AIIB

Belt-Road Initiative and Belt-Road Forum: A New Model of Global Development

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May 9, 2019

Belt-Road Initiative is Now Second Largest Trade Bloc

{Global Times} reports today that the BRI has become the second-largest trade bloc in the world, surpassing NAFTA, now second only to the EU. The BRI countries account for 13.4% of world trade, while the EU is about 20%.

In terms of investment, {Global Times} reports, the BRI countries have become the most important destinations for foreign capital inflows in the world, accounting for 31.6 percent of the total in 2017, exceeding the 23-percent share of NAFTA and the 21.2-percent share of the EU.

Chinese President Xi Jinping talks to United Nations Secretary General Antonio Guterres (not pictured) during the bilateral meeting of the Second Belt and Road Forum at the Great Hall of the People on 25 April 2019 in Beijing, China. (Credit: Getty Images/Getty Images News/Andrea Verdelli / Stringer)

Vladimir Yakunin: BRI is “A Future Model of Global Development-in-Solidarity”

Vladimir Yakunin, the former president of Russian Railways and the initiator of the Dialogue of Civilizations (DOC — the Rhodes Conference), has posted an article on the DOC Research Institute website titled: “The Belt and Road Initiative as a new model for global inclusive development and solidarity.”

Yakunin writes that the Second Belt and Road Forum “should be seen to represent significant global development amidst uncertain times.” He reviews the decay of the world economy that led to the 2008 financial crisis, where investments in infrastructure were drastically curtailed, while “the world economy became `financialized;’ i.e., the financial sector increasingly dominated the real sector. This uncontrolled imbalance eventually led to the financial crisis and later to the global systemic crisis.”

The DOC, founded in 2012, took on an effort to develop “a new approach to under-standing the role of infrastructure projects in global development,” which was published as: “Trans-Eurasian Belt Development: RAZVITIE project,” and presented at a specially organized conference in Milan in November 2012.

The developments at the Second Belt and Road Conference this past week, Yakunin writes, “showed an increasingly widespread unders-tanding that economic egotism and arrogance is giving way to rational collectivism and an orientation towards a new type of globalization, based on principles of equality, sovereignty, and mutual development.”

Yakunin notes that some Western officials are worried that the BRI, together with the new financial institutions like the AIIB, the BRICS’s NDB, and the Silk Road Fund, are challenging their “long-time dominant positions,” but notes that “the traditional international development institutions did not provide the necessary weight for developing countries to participate in the global financial system.”

He reviews the huge growth in the BRI, such as the 73% increase in China-Europe freight trains in 2018 over 2017, with 6,363 trips in 2018, connecting 59 Chinese cities and 49 cities in 15 European countries.”

His conclusion: “[T]he key idea of the Belt and Road initiative — equal and mutually beneficial cooperation without imposing any political conditions — clearly contradicts the currently dominant thesis in contemporary world politics. The new approaches could change the very essence of geopolitics and geo-economics by altering the outdated Cold War mentality of the past. Geopolitical theory has always been articulated through a lens of conflict, dividing the world into `us’ and `them’…. “The Belt and Road Initiative could be the source of a future model of global development-in- solidarity. The key here is the inability to return to the concept of a uni-polar or bipolar world, which can be seen today in global trends towards development of a truly multilateral world.”

Excerpts below:

“SEARCHING FOR A NEW PARADIGM OF SOCIO-ECONOMIC DEVELOPMENT”

“Numerous studies conducted after the crisis demonstrated a positive correlation between investment in infrastructure and economic growth. Importantly, it was also shown that infrastructure projects play a positive role in short-term outcomes as well, due to their creation of new jobs and their development of local enterprises, which increase long-term regional development levels.[1] Another conclusion voiced by many prominent economists over the last ten years has been the necessity of developing a new economic model to replace the existing neo-liberal system because neo-liberalism no longer meets requirements. Such statements were difficult to imagine before the crisis, but now seem obvious”

“CHALLENGES ON THE PATH TO IMPLEMENTATION”

“Taking into account the scale of the Belt and Road Initiative and the amount of investment China put into it through the newly founded multilateral financial institutions like the Asian Infrastructure Investment Bank, the New Development Bank, and the Silk Road Fund, it is not surprising that major powers including the European Union and the US are expressing significant concerns.”

