Tag: BRI

China-Africa Relations: An Agreement Built in Glue

Posted on by Salim Abila Asuman

Have you ever tried gluing two pieces of paper together that are reluctant to stick together, one hesitant to adhere and prefers to do lumps with the stickier paste? Welcome to the world of building agreements where it is not only about making the glue work, but it is equally important that it must last.

In this article, I explain how China builds agreements with its partners into impenetrable bonds which even the most tenacious of parties cannot tear asunder.

Irrefutably, China is the unsurpassed in international affairs when it comes to the building of agreements. In contrast, Western nations often seem to randomly slap glue on their agreements and then are shocked when their agreements fall apart.

But what is the secret of China regarding the durability of their engagements, while those of Western nations are so easily broken and dissolved?

What worked for China’s approach was applying glue to and on every edge so that each and every corner should stick before going to other pieces. Now, think of the Belt and Road Initiative; it is an all-inclusive Chinese agreement.

The BRI is much more than a high-level infrastructure development undertaking; rather, it constitutes a matrix of associations built upon strategic loans and technological handovers underpinned by long-term cooperation. Each contract in the BRI constitutes one that inscribes an exercise of patience, trenched and designed to benefit both China and its various partners. Such a tie binds them together in mutual embrace from which it is hard to break.

The looming question is why do this agreement last, while those with the West often fail? Look no farther, the answer is in the glue, on how it is applied, the intension of applying it and the strength of the connection it formulates. Agreements with China are based on mutual respect and long-term cooperation.

It is not just an effort to sign the agreements; the effort is in ensuring that it lasts. This itself explains why most of the countries that find themselves involved in the BRI often find themselves in relationships which remain intact even at the face of challenges. China does not walk away after the initial deal but always stays on, reinforcing the bond as needed.

The foundation of Uganda’s rise to progress heights is based on the Agreement on Economic and Technical Cooperation between Uganda and the People’s Republic of China, binding the affluences of Uganda and China together.

The effort is not just in signing the agreements but in the sustainability of those agreements. This perhaps explains why nations absorbed in the BRI often find themselves in ties that last longer than challenges. China does not walk away after the first contract; it stays around, reinforces, and reassures the relationship where needed I repeat.

It is on this premise, that the commitments in each agreement China reaches serve as a foothold to provide solid joint ventures, technology transfer, and capacity building. It is a result of such a setting that with each passing day, Uganda and China’s bond becomes stronger economically thus laying a sound footing for sustainable growth.

However, there is no climb without risks, hence the Uganda-China Bilateral Investment Treaty, or as it were called, the Investment Promotion and Protection Agreement serves as a join, making investments stable and secure. Like a knot tied with precision, this treaty ties the two nations into commitments for building confidence and resilience against the uncertainties of the market.

Compare this to the Western treaties, that so often feel like the equivalent of sticking two pieces of paper together with a cheap glue stick, there is a connection, sure, but it is flimsy and prone to peeling apart under pressure.

Take, for instance, the Paris Climate Agreement, hyped as some sort of grand achievement; in reality, it was not. Some Western countries, perhaps due to altered political affluences or economic compulsions, have rolled back on their commitments or fallen short of their targets. Here, the glue was too thin, put on in rapidity and without consideration for long-term implications.

So, why does this happen? It is because most of the treaties formed in the West stand based on very short-term gains or politicking rather than long-term workable partnership. They may appear firm on the surface, but often there are imbalances in conditions underneath which may favour the more powerful nation with limited regard for the lasting effect on the weaker party. These agreements, in the absence of reinforcement(s), begin to crack and fall apart when circumstances change.

Another reason is due to the absence of a follow-through. In many Western agreements the parties simply walk away once the ink is dry, assuming signing a document is enough to hold it. However, without consistent effort even the best intentions crumble.

China treats agreements as ongoing commitments. It will not refrain from applying more glue if needed; check in, adjust terms, and see that both sides are well glued, no doubt China-Africa Relations is built in glue.

The writer is a research fellow at the Development Watch Centre

Build Back Better World v BRI: Can Africa Benefit From Development Finance Competition?

Posted on by Allawi Ssemanda

There is a competition. A spending competition. The spending is in trillion dollars. Developing countries are participants. Participating from an interesting position. Participating as recipients. Imagine that. Being at the receiving end of a spending competition!

Whereas both foreign aid and development finance are projects that pursue development objectives in developing countries, we should distinguish them. Unlike foreign aid, development finance comprises an extensive range of financial instruments and interventions intended to support long-term economic growth and infrastructure development in underdeveloped countries.

Foreign aid often tends to address immediate humanitarian needs, support social welfare programs and alleviate poverty in poor countries. It has also suffered profound criticism as deleterious and counterproductive to the development of African countries.

The biggest foreign aid providers are historically Western countries including the countries under the European Union, the United States, Germany, United Kingdom, France, Sweden, Netherlands, Italy, Canada and Norway. Japan is also a major foreign aid giver. China is noticeably absent from this list. It has unwaveringly pursued a unique strategy borne out of its shared historical experience with Africa. This was partly the spirit in which the Belt and Road Initiative (BRI) was initiated.

While the G7 countries launched the Build Back Better World (B3W) in 2021, they were reactively ushering in an alternative to China’s BRI. It had been almost a decade earlier since China had recognised the primacy of infrastructure development in low- and middle-income countries. Observed, that it could also have been a quiet concession that foreign aid was not as impactful as it had been magnified to be.

The B3W initiative focuses on addressing infrastructure needs in developing countries. It is planned that by 2035, this initiative will have contributed about $40 trillion worth of infrastructure in recipient countries.

By contrast, the cumulative BRI engagement in the 147 countries undertaking the project since its inauguration in 2013 is $962 billion. Out of that, about $573 billion was invested in construction contracts while $389 billion went into non-financial investments. It is also estimated that BRI will likely increase the world GDP by $7.1 trillion per annum by 2040. Its benefits are also expected to be “widespread” because of the efficiency likely to be experienced in world trade as a result of improved infrastructures across the world.

