China conscripts Blackwater chief for its march into Africa

January 31, 2014

As the contest for influence in Asia between China and Japan spills over into a scramble for trade, resources and political support in Africa, Beijing has gathered into its camp one of the world’s most famous mercenaries.

Erik Prince, the former United States Navy Seal who founded the controversial private security group Blackwater in 1997 and saw it become an indispensable element in the American occupations of Iraq and Afghanistan, is taking on a new role as the bodyguard of Beijing’s investments in Africa.

Prince sold Blackwater in 2010 after, as he puts it, the company was “thrown under the bus” by the U.S. government. His “contractors” – in reality mercenaries drawn from special forces units world wide – gained a reputation for being trigger happy, especially after a 2007 firefight in Baghdad in which 17 civilians were killed.

He emerged in Hong Kong in mid-January as chairman and largest shareholder of Frontier Services Group, which is closely linked to Beijing’s African ambitions and, like Blackwater in its early days, is promoted as a company providing logistics, risk assessment and security services.

It was doubtless pure coincidence that China’s acquisition of the services of the world’s most famous mercenary came as Japanese Prime Minister Shinzo Abe was in the midst of a week-long visit to the Ivory Coast, Mozambique and Ethiopia.

At the same time, China’s Foreign Minister Wang Yi was also in Africa, Djibouti, Ghana, Senegal, and crossing paths with Abe in Ethiopia.

Both delegations came simmering with the highly-charged rhetoric and antipathy that has overtaken the Japan-China relationship for over a year. A dispute over sovereignty over five uninhabited islands in the South China Sea is the immediate cause of the freeze in relations, but the real contest is an ancient one for supremacy in Asia.

This has now spilled over into Africa, with Tokyo and Beijing portraying themselves as the best partner for the continent’s future. Their rival, both say, cares nothing for Africa and is merely out for profit.

The sniping at each other by officials from both countries during the visits became unusually sharp, with China’s ambassador to Ethiopia, Xie Xiaoyan, at one point calling Japanese Prime Minister Abe “the biggest troublemaker in Asia.”

There is a fundamental difference in the way the two countries are approaching investment and developing trade ties with Africa.

Beijing has taken a largely political approach, offering cheap loans and aid with infrastructure projects to governments shunned by the West because of their poor human rights records. The return for China’s “friendship” is access to natural resources and the retail markets.

Although Abe, during his visit, pledged more than $30 billion in aid to Africa, Japan’s push into Africa is led by the country’s companies. A spokesman for Abe said Japan “cannot provide African leaders with beautiful houses of beautiful ministerial buildings.” Instead, he said, it is “to really aid the human capital of Africa” by providing jobs and business training.

Japanese companies are going to have to work hard to match China in Africa, where Beijing’s policy of paying court and tribute to African leaders has made China the continent’s largest economic partner. Two-way trade is now $200 billion a year, by some counts.

But China has also learned the hard way that there can be significant risks in trade and investment in Africa.

There have been anti-Chinese strikes and riots in Zambia at the way Chinese companies are operating copper mines. In neighbouring Zimbabwe there is outrage at the increasing dominance of the retail trade by Chinese storekeepers, the crippling of local manufacturing industries by cheap Chinese imports, and the takeover of large farming enterprises by Chinese companies.

In Sudan, Beijing was caught wrong-footed after spending much credit to develop a relationship with the Khartoum government in order to get access to oil fields in the centre of the country. When Sudan divided in 2011, however, and the independent state of South Sudan was created, the new country got most of the oil fields. Beijing had to scurry to secure its relationship with the new rulers.

Most dramatic of all was China’s evacuation of 36,000 of its citizens from Libya in 2011, when they were under threat of being caught up in the civil war.

All these and many more incidents have convinced Beijing it needs to pay more attention to mitigating risk than it has done in the past, if its ambitions in Africa are to be achieved.

Prince, whose forces in Iraq and Afghanistan sometimes nearly matched those of the Pentagon in number, has just the skills and experience Beijing thinks it needs. He will, however, be on a short leash.

Beijing’s largest state-owned conglomerate, Citic Group, has a 15 per cent stake in Frontier Services and will have executives sitting on Prince’s board.

Beijing’s plans for Africa are huge. It intends to spend $1 trillion by 2025 on roads, railways and airports in Africa in order to be able to harvest the continent’s largely untapped and inaccessible resources.

In a recent interview with The Wall Street Journal at his office in Hong Kong, Prince said his company aims to provide “end-to-end” services to companies in the “big extractive, big infrastructure and big energy” industries. The initial aim is to provide these companies with secure and dependable air, trucking, barging and shipping facilities to remote mines and oil fields.

But what about the guns? Blackwater became notorious for being the company to which Washington outsourced large elements of the wars in Iraq and Afghanistan, but also military training and even its “war on terror.”

Prince is careful to downplay his new company’s role as a provider of armed security. “We are not there to provide military training,” he said in one interview. When security is required, it will be provided by local police and private companies.

“We don’t envisage setting up a whole bunch of local guard services around the continent,” he said.

Frontier Services employees carrying arms “would be the exception, certainly not the rule,” Prince said.

Copyright © Jonathan Manthorpe 2014