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China’s Belt & Road New Paradigm for Development: United States Should Join

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April 18, 2019

Belt and Road Creates New Asian Paradigm for Global Economic Integration and Inclusiveness

That is the headline on an April 15 {Global Times} op-ed by Toumert Al, the director of Education, International Bachelor Program at the International School under the China Foreign Affairs University. The article provides a tour d’horizon of BRI achievements to date in infrastructure projects on various continents.

“In South Asia, the Belt and Road Initiative is seen as a main driver for infrastructure construction in a region that must bridge the ever-growing gap between its economic potential and the realities of its insufficient infrastructure. According to the World Bank, South Asia requires about 2 trillion dollars of investment in infrastructure construction from 2011 to 2020 if the region wants to be part of the new economic order shaping the future.” The article then discusses a couple of key projects, such as the Padma bridge in Bangladesh and Gwadar port in Pakistan.

Nigeria’s Mambilla Hydro-Electric Dam-3,000 megawatts (courtesy nigerianmuse.com)

“True to its global status and inclusive nature, the BRI is not merely a regional initiative. Africa can be considered a major beneficiary of  China’s economic drive to support the continent’s development and to help its infrastructure and economy achieve targeted growth plans. The year 2018 could be considered the turning point for the BRI in Africa as the signing of the MOU of cooperation between China and 37 African countries and the African Union raised the initiative to a new level. Infrastructure financing provided by China to Africa averaged $11.5 billion between 2012 and 2016.” Examples cited include the $5.8 billion Mambila Hydropower Plant in Nigeria, the Addis Ababa-Djibouti railway, the $11 billion port in Bagamoyo, Tanzania now under construction, and the Nairobi-Mombasa railway project. “Another project that is moving forward and may have the same implications as CPEC (China Pakistan Economic Corridor) has in South Asia is the Suez Canal corridor in Egypt,” the Toumert wrote. In short, the BRI “is a truly new paradigm in international cooperation.”

The Belt and Road Initiative Keeps Growing

China is now engaged in heavy organizing in the countdown to the April 26-27 Second Belt and Road Forum in Beijing, which will bring together representatives of over 100 countries and 29 international organizations. Just how powerful a draw the BRI is to nations across the planet, was shown earlier this week when the tiny Caribbean nation of Jamaica announced that they had signed an MOU with China on the BRI –notwithstanding the withering pressure that Washington and London have brought to bear. A similar, if strategically weightier example of this process was Italy’s signing an MOU with visiting Chinese President Xi Jinping last month.

Foreign Ministry spokesman Lu Kang yesterday discussed China’s approach to the upcoming Forum: “While the BRI was proposed by China, it has grown into an international public good. The success of the first BRF together with the bumper practical outcomes speaks volumes. The fact that more countries and international organizations are taking an active part in the second forum is further proof to its success.”

Asked about media accounts that India would not be sending a delegation–as they hadn’t to the First Belt and Road Forum–because they view the BRI’s China Pakistan Economic Corridor (CPEC) as infringing on Indian sovereignty, Lu responded:

“I would like to reiterate that the BRI is an open and inclusive initiative for economic cooperation. It never concerns territorial disputes. In pursuing BRI cooperation, China and partner countries are committed to equality, openness and transparency, to business operations centered around enterprises and to market rules and international norms. For those with inaccurate judgment on the BRI based on misunderstandings due to lack of knowledge of the real situation, I would like to reassure them that China is sincerely and resolutely committed to the principle of consultation and cooperation for shared benefit, equality and mutual benefit. Since its initiation, the Belt and Road cooperation has been inclusive and open to all countries that are interested in joining and working for win-win cooperation. It excludes no one. If the relevant country would like to take some time to see, we can wait.”

Meanwhile, Xinhua interviewed Cambodia’s Information Minister Khieu Kanharith who said that “the BRI forum will also further promote cooperation between China and ASEAN and between China and Cambodia…. For Cambodia, with Chinese assistance, we can build mega-infrastructure projects, and those projects are crucial to boosting economic growth and making communication easier and faster…. Our first priority is to boost economic growth and to make everybody have a fair share of the economic growth, The BRI can help us through sup-porting infrastructure projects and human resources development.”

