Advertisements
jump to navigation

JT: China’s creditor imperialism. #Africa August 26, 2018

Posted by OromianEconomist in Uncategorized.
Tags: , , , , , ,
1 comment so far

 Odaa Oromoooromianeconomist

“Unlike International Monetary Fund and World Bank lending, Chinese loans are collateralized by strategically important natural assets with high long-term value (even if they lack short-term commercial viability). Hambantota, for example, straddles Indian Ocean trade routes linking Europe, Africa and the Middle East to Asia. In exchange for financing and building the infrastructure that poorer countries need, China demands favorable access to their natural assets, from mineral resources to ports.”


China’s creditor imperialism

BY BRAHMA CHELLANEY,  The Japan Times, 21 December 2017
China’s creditor imperialism
Police in Sri Lanka use water cannon to disperse people protesting a government plan to grant a 99-year lease of Hambantota port to a Chinese company on Jan. 7. Nations caught in debt bondage to China risk losing both their most valuable natural assets and their very sovereignty. | AP

This month, Sri Lanka, unable to pay the onerous debt to China it has accumulated, formally handed over its strategically located Hambantota port to the Asian giant. It was a major acquisition for China’s Belt and Road Initiative (BRI) — which President Xi Jinping calls the “project of the century” — and proof of just how effective China’s debt-trap diplomacy can be.

Unlike International Monetary Fund and World Bank lending, Chinese loans are collateralized by strategically important natural assets with high long-term value (even if they lack short-term commercial viability). Hambantota, for example, straddles Indian Ocean trade routes linking Europe, Africa and the Middle East to Asia. In exchange for financing and building the infrastructure that poorer countries need, China demands favorable access to their natural assets, from mineral resources to ports.

Moreover, as Sri Lanka’s experience starkly illustrates, Chinese financing can shackle its “partner” countries. Rather than offering grants or concessionary loans, China provides huge project-related loans at market-based rates, without transparency, much less environmental or social impact assessments. As U.S. Secretary of State Rex Tillerson put it recently, with the BRI China is aiming to define “its own rules and norms.”

To strengthen its position further, China has encouraged its companies to bid for outright purchase of strategic ports where possible. The Mediterranean port of Piraeus, which a Chinese firm acquired for $436 million from cash-strapped Greece last year, will serve as the BRI’s “dragon head” in Europe.

By wielding its financial clout in this manner, China seeks to kill two birds with one stone.

First, it wants to address overcapacity at home by boosting exports. Second, it hopes to advance its strategic interests, including expanding its diplomatic influence, securing natural resources, promoting the international use of its currency and gaining a relative advantage over other powers.

China’s predatory approach — and its gloating over securing Hambantota — is ironic, to say the least. In its relationships with smaller countries like Sri Lanka, China is replicating the practices used against it in the European-colonial period, which began with the 1839-1860 Opium Wars and ended with the 1949 communist takeover — a period that China bitterly refers to as its “century of humiliation.”

China portrayed the 1997 restoration of its sovereignty over Hong Kong, following more than a century of British administration, as righting a historic injustice. Yet, as Hambantota shows, China is now establishing its own Hong Kong-style neocolonial arrangements. Apparently Xi’s promise of the “great rejuvenation of the Chinese nation” is inextricable from the erosion of smaller states’ sovereignty.

Just as European imperial powers employed gunboat diplomacy to open new markets and colonial outposts, China uses sovereign debt to bend other states to its will, without having to fire a single shot. Like the opium the British exported to China, the easy loans China offers are addictive. And, because China chooses its projects according to their long-term strategic value, they may yield short-term returns that are insufficient for countries to repay their debts. This gives China added leverage, which it can use, say, to force borrowers to swap debt for equity, thereby expanding China’s global footprint by trapping a growing number of countries in debt servitude.

Even the terms of the 99-year Hambantota port lease echo those used to force China to lease its own ports to Western colonial powers. Britain leased the New Territories from China for 99 years in 1898, causing Hong Kong’s landmass to expand by 90 percent. Yet the 99-year term was fixed merely to help China’s ethnic-Manchu Qing Dynasty save face; the reality was that all acquisitions were believed to be permanent.

Now, China is applying the imperial 99-year lease concept in distant lands. China’s lease agreement over Hambantota, concluded this summer, included a promise that China would shave $1.1 billion off Sri Lanka’s debt. In 2015, a Chinese firm took out a 99-year lease on Australia’s deep-water port of Darwin — home to more than 1,000 U.S. Marines — for $388 million.

Similarly, after lending billions of dollars to heavily indebted Djibouti, China established its first overseas military base this year in that tiny but strategic state, just a few kilometers from a U.S. naval base — the only permanent American military facility in Africa. Trapped in a debt crisis, Djibouti had no choice but to lease land to China for $20 million per year. China has also used its leverage over Turkmenistan to secure natural gas by pipeline largely on Chinese terms.

