high speed rail

“HARD INFRASTRUCTURE IS WHAT WE NEED TO GET OUT OF POVERTY.”

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Watch the video interview below with Olawale A-Rasheed, CEO of Abuja, Nigeria-based African Railway Consulting Ltd, who provides an excellent discussion of Africa’s needs for massive railroad construction.

The Silent Revolution in African Rail

2 June 2021

In this new podcast of the Belt and Road Institute in Sweden (BRIX), host Hussein Askary discusses with our guest Olawale A-Rasheed, CEO of Abuja, Nigeria-based African Railway Consulting Ltd, the current situation and future plans for railway connectivity in the African continent. We try to answer the following questions: – What is the status of transport sector in Africa, West Africa, and Nigeria? – What projects are completed, under construction? Who is building them? – What are the plans to develop this sector? Trans-African High-speed rail? – What is the role of China and the BRI in this process, and what can the U.S. and Europe contribute to it? Why they should learn from China in focusing on building the hard infrastructure in Africa? – There are many initiatives proposed by the U.S., the UK, and the EU to “rival” the BRI and China in Africa. Are these realistic? Wouldn’t it be better if the West and China join hands with Africa to reach the development goals? Mr. Rasheed is also the Director of the African Rail Roundtable and editor of the specialized magazine Rail Business (http://railbus.com.ng/)

“The real friends of Africa now are those trying to bridge the infrastructure deficit…..China has done it. It has pumped billions of dollars into the Belt and Road Initiative. Now, whatever critisism they have on that initiative, it has helped Africa. It has opened up Africa and it has challenged the world, that to be a friend of Africa, come and help us to build roads, bridges, have vision, high cities, power, and all those. So it is a clarion call to all friends of Africa in the West, East, Asia that HARD INFRASTRUCTURE IS WHAT WE NEED TO GET OUT OF POVERTY.”

Lawrence Freeman is a Political-Economic Analyst for Africa, who has been involved in economic development policies for Africa for over 30 years. He is the creator of the blog: lawrencefreemanafricaandtheworld.com. Mr. Freeman’s stated personal mission is; to eliminate poverty and hunger in Africa by applying the scientific economic principles of Alexander Hamilton

Railrads-across-africaDownload

Biden Administration Must Break from Past Practices, to Collaborate with China in Fostering Economic Development in Africa

Lawrence , , , , , , , , , , , , , , , , , , ,
CGTN published an abridged version of my article under the title: Biden administration should work with China to boost growth in Africa. https://news.cgtn.com/news/2020-12-16/Biden-administration-should-work-with-China-to-boost-growth-in-Africa-WgaMXPhB0A/index.html

Read below my complete article entitled: 

Biden Administration Must Break from Past Practices to Collaborate with China in Fostering Economic Development in Africa

Lawrence Freeman

December 16, 2020

For the incoming Biden/Harris administration to make a real difference and have positive impact on the lives of hundreds of millions of African still living in poverty, they should work in partnership with China. This would require rejecting and reversing the anti-China mindset of the Trump and Obama administrations, echoed by the current chorus of voices spewing from officials of both the Democratic and Republican parties. A repeat of the defective policies of the last twelve years coupled by the shrill geo-political motivated propaganda against the nation of China, will not only do little for Africa, but it will also harm the United States, and endanger strategic relations. It should be obvious to qualified leaders, as it is to me, that the horrific conditions of life for a majority of Africans, reflects the scope of the continent’s deficit in vital infrastructure. Over 600 million are without access to electricity, over 400 million Africans live in poverty, and several nations are currently threatened with famine. If the two economic power houses, China, and the United States, worked in partnership with African nations, this impoverishment could be eliminated.

US President Donald Trump (L) and China’s President Xi Jinping speak during a joint statement in Beijing on November 9, 2017. (NICOLAS ASFOURI/AFP via Getty Images)

Failures of Trump and Obama

Presidents Trump and Obama similarly failed to understand the necessary requirements to create real-physical economic growth to improve the conditions of life, for America or Africans. Neither comprehend the principles of the American System of economics that built the foundation of the industrialized U.S. Their conception of economics remains dominated by a belief that the wealth of a nation is measured by Wall Street’s monetary values.

US President Donald Trump (L) and China’s President Xi Jinping speak during a joint statement in Beijing on November 9, 2017. (NICOLAS ASFOURI/AFP via Getty Images)

Trump began his presidency establishing an amiable relationship with Chinese President, Xi Jinping. Unfortunately, that quickly deteriorated as Trump propitiated the anti-China prejudices of his supporters.  Although President Trump’s road to the White House was achieved by his status as an outsider to the Washington establishment, it was evident by the second year of his administration that he had acquiesced to the same geo-political world view of his predecessors. Geo-political doctrine speciously asserts that nations are either winners or losers in a zero sum game with the world as a chessboard. That the only interest of a superpower is achieving hegemony, rejecting any conception of a shared common interest among nations. His choice of neocons, Mike Pompeo for Secretary of State, and John Bolton as National Security Advisor in April 2018, left no doubt the direction of President Trump’s foreign policy.

On December 18, 2018, speaking at the Heritage Foundation in Washington DC, Bolton unveiled President Trump’s so called Africa Strategy. In his presentation Bolton defined the goal of U.S. policy in Africa, to wit: stopping China’s advances on the continent. In less than an hour, he attacked China and its Belt and Road seventeen times.  President Trump did not disavow Bolton’s assault on China, nor his demeaning treatment of Africa as a game board for geo-politics. Read President Trump’s Non-African Strategy: Published in AU’s “Invest in Africa” magazine

Prior to President Obama’s anti-China Asian Pivot in January 2012, his administration launched the most destructive military operation against an African nation by any U.S. President. In October 2011, President Obama, advised by UN Envoy Samantha Powers, Assistant Secretary of State for African Affairs, Susan Rice and Secretary of State, Hillary Clinton, toppled the government of Libya. This irresponsible military adventure resulted: in the death of Libyan President, Muammar Gaddafi; the destruction of the nation of Libya, turning it into a failed state for the last nine years; and unleashing hordes of violent extremists across the Sahel into Mali, Burkina Faso, Niger, and Nigeria, causing tens of thousands of deaths and displacing millions of Africans.