He continued: “China has assisted us on equal footing, meaning that although China is a big country and Cambodia is a small country, China always treats us equally. With Chinese support, Cambodia has gained confidence in ourselves and our people are proud and confident in rebuilding the country.”

Chinese Insist the U.S. Should Join the Belt and Road

Asian Infrastructure Investment Bank President Jin Liqun told last weekend’s Harvard China Forum that the “infrastructure bottlenecks are the sewage problems of development. I would say that that’s also a problem for the United States”–a statement Americans can agree with. He presented the Belt and Road Initiative as “a platform for all participating countries to work together, including on connectivity,” which he called a matter not only of regional development, but also of “world peace and prosperity.”

When a discussion arose on how China had gone from being a debtor nation dependent on foreign development assistance, to one of the largest contributors to the World Bank’s International Development Assistance facility today, Jin pointedly commented that how much money a country has is not the issue.

“Accumulated wealth cannot buy you respect unless you help do good things for the rest of the world. So China has been trying to invest and help other countries through its own experience,” Jin stated.

At a Center for China and Globalization conference in Beijing over the same weekend, Jin Xin, director of the China Center for Contemporary World Studies of the Communist Party’s International Liaison Department, took on the arguments of former U.S. Ambassador Terry Miller (from the G.W. Bush days), who asserted the U.S. had no interest in participating in the Belt and Road Initiative, which is viewed as “a Chinese show” that “doesn’t have much to do with us.” Jin Xin countered that the U.S. should work with China in third-country markets under the BRI. If it decides not to do so, the U.S. will again find itself “excluded,” just as it excluded itself from the AIIB, in which more than 90 countries are now members, Jin said.

China Remains Committed to Africa’s Development

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Jan. 14, 2018–Chinese Foreign Minister Wang Yi visited Rwanda and Angola over the past two days, the first of four African nations he will visit on his first trip abroad in 2018. With Rwanda assuming chairmanship of the African Union for 2018 at the end of January, Wang discussed with Rwandan Foreign Minister  Mushikiwabo and Pres. Paul Kagame, preparations for this year’s summit of the Forum on China-Africa Cooperation (FOCAC). The aim of the summit will be to “dovetail China’s Belt and Road Initiative with African countries’ development strategies, thus boosting industrialization and modernization, and raising the comprehensive strategic partnership between China and Africa to a new level,” Xinhua reported as Wang’s message.

FOCAC, joining the 52 African nations, China and the African Union, has held a summit every three years, alternating between Beijing and an African capital, since its founding in 2000. A three-year action plan between China and the African countries is adopted at each summit. Beijing hosts the FOCAC summit in 2018.    At the conclusion of his visit to Angola today, Wang told a joint press conference with Angolan Foreign Minister Manuel  Augusto, that China will continue to support Angola in its efforts to diversify and modernize its  economy through “accelerated industrialization … on behalf of peace and unity on the African continent,”  Angolan media reported.  Wang also stressed that China is not concerned about Angola’s debt, and Domingos Augusto reported that they had discussed mechanisms to make the debt sustainable without interrupting current and future projects which require a financial cushion.

Angola’s foreign debt is over $40 billion now, much of it owed to China. With the price of its major export, oil, still low, Western bankers talk of Angola’s “debt crisis.”

Xinhua reported that Wang discussed the debt in response to a reporter raising the Western canard that “China’s financing has increased the debt burden of African countries,” and carries political conditions attached. Wang was blunt: “Such a claim, which is made with ulterior motives, is an outright false accusation…. China’s financing is in response to Africa’s demands for self-development. A country has a huge need for capital in its primary stage of economic take-off and industrialization and Africa is no exception,” he said. He added that “China also passed through this process; these are temporary problems,” as reported by Angolan media.

Furthermore, China does not attach political conditions. “Like African countries, China also had memories of a bitter past when, with its economic lifeline controlled by foreigners, it was unfairly treated and even exploited and oppressed. Therefore, when providing aid to and engaging in cooperation with Africa, China will not repeat what Western countries did and will never impose its own views on others.” China follows the principle of mutual benefit and win-win results, Wang stated.

