Page 36 - Issue 9

Concerns are also being raised about circumstances under which the strategic ultimately default, increase.
the role of private Chinese in Africa’s Indian Ocean port of Mombasa was
security sectors. Under Chinese law, used as collateral for the loans the One Belt One Road can have positive
the line between public and private government from China’s Exim Bank to net benefits for African countries, but
companies is blurred. Private firms are build the Mombasa-Nairobi railway. much will depend on whether the
required to install ruling party branches China-Africa relationship can be placed
within their decision-making structure, In Africa, debates about One Belt One on more equal footing. It is first and
a regulation known as This relationship Road have focused on whether it can foremost a Chinese geopolitical project
is tightened by the practice of strictly support the continent’s infrastructure designed to advance China’s grand
hiring demobilized PLA soldiers and needs. The World Bank estimates that strategy. The challenge for Africa is in
former Special Forces, intelligence, and Africa will need up to $170 billion in establishing where its interests converge
police officials. Today, around 3,000 investment a year for 10 years to meet with China’s, where they diverge,
ex-military members are employed in its infrastructure requirements. The and how areas of convergence can be
One Belt One Road projects around the African Development Bank has posited shaped to advance African development
world. that if Africa positions itself well, it can priorities.
source some of this from the OBOR
One Belt One Road has troubling and channel it to the African Union’s Chinese President Xi Jinping made it
implications for debt sustainability. infrastructure master plan. clear at the World Economic Forum
According to the meeting in Davos
Johns Hopkins that the world
China Africa should abandon
R e s e a r c h protectionism and
Initiative, East commit itself to
African countries an open global
borrowed about economy.
$ from China for In 2017,
infrastructure, H am b an t o t a
energy, and port in Sri Lanka
co n s t r uc t io n was taken into
projects. Chinese hands,
Beijing appears along with 69
in some cases to square kilometers
have attached more of land, after
importance to the government
acquiring strategic defaulted on debt
assets than debt repayment The Chinese built electric railway from Addis Ababa to Djibouti payments. Pakistan,
from its partners. In 2017, Sri reeling from a balance of
Lanka handed over Hambantota port Can African countries seize these payments crisis, has asked
to Chinese state-owned companies on opportunities and mitigate some of the for retrenchment of and easier terms on
a 99-year lease after defaulting on an risks inherent in Beijing’s latest strategy? the China-Pakistan Economic Corridor
infrastructure loan. Pakistan handed Accountability and transparency will (CPEC).
over Gwadar port on a 40-year lease be the key to answering that question. BRI has become a cause of concern
in an arrangement where the Chinese The opaque nature of many OBOR for its impact on the more vulnerable
partner also retained 90 percent of its negotiations prevents public and private countries. According to the Centre for
revenues. sector scrutiny. Parliaments, public Global Development, distress from a
protectors, and other oversight bodies highly unsustainable level of debt and
These developments set off alarm bells must actively monitor such negotiations,
in East Africa, where speculation is rife create safeguards, and keep the public interest rates has worsened in countries
that Djibouti and Kenya, both highly informed. holding debt from BRI projects.
indebted to China, could lose their ports For instance, a railway project in Laos
in a similar fashion. In January 2019, Beijing is sensitive to how host nations involves $6 billion of Chinese lending,
Uganda’s auditor general warned of the perceive it. When the public is aware, almost one third of its annual GDP.
country’s ballooning debt and the risk vigilant, and active, OBOR negotiators The unsustainability of these debts has
that conditions placed on its loans were can become more responsive to local fuelled suspicions about China’s avowed
a threat to its sovereign assets. demands. The lessons of Hambantota intention of “community and shared
and Gwadar suggest that when destiny” in funding these projects.
The following month, the Kenyan accountability and oversight are absent, On top of that, almost 89% of the BRI
parliament opened a probe into the the risks of unfavorable agreements, and contractors are Chinese companies.

36 | The Nile Explorer 009