Courtesy CSIS China Power Project

China Delivers Infrastructure

Contrary to U.S. squealing and whining about China’s influence in Africa, Deborah Brautigam of the DC based China Africa Research Initiative, precisely presents the paradox: “China still addresses Africa’s hunger for structural transformation in a way the West does not.” (1)  China has increasingly been engaged with African nations over the last two decades to build vitally needed infrastructure in rail, energy, ports, airports, roads, etc., and the U.S (West) has not.

Courtesy CSIS China Power Project

Take rail for example. Examine China’s commitment to building railroad tracks in Africa, as reported by the Washington think tank, Center for Strategic and International Studies (CSIS). (2)

“Between 2008 and 2019, China built an average of 5,464 kilometers (km) of railway track per year. Roughly half of the new track added was high-speed rail. At 35,388 km, China’s high-speed rail network is the largest in the world.” China has built an additional 100,000 km of non-high speed rail track.

According to the CSIS report,

“Chinese companies signed $61.6 billion worth of rail construction contracts from 2013 to 2019 – more than double the value of the previous seven-year period (2006-2012) coinciding with the launch of China’s Belt and Road Initiative in 2013.”

“Africa received the second-highest amount of [China’s] rail contracts from 2013-2019. At $20.8 billion, this accounted for 33.8 percent of the total… About $7.5 billion worth of rail-related construction contracts (36.1 percent of the amount in Africa) were signed with Nigeria, where China is constructing a series of lines that comprise the 1,300 km-long Lagos-Kano Railway Modernization Project. This massive undertaking has made Nigeria the world’s top recipient of Chinese rail construction contracts during the 2013-2019 period.”

Courtesy of dica.logcluster.org

China’s construction of Kenya’s Standard Gauge Railway and the Addis Ababa to Djibouti railroad are exemplary of crucial infrastructure projects for Africa.

Michelle Gavin in her December 3 post, The United States and Europe Should Work Together to Promote a Prosperous Africa, expresses the dilemma for U.S.-Africa policy:

“There is no doubt that U.S. influence—and therefore U.S. capacity to achieve various foreign policy goals—suffers when China’s investments in the tangible, visible infrastructure of African prosperity appear (sic) to dwarf U.S. development efforts.” (emphasis added)

Speaking in China on December 8, Rahamtalla Osman, the Permanent Representative for the African Union in China, said, “The goals of the BRI coincide with the AfCFTA,” referring to the African Continental Free Trade Area.

The “Same Old” Will Not Do

As the inauguration of the new U.S. president nears, many words are written extolling how a Biden administration will bring a return to “normalcy, global alliances, international diplomacy.” We should think for a minute. Do we want to return to war, regime change, sanctions, and drone assassinations as the core of U.S. foreign policy? Early indications are that under a President Biden, the U.S. will pursue with our allies, a more belligerent policy with China. How will this realignment shift the world to a higher platform of development? How will it stimulate economic growth in Africa?

Presidents John F Kennedy and President Kwame, Washington DC, Head of State visit- March 1961.

The Biden-Harris agenda for Africa is vague with no specifics to address Africa’s urgent needs. Ambassador Linda Thomas-Greenfield, who is President Elect Biden’s nominee to be envoy to the United Nations, has a deep background in Africa and is respected by many African leaders. Having played a prominent role in the Biden transition team, she may be an individual who can put a focus on Africa in the new administration. However, it is unclear what those policies will be.

The last U.S. president to fully engage in Africa’s development was John F Kennedy, who established a personal relationship with Ghanaian President, Kwame Nkrumah, and gave crucial backing for the construction of the Akosombo Volta Dam complex.

For the incoming administration to genuinely support Africa, the new president should audaciously break from past boundaries of previous thinking and join with China in launching a great mission for mankind: the elimination of poverty in Africa within the next generation through massive infrastructure expansion. That is my mission.

(1) African countries will remain best friends with China, https://www.economist.com/the-world-ahead/2020/11/17/african-countries-will-remain-best-friends-with-china

(2) How Are Foreign Rail Construction Projects Advancing China’s Interests? https://chinapower.csis.org/rail-construction/

 Lawrence Freeman is a Political-Economic Analyst for Africa, who has been involved in economic development policies for Africa for over 30 years. He is the creator of the blog: lawrencefreemanafricaandtheworld.com

Nigeria and Egypt Building Railroads: Great News For Africa

Lawrence , , , , , , , , , , , , , , , , , , , ,

Minister of Information and Culture, Lai Mohammed [PHOTO CREDIT: FMIC Website]
Minister of Information and Culture, Lai Mohammed [PHOTO CREDIT: FMIC Website]

October 7, 2020

For those of us who understand physical economy, these two developments reported below are truly great news for Africa. Africans have suffered from a paucity of infrastructure in rail construction and energy production. When African nations liberated themselves from colonialism beginning in the 1960s, following 400 years of slavery, they were intentionally left with no infrastructure.  By denying African nations rail systems that connected the continent and electricity to industrialize their economies, the African people have been forced to lived in poverty brought about by imposed underdevelopment. Ghana’s founder, Kwame Nkrumah understood this well. He discussed the necessity of infrastructure to achieve true economic independence in his opening speech to the Organizing of African Unity on May 25, 1963 and his his book, Africa Must Unite. It is a crime that 60 years after the liberation from colonialism, African nations remain grossly deficient in basic infrastructure. Therefore let us rejoice in the progress that African nations are making today, in the 21st century to provide vital infrastructure for their people. We should all celebrate all measures taken to rectify the legacy of colonialism, that denied Africans the right to economic development. To their credit, Presidents Buhari (Nigeria) and el Sesi (Egypt) have pursue the expansion of infrastructure in their respective nations.

Why we’re extending rail construction to Niger Republic – Nigerian govt

ByAgency Report

October 2, 2020

“The federal government said it approved the extension of rail construction from Lagos-Kano-Katsina to Marradi in Niger Republic for economic and commercial benefits.

“The Minister of Information and Culture, Lai Mohammed, gave the explanation on Friday when he featured on Nigeria Television. Authority (NTA) live programme, “Good Morning Nigeria”

“The programme which focussed on “Nigeria at 60: Matters Arising” was monitored by the News Agency of Nigeria (NAN) in Abuja.