Several other countries, from Argentina to Namibia to Laos, have been ensnared in a Chinese debt trap, forcing them to confront agonizing choices in order to stave off default. Kenya’s crushing debt to China now threatens to turn its busy port of Mombasa — the gateway to East Africa — into another Hambantota.

These experiences should serve as a warning that the BRI is essentially an imperial project that aims to bring to fruition the mythical Middle Kingdom. States caught in debt bondage to China risk losing both their most valuable natural assets and their very sovereignty. The new imperial giant’s velvet glove cloaks an iron fist — one with the strength to squeeze the vitality out of smaller countries.


Brahma Chellaney, a professor of strategic studies at the New Delhi-based Center for Policy Research and a fellow at the Robert Bosch Academy in Berlin, is the author of nine books, including “Asian Juggernaut,” “Water: Asia’s New Battleground,” and “Water, Peace, and War: Confronting the Global Water Crisis.” © Project Syndicate, 2017


Related article from Financial Times:

The Chinese model is failing Africa

Beijing’s plans for Africa do not stop there. President Xi Jinping is keen for China to serve as an economic and political model for the developing world. He hopes that China’s infrastructure finance and manufacturing investment in Africa will spur industrialisation and development. But to be productive and contribute to economic development, infrastructure needs to be high-quality and high-performing. And the evidence shows that China’s infrastructure-driven economic model has been far from efficient and is one to avoid rather than emulate. Over half of China’s infrastructure projects are under-performing, damaging rather than fuelling growth and leaving an enormous debt burden for the domestic economy.

Advertisements

Made in China: Once known for cheap knockoffs, Chinese companies are now the world’s innovators — Quartz October 30, 2016

Posted by OromianEconomist in 25 killer Websites that make you cleverer, Uncategorized.
Tags: , , , ,
add a comment

Odaa Oromoooromianeconomist

Most of us use products made in China every day and are aware of its growing economic power as a factory to the world. But China intends to become a developed nation by mid-century, and integral to this ambition is its intense focus on innovation. In a few decades, Chinese companies have evolved from imitators…

via Made in China: Once known for cheap knockoffs, Chinese companies are now the world’s innovators — Quartz

Rivalry: Japan, China & the Scramble for Africa January 14, 2014

Posted by OromianEconomist in Africa, Aid to Africa, Colonizing Structure, Economics: Development Theory and Policy applications, Land Grabs in Africa, Oromia, Oromiyaa, Oromo, Oromo Nation, The Colonizing Structure & The Development Problems of Oromia, Theory of Development, Tyranny, Uncategorized.
Tags: , , , , , , , , , , , , , , , , , , , , , , , , , , , ,
add a comment

???????????Real inspiration, Abebe Bikila

 

Abe (Japanese PM) recalls Abe (the legend Oromo Olympian, Abebe Bikila)

 

Japanese premier, Mr. Abe,  received a gift from the son of the late Oromo barefoot marathon legend Abebe Bikila, winner of the Tokyo Olympic marathon 50 years ago.

Japan’s rivalry with China is going global. After years of jousting over obscure islands in the East China Sea and competing for Asian influence, the two countries are now battling for power in a new arena: Africa.

It’s a region that Tokyo has long ceded to the Chinese, allowing Beijing to pile up massive economic and political capital across Africa. But on Friday, in a major shift in strategy, Japanese Prime Minister Shinzo Abe arrived in Ivory Coast to begin his first tour of sub-Saharan Africa – and the first by any Japanese prime minister in eight years.
As he has finished a three-nation tour of Africa on Monday in which he offered aid and development projects potentially worth billions of dollars to help his nation catch up with China’s enormous footprint on the continent, the prime minister, Shinzo Abe, has said he wants to expand Japan’s presence in Africa, and tap a region that can serve as both a source of minerals and energy for Japan’s industrial economy and a new market for Japanese goods.

Mr. Abe has made Africa one of the centerpieces of a diplomatic push to complement his domestic growth policies, known as Abenomics, which aim to end Japan’s long economic decline.

By placing more emphasis on Africa, Mr. Abe is throwing Japan into a scramble for resources there that also involves companies from China, the United States and other Western countries. Japan is particularly keen to find new sources of so-called rare earths and metals, raw material used in electronics and cellphones that it currently imports mostly from China.

But Japan also finds itself lagging far behind its rival China, which has been investing heavily in Africa for a decade. As if to underscore that great rivalry, at the same time that Mr. Abe was in Africa, China’s foreign minister, Wang Yi, was on a four-nation visit to the region. Japan will find it difficult to catch up to China’s political influence here. China’s leaders are frequent visitors to the continent. Chinese President Xi Jinping visited Africa last year on his first overseas trip as President. Beijing has cultivated close relationships with Africa’s ruling parties, routinely inviting their officials on junkets to China.

