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CGD in the News

November 5, 2018

Reality Check: Is China burdening Africa with debt? (BBC News)

By Reality Check team

From the article:

Africa is facing a looming debt crisis, say leading development economists.

"Almost 40% of sub-Saharan African countries are in danger of slipping into a major debt crisis" according to the Overseas Development Institute, ahead of a major conference on debt being held in London this week.

And the relationship between African nations and China is often seen as a significant part of the problem.

Compared to institutions such as the IMF, World Bank and Paris Club (a group of 22 creditor nations not including China,) loans from China are seen by some as much quicker, cheaper, and come with fewer strings attached.

The United States in particular has been highly critical of China's approach.

Earlier this year, ahead of a visit to Africa, the then US Secretary of State, Rex Tillerson, said China's lending policy to Africa "encouraged dependency, utilised corrupt deals and endangered its natural resources".

China's response was forthright. Its ambassador in South Africa, Lin Songtian, said China was proud of its influence in Africa and that Mr. Tillerson's comments were part of a smear campaign by the United States.

"China is just like any other lender," says Gyude Moore, a former Liberian Government official, and "China's strategic interest is in African countries paying back debts."

There are many examples of China supporting programmes to help with debt repayments, says Mr. Moore, who's currently a visiting fellow at the Centre for Global Development.

Read the full article here.

 

September 10, 2018

Why 2018 marks a critical milestone in China-Africa relations (Quartz)

By Abdi Latif Dahir 

From the article: 

Leaders from all African nations, except for eSwatini, attended the 2018 Forum on China Africa Cooperation (FOCAC) in Beijing this past week. There, Chinese president Xi Jinping pledged $60 billion to the continent in loans, grants, and development financing. Xi also announced eight initiatives aimed at improving Sino-Africa relations, including investments in healthcare, education, security, cultural exchanges, and increasing non-resource imports from Africa.

The conference happened against a backdrop of growing scrutiny of Beijing’s lending practices. Critics have argued that China’s Belt and Road initiative, modeled on the old Silk Road, was a giant “debt trap” and akin to “neocolonialism.” Observers also noted the Asian superpower wasn’t being straightforward about whether it fulfilled all the amounts it previously committed to African states. The $60 billion financial commitment in 2018 was also an aberration from China’s pattern to double or triple pledges every three years: from $5 billion in 2006 to $60 billion in 2015. 

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Given all this, China might become “stringent” and cautious in extending loans to Africa, says Gyude Moore, a former Liberian minister and a visiting fellow at the Center for Global Development in Washington DC. And while China has always provided quick, no-strings-attached loans that set fewer conditions to African states, Moore says that’s going to be difficult to undertake if Beijing “is also saying that they are going to do projects that are sustainable.” 

Read the full article here.

September 7, 2018

Opinion: Trade War Opens Possibilities for Africa-China Relations (Caixin)

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.

 

September 6, 2018

China Offers Debt Relief, But Most African Countries Borrow Elsewhere (Voice of America)

By Salem Solomon 

From the article: 

WASHINGTON — Chinese President Xi Jinping promised Monday to cancel debt for some of Africa’s least-developed countries.

Erasing debt tied to interest-free loans has long been a part of China’s policies in Africa. But the announcement, made at Xi’s opening speech at the 2018 Forum on China-Africa Cooperation, or FOCAC, comes amid growing concern over China’s lending practices, which some have deemed “debt-trap diplomacy.” 

Yet Chinese loans make up just a small portion of Africa’s debt, W. Gyude Moore, a visiting fellow at the Center for Global Development, told VOA. Moore is Liberia’s former minister of public works and focuses on infrastructure financing in Africa. 

Read the full article here

 

July 13, 2018

Doubtful donors, Afghan balancing act and football felines: The Cheat Sheet (IRIN News)

Every Friday, IRIN’s team of specialist editors offers a round-up of humanitarian trends and developments from around the globe. 

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A bit more red, white, and blue for UNHCR

Don’t offer the US a demur ‘thank you.’ The US government expects more credit for its funding to the UN Refugee Agency. UN-watchdog blog PassBlue reported that a May agreement between the US State Department and UNHCR includes more demanding conditions for “visibility” — donor thank yous on websites, publications, and supplies. By the end of the year, the deal says, 75 percent of UNHCR’s public information tools will “more clearly and prominently acknowledge US contributions”. By the end of 2019, the figure should be 100 percent. Other donors have similar demands, often intended to shore up domestic support for aid spending. But a recent paper from think-tank Center for Global Development argues that donor logos on aid projects can have “corrosive” effects, undermining the authority of local government. For more on the pros and cons of aid branding, take a look at this piece from National Public Radio

Read the full article here.

June 25, 2018

Logos On Aid Supplies: Helpful, Demeaning...or Dangerous? (NPR)

It seems like a pretty simple thing. When a humanitarian group hands out bags of food or sets up toilets for people who are poor or recovering from a crisis, the group puts its logo on the product.

It's a way of taking credit, which makes donors happy. It's a way of letting the recipients know where to complain if there's a problem. And if you're sitting at home and catch the logo on a TV report, you might be inspired to contribute to that particular charity.

But now, some people are questioning the branding of aid goods.

The first concern: How do the logos make aid recipients feel?

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Logos have become such a powerful tool that there have been incidents of ISIS stealing U.N. food aid, slapping their own logo on the boxes and redistributing it back to people.

Governments — especially those recovering from a humanitarian crisis — are anxious to get credit, too, says W. Gyude Moore, the former Liberian minister of public works. Except there's one problem: They don't often control the purse strings.

Read the full article here.