“Specifically, the minister said the rail extension is intended for Nigeria to take economic advantages of import and export of Niger Republic, Chad and Burkina Faso which are landlocked countries.”

Continue Reading: Nigeria Extending Rail Construction to Niger

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Egypt to Build High Speed Rail

China Civil Engineering Construction Corporation (CCECC) and Egyptian companies Samcrete and the Arab Organization for Industrialisation have won a $9bn contract to build a 543-km-long high-speed railway in Egypt, reports newspaper The Egypt Independent, citing “senior sources”.

“Accommodating train speeds of 250km/h, the line would link the Mediterranean coast at El-Alamein to the Red Sea at Ain Sokhna, cutting the journey between the two cities to three hours.

“The scheme’s importance to Egypt was compared to the Suez Canal by the chief executive of Samcrete, Sherif Nazmy, who told Arab-language newspaper Al-Masry Al-Youm that it would be the first new electric railway in Egypt since 1854.”

Continuing Reading: (Egypt to Build High Speed Rail

Lawrence Freeman is a Political-Economic Analyst for Africa, who has been involved in the economic development policy of Africa for over 30 years. He is the creator of the blog: lawrencefreemanafricaandtheworld.com

China Eliminated Poverty With Science and Infrastructure. It Can Be Done in Africa Too!

Lawrence , , , , , , , , , , , , , , , , , ,

China's Long March Out of Poverty | African Agenda – A new ...
Deng Xiaoping, who put China firmly on the path of “reform and opening up.

August 14, 2020

If one examines the long path from the end of China’s disastrous “cultural revolution” in the 1970s to China’s 2020 modern miracle of eliminating poverty for 800 million Chinese, many lessons can be learned. China’s commitment to science and building infrastructure were two essential ingredients for this accomplishment.  William Jones discusses this interesting history in his article below,”China’s Long March Out of Poverty”.

China Employs Hamilton’s Principles of Credit  for Railroads

(EIRNS) —China’s exciting announcement of its plan to increase the pace of development of maglev and its high-speed rail network, is based on its assurance that it knows how to implement that, and to finance it on top-down principles of the type proposed by Alexander Hamilton.

China announced its plans to build a system of 600 kph (373 mph) maglev vehicles, after it successfully conducted its maiden test run of a maglev vehicle at a test track at Tonji University in Shanghai on June 21. Though the train-set did not run at top speed of 600 kph, but at a lower speed, various important features were tested. Prototype vehicles are approved for construction in 2021, and up to nine new maglev lines, totalling over 1,000 km (600 miles), are planned for the future.

Equally impressive, China’s plan to double its existing 35,000 km of high-speed rail already in operation, to 70,000 km by 2035, shows how a Confucian/Hamiltonian economy actually works. Based on estimates by the Lange Steel Information Research Center in Beijing, reported by the Wall Street Journal, China would have spent $180 billion for 35 approved railway projects in 2019, most of them high-speed rail, launching the next phase of HSR development.

In the first half of 2020, according to the Aug. 13 *China Daily), China invested $207 billion in combined railway, highway, waterway and civil aviation infrastructure, of which $46.9 billion was in railways. China’s transportation infrastructure investment alone, is 5-10 times that of every country on Earth. Featured in China’s railway investment is a new, 1700 km high-speed rail system between Chengdu, Sichuan and Lhasa, Tibet; high-speed rail in landlocked Shaanxi Province, etc.

China finances the rail and other critical infrastructure, through two methods of directed credit: China’s four largest state-owned commercial banks—the Industrial & Commercial Bank of China, the Bank of China, the Agricultural Bank of China, and the China Construction Bank—make ample loans directly to the China Railway company, the China Railway Rolling Stock Corporation (CRRC), which builds the rail equipment, etc. This is overseen by China’s three “policy banks.”

Second, the national government and local governments purchase bonds issued by China Railway Corporation, CRRC, and so forth.

China has announced its new rail construction program. The government plans to build 200,000 km of rail by 2035, about 70,000 of which will be high-speed rail. All cities with a population of 200,000 or more will be connected by rail, and all cities with 500,000 people or more will be connected by high-speed rail. China is also working on the next generation maglev train that could travel at speeds of 600 kph.

Pause for a moment from your daily activity. Let your imagination look into the future, and ponder what the nations of Africa would look like if, all cities with 200,000 people or more were connected by railroads. The topology of the continent would be different. China has proved it can be done. It is not a matter of Africa following the China model. Rather, it is comprehending the scientific principles of Alexander Hamilton’s economic system. Read my earlier posts: Alexander Hamilton’s Credit System Is Necessary for Africa’s Development and Nations Must Study Alexander Hamilton’s Principles of Political Economy

 

Click to access 45-54_4726.pdf

In his article below, William Jones provide an insightful analysis of the forces behind the anti-China mantra, rampant in the Trump administration.

As the ‘Five Eyes’ gear up to confront China, can anyone say that the British Empire is a thing of the past?

“A recent article published in the China Economic Diplomacy Watch pointed to the “Five Eyes” – the U.S., UK, Australia, Canada and New Zealand – as the key rallying group for Pompeo’s call for a containment policy toward China. The article has indicated a crucial element in the danger the world is facing. The unifying factor in this grouping is, firstly, that the “Five Eyes” are all English-speaking countries, and secondly, that they all at one time or the other belonged to the British Empire.”

Lawrence Freeman is a Political-Economic Analyst for Africa, who has been involved in the economic development policy of Africa for 30 years. He is the creator of the blog: lawrencefreemanafricaandtheworld.com

China’s Successful Economic Model Eliminates Poverty

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China’s new Magnetic Levitation train for 2020 will be able to travel 360 miles per hour. (courtesy of (Motor1.com)

November 11, 2019

The article below by Helga Zepp LaRouche, founder of the Schiller Institute, provides a useful overview of China’s successful economic model. However, Chinese leaders have repeatedly pointed out that they are not asking other nations to adopt this model for their emerging economies. 

“Rather than seeing the rise of China as a threat, we in the West should acknowledge the enormous benefits for mankind flowing from the unprecedented economic miracle that China has achieved in the past 40 years. Unfortunately, most people in the United States and Europe know very little about China and its 5,000-year-old culture, which makes it relatively easy for the geo-politically motivated mainstream media and exponents of the anti-China lobby to paint a completely distorted picture of the country.