But here is the catch. Whereas both initiatives sound ambitious, a close examination of their current contribution is very revealing. Out of the gigantic promise of $40 trillion, the B3W has so far yielded a paltry $6 million in global infrastructure construction. Whereas China’s BRI did not promise trillions of funds to China’s friends and allies, it has already sunk almost a trillion dollars in brick-and-mortar infrastructure projects around the world.

Let’s turn the focus to Africa. The majority of the world’s poorest and developing countries are spread across this continent. We are the central focus of this development finance competition between the West and China. If we need to choose a reliable partner, given the above delineation of how the B3W and BRI promise versus how they have performed, where should we fall?

As we seek to unlock our development potential by tapping into financial assistance to jumpstart our industrialisation, let us not lose sight of the dynamics involved by the two major development finance funders, China and the United States.

The BRI is already directly seen to be bridging the gap of Africa’s infrastructure deficit which is reported to be about $130-170 billion annually. We need all the financing we can find to close this gap since our development needs are many.

This is where the B3W initiative would come in. It presents us with an opportunity to diversify our sources of development finance. The problem only arises from the signature conditions that come with Western funding. The well-meaning, well-sounding terms that espouse democratic governance values and transparency as prerequisites for qualifying to receive this finance. A lot has been written and said about the mismatch between the focus on these values as opposed to the impact which that focus makes on the ground. Unless the West is capable of learning from the futility of its conditional foreign aid to Africa and is willing to risk a blind investment with the understanding that different societies evolve with different norms and habits which may change as they achieve economic development, insisting on these preconditions will yield nought.

As Africa, we need to leverage both the BRI and the B3W initiatives by aligning the investment that comes from them with our national development priorities. If we are not clear on those priorities, it doesn’t matter how much money will be thrown at us, it won’t impact our people. But the choice is in our hands.

The Writer is a senior research fellow at the Development Watch Centre.

 

Understanding the Belt and Road Initiative

Posted on by Nnanda Kizito Sseruwagi

Probably you have heard about it. Probably not. What is it? Let us first understand what it isn’t. Many initiatives from China suffer from being misunderstood, even at the highest echelons of policy experts around the world. This is due to the saturation in public media internationally by Western propaganda and culture, which has bred most of us. We are therefore predisposed to be suspicious of any agenda, idea, initiative or policy from “others” i.e. not the collective West. That’s why it’s important to begin by explaining what the Belt and Road Initiative (BRI) has been disarticulated to be.

Firstly, it isn’t about Debt Trap Diplomacy. BRI has been grossly misrepresented in the media as China’s means to propagate an empire across the globe by intentionally loaning developing countries sums of money they cannot repay. And that in default, China will turn around and attach national assets and gain strategic control of countries’ resources. Not only is this an oversimplification of the complexities involved in the financial architecture of BRI, but there is also no evidence found for a single national asset auctioned to China by any developing country that defaulted on a loan.

What is widely available is evidence where China has written off billions of loans owed to China by African countries including forgiving interest free loans that reach maturity. For example, in 2022,  China announced debt cancellation of 23 loans for 17 African countries. Also, a study by Deborah Brautigam, the director of the China-Africa Research Initiative at Johns Hopkins University concluded that between 2000 and 2019, China restructured about $15 billion in African debt adding that to date, no evidence that China has been involved in any asset seizures.

Secondly, some critics have expressed concerns that misunderstand the BRI as a subtle strategy that China is employing to pursue military interests. This might be more a reflection of what those critics would have done and less to do with China’s primary goal. It is in China’s interest and strategy for long-term success as a nation to maintain its founding ideals of peaceful coexistence and mutual respect for all nations. Building its military muscle would threaten a global conflict with America and it has nothing to gain from such a catastrophe, yet it has everything to gain in pursuing economic success.

Having dispelled the major misconceptions and misrepresentations of what BRI isn’t, let’s understand what it is. The Belt & Road Initiative is ironically China’s promotion of a Western-born idea and process of globalisation. It is generally agreeable that globalisation is synonymous with global Westernisation, which might be why the West generally criticises China for BRI because it is a way of China overtaking them on their own game. The BRI is a restoration of the ancient Silk Road Economic Belt and 21st-Century Maritime Silk Road Development Strategy.

This initiative is designed to increase global connectivity, primarily through constructing gigantic infrastructure projects. Its broader aim is to link Asia, the Middle East, Africa, and Europe via railways, highways, sea ports and other infrastructure and trade channels. By 2023, over 150 countries and about 75 percent of the global population had signed up under the initiative.

BRI’s stated objectives include; constructing a unified large market, making full use of both international and domestic markets through cultural exchange and integration, enhancing mutual understanding and trust of member nations, and creating innovative patterns of capital inflows, talent pools, and technology databases. The project also intends to fill the infrastructure gap in developing countries which promises us increased economic growth.

To become a member of BRI, countries sign a memorandum of understanding with China regarding their participation in it. The Government of China maintains a profile of all member countries and Xinhua News Agency, China’s state media house, releases a press statement whenever a memorandum of understanding related to the Belt and Road Initiative is signed with a new country.

Financing of BRI mainly comes from the Chinese government. It has injected billions of dollars into Chinese public financial institutions, such as the Chinese Development Bank (CDB), the Silk Road Fund (SRF) and the Export-Import Bank of China (EXIM). As policy banks, these enjoy low borrowing costs given that their bonds are Chinese government debt with very low interest rates.

The Central Bank of China also lends cheaply to both Chinese and foreign companies working on BRI projects. Multilateral financial institutions, such as the Asian Infrastructure and Investment Bank (AIIB) and the New Development Bank (NDB), Commercial banks, such as the Industrial and Commercial Bank of China (ICBC), China Construction Bank, and the Agricultural Bank of China also provide loans and financial services for this initiative. China has also established bilateral agreements with some member states to finance BRI projects through concessional loans (loans characterized by more generous terms than market loans e.g. below-market interest rates, long-term grace periods etc.), grants, or other financial instruments. It should be noted that BRI projects’ financing mechanisms may vary per project specification, the country involved or the type of infrastructure being developed.