China’s state media were quick to portray Mr. Abe’s visit as an attempt to challenge Beijing in the African arena. Quoting several Japanese sources, state-owned China Daily said the Japanese leader is seeking to “contain” China’s influence in Africa.

Another Chinese newspaper, Global Times, quoted Japan analyst Geng Xin as saying that Tokyo was “cozying up” to Africa to try to dispel Japan’s image as an “economic giant and political dwarf.” He said Japan is wooing the votes of African countries for its bid to become a permanent member of the United Nations Security Council.

A spokeswoman for the Chinese Foreign Ministry, Hua Chunying, issued a veiled warning to Japan. “If there is any country out there that attempts to make use of Africa for rivalry, the country is making a wrong decision, which is doomed to fail,” she told a press conference this week.

Japanese officials have said that while they cannot match the $75 billion indevelopment aid that China has poured into Africa since 2000, they hope to close the gap in other ways. One is to use Japanese aid to train African engineers and technicians, in order to differentiate Japanese efforts from Chinese projects that have been criticized for employing mainly Chinese workers while offering few jobs to Africans. Japan, he said, prefers to “aid the human capital of Africa.”

The visit also brought an unusual amount of showmanship to Japan’s often drab style of diplomacy. On Friday, Mr. Abe traded jokes and even exchanged soccer jerseys with the president of Ivory Coast, Alassane Ouattara. The next day, Mr. Abe attended a tournament of the Japanese sport of judo in Abidjan.

Japan criticizes Beijing for its tendency to build lavish headquarters and office towers as donations for African politicians – including, most famously, the new $200-million headquarters of the African Union in Finfinnee (Addis Ababa), where Mr. Abe is scheduled to give a policy speech next week.

“Countries like Japan … cannot provide African leaders with beautiful houses or beautiful ministerial buildings,” Mr. Abe’s spokesman, Tomohiko Taniguchi, told the BBC.

But while the two countries take verbal shots at each other, the reality is that China has adopted a far more aggressive strategy in Africa, and has been enormously successful so far. China’s investment in Africa was reported to be about seven times that of Japan in 2011, and its exports to Africa were about five times greater.

China has become the top trading partner, or second-biggest trading partner, of about half of Africa’s countries. It is a major investor in Africa’s resources sector, and the biggest buyer of oil and minerals from many African countries. Its construction companies are building roads, highways, railway lines, sports stadiums, transit systems and hospitals across Africa.

Japan has lagged far behind in this race. Most of its engagement with Africa is as an aid donor. Last year it promised up to $32-billion in public and private assistance to Africa over the next five years, but this only confirmed its reputation as a donor, rather than a business partner.

Only a handful of Japanese investors are active in Ivory Coast, Ethiopia and Mozambique  According to a fact sheet by the Japanese government, there are only two Japanese companies in Ivory Coast and only one in Ethiopia.

Japan’s prime minister Shinzo Abe has kicked off a visit to Ethiopia (Oromia) by meeting the  Oromo running stars.The Japanese premier received a gift from the son of late Oromo barefoot marathon legend Abebe Bikila, winner of the Tokyo Olympic marathon 50 years ago. “My name is Abe, but everybody teased me at school, calling me Abebe,” Mr Abe said. “Many Japanese  marathon runners would actually collapse after the race but when I saw Mr. Abebe actually stretching afterwards, it was such a surprise, even for a 10-year-old.”
In his visit to Ethiopia (Oromia), the Japansese prime minister was presented with a photo of Bikila winning Olympic gold in Tokyo, a gift from the late legend’s son, Yetnayet Abebe.”Today I had the opportunity to meet famous athletes from Ethiopia as well as the son of Mr. Abebe, as well as wonderful children boys and girls who will one day be gold medalists, or who will one day be winners at the 2020 Tokyo Olympics and Paralympics,” Mr Abe said. Bikila died in 1973 from complications caused by a road accident four years before, and remains one of the great icons of running, especially in Japan. The Japanese prime minister also met with Oromo female road and track stars Meseret Defar, Tiki Gelana, Derartu Tulu and Ibrahim Jeilan.More can be read from original sources @https://oromianeconomist.wordpress.com/?s=oromo+athletics&searchbutton=go

http://www.japantimes.co.jp/news/2014/01/14/national/abe-recalls-abebe-meets-ethiopias-running-heroes/#.UtcsptJdXbh
http://www.globalpost.com/dispatch/news/regions/africa/south-africa/140110/japan-china-lord-voldemort-africa

http://www.nytimes.com/2014/01/14/world/asia/japans-leader-pledges-aid-on-africa-tour.html?ref=world

http://www.theglobeandmail.com/news/world/japan-battles-china-for-influence-in-africa/article16288594/?click=tglobe