Ideas to Action:

Independent research for global prosperity

CGD in the News

February 7, 2019

David Malpass, US nominee for World Bank president and long-time China hawk, ‘will continue to take part in trade talks’ (South China Morning Post)

From the article:

David Malpass, a China hawk who is US President Donald Trump’s nominee to become the World Bank’s new president, will continue to play a “very important part” in trade negotiations with Beijing, senior US administration officials said on Wednesday.

--

Despite the continuity between the administration’s and Malpass’s positions on the World Bank, his nomination has elicited strong opposition from some observers, who view him as a threat to multilateralism.

“An incorrigible arsonist will now be our fire chief,” tweeted W. Gyude Moore, Liberia’s former minister of public works. “Man spends his adult life denigrating multilateralism and now has the ‘pleasure’ of running one of its pillars.”

“David Malpass is a Trump loyalist who has committed economic malpractice on a wide range of topics, from dismissing the first signs of the 2008 global financial crisis to flirting with the abolition of the IMF,” Justin Sandefur, senior fellow at the Centre for Global Development, said in a statement.

Malpass also served as chief economist at the now-defunct investment bank Bear Stearns, which collapsed during the 2008 financial crisis. Seven months previously, he had written a commentary for The Wall Street Journal titled “Don't Panic About the Credit Market” that played down indications of the looming financial disaster.

“There is no case for Malpass on merit,” Sandefur said. “The question now is whether other nations represented on the World Bank’s board of governors will let the Trump administration undermine a key global institution.”

 

February 5, 2019

Trump’s World Bank-hating pick for World Bank president, explained (Vox)

From the article:

President Donald Trump will select David Malpass, currently the undersecretary of treasury for international affairs, as the US nominee to lead the World Bank, the Washington Post and Politico have reported.

--

Justin Sandefur, an economist at the Center for Global Development, an influential think tank working on global poverty and development, put out a statement arguing that other World Bank stakeholders should attempt to block Trump’s pick. While the US has traditionally chosen the World Bank head, formally the position is selected through a vote of bank shareholders, and other countries could indeed band together to reject Malpass.

@JustinSandefur on the US's nominee for @WorldBank president - view Tweet here

W. Gyude Moore, the former minister of public works for Liberia (and thus someone with deep experience in one of the developing countries where the World Bank is most needed), compared nominating him to nominating an arsonist to be a fire chief.

“An incorrigible arsonist will now be our fire chief. Man spends his adult life denigrating multilateralism and now has the "pleasure" of running one of it's pillars. When does it end?" - view Tweet here

February 5, 2019

The “debt-trap” narrative around Chinese loans shows Africa’s weak economic diplomacy (Quartz Africa)

From the article:

Hugging the shores of the Indian Ocean, Kenya’s Mombasa port is one of the biggest and busiest harbors in East Africa.

Almost 1,800 vessels docked at the port in 2017 alone, with cargo worth over 30 million tons processed—much of it heading to neighboring or landlocked nations including Uganda, Rwanda, Burundi, and DR Congo. Since its opening in the mid-1890s, the seaport has developed to be a rising regional hub and a key cog in Kenya’s growing infrastructural development.

In December, reports surfaced the prized port was used as collateral for the $3.2 billion loan that was used to construct the 470-kilometer (292 miles) rail line between the seaside city and the capital Nairobi. In a leaked report linked to the auditor general’s office, Kenya was said to risk losing its port if it defaulted on the loan, with the Exim Bank of China taking over the port authority’s “escrow account” to regain revenues. Further reports have even noted it goes beyond just one asset that’s been put up as collateral and that “any state” possession was on the table in the event of a non-payment.

--

Western leaders, drawing on these examples and wary of China’s rising financial and economic might, have cautioned African states from taking out these loans. Observers have also pointed to the fact Beijing offers financing with fewer strings attached and isn’t part of the global multilateral framework for official creditors known as Paris Club. This has raised questions about the transparency, sustainability and commercial viability of Chinese state-sponsored lending, which have grown tenfold in the past five years in Africa.

And with no officially-published contracts or “no written predictable rules” of how Beijing responds to a loan default, “people are free to speculate,” says W. Gyude Moore, a visiting fellow at the Center for Global Development. Between 2000 and early 2019, there were 85 instances when China canceled or restructured debt globally—including most recently in Cameroon.

The Sri Lanka port remains the only place in the world where Beijing took control of a state asset, with observers noting that officials understood the damages “debt book diplomacy” could bring to China. Yet Beijing’s debt relief or repayment actions, Moore notes, remains “haphazard. It’s unpredictable. There’s nothing written. It’s confusing.”

--

Because there’s no frame of reference for Chinese deals, Moore, who previously served as Liberia’s minister of public works, says African governments can improve their capacity to negotiate by drawing support from global litigation services. These include the African Legal Support Facility hosted by the African Development Bank or pro-bono entities like the International Senior Lawyers Program. Mobilizing these resources, he adds, could improve the quality of project selection and the process of delivering them.

January 31, 2019

Opportunities and Challenges of Chinese Investments for African Nations (Becker Friedman Institute at UChicago)

From the article:

In November, 2018, BFI hosted the University of Chicago’s annual US-China Forum, focusing on China and the Global Economy. Academic and policy leaders from the US and China participated in the Forum, and several participants offered their thoughts on China and the global economy including W. Gyude Moore, Visiting Fellow at the Center for Global Development and Former Minister for Public Works of Liberia.

Moore discusses how Chinese investment has changed dynamics for African nations, and new opportunities and challenges has it presented.

Click here to watch!

December 5, 2018

After the war, many Liberians returned to rebuild the state. I was one of them (Apolitical)

From the op-ed:
 
In 2006, at the end of almost two decades of civil and political strife, Liberia was a broken nation. Ethnic and sectarian tensions weakened the bonds that upheld our sense of a shared national identity.
...
Longing for opportunities to contribute to the country’s development, many Liberians living in the diaspora returned home to serve as fellows.
 
I was one of them.
 
Read the full piece here.
 
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. 

... 

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

 

Pages