China will continue to do its part in helping Africa develop itself, Wang concluded, citing two Chinese sayings: “only the feet know if the shoes fit,” and “people have a sense of natural justice.” The African people are in the best position to decide who is Africa’s true friend and most reliable partner.

In its Third Year, AIIB Will Expand Lending to African and South American Nations

As the Asian Infrastructure Investment Bank (AIIB) enters its third year of operations, its President Jin Liqun explained in an interview with the {South China Morning Post} that in the coming year, it intends to expand lending and operations to South American and African nations, as well as further into the Middle East as soon as that is possible.

Jin noted that with “quite a number” of South American nations joining the Bank, it will be a good idea to finance some middle-income projects in South America to “bring South America and Asia together,” and reduce transaction and shipping costs.

But, he stated, “I would also pay attention to supporting African member countries. Asia is developing quickly, but it cannot sustain itself well without collaborating closely with African countries.” Jin emphasized that the  geographical scope of the Bank’s activities makes clear its role “in pushing broader-based social and economic development in the member countries in which we invest.”

Responding to the claims from some quarters that the Bank is merely an instrument of China, Jin said quite the contrary is true. China “is committed to building the Bank into a multilateral development institution with 21st Century governance.” The AIIB is separate from the Belt and Road Initiative (BRI), he said, but that it is inescapable that some projects in which the AIIB is involved would be connected to the BRI, simply because of the scale of this global development project, which covers 60 countries across multiple land and maritime corridors.

Jin Liqun was emphatic that China strictly adheres to the Bank’s principle of multilateralism and internationalism. “There has never been any interference by the Chinese government in the decision-making process.”

Africa Advancing With Science, Technology, and Infrastructure

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China’s Belt and Road Initiative and Its Long-Term Impact on African Countries

Dr. Alexander Demissie of Ethiopia, an expert in China-Africa relations, spoke in Germany, November 26, 2017.

Below are excerpts from an excellent presentation by Dr. Demissie on the increasingly productive relationship between China and Africa to develop the continent’s infrastructure, which Europe and the Unites States have refused to do.

‘My third point: the BRI is primarily an infrastructural undertaking. We don’t yet have political institutionalization. We have infrastructural ideas. We have corridors, but we don’t yet have political institutions. So, if we talk about the Asian Infrastructure Investment Bank (AIIB), or the Silk Road Bank, these are just connected
to infrastructure; they are not political ideas.

“Interestingly, this idea fits perfectly into the current African need—infrastructure development. Africa wants infrastructure, going back here to the African Union’s Agenda 2063 strategic framework that has also, coincidentally, been coming up. Together with the BRI, Africa wants a good infrastructure connection, a good internal interconnectivity. So, the idea of the BRI coming from China is perfectly fitting into the idea—actually happening or being discussed—within the African continent.

“China has also been very clear since Johannesburg in 2015 that they want to cooperate more with Africa more on infrastructural projects that create regional connectivity. That is where the BRI comes in. That’s why I mentioned earlier that the BRI is primarily an infrastructure topic.

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Putin and El-Sisi Sign Economic Deals in Cairo; Russia To Build Nuclear Power Four-Plant Complex for Egypt

December 11, 2017–Russia and Egypt have signed an agreement to construct Egypt’s first nuclear plant, which will be followed by construction of three more. Costing $21 billion, the porject is scheduled to be finished by 2028-2029.

Russian President Vladimir Putin met today in Cairo with Egyptian President Abdel Fattah al-Sisi. They discussed economic matters, energy, and politics, as well as the possibility of resuming air travel between Russia and Egypt, which was suspended in November 2015 after the crash of a Russian passenger jet over Sinai in what is believed to have been an act of terrorism.

President Putin stated, “I am pleased to note that our economic links are developing at a fairly high pace, and we really have a lot of good projects ahead.”

President al-Sisi responded, “Since the 1950s and ’60s, Russia has always supported Egypt and still supports our country: both with metallurgical plants and the construction of the Aswan Dam, and today we will sign a contract for the construction of a nuclear power plant.”

