Second Belt & Road Forum: Infrastructure is the Bedrock of Development

April 30, 2019

2nd Belt & Road Forum-April 25-27, 2019 (courtesy TheNews.com)

Xi Jinping’s Keynote to Belt and Road Forum Emphasized Goals of the BRI

Chinese President Xi Jinping’s speech to the opening ceremony of the Second Belt and Road Forum on April 26, “Working Together To Deliver a Brighter Future For Belt and Road Cooperation,” broadly laid out the BRF approach and prospects for the future.

“Together, we will create an even brighter future for Beltand Road cooperation…. The joint pursuit of the BRI aims to enhance connectivity and practical cooperation. It is about jointly meeting various challenges and risks confronting mankind and delivering win-win outcomes and common development…. A large number of cooperation projects have been launched, and the decisions of the first BRF have been smoothly implemented. More than 150 countries and international organizations have signed agreements on Belt and Road cooperation with China….
“Infrastructure is the bedrock of connectivity, while the lack of infrastructure has held up the development of many countries. High-quality, sustainable, resilient, affordable, inclusive and accessible infrastructure projects can help countries fully leverage their resource endowment, better integrate into the global supply, industrial and value chains, and realize inter-connected development. To this end, China will continue to work with other parties to build a connectivity network centering on economic corridors such as the New Eurasian Land Bridge….

“Innovation boosts productivity; it makes companies competitive and countries strong…. China will continue to carry out the Belt and Road Science, Technology and Innovation Cooperation Action Plan and Technology Transfer.”

President Xi also used his speech to present a list of a half-dozen major policy steps China has undertaken as part of its Opening Up strategy:
“First, we will expand market access for foreign investment in more areas….
“Second, we will intensify efforts to enhance international cooperation in intellectual property protection….
“Third, we will increase the import of goods and services on an even larger scale. China has a vast potential for increasing
consumption….
“Fourth, we will more effectively engage in international macro-economic policy coordination. A globalized economy calls for global governance. China will strengthen macro policy coordination with other major economies and keep the RMB exchange rate basically stable….
“Fifth, we will work harder to ensure the implementation of opening-up related policies.”

President Xi Jinping Chairs Roundtable at 2nd BRI Forum– ‘Boosting Connectivity for New Sources of Growth’

The concluding day of the 2nd Belt and Road Forum for International Cooperation in Beijing, President Xi Jinping chaired the Roundtable discussion among the 39 guests–37 heads of state plus the leaders of the IMF and United Nations. A joint communiqué has been issued (see separate slug,) and the Chinese Foreign Ministry has also posted a summary of the “Deliverables” from the Forum.

After a day of presentations, as well as sideline bilateral meetings, Xi and his wife Peng Liyuan hosted a welcome banquet for the national leaders. The cordial, but high-level tone of the deliberations April 25-27, was set in Xi’s keynote opening yesterday, when he happily welcomed everyone, “Good morning! As a line of a classical Chinese poem goes, ‘Spring and autumn are lovely seasons in which friends
together to climb up mountains and write poems.’ On this beautiful spring day, it gives me great pleasure to have you with us here at the Second Belt and Road Forum for International Cooperation (BRF).”

Read President Xi’s Key Note address

Second Belt & Road Forum Joint Communiqué States Development Commitments; Lists 35 Specific Economic Corridors–Including “The New Eurasian Land-Bridge”

The 37 national leaders were listed in the very first point of the Communiqué, and the following points identified the role of the “ancient Silk Road” to “the strengthening of the connectivity and the expansion of the world economy in the spirit of promoting peace and cooperation, openness, inclusiveness, equality, mutual learning and mutual benefit” and the role for today’s “Belt and Road cooperation” to do the same thing for the future. The remaining points were grouped under these headings: “Strengthening Development Policy Synergy”; and “Boosting
Infrastructure Connectivity”; and “Promoting Sustainable Development”; and “Strengthening Practical Cooperation”; and “Advancing People-to-People Exchanges”; concluding with, “Way Forward,” which stated, “We envisage the Belt and Road Forum on regular basis with possible follow-up events…[looking forward] to the 3rd Forum.”