“In fact, China has opened a new, totally inspiring chapter of universal history, by setting an irrefutable example, for all other developing countries, of a way to overcome poverty in a relatively short period of time and achieve a good standard of living for a growing segment of its population. Over the past 40 years, China has implemented the most massive anti-poverty program in human history, lifting 850 million of its own citizens out of poverty, and contributing 70% of the total global poverty alleviation efforts. Its average economic growth from 1978 to 2018 was an impressive 9.5% per year, and even the decline this year to only 6% growth, due to various factors, still represents a level that European nations and the United States can only dream of.”

Read: The Secret of China’s Success Model

AU Demands: African Integrated High Speed Railway Network

Lawrence , , , , , , , , , , , , , , , , , , , , , , , ,

July 4, 2019

The article below written by a friend of mine is a useful over view of the African Union’s plan to build High Speed Rail-lines in Africa.  High-Speed Rail together with the production of abundant supplies of energy are indispensable for the continent’s development and the industrialization of African economies. The link to the entire article that is worth reading follows the excerpts.

“The vital plan for an African Integrated High-Speed Railway Network (AIHSRN), approved by the African Union (AU) in 2014, appears to be going forward energetically. But in fact, Africa is getting only half a loaf at best. Standard gauge rails are being built, but to “save money,” they are not being built to standards permitting the high speeds that the African Union had specified. These “higher”-speed lines are not “high-speed” by any accepted standard. Or, worse, existing lines of the old colonial gauge are being rehabilitated—again because “there is not enough money.”

“Yet having “enough money” is not the problem it seems to be: The principle of Hamiltonian credit—credit extended by government, on the strength of nothing but the skills of the population, and earmarked for projects sure to produce leaps in productivity—has been known in theory and practice for 200 years, even if suppressed by the business schools.” Read my post from earlier this year on Alexander Hamilton: Nations Must Study Alexander Hamilton’s Principles of Political Economy

“AIHSRN is not a master plan for all rail transport in Africa. It is, rather, a plan for rapid rail transport across long distances. And Africa has long distances. To go from Cairo to the Cape of Good Hope by road or rail is more than 10,000 kilometers (6,200 miles)—the equivalent of going from New York to San Francisco and back again.

“Yet with the AIHSRN, an express train could depart from Cairo at 6:30 a.m. on Monday morning, travel at an average of only 220 km/h (137 mph), make only five half-hour stops—at Khartoum, Nairobi, Dodoma (Tanzania), Harare, and Johannesburg—and arrive in Cape Town in time for an early breakfast on Wednesday. The east-west trip from Addis Ababa in Ethiopia to Dakar, Senegal—“only” 8,100 km—will be quicker. The implications of such speed for the African economy—and for African integration in all respects—are enormous.

“The continental plan is for six west-east routes from the Atlantic to the Indian Ocean/Red Sea, and four routes that run from north to south—a 6×4 grid (see map).

“Because of their high speeds, the trains must run on dedicated, standard gauge lines that will not usually accept traffic from other, slower lines of the sometimes denser, surrounding rail network.

“The plan includes the construction of railway manufacturing industries, parts suppliers, maintenance facilities, and the building up of railway training academies.

“The AIHSRN is part of the African Union’s Agenda 2063, a fifty-year plan for the economic, social and cultural development of the entire continent, born in 2013”

Read full article: Africa Integrated High Speed Railway Network

AU Amb Chihombori-Quao: “The African Sleeping Giant is Rising”-The Significance of the Africa Continental Free Trade Area

Lawrence , , , , , , , , , , , , , , , , ,

On June 2, 2019, I interviewed African Union Ambassador to the United States, Arikana Chihombori-Quao at her home, on the significance of the new agreement on an Africa Continental Free Trade Area-AfCFTA, initiated on May 30. The AfCFTA is intended to reduce tariffs and barriers between African nations to promote trade, and spur economic development throughout the continent.

 

In the interview above, Ambassador Arikana Chihombori-Quao, provides a provocative and optimistic analysis of what the newly enacted agreement for an Africa Continental Free Trade Area-AfCFTA will mean for continent over the coming years and decades.

Amb Chihombori emphasizes huge potential for the AfCFTA to double, triple and even quadruple intra-African trade, which today is a mere 16%-18% of total continental trade. According to the UN Commission on Africa, AfCFTA could increase intra-trade by 15% to 25%, that equals $50-$70 billion in the next 20 years.  The concept of AfCFTA is to enable each African with the opportunity to potentially access the continent’s multi-trillion dollar market and 1.2 billion buyers and sellers. Landry Signe of the US based Brookings Institute estimates that by 2030 AfCFTA could boost consumer and business spending to $6.7 trillion.

Historically, Amb Chihombori views the AfCFTA as a continuation of the struggle by African nations to liberate themselves from intended under-development imposed on Africa by the infamous Berlin Conference (1884-1885). She stresses that 56 years (and five days) after the founding of the Organization of Africa Unity-OAU (May 25, 1963), Africa will now be functioning as one trading bloc of nations, which is intended to equalize the international playing field. As the implementation of AfCFTA proceeds, Amb Chihombori believes that Africa will acquire the stature of a “heavy-weight” in global trade and commerce. She is also hoping that by the end of this year Africa will ratify the “Free Movement Protocol” that would allow Africans to live, travel, and work anywhere on the continent, thus complementing the AfCFTA

Amb Chihombori accentuates in this interview, that infrastructure is a level one priority for Africa in the AfCFTA. “Investment in infrastructure is an absolutely essential step for us to take as we move into the implementation of AfCFTA,” she says. The denial of basic infrastructure, power, access to water, education and healthcare, by the colonial powers following the Berlin Conference, kept African nations from  developing; by design. “Leaders in Africa are now discussing the building highways and high-speed rail from Cape Town to Cairo and Djibouti to Dakar.”

Challenging those who advocate reducing Africa’s population and falsely claiming that Africa’s growing population is a major contributor to Africa’s economic problems, Amb Chihombori asserts that: “Our youth is the biggest advantage we have over the rest of the world…Youth is our biggest asset.”

Amb Chihombori wants to make the US the number one trading partner with Africa, telling Americans; “that the African sleeping giant is rising-it is a new game.”