Cynics have not spared critiquing the BRI. Most of its critics are policymakers from non-participant countries, especially the United States. They have called it a plan for a Chinese-centered international trade network to make it unpopular. In fact, panicking about the success of BRI, the United States, Japan, and Australia formed the Blue Dot Network (BDN) in 2019 to support infrastructure investments around the world. As though BDN wasn’t effective, in 2021, Western nations comprised under the G7 introduced another initiative called Build Back Better World (B3W). As developing countries, let us cautiously navigate how to achieve our own interests from this project finance competition among global powers.

The writer is a Lawyer and Research Fellow at the Development Watch Centre.

China is Shifting To A Green Belt And Road Initiative In Africa

Posted on by Admin

By Steven Akabwayi

When I was researching China’s policy on climate, a friend of mine recommended to me a book titled “China Urban Evolution by Austin Williams”, in the book, Austin writes about the mythological China character known as “Yu the Great”, Yu was a founder of the Zia dynasty between 2100 to 1600 BC, in the book, William narrates how Yu was faced with a dangerous environment catastrophe during his time, amidst this potential devastation, Yu built flood defenses, rerouted rivers, dredged channels, constructed canals and contained those forces that threatened his community.

In doing so not only did Yu manage to contain the floods, but also the ranging waters were channeled towards irrigating the fields leading to agricultural plenty. This is what most scholars compare to what modern-day China under President Xi Jinping is doing towards addressing the climate change problem.

When President Deng Xiaoping took over power in China during the 1970s, as a reformist leader, he implemented a series of economic policies that transformed China’s economy, his revolutionary policies often referred to as “Deng Xiaoping theory or Dengism” aimed to transform China from a centrally planned economy to a market-oriented socialist system.

Under these reforms, China had a great hunger for development it was willing to undertake whatever means possible to achieve economic prosperity.

One of the guiding diplomatic philosophies of President Deng Xiaoping was “It doesn’t matter whether the cat is black or white for as long as it catches the mice”.

This simple yet deep premise helps to explain the Chinese modus operandi in all spheres of its diplomacy including the environment during the economic revolutionary years.

China topped the charts of top emitters in the 2000s surpassing the United States, as a result of liberalizing her economy, China experienced a boom of industrialization and economic growth which led to the expansion of the industrial sector and construction that required large quantities of energy to operate leading to an increase in emission of Greenhouse gases.

During this era, China relied heavily on coal due to its abundance coupled with its affordability which made the CPC party pay less attention to coal’s impact on the environment.

Due to its newly established economic policies that favor development, China also experienced rapid urbanization and a strong middle class that led to an increase in energy demand, by the time President Xi Jinping took over power, China was already heavily Industrialized banning fossil fuels in large quantities which resulted in significant environmental changes, having achieved economic stability and drastically reducing absolute poverty, China had to consider a transition. It was no longer necessary to just chase the GDP growth rate; under President Xi Jinping era quality now mattered over speed and President Xi has consistently noted that China is now concerned with sustainable development where green development is at the centre of all.

In October this year, President Xi Jinping met world leaders and representatives from over 130 countries in Beijing to mark the 10th anniversary of the Belt and Road Initiative. The forum was held against a global backdrop of the pandemic’s lingering impacts, increasing effects of climate crises and environmental degradation, and an economic slowdown. These factors have contributed to rising debt in countries where BRI projects are implemented, constraining their ambitions for greater infrastructure connectivity and agency in their own development and green transitions.

Just like it has been in the previous forums, Africa was well represented with over 5 heads of state including Kenya, Ethiopia, the Republic of Congo, Mozambique, and Egypt presidents attending in person and top of the agenda was climate.

In his opening remarks, President Xi Jinping pledged to finance and roll out more signature projects with more priority appropriated to lower risk and more socially and environmentally impactful projects announcing over U.S. dollar 100 billion in new funding for Belt and Road Initiative cooperation projects

Among the smart projects to be Funded in Africa under the Belt and Road initiative include a 25 MW photovoltaic solar power plant in Burkina Faso, a 10,000 MW solar power plant in Ethiopia, 50 MW wind farm in Lumu area Kenya among others. Investing in these considerably small yet smarter projects signifies the importance China attaches to green development among African countries especially those that are signatories to the Belt and Road Initiative

Steven Akabwayi is a Research Fellow at the Sino-Uganda Research Centre.

 

Belt And Road Initiative: 10 Years of Transforming Africa

Posted on by Admin

By Steven Akabwayi

In 2013, Chinese President Xi Jinping launched the Belt and Road Initiative (BRI) which emerged to be one of the most significant and greatest projects of the 21st century according to experts.  By June 2023, over 152 countries and organizations had signed agreements related to BRI including the African Union as bloc.

The BRI was primarily established to link East Asia and Europe through physical infrastructure but was later expanded to Africa and other continents by the Chinese government significantly broadening the Chinese economic foothold on the continent.

Just two weeks ago, world leaders gathered in Beijing for China’s Belt and Road initiative, this was its third event of this kind since its official flag-off by President Xi Jinping in 2013, over 130 countries participated in this summit with analysts noticing China’s ambitions to solidify its relations and engagements more towards the global south as ties between Western countries and Beijing continue to take a drastic rift.

From the African perspective, the Belt and Road Initiative is beyond major infrastructure projects, Africans view the Belt and Road Initiative as a vehicle for improving people’s livelihoods and standards of living and a way of sharing China’s development dividends with other countries especially those in Africa where there is great hunger for development.

The Belt and Road initiative also embodies China’s vision of a win-win foreign policy approach that envisions building a global community of shared future as President Xi Jinping proclaimed in this years BRI summit.