Here is the full list of “Economic corridors” identified in the Communiqué:

(1) Addis Ababa-Djibouti economic corridor, including the
development of industrial parks along the economic corridor
(2) Agua Negra Pass International Tunnel
(3) Baku-Tbilisi-Kars new railway line and Alyat free
economic zone in Baku
(4) Brunei-Guangxi economic corridor
(5) China-Central Asia-West Asia economic corridor
(6) China-Europe Land-Sea Express Line
(7) China-Indochina Peninsula economic corridor, including
Laos-China economic corridor
(8) China-Kyrgyzstan-Uzbekistan International Highway
(9) China-Laos-Thailand Railway Cooperation
(10) China-Malaysia Qinzhou Industrial Park
(11) China-Mongolia-Russia economic corridor
(12) China-Myanmar economic corridor
(13) China-Pakistan economic corridor
(14) Eastern Economic Corridor in Thailand
(15) Economic corridor in Greater Mekong Subregion
(16) the EU Trans-European Transport Networks
(17) Europe-Caucasus-Asia International Transport corridor
and Trans-Caspian International Transport Route
(18) the Industrial Park “Great Stone”
(19) International North-South Transport Corridor (INSTC)
(20) the Lake Victoria-Mediterranean Sea Navigation
Line-Linkage Project (VICMED)
(21) the Lamu Port-South Sudan-Ethiopia Transport corridor
(22) Malaysia-China Kuantan Industrial Park
(23) the Nepal-China Trans-Himalayan Multi-dimensional
Connectivity Network, including Nepal-China cross-border railway
(24) New Eurasian Land Bridge
(25) the New International Land-Sea Trade Corridor of the
China- Singapore (Chongqing) Demonstration Initiative on
Strategic Connectivity
(26) Northern Corridor Trade Route in Africa linking the
maritime port of Mombasa to countries of the Great Lakes region
of Africa and Trans-Africa Highway
(27) North-South Passage Cairo-Capetown Pass-way
(28) the Port of Piraeus
(29) Port Sudan-Ethiopia Railway Connectivity
(30) Regional Comprehensive economic corridors in Indonesia
(31) the Suez Canal Economic Zone
(32) Transcontinental shipment of cargo using the capacities
of the Northern Sea Route
(33) Transoceanic fiber optic cable
(34) “Two Corridors and One Belt” Framework
(35) Uzbekistan-Tajikistan-China International Highway

Read entire communique of Belt-Road Forum

Belt and Road Is Unstoppable: `Critics’ Are Strong Supporters

The extraordinary attendance of governments, heads of state and government, and thousands of businesses at the Second Belt and Road Forum, comparing with the largest international meetings in history, was already proof that the Belt and Road Initiative (BRI) has expanded greatly since the first BRF in 2017 and is now  an unstoppable new paradigm of economy. After the Second BRF, certain myths of “backfire” and “criticism” in Asia also fell away.

Malaysian Prime Minister Mahathir Mohamed gave interviews in which he expressed full confidence in the BRI and surprise at its scope. Speaking to Bernama News Agency April 28, he said: “We feel that the [One Belt, One Road] OBOR initiative is not a domination plan by China, which would end up being controlled by China. Instead, it is a policy developed by all the countries, and not only focused on China. Previously … including the Trans-Pacific Partnership, developed countries made the proposals and asked us to accept them. This is not like that; the forum attendees are from small countries and they are sitting with China…They sit together at the same level, and talk about how to develop infrastructure projects.”

In an interview with China’s TV network CGTN, Dr. Mahathir said he had thought the Belt and Road was an infrastructure project for Asia.

“Now it is quite clear that it is, practially, a worldwide project …to improve connectivity and infrastructure development all over the world…I’m very glad I’m here, because now I understand better the character of the project. China has a lot of new technologies, and we need these new technologies.” He forecast large-scale Chinese investment and exports into Malaysia.