***The AfCFTA had already come under attack, even before its birth, by the International Monetary Fund-IMF. According to the People’s News Africa, the IMF warned African nations they could lose revenue, if the AfCFTA is enacted.

Rwanda’s President Paul Kagame quickly responded: “It is important that Africa gives the necessary considerations to the views and opinions by external entities and ‘development partners,’ it is more important at the same time that Africa becomes aware of what we want for ourselves, pursue what is good for the continent, and defend what is necessary for our collective development.”

Africa Needs Real Economic Growth, Not IMF Accountants

Lawrence , , , , , , , , , , , , , , , , , ,

February 4, 2019

A recent forum sponsored by Brookings Institute in Washington DC entitled: “Top priorities for Africa in 2019” produced a healthy discussion that alluded to important fundamental conceptions of economics. Although the deeper principles of what should be called economic science were not elucidated, issues raised in the dialogue serve as a useful starting point for further elaboration of that subject.

The event was organized to present FORESIGHT AFRICA, a new publication by the Africa Growth Initiative. Representative from the International Monetary Fund-(IMF), and Mo Ibrahim Foundation, joined Ambassador Linda-Thomas Greenfield, and Brahima Coulibaly, director of the African Growth Initiative, for a wide-ranging discussion on the future of Africa to a packed audience.  

Members of the audience challenged the prevailing assumptions of the International Monetary Fund. One participant raised the inadequacy of the IMF’s rigid macro-analytic approach, when what is needed, she said, is a fine-tuned micro-economic intervention to deal with the scope of the challenges facing African nations. Another suggested the need for a state-funded public sector job program to put the millions of unemployed youth to work—a proposal which the IMF representative categorically rejected. The IMF’s hostility to state sector involvement belies the several hundred-year historical record of the modern economy, which is replete with successful and indispensable interventions by the state to foster economic growth.

Measuring Real Economic Growth      

While the Brookings report, FORESIGHT AFRICA, provides some relevant statistics, its analysis rests on erroneous axioms of what comprises economic growth

The commonly accepted notion that African nations today are experiencing “jobless economic growth” reveals the fundamental antagonism between the analysis of the IMF and its co-thinkers, and proponents of real i.e. physical-economic growth. Jobless growth is a moronic oxymoron.  Real*economic growth augments the productive power of society to increase its surplus of tangible wealth in order to sustain an expanding population at a higher standard of living. The IMF pretends to measure growth by adding up monetary values such as the price of extracted resources and real estate, stock market gains, etc.  The aggregation of prices is not a measure of the economy’s growth.  The only true calculation for economic growth is the result: an improvement in the living conditions of the population.

Africa’s Bright Economic Future Is Its Youth

Creating Real Economic Growth          

An excellent example of this defective thinking is highlighted in the article from the Brookings report entitled “How Industries without smokestacks can address Africa’s youth unemployment crisis.”  Author John Page reports that Africa has not only failed to industrialize, but shockingly, its share of global manufacturing today is smaller than it was in 1980! He forecast that Africa’s working age population (15-64 years of age) will grow by 450 million between 2015 and 2035, and that “20 percent of new employment for wages will be in the service sector, and only 4 to 5 percent will be in a wage paying job in industry.” His conclusions for the future of youth employment in Africa are ill-founded and deadly when he states that since: “industry has declined as a share of output and employment…over the past four decades…Africa may not be able to rely on industry to lead structural change…”

Page then proceeds to dangerously postulate the equivalence of employment in manufacturing with tourists and service jobs. He writes: “The same forces that limit Africa’s opportunities in industry, however, are also creating a growing number of tradeable services—such as tourism and remote office services…”

“Growth in tourism is outpacing manufacturing in many African countries… It has the potential to create some of the millions of formal sector jobs Africa needs each year to employ youth entering the labor force…”

This is not an academic question for the people of Africa. We should all be level-headed about the implications of this prognostication: without industrialization Africans will die. African are dying every day due to lack of infrastructure, a diminutive manufacturing sector, and an inefficient food-producing industry. The industrialization of Africa with a massive expansion of its manufacturing base is not an option, but a life-or-death necessity!

Nor is this conjecture on my part. From the standpoint of economic science of physical economy there is no equivalence. Manufacturing, by transforming nature and producing needed goods, contributes real value to society; tourism and services do not. A variety of services are required for a functioning society, but this sector should not perform role of a primary employer for new entrants into the labor force. Tourism serves no vital task except to promote the natural beauty of a county.  No new wealth is created by tourism; it is essentially collecting other people’s earned income.

Service-related jobs, whether useful or not, will never lead to real economic growth for one elementary reason. They do not contribute to the creation of new wealth. A properly organized economy would only have a relatively small percentage of its employed labor in the service sector. To do otherwise, as some African nations unfortunately are, is not sustainable, and will lead to calamity. To equate non-goods producing employment with manufacturing jobs is a grave fundamental error that should be rejected by serious economists and leaders.

Africa’s Youth Bulge Is Not A Curse

FORESIGHT AFRICA estimates that today 60% of Africa’s 1.25 billion people are under 25 years of age. That amounts to 750 million youth, a majority of which are unemployed or mis-employed in the pathological informal economy. It is projected that in sub-Saharan Africa alone, the youth population will expand by 522 million, and comprise one-third of the world’s youth by 2050. Thus, making  Africa the continent with the youngest population, and potentially the largest workforce on the planet.

While these figures are striking, they do not justify enforced population reduction measures, as extremists advocate. Human life is intrinsically sacred because it is endowed with the divine spark of creativity. Contrary to popular misguided opinion, human creativity is the underlying source of all wealth; not money or even natural resources.  Paleoanthropology shows us that millions of years ago before the emergence of homo sapiens-sapiens (wise-wise man), proto-humans, homo hablis, (handy man) designed tools first in the mind’s eye before shaping rocks into useful implements that were used to transform the environment for the benefit of mankind. Africa is not facing a crisis of too many people, but rather the urgency to formulate the best policies today that will incorporate millions of youth as productive members of the labor force.

What African nations most desperately need, and which will have the greatest impact of their economies, is infrastructure, infrastructure, and more infrastructure.  It is not hyperbole to state that the lack of infrastructure is responsible for millions of deaths on the continent. The dearth of on-grid energy, arguably the most crucial component of an industrialized-manufacturing society, is preventing African nations from attaining the levels of economic growth required to sustain their populations.