While speaking at the second Belt and Road Initiative Forum for International Cooperation in 2019, UN Secretary-General Antonio Guterres acknowledged the critical linkage of the Belt and Road Initiative with the 2030 agenda.

He noted that the scale of the Belt and Road Initiative’s planned investments offers a meaningful opportunity to contribute to the creation of a more equitable prosperous world for all given that the five pillars of the Belt and Road Initiative are intrinsically linked to 17 sustainable development goals, these are conceptual pillars that can be translated to real world progress for all people mostly in Africa addressing poverty, hunger, climate change among others.

As one way of addressing climate change which ranks number 13 on the UN’s 17 Sustainable Development Goals(SDGs), China has expressed commitment to green development and promoting environmentally friendly projects.

“It doesn’t matter whether the cat is white or black, for as long as it catches the mice” This was the point of view Deng Xiaoping put forward as a guiding philosophy to develop the economy and restore productivity, however, when Xi Jinping took over in 2013, he reversed this view citing that for the cat to catch the mice, the later has to be green. This potrays  the emphasis and priority he accords to a sustainable clean green environment.

Currently, China is the world’s leading investor in Greenfield energy and infrastructure systems across the developing world the same climate-friendly developments have been intensified under the Belt and Road initiative by promoting renewable energy and clean sustainable transportation systems.

On the issue of poverty, China has facilitated a reduction of unemployment in Africa with the Belt and Road initiative projects established, recently china’s leading television CGTN released a documentary that starred a 29-year-old Ugandan youth named Bless whose life was transformed after securing an entry job at karuma hydroelectric power station in Kiryadongo district . According to the documentary, while working at the station Bless gained a set of professional skills that laid a solid foundation for his future development and light a path to a better future for other Ugandan youth.

Contrary to the Western narrative, China’s Belt and Road Initiative is not a debt trap for African countries, china a developing country Sees African countries as its fellows given their shared history, and the Asian economic giant comes intending to provide the assistance that is necessary for Africa development,, through its journey of development, China has identified infrastructure as a critical component for any countries development .

China contributes significantly to the development of infrastructure in Africa which has been for long been the main constraint of achieving economic transformation on the continent.

In less than a decade, Africa has witnessed the establishment of mega airports, roads, and railways to overlapping bridges that run overseas and across rivers connecting faraway places, ports, and large cities.

As far as infrastructure is concerned in the East African Community, China has been a key player through connective finances and technology exchange.

Some of the recent famous projects that have been launched under the Belt and Road Initiative in Africa as a whole include the Bagamoyo port in Tanzania which aims at enhancing Tanzania’s maritime capabilities and facilitating regional trade.

There is also a standard gauge railway in Kenya connecting port Mombasa to the capital Nairobi, the Lamu Port that aims at connecting Kenya with South Sudan and Ethiopia, Suez Canal Economic Zone in Egypt, port of Djibouti among others.

Steven Akabwayi is a Research Fellow at the Sino-Uganda Research Centre

 

 

 

China’s Belt And Road Initiative is Good for Uganda and the Region at Large

Posted on by Admin

By Steven Akabwayi

 

“Uganda and China have established deep-rooted and unshakable political mutual trust that have seen remarkable achievements in bilateral Economic Cooperation” These were President Museveni’s remarks in 2019 in an interview with People’s Daily an official Newspaper of the Central Committee of the Chinese Communist Party (CCP).

After approving the national vision statement in 2007 that aimed at “ a transformative Ugandan society from a peasant to a modern prosperous country within 30 years”.

Uganda’s National Planning Authority in conjunction with other government institutions and relevant stakeholders developed the Uganda Vision 2040 and launched it in 2013 to have the above statement materialize.

The Uganda Vision 2040 is being implemented under short and medium-term National Development Plans (NDPs) With its fundamentals encompassing infrastructure of all forms including energy, transport, and water among others.

As the Belt and Road Initiative marks 10 years since its flagship in 2013 by Chinese President Xi Jinping, the initiative has already had tangible impacts on the ground not only within Uganda but also across other neighboring East African Community countries.

The Belt and Road initiative envisions bringing together world economies through an overland of infrastructure, trade, and investment,people-to-people exchange, and connecting cultures.

Within its first decade, the Belt and Road initiative has helped bankroll a boom in Uganda’s infrastructure establishing mega hydropower projects, roads, and airport expansion among others despite Uganda’s national budget constraints.

In his 2019 visit to China to attend the Forum on China-Africa Cooperative (FOCAC) a summit that brought together over 40 African heads of state, President Museveni and his Chinese counterpart Xi Jinping signed a memorandum of understanding within the cooperation framework of the BRI.

This development aimed to serve as a strategic and policy foundation for the Belt and Road initiative cooperation between China and African countries in particular Uganda and China.

On infrastructure development, it would be unjust not to mention the magnificent Kampala-Entebbe express highway that is regarded as Uganda’s gateway to the world given its connectivity to the largest International Airport in the country.

The Entebbe -Kampala express highway has eased transport from Entebbe to Kampala and vice verse the distance that has been taking two hours on average has been narrowed to less than 30 minutes.

In 2019, President Museveni launched the Isimba hydropower plant another major project that falls under the Belt and Road Initiative in Uganda. During its launch, President Museveni hailed China for being a reliable development partner for Africa and Uganda in particular.

He pointed out that the technical and financial muscle extended to Uganda by China in building this power plant distinguishes China as a genuinely committed development partner.

The Isimba hydropower plant added 183 megawatts of electricity to Uganda’s National Grid an increase of 18.6% to the country’s generation capacity.

Uganda is also gearing up to Commission Karuma power plant which is said to be the largest power project in Uganda, the 600 MW project was flagged off in December 2013 at a price of U.S. dollar 1.7 billion and is expected to lower the price of electricity in the country, connect rural communities to the National Grid and bolster Uganda’s match towards industrial revolution a key component under Uganda vision 2040.