The preliminary agreement between the countries was signed in 2015; a loan from Russia will cover 85 percent of the construction costs. Russia’s Rosatom will service the complex’s four reactors for 60 years, its chairman Aleksey Likhachyov said today, RT reported. Representatives of Russia’s Rosatom nuclear corporation and Russian universities have recently visited Egyptian universities to prepare engineering students to work at the Daba nuclear power plant in the future. The Russian delegation gave a number of presentations at the Russian Center for Culture and Science in Cairo.

One day after Eyptian President El-Sisi and Russian President Putin witnessed the signing of a deal for the construction of four Russian reactors in the Dabaa Nuclear Power Plant project, it is reported that the Egyptian Atomic Energy Authority (EAEA) has already begun a study at the El Nagila site, which takes about three years, to see if it is suitable for the construction of four nuclear plants, according to sources at the Egyptian Ministry of Electricity. The study will be carried out parallel with the construction at the Dabaa site, where the first reactor is scheduled to come on-line in 2026. When that plant is complete, it will become only the second country in Africa, following South Africa, to have a nuclear power plant.

The {Daily News Egypt} reports that Egypt has signed protocols and MOUs with 10 countries for cooperation in nuclear energy, to help with training and the utilization of expertise in reactor management, and security, safety, and the possibility to provide formal advisory services to the EAEA

Africa’s Ports Revolution: Railway Ports of the East

This an informative article written on February 23. 2017, reporting on the exciting potential for the developments of Africa’s East coast ports with railroad connections to the interior of the continent. 

The population of Africa is presently 1.2 billion and growing at a rate of 2.5% a year, more than twice that of any other continent. In two years’ time, it will gain the population of the UK; in 12 years of compounded growth it will gain the population of China.

All these extra people may add dynamism to economies, but only if the increase in labour supply can be matched by an equivalent increase in economic activity; otherwise,  rising population density may destabilise social and political systems – an effect already seen in Rwanda and the Democratic Republic of Congo (DRC).

This challenge has led to a different pattern of development for ports on Africa’s east coast, compared to the west coast. In the west, the centres served by these ports are close by, sometimes right outside the port gate. In east Africa, by contrast, they are between 500km and 1,000km away, and most of the infrastructure needed to reach them has not yet been built. In the case of the Doraleh container terminal at Djibouti, the goal is the Ethiopian highlands and the valley of the White Nile at Khartoum, a cluster roughly equivalent to the population of Japan. In East Africa, a similar-sized population is grouped in the Great Lakes states, South Sudan and the DRC. All of these centres, with the marginal exception of the DRC, are landlocked.

Their ability to attract investment and benefit from globalisation depends, among other things, on having efficient rail, road and pipeline links to the Indian Ocean “transit  states” of Kenya, Tanzania and Djibouti.

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Ethiopia, Nigeria, South Africa Moving Forward: What Will US Policy Be?

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UN Envoy Haley Off to Africa While McCain and Graham Thump for More War

October 21, 2017–In all the controversy that has arisen around the deaths, earlier this month, of four U.S. Green Berets in Niger, the question that nobody seems to be able to answer is what is U.S. policy in Africa. The Trump Administration hasn’t spelled out a strategic concept, beyond giving U.S. military forces looser rules of engagement to go after terrorists. U.S. Ambassador to the UN Nikki Haley will be the first member of the Trump Administration to actually visit Africa when she travels to South Sudan, Ethiopia, and the Democratic Republic of Congo next week. Her mission, announced by President Trump last month on the sidelines of the UN General Assembly, is officially to review UN peace-keeping activities on the continent, but she may go ‘off-mission’ and freelance on policy.

       Back in Washington, the Senate Armed Services Committee is growing increasingly frustrated with what they say is a lack of information flowing from the Pentagon on the Niger attack, but the Committee clearly has war-making on its mind as well. Members of the Committee met with Secretary of Defense James Mattis, after which Sen. Lindsey Graham (R-SC) said that the Trump Administration plans to step up its counter-terrorism operations and loosen its military rules of engagement. “The war is morphing,” Graham said, reported {Politico}. “You’re going to see more actions in Africa, not less. You’re going to see more aggression by the United States toward our enemies, not less. You’re going to have decisions being made not in the White House, but out in the field, and I support that entire construct.