For example. If we desire, as we should, that Africans enjoy the same relative living standard as Western nations, then each of the 2.5 billion Africans in the year 2050 should have access to at least one kilowatt (1,000 watts) of power every day. That would require, starting immediately, erecting enough power plants to generate 2,400 gigawatts of electricity. Itemize the bill of materials to build that many thermal, hydro, and nuclear power plants.

Now contemplate the number of workers that would be employed in this endeavor. Extend the same mode of thinking to constructing hundreds of thousands of kilometers of high-speed rail lines to connect the major cities, ports, and manufacturing centers across this vast continent. Add to that the number of new roads, hospitals, schools, libraries, and water ways that need to be built to provide an adequate standard of living. How many tens of millions or more youths will Africa need to employ in just the construction of primary infrastructure projects? Imagine how many additional jobs will be created in the spin-off industries.

Nuclear Energy is Critical to Meet Africa’s Energy Needs (ESI Africa)

Africa’s Future Begins Today

Trillions of dollars of long-term low interest credit must be made available to fund these projects. Only state-issued public credit will suffice for this scope of investment. The private sector, investments funds, or any other fund that is motivated by seeking high yield and quick financial returns on their investment will never, ever, underwrite the credit necessary. The overriding concern of the nation state is not making quick monetary profits, but the welfare of its citizens living and their posterity.  The IMF thus far shown itself to be mentally, emotionally, and ideologically incapable of comprehending the true economic needs of Africa, or how to fund them. Those who are blinded by their erroneous view of evaluating an economy by its monetary worth, will forever be incompetent, and are not qualified to give advice, much less diktats to developing nations.

Credit issuance by the nation state is not a new or novel concept. The success of United States’ economy, which was maintained with ups and downs until its decline over the last five decades, emanated from the accomplishment of President George Washington’s Treasury Secretary, Alexander Hamilton.  It was Hamilton’s understanding of credit and the central role of manufacturing that created the basis for U.S. economic growth from thirteen indebted colonies.  Over the last 230 years, those leaders, in the U.S. or abroad, who were wise enough to comprehend and apply Hamilton’s understanding of national banking and credit, have been successful in stimulating economic growth for their nations.

Africa’s future does not begin in 2050; it begins now. It is incumbent on Africans, with the assistance of their friends and allies, to prioritize crucial transformative infrastructure and related projects that must be built and funded. This cannot wait. This is a war to eradicate poverty, hunger, and disease, and secure a productive life for billions of Africans living and yet to be born. Thus, this campaign should be conducted with a military-like commitment to achieve objectives and goals each month and each year. Hence, we are not waiting for the future; we are creating the future in the present.

*real and true are interchangeable terms signifying a physical (non-monetary) improvement in the economy.

Lawrence Freeman has been involved in Africa for over 25 years as a writer, analyst, and consultant. He teaches courses on African History in Maryland. In 2014 he was appointed Vice chairman of the Scientific Advisory Committee to the Lake Chad Basin Commission.

End French Colonialism in Africa: Terminate the CFA franc

Lawrence , , , , , , , , , , ,

Italy Rightly Accuses French of Colonialism in Africa

Italian Deputy Prime Minister Luigi Di Maio has accused France of running a “neo-colonialist system” in Africa through the CFA franc single currency union imposed on ten countries in Central Africa of being the cause for impoverishing Africa and for migration flows.

Di Maio, who has managed to make this the issue number one of the political debate in Italy, declared that “Europe is ignoring one thing, i.e. what some countries are doing, impoverishing Africa. France above all, prints a double currency in over ten countries, through which a percentage of French national wealth is paid and a minor part of the French deficit is financed.”

“Africans will stay in Africa if the French stay at home instead of colonizing,” Di Maio went on, announcing  a parliamentary initiative. “I want to ask the EU to sanction countries such as France and we will ask France to open its ports.” Di Maio threatened to henceforth ship all refugees rescued at sea to Marseille until France stops printing the CFA franc.

French sources acknowledge that the CFA franc is an issue and there is a debate in France already, but say it is not connected to the refugee flows. The countries where most refugees come to, such as Italy  are from Nigeria, Eritrea, which are not part of the  CFA  franc. The Italians have responded that the CFA franc area is nevertheless allowing the transit of refugees organized by human traffickers.

{Italy is correct. Through their monetary imposition of the CFA franc currency, the French are continuing their colonialist policy in Africa. The African Union with the full support of all African nations should immediately declare termination of the CFA in West and Central Africa. Every African nation has a right to be sovereign and control its own currency}

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The article below echoes the theme in my own earlier statement regarding the so called US-Africa Strategy: Pres. Trump’s Non-Africa Strategy

It concludes: That renewed focus gives African nations unprecedented opportunities to pursue their own interests, rather than simply act as client states. America’s drive to contain both Russian and Chinese influence brings chances to secure foreign investment and to leverage strategic advantages into a more prominent presence on the world stage. And, after centuries in the shadow of global powers, it is high time that Africa finally found its own voice.

Read: America’s New Policy in Africa is Attempt to Contain Chinese and Russia 

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Same Geo-political outlook for Africa

New National Intelligence Strategy Report: Geopolitical Focus on Russia and China

Director of National Intelligence (DNI) Dan Coats presented the 2019 National Intelligence Strategy Report, which is released every four years. Similar to National Security Adviser Bolton’s so called US African Strategy released last year, it s steeped in British geo-political ideology. Like NSA Bolton’s report, it emphasizes the dangers posed by such “traditional adversaries” as Russia and China, as well as North Korea and Iran, reflecting a shift away from previous years’ focus on combating international terrorism.

It is also said to echo the intelligence community’s “unanimous” 2017 conclusion that Russia interfered in the U.S.’s 2016 presidential elections to “undermine the U.S.-led liberal democratic order. While documenting many other “dangers” such as cyber-threats, the “democratization of space,” the development of anti-satellite weapons, the report is primarily concerned that “traditional adversaries will continue attempts to gain and assert influence internationally  weakening of the post-WWII international order and dominance of Western democratic ideals…in the West, and shifts in the global economy.”