The Belt and Road Initiative impacts have not exclusively materialized in Uganda but also across other East African countries, since gaining their independence, regional integration has been widely regarded as a vital component for facilitating economic development by East African countries.

In this year’s independence speech, President Museveni emphasized his longing desire for East African intergeneration as a critical component for development.

“Since independence, our grandfather Julius Kambarage Nyerere was telling us to integrate otherwise we wouldn’t develop but people were asleep they didn’t know what he was talking about”, President Museveni said.

“We need regional socio-economic, and political integration. This is to support wealth creators, we wealth creators need regional integration, the parasites who consume don’t care and only talk about tribes” he added in another bitter statement.

As one way of achieving the integration goal, the East African Community bloc has pushed for the establishment of a single market supported by an internal free trade movement, and monetary union, that will eventually lead to a political federation.

This has precipitated the need for infrastructure improvement and expansion as a key pillar towards achieving optimal integration.

As far as infrastructure is concerned in the East African Community, China has been a key player through connective finances and technology exchange.

Some of the recent famous projects that have been launched under the Belt and Road Initiative in East Africa as a whole include the Bagamoyo port in Tanzania which aims at enhancing Tanzania’s maritime capabilities and facilitating regional trade.

There is also a standard gauge railway in Kenya connecting port Mombasa to the capital Nairobi, the Lamu Port that aims at connecting Kenya with South Sudan and Ethiopia among other projects.

Steven Akabwayi is a research fellow at the Sino-Uganda Research Centre

Xi’s Third Belt & Road Forum Speech Re-affirms China’s Commitment to Building a Community of Shared Prosperity

Posted on by Allawi Ssemanda

Last week, the world leaders gathered in Chinese capital Beijing as leaders from over 150 countries, and representatives of international organisations met in Beijing for the Third Belt and Road Forum for International Cooperation. The event also marked 10 years of the Belt and Road Initiative (BRI). Jointly implemented by participating partners, BRI which was initiated by China in 2013 is a high quality public good whose benefits are shared by the world. The project delivers high-standard, sustainable and livelihood-enhancing outcomes globally appreciated.

The project is highly commended for its contribution towards global infrastructure development which has greatly contributed to global connection and easing of trade and the movement of goods and services which has contributed to uplifting of 40 million people out of extreme poverty across BRI economies. This makes the initiative a textbook example of win-win cooperation and shared prosperity which China has always advocated for.

Stressing that the Belt and Road cooperation is based on the principles of “planning together, building together, and benefiting together,” President Xi explained that the BRI “transcends differences between civilizations, cultures, social systems, and stages of development,” adding that “it has opened up a new path for exchanges among countries, and established a new framework for international cooperation.”  “The BRI represents humanity’s joint pursuit of development for all,” observed President Xi.

With this, one can argue that President Xi was spot-on considering study reports about BRI conducted by different independent organisations including major think tanks and the World Bank (WB) whose conclusions contend that BRI is contributing to global development.

The other key area President Xi noted in his speech is the progress the BRI has achieved in green and low-carbon development and addressing climate change challenges. He revealed that this huge public good initiative does not only look at addressing today’s needs by improving connectivity through infrastructure development but it is also keen to addressing environmental concerns as a way of addressing climate change which is key for sustainable development as China continues her efforts of ensuring shared prosperity for mankind. “China has issued documents such as the Guidance on Promoting Green Belt and Road and the Guidelines on Jointly Promoting Green Development of the Belt and Road, and set itself the ambitious goal of forming a basic framework of green development through BRI cooperation by 2030,” Xi announced.  While critics of the BRI have always wrongfully claimed that the initiative is silent about environment, President Xi revealed; “China has also signed an MoU with the United Nations Environment Programme on building a green Belt and Road…, reached environmental cooperation agreements with more than 30 countries and international organizations, launched the Initiative for Belt and Road Partnership on Green Development together with 31 countries, formed the Belt and Road Initiative International Green Development Coalition with more than 150 partners from 40-plus countries, and established the Belt and Road Energy Partnership with 32 countries.”

Further, President Xi also talked about debt sustainability among BRI economies (countries that signed up for the BRI). He explained different ways China has put in place through consultations with partner countries as a way of managing debts so that the project supports wholesomely partner countries without causing economic stress. He stressed that basing “on the principle of equal participation and benefit and risk sharing, China and 28 countries approved the Guiding Principles on Financing the Development of the Belt and Road, encouraging the governments, financial institutions and enterprises of participating countries to attach importance to debt sustainability and improve their debt management capability.”

With aim of avoiding debt burden to BRI economies, China came up with debt sustainability framework for low-income countries. This framework which is endorsed by the World Bank and International Monetary Fund when extending funding and loan facilities looks at among others actual conditions of individual countries. Additionally, while implementing BRI projects, “China has prioritized economic and social benefits and provided loans for project construction based on local needs and conditions. The key areas of investment are infrastructure projects designed to increase connectivity, and projects for public wellbeing urgently needed in participating countries. These have brought effective investment, increased high-quality assets, and boosted development momentum,” Xi stressed.

It is not a surprise that several studies continue to credit BRI projects as catalysts for social-economic development of not just BRI economies but also countries that did not sign up for it but are in corridors of the BRI.  For example, a study by WB conducted in 191 countries, titled “How Much Will the Belt and Road Initiative Reduce Trade Costs?” concluded that the Belt and Road Initiative projects have made trade easier in BRI participating countries by “reducing shipment times and trade costs at country-sector level.”

Examining trade figures from 191 BRI economies and those in BRI corridors and 1,818 cities in BRI economies only, the study concluded that “for Belt and Road economies, the change in shipment times and trade costs will range between 1.7 and 3.2 percent and 1.5 and 2.8 percent, respectively.” Further, the study found that non BRI economies or countries that did not sign up for the BRI are equally benefiting from the initiative stressing that it has led to “reduction in shipment time ranging between 1.2 and 2.5%,” and reduced “trade costs of up to 2.2%.” Also observed by the study was that BRI economies and those countries where BRI projects go through or BRI corridors benefited the most with “shipment times along these corridors decline by up to 11.9% and trade gains by 10.2%,” noted the WB study.

