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Press Center
Welcome to the Center for Global Development's Press Center!
The Center for Global Development’s communications team is standing by to assist reporters on deadline. Our experts can provide analysis, commentary, data, and unique expertise on the global development and economic issues that are driving the news cycle. You can search for experts by their area of expertise here. To arrange an interview or to be added to our press list, please contact Holly Shulman, CGD communications director, by phone or email at +1202.416.4040 and hshulman@cgdev.org.
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CGD in the News
September 24, 2018
Article
By Financial Times
From the article:
Chinese officials have long talked up the “win-win” attributes of their engagement with other developing countries. China wins contracts, markets and access to raw commodities. Its partners win infrastructure and investment, and an ally that, unlike western countries, eschews obvious political conditionality in return for loans. The mutual benefits can indeed be great. A growing number of the recipients of Chinese credit are discovering, however, that the purported “win-win” formula also creates losers.
US officials now see a disturbing pattern in which Beijing has encouraged indebtedness in order to gain control of strategic assets when debtors default on repayments. Whether China is doing this deliberately or not — and Beijing strongly denies this — the effect in parts of Africa and Asia is as such.
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But there are also valid reasons for US concern. No doubt, Chinese financing is supporting growth in Africa and Asia. No doubt too it is increasing the risk of distress in vulnerable clients. A detailed recent study by the Centre for Global Development found this was the case in 23 of 68 countries with BRI funding, eight of which already have unsustainable levels of sovereign debt.
Read the full article here.
September 24, 2018
Article
By Kimani Chege
From the article:
A few weeks before President Uhuru Kenyatta traveled for a meeting with US president Donald Trump in Washington, sixteen US senators had written to the US Secretary of Treasury and US Secretary to the Department of State asking them to caution them against US tax payers money not being used by IMF to bail out countries indebted to China.
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"We write to express our concern over bailout requests to the IMF by countries who have accepted predatory Chinese infrastructure financing," the 16 senators said. The Centre for Global Development has estimated that of the 68 countries currently hosting Bridge and Road Initiative (BRI) funding protects, 23 are at risk of debt distress, and in eight of those countries, future BRI-related financing raises serious concerns about sovereign debt sustainability.
Read the full article here.
September 24, 2018
Article
By Max Nathanson
From the article:
Over the past decade, the U.S. has lost influence in Latin America. One of the reasons for declining U.S. weight in the region is infrastructure. Latin American countries want to build large infrastructure and energy projects, and China is willing to finance them.
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However, researchers at the Center for Global Development have found that recipients of Chinese infrastructure finance are often at risk of serious debt distress that can hamstring fiscal sovereignty. It is precisely these economic mechanisms that allow China to build political partnerships based on the need to continue financing for their debt obligations.
Read the full article here.
September 24, 2018
Article
By Dylan Matthews
From the article:
I write a lot about the benefits of fighting poverty by giving poor people cash, rather than, say, giving them chickens or food parcels or water pumps. Giving cash directly to the poor is relatively easy, it respects the decisions of poor people as to how to spend it, and it avoids the central planning challenges of some other anti-poverty policies. Moreover, there is, I think, pretty good evidence demonstrating its effectiveness.
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Then there’s the fact that beneficiaries were still doing better after nine years in terms of assets. “I wouldn’t underrate the asset findings,” said Amanda Glassman, chief operating officer and senior fellow at the Center for Global Development, who’s read the study. “Having those assets is also associated with higher earnings over the lifetime, and it’s possible that might be pretty important over the long term.” Blattman and his co-authors didn’t find that assets like livestock and trees were leading to a lot more income nine years out — but that could change in the future.
Read the full article here.
September 24, 2018
Article
By He Qinglian
From the article:
On September 3, Chinese President Xi Jinping declared at the opening ceremony of the Forum on China–Africa Cooperation Beijing Summit in 2018 that China is willing to provide to African countries $60 billion through various channels including government assistance, financial institutions, and corporate investment. Some of the countries in this list are among Africa’s least developed, or the most heavily in debt, and now Beijing has exempted them from making loan payments that were originally due at the end of this year.
Xi’s statements sparked negative responses in Chinese online circles, with many people accusing the leader of “wantonly showering coins.”
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Reality has also shown that China’s Belt and Road is vulnerable to major setbacks. Prime Minister Mahathir of Malaysia visited Beijing in August to seek China’s understanding: because Malaysia’s national debt had soared to $250 billion, it had no choice but to suspend three major infrastructure projects. About 70 countries are currently participating in China’s One Belt One Road plan, many of which owe large debts. The Washington-based think tank “Center for Global Development” estimated in March this year that the Belt and Road Initiative has mired eight countries in severe debt.
Read the full article here.
September 21, 2018
Article
By Allan Olingo
From the article:
Ethiopia became the first country on the continent to have its Chinese debts restructured even as it became apparent that several other countries were waiting for loan concessions to avert distress.
On Thursday, Ethiopia announced that China had agreed to restructure some of its loans, including the one for the $4 billion railway linking its capital Addis Ababa with Djibouti.
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It is understood that Djibouti could also be on the way to enjoying reprieve, given that its debts from Beijing were already choking it.
The country has seen its debt to GDP ratio raise 88 per cent, the latest report from Centre for Global Development shows, even as it ramps up its port infrastructure investment already running into billions of dollars.
During the summit, some African countries got a reprieve when Beijing decided to write off interest on some of their loans even as China said it was not to blame for the debt distress some of these countries found themselves in.
Read the full article here.
September 21, 2018
Article
By Xuan Loc Doan
From the article:
During a state visit to China last month, Malaysian Prime Minister Mahathir Mohamad warned against what he called “a new version of colonialism,” which was seen as a rebuke to China’s increasing economic and political dominance in the region.
The accusation that China is pursuing neo-colonialism and debt diplomacy, especially through its global trade and infrastructure projects under the trillion-dollar Belt and Road Initiative (BRI), has been made by others.
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Pakistan, another South Asian nation, is also faced with the same dilemma as there are question marks over its ability to repay colossal Chinese loans related to the $62-billion China-Pakistan Economic Corridor (CPEC), another key component of China’s BRI. In fact, according to the Center for Global Development, it is one of the eight most vulnerable to debt distress due to BRI-related financing.
Read the full article here.
September 21, 2018
Article
By Gyude Moore
From the article:
Between the year 2000, when the first Forum on China-African Cooperation (FOCAC) summit was held, up to the most recent summit, China has moved from a bit player in Africa’s economy to its largest trading partner, surpassing the United States in 2009. China-Africa trade has ballooned from $10.5 billion in 2000 to over $200 billion this year. The most recent edition of China’s flagship summit around its Africa policy has come and gone and with it an investment, loan and grant package of $60 billion. The 2018 FOCAC summit also appears to have had the highest participation for such a gathering, with about 48 African heads of state and government participating, but the summit also attracted significant attention and scrutiny of the China-Africa relationship — both from the domestic Chinese audience and the international one.
This is an opportunity for the relationship to move to the next level. The sheer volume of trade and investment flows cannot be the only measure of the success of the relationship. This FOCAC can and should be a departure point.
Read the full article here.
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