Indonesia’s investment minister, Harvard graduate Tom Lembong, who had been critical of China’s rail investments, told {South China Morning Post} that Indonesia has “found China’s openness to its feedback on improving the Belt and Road Initiative highly encouraging…. I believe in the next 5 to 10 years, BRI will stimulate additional investment in probably tens of billions of dollars [in Indonesia],” Lembong said.

In Europe, Italy and Austria are joining Portugal in planning issuance of “Panda Bonds” — infrastructure bonds issued by other countries in yuan, to be issued into China’s bond market. Even Germany Economics Minister Peter Altmaier found the Beijing forum “better than expected,” and is headed back with a Mittelstand delegation.

March 1: Celebrate Ethiopia’s Defeat of Italy At Adwa; A Victory Against European Imperialism

This article was published in the March 2017 Newsletter of the Ethiopian Embassy in Washington DC. If you read the headlines of  the European press following Italy’s defeat in 1896, you will see that this battle shook the foundations of European Imperialism to its core. 

Victory at Adwa- A Victory for Africa

Ethiopia’s victory against Italy at Adwa on March 1, 1896, profoundly shaped the future of Ethiopia.

Lawrence Freeman

March 1, 2017

The battle of Adwa is probably the most renowned and historic battle in Ethiopian history. This celebrated victory by the Ethiopian army helped define the future of their nation, as one of only two non-colonized countries in Africa. The defeat of a European colonial empire by an African country, following the “Scramble for Africa” after the 1884-1885 Berlin conference a decade earlier, is not only a source of enduring pride and nationalism for Ethiopians, but also an inspiration to other Africans, who took up the fight for independence six decades later. Some historians suggest that this victory also led to the idea for the Pan-African movement. As a result, it is no surprise that on May 25 1963, Ethiopia under the rule of Emperor Haile Selassie was a founding member of the Organization of African States-OAS.

Adwa, also known as Adowa, and in Italian Adua, was the capital of the Tigray region in northern Ethiopia. A late comer to grabbing territory in Africa, Italy began colonizing Somaliland and Eritrea in the 1880s. It was from the vantage point of Eritrea from where Italy launched its campaign against Ethiopia. The immediate pretext of the invasion was a dispute of Article 17 of the 1889 Treaty of Wuchale. Italy insisted that the treaty stated that Ethiopia had to submit to its imperial authority, thus effectively making Ethiopia a colony of the Kingdom of Italy. The Ethiopians resisted Italy’s military enforcement of its version of the treaty, leading to the outbreak of war in December 1894, with the Italian imperialists occupying Adwa and moving further south into Ethiopian territory. On March 1, 1896, King Menelik II, who, commanded a force of over 70,000, defeated the Italian army, killing 7,000 of their soldiers, wounding 1,500, and capturing  3,000 prisoners, routing their enemy, and forcing them to retreat back to their colony of Eritrea. It has been speculated that, if Menelik had pursued the retreating Italian troops, and driven them off of the continent, it might have prevented a second Italian invasion. On October 3, 1935, Italy led by fascist dictator Benito Mussolini, launched its second military incursion into sovereign Ethiopia territory. Five years later in 1941, Ethiopia once again drove the Italian invaders out of their country. The 1896 defeat of a European nation, considered an advanced country, by Ethiopia, viewed as a backward Africa country, led to riots on the streets of Italy and well deserved consternation in the capitals of European powers.