Generally, there is a consensus that the BRI is a public good whose benefits are being enjoyed by a great percentage of mankind irrespective of our respective countries. For example, between 2013 and 2022, the cumulative value of imports and exports between China and BRI economies reached US $19.1 trillion which translates to 6.4% average annual growth, according to a white paper (WT), “The Belt and Road Initiative: A Key Pillar of the Global Community of Shared Future” released by China’s State Council Information Office this month. In this WT, figures indicate steady growth in two-way investments between BRI economies and China which reached USD $280 billion. As of 2022, the value of both imports and exports between BRI economies and China reached USD 2.9 trillion translating to 45.4% of China’s overall foreign trade which represents 6.2% increase if compared with 2013; while the overall value of imports and exports of Chinese private enterprises to BRI economies grew past USD 1.5 trillion which translates to 53.7% of trade between China and BRI economies for the said period.

From her successful experience, China understands the role infrastructure plays while pursuing sustainable development. As two Chinese adage contend; “要想富” , “先修路”; “Better roads lead to better life.” and “Build roads if you want to get rich,” it is clear that it is China’s thirst to contribute in building a community of shared future for mankind in the new era, that with hope of mutual benefits, Beijing embarked on funding this huge public good project  the Belt and Road Initiative to fasten efforts of achieving shared prosperity for mankind in the new era.

Allawi Ssemanda, PhD is Executive Director Sino-Uganda Research Centre and a Senior Research Fellow at the Development Watch Centre.

A Decade of Lighting Nations Through Energy Infrastructure Development: Recounting Fruits of the Belt and Road Initiative

Posted on by Allawi Ssemanda

On average, an African woman spend up to 5 hours per day collecting firewood. A study funded by Finnish ministry of foreign affairs on Modern Cooking Facility for Africa (MCFA) contends this prevents women and young girls from engaging in productive economic activities, school and at times exposes them to physical violence. MCFA attributes this challenge to lack of access to affordable and clean cooking facilities which can largely be explained by lack of electricity on the continent especially in rural areas.

Relatedly, the Word Bank (WB) indicates that approximately, one billion people from Sub-Saharan Africa and South Asia have no access to electricity. This indicates a huge barrier to socio-economic transformation of world’s significant population portion and has both direct and indirect effects on development efforts like hindering or slowing expansion of development indicators such as health, poverty reduction programs, education, food security among others.

However, infrastructure financing including energy infrastructure is a very expansive venture which involves huge amounts of funds. A study by the WB titled “why we need to close the infrastructure gap in sub-Saharan Africa,” underscores this stressing that infrastructure funding gaps are bottlenecks to Africa’s economic take-off. The African Development Bank (ADB) also stresses the need to reduce the region’s infrastructure funding gaps for the continent to achieve its development goals putting needed budget to $130-$170 billion annually.

Despite this, international creditors and commercial loans meant to fund such projects in developing countries have significantly reduced over a period. Other funders especially from the Western world are largely interested in funding areas like administration and so-called democracy programmes, leaving out key sectors like energy and transport infrastructures which are key for social economic development to be achieved. For example, World Bank which used to spend 70% of its funding in infrastructure significantly reduced this to about 30%.

In Uganda, the government has been working hard to increase electricity production capacity as a sure way to increase its accessibility countrywide and China has been a reliable partner in this endeavour with Beijing funding the country’s two major hydropower projects under the Belt and Road Initiative (BRI). Also, under the same arrangement, China is funding Uganda’s rural electrification program.

Through EXIM bank of China, Chinese government offered concessional loan to fund 85% cost of the Karuma Hydropower project, while Uganda government is meeting the remaining 15%.  A Chinese firm SinoHydro Cooperation is undertaking the project which is Uganda’s biggest hydropower plant and possibly, the 14th largest hydropower dam in the world. Upon completion, the project which is now 99.45% complete will produce 600MW which will push the country’s hydropower generation to 1,868 MW. The government hopes this will help the country to increase power accessibility countrywide reduce power tariffs in the long run.

Currently, 200 megawatts have been connected to the national grid. Upon completion, it will add 44.6% to Uganda’s increased power supply effectively helping more Ugandans to get connected and lowering power tariffs and advance the country’s goal of industrialization drive.

Isimba hydropower dam is another project funded and constructed by Chinese government still under BRI arrangement.  The dam which started its commercial operation in 2019 was formally handed to the Uganda government on 31st March 2019. As of May 2023, it had produced about 3.98 billion KWH generating approximately 165 million USD revenue to Uganda government. Today, Isimba power tariffs is at 4.16 cents per kilowatt hour (KWH).

Also, Uganda’s Rural Electrification program which aims at increasing the country’s access to electricity to is 90% on course. The program which is funded by Chinese government as a concessional loan is being implemented by a Chinese firm TEBA has already connected over 170,000 Ugandans in rural areas to national grid.  It is also under the BRI arrangement.

From Chinese experience, we learn that infrastructure development is key for any country to achieve its development goals. As Asia Development Bank chief, Jin Liqun once noted; “The Chinese experience illustrates that infrastructure investment paves the way for broad-based economic social development, and poverty alleviation comes as a natural consequence of that.” There is no doubt that China gives us a perfect case of what investing in infrastructure can do for countries seeking socio-economic development.  The good news is that as Beijing pursues building a community of shared future, it has been willing to share and support willing countries by investing in their infrastructure development as a way of backing their economic take off. BRI has been vital in this journey.

