and Angola are now dealing with these “confusions”.

“I assume that after Xi Jinping took over Chinese leadership, steps were taken to eradicate corrupt practices. China sent many auditors to Angola, they limited lending to Angola.” The Angolan president, João Lourenço, who took office in 2017, tried to investigate and accuse the generals and ministers, who in the past were benefiting from that money.”

“Therefore, what we have is a kind of reassessment, renewal of Angola’s relationship with China and China with Angola and not a setback”, he said, adding that China has participated in several large infrastructure projects in Angola in recent years. , namely with the construction of numerous railways and roads, as well as houses, schools, hospitals and other facilities in the country. The Caculo-Cabaça hydroelectric plant and the airport are also key projects.

Of the biggest debtors

According to data from the Central Bank of Angola, as of the second quarter of 2021, China was Angola’s largest external debtor, and this African country is also one of those with the highest debt to China. In response to suggestions that this is “debt trap diplomacy”, Rui Verde did not agree, noting that all investment, all loans, have the potential to run into problems, and that China, in relation to the money it has placed in Africa, in Angola, he learned a lot.

“They took out the loans and are seeing what is happening. Some loans are repaid, some countries are more difficult than others, some are not. What has been China’s reaction? The usual. They did some restructuring, suspensions, delays, it’s normal. So, what we are seeing in China’s financial policy towards Angola, are what the usual negotiations that capitalist systems allow”.

Rui Verde added that China studied the history of the Soviet Union very well, which had lent money to Egypt to build the Aswan dam, and when they forced the Egyptians to pay the debts, the Egyptians began to feel uncomfortable with the Soviets and opted to buy arms from the United States. “So of course China is now not going to make the same mistake as Brezhnev in Africa,” he said.

Liberalization of the diamond market

Angola is also one of the largest diamond exporting countries in the world. During the talk, a participant asked the speakers about the opening of the Macau Diamond Exchange in 2018, the second exchange in China.

Will the Macau Diamond Exchange benefit Macau? Rui Verde replied that the current situation in Angola has changed a lot, and in 2017-2018 the market was still a monopoly of some of the generals, although now they are trying to open and liberalize the market a little. The expert, incidentally, even confessed that “Macau has great possibilities of replacing Dubai as a center for diamonds”, due, above all, to the fact that this Emirate has engaged “in many illegal activities, burning its prestige”.

Rui Verde also considered that Angola is also seeking to be a regional power, replacing South Africa. In international relations, Angola is looking for a middle ground, neither too pro-American nor too biased towards China, and this position could give it more negotiating power.

“Since Lourenço, that is, since 2017, they are also opening up to the United States, stressing that they are “everyone’s, they are not taking sides”, said Rui Verde, referring later that “Angola is trying to keep at the same time relations with China and to a lesser extent with Russia”.

Incidentally, regarding the visit of the Russian Foreign Minister, Sergei Lavrov, to Angola earlier this year, Rui Verde considered that Russia’s influence in “Angola is not as strong as it used to be”, not least because when João Lourenço and Isabel dos Santos, daughter of former president José Eduardo dos Santos, came into conflict, Putin did not take sides, “he stayed in the middle”.

This post is also available in: Português 繁體中文

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