Why the West Needs to Stop Complaining and Start Engaging China in Africa

This article makes the essential point that I have made for many years. If the US would collaborate with China and join the One Belt-One Road, great advances would be accomplished in the economic development of Africa.  (see emphasis at end of article)

China is here to stay, and Western and African countries alike should make the most of it.

Pippa Morgn, The Diplomat

March 20, 2018

Ethiopia is one of the world’s poorest states, with an annual per capita GDP of just $707. Yet Addis Ababa is awash with billboards for Chinese construction firms, and China’s presence is palpable all over the country. Is “neo-colonial” China “out for oil” yet again?

In Ethiopia, that explanation just doesn’t add up: the country has virtually no oil, gas, or other precious minerals.

Fortunately, while the media and politicians seem stuck on uninformed accusations of neo-colonialism, some Western investors are starting to make the most of China’s growing presence. In Ethiopia’s Hawassa Industrial Park, the crown jewel of its industrial policy, the largest jobs provider is PVH – the U.S. owner of major global brands such as Calvin Klein, Tommy Hilfiger, and Speedo. Eco-friendly Hawassa was built by a Chinese company, the state-owned China Civil Engineering Corporation (CCECC), in just nine months. And, of course, PVH and other global investors could not run their businesses –and create thousands of coveted manufacturing jobs – without the railways, roads, and power stations that China is constructing all over Ethiopia.

There are also encouraging signs at the local level that, instead of pointing fingers at each other, China and the West can work together to deliver development aid. While the majority of Chinese funds go to hard infrastructure, traditional Western donors prefer social “soft” sectors. This makes them complements, not rivals. Ethiopia is eager for roads and railways, but it also   needs a better-trained, healthier workforce. Take Ethiopia’s new railway academy, designed to educate a fresh, local generation of engineers and workers: China is funding and building the school’s physical infrastructure, while the World Bank and European institutions are helping with curriculum development and business planning.

Turning “Made in China” to “Made in “Ethiopia”

History shows that (without massive oil reserves) industrialization – working up from cheap, lightly manufactured products to technically sophisticated products – is the only way to develop quickly. Factories offer an escape from unproductive and grueling subsistence farming into modern jobs with regular wages. Japan, South Korea, and later China all owe their economic success to this model, and Ethiopia’s government hopes to turn “made in China” to “made in Ethiopia.”

But industrialization needs more than cheap labor (which Ethiopia has in abundance) and the good governance that Western donors strive to instill. Investors desperately need roads, electricity, water, and the internet. With traditional Western partners either unwilling or unable to fund these at scale, and low tax revenues due to the country’s poverty, how else can the Ethiopian government build the basic infrastructure that we take for granted in the developed world? Without Chinese help, Western money for training and other “soft” sectors is sinking money into a black hole, and Ethiopia risks being “too poor to develop” –condemned to survive on subsistence agriculture and international handouts.

Ethiopian officials stress that they take the lead in dealing with China. They lament that Western aid (although well intentioned) is frankly “not enough.” Ethiopia, which has ambitious plans to escape poverty and become a middle-income country by 2025, does not have time to waste.

What’s in it for Beijing?

But is China a trustworthy partner? Beijing claims its aims are “win-win” rather than “neocolonial,” but what is China’s “win”? Like the United States after World War II, China seems to realize that providing global public goods is in its own interests. In Ethiopia, an important African hub for the Belt and Road Initiative (BRI), China secures important diplomatic gains and lucrative business opportunities…

Chinese business interests are also at play. Official loans are tied to the use of Chinese contractors, creating lucrative revenue streams. Fresh from “building China” over the past 40 years, Chinese state-owned enterprises (SOEs) are experts in cheap, fast infrastructure. They’re also eager for new opportunities as domestic growth slows. For example, the multi-billion dollar Addis-Djibouti railway was built by the state-owned China Railway Group and China Civil Engineering Construction Corporation, who later won a multiyear contract to operate the new line.

Why Engagement Not Estrangement is the Key

So is this really “win-win” for everyone? On the one hand, the commercial rates of many Chinese loans make debt sustainability a huge concern. To pay back what it owes, and eventually stand on its own feet, Ethiopia is in serious need of more tax revenue. So, if it fails to grow as quickly as hoped, Western warnings of a mountain of unsustainable debt may prove right. Ethiopia could end up like 1980s Latin America, where countries spiraled into crisis when they could no longer pay their foreign debts.

But, while there’s some dispute over the numbers (IMF estimates are slightly lower than the official figures), Ethiopia’s economy is widely agreed to have been growing at around 10 percent for the past decade – a phenomenal achievement. Given the extraordinarily low starting base, it’s unlikely to slow down soon. Businesses in Ethiopia’s industrial zones cite the continually improving infrastructure as one of the country’s main draws, and both Chinese and international firms plan to expand in future. For Ethiopia’s booming young population, this means yet more coveted industrial jobs…

How much more might be achieved if Beijing and the West proactively worked together across the whole African continent?  Much of the media and political discourse seems unable to accept that China’s role is equaling – or even surpassing – that of the West.,,

Read entire article in The Diplomat

Trans-Saharan Railway Progressing: Great News for Africa

This rail project is vital not only for Sudan, but for the African continent. Sudan is located strategically to be the nexus for the East-West and North-South rail roads that when completed would transform the entire African landmass. Imagine the revolution in economic development when the Atlantic and Indian Oceans are connected across the girth of Africa, and also linked to the Mediterranean Sea and oceans surrounding South Africa. Port Sudan and Kenya’s port of Mombassa are part of China’s Maritime Silk Road. Ethiopia and Kenya have completed new rail lines with the assistance of China as part of the Spirit of the New Silk Road. Most people cannot even dream of how life for over one billion Africans would be changed by an industrialized and connected Africa, Yet, not only is it possible, but we can make it happen.

China signs agreement to begin planning 3,400km trans-Saharan railway

8 November 2017 |

By Global Construction Review Staff

Two Chinese companies will start planning a railway across the Sahara Desert linking Sudan’s Red Sea coast to landlocked Chad after an agreement was signed yesterday with the Sudanese government.

China Railway Design Corporation (CRDC) and China Friendship Development International Engineering Design & Consultation Company (FDDC) inked the deal with the Sudanese Railways Authority.

They now have 12 months to complete a feasibility study on the construction of the 3,400 kilometre-long railway from Port Sudan to the Chadian capital of N’Djamena.

Makawi Mohamed Awad, Sudan’s minister of transport, said that his ministry’s strategic aim was to link Port Sudan with all its landlocked neighbors. The Chad line, from its capital, N’Djamena, would join Sudan’s network at Nyala across the border. 
 

The Chad line would join Sudan’s network at Nyala, state capital of South Darfur

Plans for a Sahara railway go back some years.

In 2014, Sudan reached a political agreement with Chad to link their capitals with Port Sudan with a later extension to the Atlantic Ocean ports of Cameroon. Although both countries pledged to stop supporting each other’s rebel movements, continual instability delayed implementation. 

Further back in March 2012, Chad reached agreement with the China Civil Engineering Construction Corporation to build its portion of the line to the Sudanese border, after which it would join the Sudanese system at Nyala. The estimated $5.6bn cost of the line was thought likely be met by the Import Export Bank of China. 

The lines are to be built to standard gauge and will be allow trains to run at 120 km/h.

CRDC carries out preparatory work for railway construction. It has been a major player in the development of China’s domestic high-speed system, surveying some 7,500km of it. 

FDDC is a state-owned developer that carries out turnkey infrastructure projects outside the domestic market.