Uganda’s vision 2040 statement which seeks to see “a Transformed Ugandan Society from a Peasant to a Modern and Prosperous Country within 30 years” lists increased generation of affordable power as a magic bullet for the country’s socio-economic take off. To achieve this, Uganda must increase its electricity per capita consumption from the current 215 kWh to at least 3,668 kWh. This to happen, we must raise our power generation capacity to at least 41,738MW and increase access to national grid to at least 80%.

Considering figures and reality in the country, it is arguably incorrect one to talk about Uganda’s electrification program without mentioning China’s contribution. Through concessional loans under the Belt and Road Initiative, China has supported Uganda’s energy infrastructure sector right from Isimba to Karuma hydropower project and to Uganda’s rural electrification program. Given importance of this sector, by all means, China’s contribution to Uganda’s socio and economic development cannot be underestimated. As we mark 10 years of Belt and Road Initiative, as a Ugandan and African, I cannot shy to say China-Africa relations have produced real results and the cooperation is a textbook example of win-win cooperation and a positive effort towards building a community of a shared future for mankind in the new era.

Allawi Ssemanda is a Senior Research Fellow at the Development Watch Centre

 

 

 

 

 

The Belt and Road Initiative Celebrates 10 Years: The Journey of China and Uganda Cooperation in Summary

Posted on by Alan Collins Mpewo

By Alan Collins Mpewo

Looking to the earlier years before 2023 looks nearer, like yesterday, and yet when the Belt and Road Initiative (BRI) was launched in 2013, making it thus far would seem unachievable. It is 10 years now that the initiative has endured. It has withstood all possible forms of hurdles along the way, especially from the foreign antagonism towards China. The outright goal of BRI remains connecting the world and easing trade and movement of goods and services. Akin to the silk route that connected the major parts of Euro-Asia, the BRI has done much in bringing various countries together, with a record connection of more than150 countries and over 30 international organizations have signed up for the project. It also covers a third of the world’s GDP and more than three-fourths of the countries in the world.

To date, BRI has worked on more than 3000 cooperation projects among BRI economies, which has resulted into easing of trade and movement of goods and services resulting into investments of close to one trillion USD which has helped in job creation among participating countries and also by extension helped in reducing poverty.

Infrastructure development with focus on roads, railways, ports, airports and energy infrastructure are some of major projects the BRI has supported over the past 10 years.

The infrastructural set-up in Africa by China speaks for itself. It’s from that point of line that Uganda, just like other few countries, can now be certain that the oil dream is yet to be achieved. Chinese capital has been a go by, and what is most interesting, is that China levels granting access to their manpower and technology. This has been done with Uganda following the principle of mutual benefits and respect. China understands the fact that you can’t have sustainable development without proper infrastructure. Indeed, Chinese people have two common saying that; “要想富” , “先修路” loosely translated; “Better roads lead to better life.” and “Build roads if you want to get rich.” I am convinced right understanding explains China’s historic success story and as a way of building a community of shared future for mankind in the new era, China is sharing their experience supporting willing partners through especially through the Belt and Road Initiative which has made infrastructure development a priority.

It should be understood that Uganda being one of the first African countries to establish relations with China, has benefited more than most of her counterparts. Though it is still work in progress, with Chinese hand, today, Uganda has descent road networks spread almost in all parts of the country from the North to south, East to West and Central. China’s financing to Uganda has not only been in the road infrastructure, but also other projects such as in energy and gas. Karuma and Isimba hydropower dams are part of the major successes under this initiative. For a country like Uganda that has seen a great shift in its economic priorities, industrialization has always been a major factor to consider. Because of this, electricity supply needed to be increased across all parts of the country. After the commissioning of the Isimba dams, Uganda’s electricity capacity has grown and it is expected the country will have more especially after commissioning the nearly complete Karuma dam.

Before the Kampala-Entebbe express way was completed, transportation to and from Entebbe which doubles as Uganda’s aerial entry point was filled with much time spent on road. This equally had an effect on those who would later choose to access further areas via Lake Victoria, accounting for the much time spent on road. The story has changed in great measures. The new express way was financed by China with the understanding that time spent would be less, in order to expedite transportation of services and goods to the Airport so that they would see their export to the international market. With completion of Entebbe expressway, the time spent on the road is now about 30 minutes down from about 2 hours during heavy traffic jam.

Industrialization is not known anymore for what it was in Uganda, many years ago. Uganda had for a long time felt comfortable dealing with foreign made products than its locally made. This obviously is accounted for by many factors such as less expertise, technological challenges, and finances, and yet, Uganda’s potential to produce raw materials is unquestionable. China’s belt and road initiative has greatly changed that status quo. Organization is now a virtue, and this is seen from the scattered industrial parks by Chinese investors. This was long overdue because there needed to be a formal set-up for the industries and their professionals to converge together and carry out business while enjoying benefits granted to them in a centralized environment.

It goes without saying therefore, that while all the above are often cited, that the oil dream is yet to become the greatest success story of the two countries. The Albertine region of Uganda will soon be the hub that supplies oil, joining other global players. It cannot be said enough, of what the proceeds of the oil exportation can do for Uganda. Education, medical access, industrialization, energy and gas, and much more, if the finances are well used. The bottom line is the reduction in the unemployment rate of Uganda. Uganda’s unemployment rate stands almost equal to the employment rate, which leaves questions as to what exact extent can it be tackled. Since the growth of Chinese projects, unemployment has greatly reduced and more success is yet to be realized with the coming up of more projects under the initiative.

Much can be said about the Belt and Road Initiative and its impact to Uganda but what stands out presently is the fact that it has withstood for 10 years while positively impacting not just Uganda but over 150 Countries. It is with sincerity that the key players keep the pace for more years to come, because there is more to gain, than losing.

Alan Collins Mpewo is a Senior Research Fellow, Development Watch Center

Belt And Road Initiative at 10: A Decade of Connectivity and Shared Prosperity

Posted on by Allawi Ssemanda

This month marks 10 years since Chinese President, Xi Jinping put forward the idea of the Belt and Road Initiative (BRI). In October 2013, President Xi who doubles as the Secretary General of Chinese Community Party (CPC) explained that the initiative then seen as restoration of the ancient maritime silk road would help in facilitating trade by easing movement of goods and services, and connecting the world through infrastructure development.

