Tanzania: Another Chinese centre for money laundering?

Currently, in Tanzania, more than 700 Chinese-funded enterprises are estimated to be functioning as registered entities with the intrinsic motive of winning over every possible project in the country irrespective of whether it deals with military armaments, port buildings, agriculture, construction, manufacturing, service industry or transports.

Already, nearly 50 Chinese-funded companies are engaged in various projects in the field of infrastructure upgradation such as roads and bridges, housing, water supply, airports and ports. In 2019 alone, 64 new projects were signed by the Chinese companies valued at more than US$ one billion. The signing of these projects was primarily aimed at
providing employment to local natives, but instead resulted in a consistent rise of illegal Chinese labor in the country. More than 7,000 such Chinese personnel are alleged to be working at these company sites.

To counter this persistent increase in the presence of unauthorized Chinese persons and their undetected movement at various project locations, the Tanzanian government has introduced regulations for movement of foreigners, including the Chinese. It is embarrassing that in the past, there were visits by PLA officials whose record of travel could not be traced back with any of the ministries. Such clandestine visits could pose a threat to national security and seriously impact foreign policy matters of the government.

On the one hand, while Chinese companies are involved in construction activities and upliftment of crucial infrastructure within the country; on the other hand, their senior officials are busy amassing wealth through money laundering and financial irregularities.
 
When the matter came to light, Tanzanian authorities detained (Nov 2020) Managing Directors of eight leading Chinese companies including China Civil Engineering Construction Ltd., China Railway Jhiangchang Engg. Co. Ltd etc. and six senior-most officials of China Commercial Bang Ltd., for their involvement in controversial transactions and hoarding disproportionate amounts of cash worth more than Tanzanian Shilling 250 billion. Given the Chinese mode of economic engagements, it is no surprise that China has been carrying out these money laundering activities in other African countries as well
to enrich its own economy at the cost of projecting losses in the host country.

In Tanzania, President John Magufuli has ordered a thorough investigation into such kind of money laundering activities by the Chinese and demanded that money be recovered from defaulters by forming a task force comprising of Intelligence agencies, Security Services and other concerned organizations. However, it is quite possible that given China’s economic might and bullying nature towards lesser developed nations, a way would be devised to bypass all local laws and impediments to China’s nefarious designs. Chinese authorities, in all probability would use their tried and tested tactics of soft
diplomacy coupled with propaganda and publicity to win over the local populace and investigating authorities.

To understand how this propaganda mechanism would work, it is imperative to be aware of the mechanisms China has already put in place in most African countries including Tanzania. For instance, China has engaged a reliable broadcaster ‘Star Times’ to propagate its narrative and stories to the local population. In this process, Star Times encourages China’s mainstream media channels like CCTV-4, CCTV-9 and moviechannels, which mainly disseminate Chinese programs and dramas, to broadcast the same in local languages. A pattern can be unearthed as the Chinese programmes, translated in local tongues, would slowly influence the local inhabitants about Chinese culture and values, thereby rendering more acceptability to their ways of being & inroads into the African nation.

Apart from influencing the mindset of the local population about China as a country, these media giants also broadcast their corporate brands and promote goodwill images of Chinese companies and their products to enable the establishment of a readymade local market that would be economically beneficial.

A case in point is that of Huawei. Despite the company being boycotted in USA and other European countries for its dubious role in espionage activities, the enterprise has been flourishing in Tanzania and expanding its network of information and communication technology in local governing bodies, universities etc. Beyond the world of communication, it has also been making significant gains by winning over infrastructure
projects as well.

No doubt, economic considerations are paramount for a developing nation like Tanzania. However, given the deliberate endeavors by the Chinese to influence the leadership and consume precious local natural resources, there is a worrisome apprehension that China may lead Tanzania into the debt trap route. With measures at regulation of movement, investigation into dubious money laundering activities and conscious efforts to recognizethe propaganda attempts, the Tanzanian authorities may possibly be on a course correction mode to wriggle themselves out of the debt trap, with measures to find the flaws that were earlier ignored and lead a path to recovery as an independent sovereign country.