In its “Strategic Environment” section, the report warns of the likely continuation of “Russian efforts to increase its influence and authority” which “may conflict with U.S. goals and priorities in multiple regions.” An additional concern, is “Chinese military modernization and continued pursuit of economic and territorial predominance in the Pacific region and beyond.”

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China Plans Biggest-Ever Investment in High Speed Rail is Good for Africa

{Global Construction Review} (GCR) reports today that “China is planning to invest a record $125 billion in rail this year as the government looks to cushion the impact of slower economic growth. This would be 6% more than was spent last year, and 10% more than was originally planned, according to a report in the {Nikkei Asian Review}.”

China is taking measures to stimulate the economy in response to the “slowdown” in growth, although growth is still 2018. These include an “acceleration in construction projects, as well as cutting taxes and boosting the money supply…” {GCR} reports.

China Railways’ annual plan envisages a 45% rise in new projects, resulting in the addition of 6,800 km to the total network, {GCR} reports. High-speed rail will be expanded by 3,200 km, more than the total of High Speed Rail in any other country. This will mean China far exceeds its previous schedule to build 30,000 km of high-speed railway lines by 2020.

 

 

Africa Is  Natural Partner of China in Maritime Silk Road

Lawrence , , , , , , , , , , , ,

Africa Is  Natural Partner of China in Maritime Silk Road

Jan. 29, 2018–“The African continent was part of the ancient maritime Silk Road and now is in a good position to be China’s natural partner,” said He Wenping, Director of Africa Studies at the Chinese Academy of Social Sciences, portraying the Belt and Road (BRI) activities in Africa, on the sidelines of the just-concluded African Union Summit.

In South Africa alone, there are more than 300 Chinese enterprises, half of which are major and medium-sized businesses, investing $13 billion in electronics, automobiles, financial information network infrastructure, and construction engineering, said a report compiled by the South Africa-China Economic and Trade Association in 2016.

Despite fears, frustrations, and challenges from unexpected hardships, misunderstandings, and cultural conflicts, China is accelerating the advancement of its all-around cooperation with Africa, He Wenping continued. It is expected to set a good example of deepening regional cooperation for the so-far reluctant Western countries. “BRI deserves to be a platform for the overall exchange and intensified cooperation between China and the world,” she urged.

Germans Invited To Invest in Zambian Infrastructure

Jan. 29, 2018–During an encounter with Stefan Liebing, the chairman of the German Africa Association, in Berlin on Jan. 17, Zambia’s Ambassador Anthony Mukwita presented a document titled “Zambia’s Investment Project,” which had been prepared by the embassy.

“This document contains areas that are ripe for investment in Zambia which you must share with your membership in Germany,” said Mukwita to Liebing.

The areas of possible investment he presented include: construction, agriculture, energy, transport, and tourism, to mention but a few. The Zambian diplomat urged German business to take full advantage of Zambia’s invitation: “Our President H.E. Edgar Lungu is keen to see a reduction in poverty and rise in GDP via foreign direct investment; our peace, stability and predictability, including ease of doing business, continues being a great ingredient of attracting business.” Liebing expressed confidence of stepping up business with Zambia.

German-Zambian contacts were continued at a meeting with leading officials of the Canadian Bombardier rail-tech firm on Jan. 27.  Bombardier Head of Rail for Africa Christian Bengtsson told Mukwita that a functioning railway grid is required for transportation of goods and services in order to enhance economic growth in Zambia. A memorandum of understanding was already signed in 2016, but not much has happened since, because no financing has been made available by the German government or private banks. The Zambian project would be crucial for Bombardier, which, for lack of new contracts in Germany, has been considering reducing its workforce in Germany from 8,000 to 6,000, also by selling the railcar-producing unit in Görlitz.

Bombardier, whose transportation headquarters is in Germany, has carried out feasibility studies on Zambia Railway’s 900-km network, half of which needs to be refurbished. Once the railway is replaced and railcars are purchased, the company is expected to create 5,000 jobs and increase its cargo transportation (mostly iron ore and other minerals) from the current 700,000 tons to about 5 million tons annually, and eventually 8 million tons.

China’s Belt Road at Davos World Economic Forum

Jan. 28, 2018–Under the above headline, the {New York Times} journalist Keith Bradsher bemoans the fact that, like it or not, it was China’s New Silk Road that dominated the Davos World Economic Forum, not the efforts by many to demean the Belt and Road Initiative as merely China’s effort to “spread its influence” and to “bury the recipients in debt and cause considerable environmental damage.”

Under a picture of a smiling Liu He, Xi Jinping’s top economic advisor who gave China’s keynote speech at the Forum, Bradsher acknowledges that that Liu He’s presentation was “one of the best-attended speeches,” and that throughout the Forum, the Belt and Road was the leading subject of discussion.

“At one end of town, President Michel Temer of Brazil welcomed an unexpected offer from Beijing for Latin American nations to work closely with a Chinese initiative,” writes Bradsher. “At the other end of town…, Pakistan’s Prime Minister Shahid Khaqan Abbasi used his talk to praise the rapidly expanding Chinese investments in his country, including to build power stations and a large port…. National leaders seemed to vie with one another in Davos in calling for closer cooperation with China.”

“The China One Belt, One Road is going to be the new WTO — like it or not,” Joe Kaeser, the chief executive of Siemens, told the {Times}.

But China’s actions were not limited to Davos, Bradsher notes. “On Friday, the Chinese government used a policy document issued in Beijing to call for a Polar Silk Road that would link China to Europe and the Atlantic via a shipping route past the melting Arctic ice cap…. At a summit meeting for Latin American and Caribbean foreign ministers in Santiago, Chile, Foreign Minister Wang Yi of China called for close cooperation and participation by the regions countries.”

Belt and Road ‘Heatedly Discussed’ in Davos; ‘China Is Committed to Providing Solutions to World Problems’

Jan. 27, 2018– As reported in the Chinese Foreign Ministry website, a journalist asked spokeswoman Hua Chunying about China’s role in building a common future for the world which they characterized as s “heatedly discussed” in Davos. “Considering that the theme of this annual meeting is ‘Creating a shared Future in a Fractured World,’ what do you think of China’s role in promoting common development and building a common future for the world as the second largest economy?”

Hua Chunying answered by recalling that “the international community still remembers President Xi Jinping’s keynote speech at the WEF annual meeting last year. President Xi evaluated the world economy and came up with his prescription, gave an in-depth analysis of global pressing problems and put forward major proposals to promote the re-balancing of economic globalization, which still has broad and far-reaching influence in the international community.