Today, from Latin America to Caribbean, Middle East to Asia, Africa to Europe, more than 150 countries and over 30 international organizations have signed up for the project. This means, more than a third of the world’s GDP and more than three-fourths of the countries in the world are part of the BRI. Such support is not a surprise; extensive consultation, joint contribution and emphasis on shared benefits are key principles of the BRI.

It is now clearer that BRI is a high-quality public good initiated by China, and jointly built by all participating partners. Its wide reception is a testimony; it is delivering high standard, sustainable and livelihood-enhancing projects to all people; treating all participating countries as equal partners, promoting economic integration and connection.

BRI has become a household name due to its contribution of connecting the world and easing trade and movement of goods and service resulting into investments of nearly one trillion USD, brought over 3000 cooperation projects, and created over 420,000 jobs in countries along the routes of the project with multiplier effect helping lift 40 million people out of absolute poverty.

Driving on the five Connectivities or “five Cs”; policy connectivity, infrastructure connectivity, trade connectivity, financial connectivity, and people-to-people connectivity, BRI has positively contributed to the well-being of humanity world-over. Recent empirical study shows that the BRI has significantly improved global trade and reduced costs involved. A World Bank (WB) study conducted in 191 countries, entitled “How Much Will the Belt and Road Initiative Reduce Trade Costs?” concluded that BRI projects have made trade easier in BRI participating countries by “reducing shipment times and trade costs at country-sector level.”

Analysing trade figures from 191 countries (those that signed up for BRI and those in corridors of BRI projects), 1,818 cities for BRI economies only (cities from countries that signed up for BRI), the WB concluded that “for Belt and Road economies, the change in shipment times and trade costs will range between 1.7 and 3.2 percent and 1.5 and 2.8 percent, respectively.” Interestingly, the same study observed that even countries which did not sign up for BRI are benefiting. BRI projects world-over have seen “reduction in shipment time ranging between 1.2 and 2.5%,” and reduced “trade costs of up to 2.2%.” The study observed that in countries where BRI projects are located and or along the corridors, those countries gained the most with “shipment times along these corridors decline by up to 11.9% and trade gains by 10.2%”. While it notes that positive results of BRI projects “are magnified by policy reforms that reduce border delays and improve corridor management,” all is possible because BRI exist.

From Africa to Asia, to Europe, Middle East and Americas, under the Belt and Road Initiative, the economic cooperation between China and the rest of the world has by and large withstood the test of uncertain factors against the backdrop of the pandemic time and by all standards, it is safe to say BRI is still enjoying a good momentum of steady progress of enabling factors that are key for the world to enjoy shared prosperity.

Despite all the positive contribution of BRI, the project has been a target of the West especially the U.S. Strangely, without facts, Washington has consistently tried to promote narrative of the so-called debt trap and claims of lack of transparency from Chinese side on financing of BRI projects. However, critics claims remain baseless as different studies from independent bodies and researchers continue to rate the project positively. For example, while critics accused BRI of carrying risks, a World Bank study entitled; “Belt and Road Economics: Opportunities and Risks of Transport Corridors” concluded that there are more benefits for BRI participating countries and the entire world and that risks involved were minimal compared to benefits.

In Africa for example, projects under the BRI have greatly contributed to both social and economic growth of a number of countries. A study by the Africa Policy Institute found that, under BRI, a number of modern infrastructure projects in the Horn of Africa (HoA) and other parts of the continent increased, contributing to thousands of employment opportunities and other multiplier effects. The study also highlights Kenya’s modern Standard Gauge Railway (SGR) connecting Mombasa and inland port of Naivasha funded under BRI. Ethiopia-Djibouti standard gauge railway which connects the landlocked Ethiopia to Djibouti port is also credited for improving transport in the region. The project is already showing greater signs of sustainability with the 752.7-km railway line credited for contributing over 86.13 million U.S. dollars in revenue in 2021, which was up by 37.5% if compared to 2020 revenue collections.

In Uganda, infrastructure connectivity is visible with Kampala-Entebbe Expressway, (KEE) the country’s gateway to the rest of the world being operational. the completion of KEE cut commuting route between the country’s capital, Kampala and Entebbe international airport from a two-hour long drive within long queues of traffic jam to just 30 minutes. This is not to mention other projects funded under the same arrangements such as expansion of Entebbe International Airport, two hydropower mega projects; Isimba and Karuma among others.

Aside, critics of BRI on account of what they call putting more funds into infrastructure project should recognise that developing countries are faced with challenges of infrastructure funding. According to the African Development Bank (ADB), to meet her infrastructure funding deficits which is key for the continent to plan for its growing population and replace their ageing infrastructure, annually, the continent needs between $130-170 billion. This means; countries need allies willing to help in funding their infrastructure projects which BRI is exactly doing.

WB study “Why We Need to Close the Infrastructure Funding Pag in Sib-Saharan Africa” contends; if the region shrinks its infrastructure funding gaps, the region’s GDP per capital will grow by 1.7%. In otherwards, by implementing BRI in the region, China is already supporting Sub-Saharan African countries GDP growth by 1.7%. Should we castigate China or BRI for such because the U.S or a few politicians in Western capitals are “worried” or because they have refused to understand that BRI is a global public good? My answer is a resounding No.

As Bent Flyvbjerg, a Danish professor taught us; “Infrastructure is the great space shrinker, and power, wealth and status increasingly belong to those who know how to shrink space.” Now that BRI is with here, we should embrace it to improve infrastructure in our respective countries as we strive with allies like China to build a community of shared future for mankind in the new era of win-win cooperation.

Allawi Ssemanda, PhD is Executive Director the Development Watch Centre and Senior Research Fellow at Sino-Uganda Research Centre