Without taking the time now to review the ninety years of Ethiopian history following this famous battle, the military defeat of Ethiopia’s dictatorial Derg Regime in 1991 brings us to the beginning of contemporary Ethiopia. When the Ethiopian People’s Revolutionary Democratic Front-EPRDF assumed control of the government in 1991, it was led by the now deceased, Prime Minister Meles Zenawi, who initiated the economic policies that have guided Ethiopia for over 25 years. It was Meles Zenawi’s intellectual leadership, in particular his understanding of the indispensable role of the state in fostering economic development that distinguishes Ethiopia today from all other sub-Saharan African nations. For him the state was not “a night watchman,” but rather an active participant promoting economic growth for the benefit of its people. Ethiopia is a poor country. with a population approaching one hundred million, not endowed with rich mineral or hydrocarbon resources, and repeatedly struck by drought. Yet it has emerged in recent years with a rapidly growing economy. This is the result of Zenawi’s legacy that created a leadership with a self-conscious commitment to use the powers of the state to build an integrated infrastructure platform, which has served to drive the economy forward. This is clearly evident in Ethiopia’s Growth and Transformation Plans I and II, which set ambitious economic goals five years into the future, along with its proposed thirty year road construction plan. Since the EPRDF took over the responsibility of governing the nation, more than thirty new universities have been created, graduating more students that can be easily employed.

In collaboration with China, Ethiopia operates the first electrified train in sub-Saharan Africa, traveling 750 kilometers in seven hours from Addis Ababa to Djibouti, establishing a port to export Ethiopia’s products. Their highway system consisting of toll roads, highways, and all weather roads will connect their light manufacturing industries to the port in Djibouti via their new rail line.   As a result of coherent policy planning in energy infrastructure, the Gibe III hydroelectric power plant has now added 1,872 of megawatts to the country’s electricity grid, and over the next two years, the Ethiopian Grand Renaissance Dam (GERD) will add an additional 6,000 megawatts, making Ethiopia the second largest producer of power in sub-Saharan Africa, behind South Africa.  The next step to develop the Horn of Africa is for Ethiopia, Sudan, and Kenya to extend their rail lines to become the eastern leg of an East-West railroad. Thus would transform Africa by connecting the Gulf of Eden/Indian Ocean with the Atlantic Ocean , creating an economic corridor that would literally revolutionize the economic power of the continent; contributing to the ending of poverty, hunger, and war.

One cannot deny the success of Ethiopia’s unique path of development, nor can one omit the important role contributed to this process by Ethiopia’s successful resistance to foreign occupation; thus never having to suffer the dehumanizing effects of colonialism.

African Union Commission chief praises AU-China partnership

Moussa Faki Mahamat

Moussa Faki Mahamat, chairperson of the African Union (AU) Commission, has extolled the partnership between the 55-member pan-African bloc and China in different arenas.

The AU Commission chief made the remarks at the opening of the 32nd AU summit on Sunday in Ethiopia’s capital Addis Ababa, with the attendance of African leaders, foreign diplomats, and other prominent personalities.

Speaking of the AU-China partnership, Mahamat said that the two sides have been enjoying unprecedentedly dynamic partnership in various areas.

The successful Forum of China-Africa Cooperation (FOCAC) summit in Beijing in September 2018 demonstrated “the unprecedented dynamism” of the partnership between the two sides, he said.

In September 2018, AU officially launched the AU representational office in Beijing, he recalled, indicating that it would further strengthen the partnership.

“The remarkable success of FOCAC held in Beijing in September 2018 illustrates the unprecedented dynamism of our partnership,” Mahamat said.

“The opening of an AU office in Beijing will obviously strengthen this multifarious and fruitful partnership, including the strategic dialogue between the AU Commission and the People’s Republic of China,” he added.

Chinese support for AU peace and security totals $180 million

BRICS, China, and Ethiopia Promote Industrialization

BRICS ministers adopt new industrial action plan

The industry ministers from Brazil, Russia, India, China and South Africa (BRICS) adopted a new action plan to deepen industrial cooperation among the five nations, Trade and Industry Minister Rob Davies said in a statement on Sunday. Davies and his counterparts from the BRICS grouping attended a meeting in Hangzhou, China where industrial and manufacturing matters were discussed and which culminated in the adoption of a seven-point action plan. “The action plan states that the world economy is still in a period of profound adjustment after the international financial crisis,” Davies said.

 “Industrial sectors, the manufacturing sector and the service sectors related to it in particular, have become key factors in sustaining mid- and long-term economic development.” At the meeting, the ministers acknowledged that the new industrial revolution of digitisation among other things will change traditional production flows and business models that will give rise to new industrial forms.