       “So the rules of engagement are going to change when it comes to counter-terrorism operations,” he said

Ethiopia to Inaugurate Two Industrial Parks

October 21, 2017 – The Adama and Dire Dawa industrial parks, whose construction was launched in 2016, will be inaugurated at the end of this month, reports Ethiopian News Agency. The industrial parks will specialize in textile, apparel, and agro-processing and will increase the number of parks with similar sector to five next to Hawassa, Mekele and Kombolcha, according to Ethiopian Investment commission.

The industrial park in Hawassa, which was inaugurated last year, started operation. Companies have also shown keen interest to open shop at the recently inaugurated industrial parks in Mekele and Kombolcha.

The government spent about USD 315 million to develop the two industrial parks, deputy commissioner in charge of Industrial Parks, Belachew Mekuria  (PhD), said.

As Adama and Dire Dawa are in close proximity to the Port of Djibouti, it expected that they will contribute to the facilitation of foreign trade for the country.

The parks are expected to further strengthen industrial development in the country by facilitating the way in fulfilling its vision of becoming manufacturing hub in Africa.

Nigeria Should Join the AIIB to Muster Funds for its Infrastructure Development

October 19, 2017–Addressing a forum organized by the Center for China Studies to mark the 19th National Congress of the Communist Party of China and its implications for the Sino-Africa cooperation, held in Abuja, Nigeria, on Oct. 18, Director of the Center for China Studies, Charles Onunaiju urged the Nigerian government “to become a member of the AIIB, as many countries of the world, especially in developing countries, have accessed funds for infrastructure development from the bank,” {Business Day} reported. He also pointed out that there is a desperate need for infrastructure development in Nigeria, and lack of funds is a major reason why the country’s infrastructure has remained inadequate.

          Speaker of the House of Representatives Yakubu Dogara, who was represented by Mohammed Usman (APC-Kaduna), said, “China today is our important partner that has been supporting us, and indeed Africa, in our development strides. Nigeria and China have been cooperating in numerous areas such as in agriculture, education, finance, infrastructure and solid minerals,” Business Day reported.

          “It is in the light of this that we believe the 2017 National Congress of the Communist Party of China will most assuredly provide another opportunity to consolidate on the gains of the on-going bilateral relations between Nigeria and China in particular and Sino-African Relations [in general],” the Speaker said

South African President Zuma Appoints Mahlobo as Energy Mininster To Push His Nuclear Power Generation Plan

 October 17, 2017– In a major cabinet reshuffle, South Africa’s President Jacob Zuma has appointed his confidant David Mahlobo to head the Energy Ministry, raising speculation that Zuma will push through the nuclear deal before his second term ends in 2019, Reuters reported today. Mahlobo was the former state security minister. South Africa is preparing to add 9,600 MW of nuclear capacity — equivalent to up to 10 nuclear reactors — in a contract that could be worth tens of billions of dollars and would be one of the biggest nuclear deals anywhere in decades.

          Commenting on the cabinet reshuffle, including bringing in Mahlobo as the new Energy Minister, Lawson Naidoo of the Council for the Advancement of the South African Constitution (CASAC) said: “This is all about the nuclear deal. Mahlobo has accompanied the President on visits to Russia, presumably to lay the ground for the Rosatom nuclear deal,” according to coverage by Fin24 business site. CASAC is a private outfit which is critical of Zuma and his politics.

          What agitated the anti-nuclear cabal in South Africa further were two events occurring within days. These were: Last Friday’s nuclear site authorization and now today’s cabinet changes, including Energy Minister Mahlobo. On Friday, Oct. 13, Department of Environmental Affairs approved the Final Environmental Impact Report for the Nuclear-1 Power Station and its associated infrastructure, and has authorized the South African electricity utility Eskom to proceed with the construction of new 4 GW nuclear power plant complex at Duynefontein in the Western Cape.

          Nuclear reactor makers including Rosatom, South Korea’s Kepco, France’s EDF and Areva, Toshiba-owned Westinghouse and China’s CGN are eyeing the South African project, which could be worth tens of billions of dollars, Reuters reported