“China’s contribution to the development of the world is embodied in many aspects. China’s economic growth has injected a strong impetus into the world economy. In 2017 alone, China’s foreign investment reached $120 billion and it imported goods worth 12.46 trillion yuan, which provided a vast market and ample investment and development opportunities for all countries. It is safe to say that  China is the stabilizer and engine of the world economic growth.

“China provides popular public goods for international cooperation. China’s Belt and Road Initiative is one of the most popular international public goods for today’s world, pointing out new directions for improving global governance and providing a new model for international cooperation. The first Belt and Road Forum for International Cooperation hosted by China last year [in May 2017] has produced more than 270 fruitful outcomes.

“China is committed to providing solutions to the world’s problems. We have been attaching great importance to implementing the 2030 Agenda for Sustainable Development, actively responding to the challenge of climate change and making remarkable progress in pollution prevention and treatment. Last year, 10 million people in China were lifted out of poverty. By taking these concrete actions, China has made tangible contributions to meeting global challenges and realizing common development.

“At present, China’s economy has shifted from a phase of rapid growth to a period of high-quality development. We believe this will surely provide more and more positive energy to the common development of the world and the building of a common future,” she said

China Is Working on “the post-high-speed rail age;” Has In-Depth Development Program for Maglev Trains

Jan. 27, 2018–An entire generation of medium- to low speed maglev trains that can run at a maximum speed of 160 kmh, is being developed in China, with plans to operate 5 to 12 magnetic levitation rail lines in cities including Chengdu, Wuhan and Guangzhou by 2020. Altogether 12 Chinese cities, including Tianjin, Hangzhou and Shenzhen, are planning to launch maglev services by 2020, especially between their city center and airports, the city and suburban areas, and the city and surrounding counties.

Sun Bangcheng, deputy director of CRRC Industrial Research Institute, explained that this project is one of 18 national key research and development plans set by the Ministry of Science and Technology in 2016, researching both high-speed passenger and freight trains. The project will be completed by 2021 at a total investment of over 9 billion yuan ($580 million). The project includes six types of trains — three for freight, one high-speed passenger train, and two types of maglev trains. Freight trains with speeds of 250 kmh can transport seafood from Haikou in South China’s Hainan Province to Beijing in north China in one day, according to a project officer at CRRC.

Research into maglev includes a train that can reach 600 kmh and another that travels at 200 kmh. Research is to prepare for “the post-high-speed rail age” in technology, said Sun. The cost of a 600 kmh maglev train is almost the same as a 400 kmh version. The first Chinese-made high-speed maglev train will roll off the operation line in 2018, the report said. Design and construction will begin immediately. A sample carriage will be built in 2018, and a complete train will be ready for a 5-km test run in 2020, said Ding Sansan, deputy chief engineer of CRRC Qingdao Sifang Co.

Chinese Economic Policy Came Out of Study of Great Depression, 2008 Crisis

Jan. 27, 2018– Chinese economist, Liu He, in 2013, in his position as Deputy Director of the Development Research Center of the State Council conducted a comparative study of the 1930s Great Depression and the 2008 crisis. In a report on their conclusions he wrote: “After the outbreak of the crisis, we have been pondering over the possible period of the crisis, its possible international influence and our countermeasures. Since the Industrial Revolution, the crisis of the capitalist world has been frequent. In the 20th century, The Great Depression and the current international financial crisis were the two most widespread and devastating ones. Starting in 2010, we started to carry out a comparative study of the Great Depression of the 1930s and this international financial crisis. Except for Central Government In addition to co-workers, researchers from People’s Bank of China, China Banking Regulatory Commission, the Chinese Academy of Social Sciences, National Research Center and Peking University were also invited to participate.”

The following three conclusions were listed as the principle results of the report.

First, grasp the major changes in the connotation of the period of strategic opportunities in our country and seek the maximum intersection of China’s interests and global interests. The conclusions of the comparative study can tell us that the connotation of the strategic period in which we are located has undergone significant changes. In the economic sense, before the crisis, China’s strategic  opportunities mainly represented the expansion of overseas markets and the inflow of international capital. China seized the opportunity to become a global manufacturing center in one fell swoop. After the crisis, the world has entered a long process of insufficient aggregate demand and de-leveraging. Our strategic opportunities are mainly manifested in the tremendous stimulating effect of the domestic market on the global economic recovery and the opportunities and foundations of technology mergers and acquisitions in developed countries, their facilities and investment opportunities. We should firmly grasp these substantive changes, conscientiously analyze the enormous intersection of interests that have emerged with the new historical conditions in our country and the major economies, and clearly propose a solution to the global dilemma of growth. We will steadily implement the plan when the external conditions are clear.

Second, we should avoid moving to an over-indebted economy and attach importance to regulating and controlling financial fluctuations. We must uphold the essential requirements of

financial services for the real economy. The departure of the U.S. financial industry from its core service function has become the perpetrator of the global financial crisis. This is related to the abandonment of the traditional value of the industry by the U.S. financial industry and excessive pursuit of wealth and innovation. The good performance of the German economy in this crisis is closely related to Germany’s conservative financial tradition and the fact that the financial industry can operate soundly. Various effective measures should be taken to both improve the business environment of the real economy, consolidate the foundation for the development of the real economy,  and to curb capital from empty money-making-money schemes so as to prevent excess self-circulation and inflation in the fictitious economy.

Thirdly, in the process of establishing a new global economic governance structure, the active participants should become  leading policy shapers. Against the backdrop of accelerating changes in global power and the drastic changes in the global economic governance structure and in finding a new equilibrium, China should play a similar role to the United States in taking the initiative in shaping an international new system as a “creditor country” after World War II, China’s overall national strength and rising international competitiveness are favorable conditions for accurately judging the reality and trend of the international situation, clearly defining the interests of our country, breaking through existing institutional frameworks set by Western countries to reflect and convey the interests of our country Unanimously and with the Chinese characteristics on the global economic and financial governance and major international issues of the core ideas and propositions, set the “China agenda”, the introduction of “China program” to strengthen international personnel training and accelerate the institutionalization of China’s international rights and eventually secure the future.