Im scared for the countries getting caught in Chinas debt trap. With maintenance contracts being forced (for more than 90 years!), billions in outstanding loans in each country there is no way to climb out the hole. Everyone can see these extravaganza projects are not what Africa needs, but what China wants.
Extravagant projects are exactly how China got out of it’s poverty hole (and, if you think about it, also how a lot of Europe recovered post-WW2 as well).
Only in the US is infrastructure condemned so strongly.
indeed
There is no China debt trap. That’s just concern trolling western trolls invented
- https://www.theatlantic.com/international/archive/2021/02/china-debt-trap-diplomacy/617953/
- https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3745021
- https://www.eurasiareview.com/01022021-chinese-investment-in-africa-has-had-significant-and-persistently-positive-long-term-effects-despite-controversy/
- https://theconversation.com/china-and-africa-ethiopia-case-study-debunks-investment-myths-177098
- https://blogs.lse.ac.uk/gild/2021/01/26/how-chinese-investment-shape-new-growth-patterns-in-africa/
- https://www.asiafinancial.com/china-debt-trap-claims-in-africa-stem-from-us-rivalry-study
- https://www.sabcnews.com/sabcnews/chinas-infrastructure-investment-helps-fast-track-development-in-africa-expert/
African countries are foregoing Western investment because of the number of strings attached. Chinese loans are pretty straightforward: here’s some money, here’s a (very) competitive interest rate, and here’s how the infrastructure will be kept alive even if the country runs out of tax revenue to fund it. Critically, the project’s operation isn’t hindered by financial mismanagement and can keep delivering economic benefits to the region.
It isn’t quite like that.
China doesn’t give money to countries to build these projects. The money is given directly to Chinese State Owned Enterprises to build the projects. That can be a great way to keep costs low, but it also means there is no transfer of knowledge for building these of projects to locals.
Chinese deals are for a very long time, with some going for 100 years. China may also write the deals to trade for commodities instead of money, so there is risk that the commodity price goes up and China makes money on the deal.
Also, China makes a lot of these deals for China’s best interests. It could align with the host country’s interests, but not always. Of course, it isn’t like Western countries don’t do the same, but it is something to look out for.
I can see why countries would choose China as a partner to finance and build infrastructure, but it is important to know the fine print of the deal, or in this case, several deals.
Nobody’s forcing a country to sign a deal. Why does it matter that the project aligns with China’s best interests? The fact that the deal is signed means that both parties agree that it’s mutually beneficial… People aren’t running a charity.
And again, people assume transfer of knowledge like it happens between China and the US (two very well-educated countries)… But frankly, a lot of African countries are at the stage China was in right after the Cultural Revolution. You can’t simply transfer the knowledge of complex HSR technologies when most people don’t have the education needed to become a construction worker. There’s also the issue of experience: even the US, a country with an extremely highly-educated workforce, can’t build proper HSR (see: California HSR’s ballooning budget). It’s a difficult problem and African countries don’t have $100 billion dollars to spend on connecting Merced and Bakersfield.
The length of these deals is also not exactly the strong “gotcha” you seem to think it is. It’s a fact that a lot of African governments are rather unstable. With an outsourced maintenance scheme, the project remains viable through regime change. Plus, even stable governments like the US have shown that they have a tendency to aggressively underfund rail (see: Amtrak’s tens of billions of dollars worth of maintenance backlogs). The project is useless if it isn’t maintained, so why shouldn’t these countries sign that maintenance into effect now while they still have the power to do so?
The US has shown how to completely destroy a domestic passenger rail industry… People aren’t super keen on replicating that model with short maintenance contracts and “America First” policy.
Africa has plenty of well educated people in a variety of fields, what they don’t have is economic opportunities. Sure, Africa probably couldn’t sustain the entire project all at once, but they could very likely provide enough educated people to handle several lines.
Africa has a brain drain problem. Anyone well off enough to get a decent education but isn’t well connected enough to get into one of the few opportunities that exist immigrates to another country. India used to be the same way, but they’re finally starting to create opportunities to keep their people in the country, and the solution wasn’t mega projects funded and completed by a foreign country, but direct investment in local jobs. That’s also how China is doing it.
So if Africa wants long term prosperity, they don’t need a high speed rail service to be built for them, they need to build one themselves, and perhaps hire an outside firm to oversee it. If that means the can only build part of the system, that’s what they should do. It’ll take longer, but it’ll provide jobs and build expertise in the meantime and result in less total debt. They should focus on the most economically important links, and build the rest later.
The problem is that Africa isn’t a single entity. I’m absolutely sure that across the entire continent you could build a dream team of engineers… But in each country? That’s a bit more challenging, especially when your goal is to connect the continent.
This is even true in Europe, where each country has a different railway power standard that makes connecting their HSR systems very complicated.
But they can all agree to outsource it? Surely it’s not that much more work to convince member countries that DIY within the continent is better than outsourcing.
African countries are foregoing Western investment because of the number of strings attached
What strings?
here’s a (very) competitive interest rate
IMF loans are cheaper. Every person with two braincells will realize corrupt officials will take the chinese loans with higher interest rates because of the bribes. A 90 year maintenance contract is nonsense and you cant defend it.
Indeed, and China also does a lot of loan forgiveness because they want to establish long term mutually beneficial relationships as opposed to just strip mine these countries the way the west does.
Does Africa need full high speed rail now? Can it get away with designating the corridors, designing the geometry, and then designing cheaper rail? I feel like going straight to high speed, especially if it is mainly for freight connectivity, isn’t worth it.
I don’t see why Africa would invest in outdated technology when they can have high speed rail. There’s literally zero rationale to do that.
Because high speed rail requires costly viaducts that can make the project cost several times the price of a lower speed line.
I think the benefits of going high speed rail now would outweigh the negatives of upgrading at a later point.
It depends on the cost/benefit ratio.
Looking at Nairobi to Mombasa as an example, it looks like Nairobi to Kyumvi and Makindu to Mombasa could be designed and built as high speed rail as the terrain looks relatively flat.
However, there is a set of hills between Kyumvi and Makindu that will make the geometry of the rail a lot trickier. The cost of viaducts and tunneling through those hills could be significantly more costly than the rest of the project combined. For the expensive part of the rail, it may be better to build that part at a lower design speed that can get upgraded later.
China built a great high speed rail system, but a lot of people in China still use the traditional rail system due to ticket cost, and the population in China is wealthier than the average African. You also have the African rail system being designed to operate with freight, which is something that the Chinese high speed rail network wasn’t really designed to handle as much of.
The economics don’t seem to favor high speed rail now, so it may be better to design the system so that it doesn’t preclude high speed rail in the future.
I’m going to go out on a limb and guess that the actual economists in Africa have done the math here.
The summary isn’t detailed to go through how the system gets implemented. I also noted in another comment that it is would be wise to design the geometry of some segments to high speed rail standards if the cost increase due to tighter geometry requirements are negligible.
A continental high speed rail network is a great goal, but there are ways to implement the system that can yield faster benefits to Africans than just building the whole system to high speed standards at once.
Again, I have no idea why you’re assuming these countries haven’t done due diligence before embarking on a megaproject like this. A really weird premise to start from to be honest.
I’m assuming the same due diligence my country puts into these kinds of projects. Hell, there are large parts of the Internet that critique projects like this in general, no matter who builds it.
If I’m willing to critique developed countries in infrastructure projects, why shouldn’t do the same for developing countries?
Hell, it isn’t like they have to listen to me.
If you wanted to make a serious critique then you should spend the time to actually learn about the project and criticize specifics instead of just making stuff up based on what your country does.