The following seven points have been identified as key in the action plan:

       strengthen industrial capacity cooperation 

       strengthen the coordination and match-making in the field of industrial policies

       promote the cooperation in the development of new industrial infrastructure

       expand cooperation in technological development and innovation

       deepen cooperation in the field of small and medium enterprises (SMMEs)

       strengthen cooperation in standard area

       facilitate all-round cooperation with the United Nations Industrial Development Organization (UNIDO)

He emphasized that industrial development strategies and investment cooperation have to grapple with the potential threats in particular in the context of high unemployment.  Davies said the industrial development cooperation between the Brics countries can be used as a springboard to foster growth and development and create work opportunities. BRICS countries will focus on using their respective rich natural and human resources and broad domestic markets to broaden industrial capacity and policies, while working together in developing new industrial infrastructure and technology.

Chinese investment leads way as Ethiopia opens to outside

As Ethiopia, the most populous nation in East Africa, is spreading its economic relations across the globe, investment from the world’s most populous nation China is playing a prominent role. Ethiopia, with a population of some 100 million, is a country on the move with rail, air and road infrastructure projects and an ambitious industrialization plan.

Ethiopia keenly needs investment from industrial giants like China to give its burgeoning population, which is estimated to grow by 2 million annually, ample employment opportunities. According to the Ethiopian Investment Commission (EIC), there have been 279 Chinese companies with more than 571-million-U.S.-dollars worth of investment, creating more than 28,300 jobs in Ethiopia between January 2012 and January 2017.

Huajian Industrial Holding Company Limited, a Chinese company that has a long-term investment plan in Ethiopia, is operating two plants in the country. Yin Xinjun, Vice General Manager at Ethiopia Division of Huajian Industrial Holding Company Limited, says Huajian’s decision to have its first plant in Ethiopia stems from the country’s firm desire for industrialization. In fact, a personal call for more investment by late Ethiopian Prime Minister Meles Zenawi during an August 2011 visit to China is what motivated initially Huajian to invest in Ethiopia, says Yin. According to Yin, Huajian’s investment in its first African plant had overcome several challenges, including logistical ones. Huajian initially had to transport its goods through an overcrowded highway from the plant in landlocked Ethiopia to Djibouti port. The problem has been partially solved with the construction of the 85-km Addis Ababa-Adama Expressway funded partly by the Export-Import Bank of China (China EXIM bank) and built by China Communications Construction Company (CCCC). The 500-million-dollar expressway was inaugurated in May, 2014.

Huajian also had to face intermittent power and water outages. The Ethiopian government later solved this problem through a special water and power line for the Eastern Industry Zone where Huajian’s first plant is located. Overcoming these challenges, Huajian currently employs more than 4,000 Ethiopians with a plan to increase employment to 50,000 people by 2022. Having established a plant in the Dukem industrial zone, 37 km south of Addis Ababa, Huajian is currently building a massive 138-hectare international light industry city in Addis Ababa. With the completion of the light industry city, Huajian foresees increasing its export revenue from 30 million dollars in 2016 to 4 billion dollars by 2022

However Western critics warn Ethiopia of being trapped in a neo-colonial relationship and some Ethiopians wonder if the Ethiopia-China relationship comes at the expense of other countries. Gedion Jalata, Program Manager of Africa China Dialogue Platform at Oxfam International, says both views miss the mutual beneficial and sovereignty respecting aspect of the bilateral relations. Jalata points out that Ethiopia is one of the beneficiaries of the China-proposed Belt and Road Initiative.

While Ethiopia is attracting massive Chinese investment in infrastructure projects, the Ethiopian government has set its sight in particular on Chinese involvement in industry parks. Ahmed Shide, Ethiopia’s Minister of Transport, says the country plans to utilize Chinese built infrastructure to boost its industrial exports. Shide is especially keen on the 4.2-billion-dollar Chinese built and financed 756 km Ethiopia-Djibouti electrified rail line to boost its industrial exports.