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From Global Dominance to Global Responsibility: The case of the rising “sun” in CHINA. By A. ANANGA Michael, 2 August 2016


It is amazing how far the Chinese have come, and it is scary to imagine how far they are willing and able to go. In the early 70s, when Maoism was the doctrine and vision in China, America was quick to label such ambitions as “The Soft Yellow Threat, very Shakespearian in nature; full of sound and fury, signifying nothing.” How wrong the United States was then and is now. China over the last 30 something years has experienced a renaissance economically and socially that rivals any such outburst in the history of nations. GDP has never been higher, per capita income is on the rise, exports are sky rocketing, and the Chinese brand and market has never had better credibility. To give China’s rise a sense of context, the number of billionaires in China has gone quadrupled fold in the last decade. This statistic encapsulates the contemporary China success story in the 21st century.

Examples abound; in today’s corporate landscape, being present in China is a corporate sine qua non for most Fortune 500 companies. These days, a study of the Chinese model of comparative business strategy is a must in any Business School worthy of its name. In today’s nonstop business cycle, an association with China be it in project finance, venture capital deals, outsourcing of resources is seen as instant credibility! Today’s China has given out more loans to receiving countries than the World Bank in 2010. Nice! America essentially financed its so called “war on terror” in Afghanistan and Iraq on selling U.S. Treasury Bonds to China. As this article is being typed out, the State Department and Department of Treasury in the United States are meeting with a high powered delegation from China in Washington, D.C. to negotiate “terms of trade” to offset the huge US/China trade deficit. The question that begs an answer is; is this the same China the United States characterized as “The Yellow Threat…signifying nothing” some 40 years back? I think not. How times have changed. And ROLES, too.

Today, most goods around the world, in part or in whole, have passed through China. The relevance of the Chinese economy, its growing residual income and her buying or purchasing power is clearly shaping the future and order of global business and strategy as we know it. Today’s China is bold, confident, assertive, resolute about its objectives, and has a clear vision of where the country sits from an economic, military, geopolitical and social standpoint. From the horn of Africa, to the Asian panhandle, from North America to Europe and the Middle East, China’s presence can be felt, it has impact beyond borders and its foot prints is shaping and will define the landscape of tomorrow’s world in commerce and industry.

But how should the Chinese handle this “power”? With power comes responsibility; a huge one. Will China be the “globocop” who shrugs everybody to get what she wants at any cost? (21st century Sino – Asian Pacific Hegemony). I don’t think so, though the latter description is a characterization of another world power. Your guess is as good as mine. Will China be the global leader who will hand out economic grants and loans with “no strings” attached as to how a receiving country should use the funds, or question a receiver country’s corporate or public governance? If the Chinese policy in giving grants to African countries is any indication as to the last question, there is nothing to worry about, for China doesn’t meddle in the sovereign affairs of a receiving country in giving loans or grants. Will China be that global leader who shall always side with Russia and North Korea just to “stick it” to the Americans, and not base her foreign relations with the West on any aforethought or policy considerations as it seems to be the case thus far? Will the China of today be so obsessed with obtaining natural resources around the world that she will stop at nothing to get them, and in doing so not share technology transfer with the host countries? Is China ultimately a friend or foe to most countries it seeks to open relationships with for economic reasons?

How will a renewed partnership with China be moving forward? What will be the face and attitude of the “NEW and BOLD CHINA?” These are some of the fundamental questions we as policy analysts and macro economic and political economy pundits should be asking in the wake of the China –Africa Forum 2016 in Johannesburg, South Africa. Rightly or wrongly, China is clearly the future of global business. How African countries seize opportunities with this impending global dominant power will shape the future of the African horn moving forward. History is watching and shall judge us by our actions, not words.

Mr Ananga is a Senior Corporate Counsel at C.S.P.H (The Hydrocarbons Prices Stabilization Fund). He is Vice President at CACLiTA.

 
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Posted by on August 2, 2016 in Africa Development

 

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The African Union’s illusory quest for financial independence by Asanji Burnley and Chofor Che, published at Africanliberty.org , 15 February 2015


In an op-ed by Gulfnews.com dated the 1 of February 2015, African leaders teamed up in Addis Ababa the capital of Ethiopia in a bid to seek for solutions for an independent African Union (AU). After a two-day summit which took place at the AU’s headquarters ironically built by the Chinese, African leaders proposed new taxes on hotel stays and airline tickets in a bid to finance the AU. Analysts estimate that this move would raise about $730 million dollars a year. AU officials are also optimistic that an additional half-a-cent tax on SMS exchanges would bring in $1.6 billion. They are hoping to see the AU finance its projects and operations to the tune of 65 per cent by 2016. The AU has for long now depended on financial assistance from the West to accomplish missions on the continent, reason why this international body has been faced with a lot of criticisms. Though it is imperative for the AU to be financially independent, one begins to wonder if the right move to financial independence is by imposing heavy taxes on improvised African citizens.

Gulfnews.com opines that the AU was once seriously financed by assassinated Libyan leader Muammar Gaddafi, who was bent in making this institution an opponent to Western dominance. Presently, the AU which is made up of 54 member states gets only 28 per cent of its half-billion dollar operational budget from these members. 72 per cent of the AU’s operational budget is obtained from international donors especially from the European Union (EU), the World Bank, China, Turkey and the United States of America (USA).

Zimbabwean President, Robert Mugabe, notorious for his ‘tug of war’ with the West, and who is currently the AU’s chair observed that “Over 70 per cent of our budget is foreign funded. This is not sustainable,” This position was corroborated by Kenyan President Uhuru Kenyatta, who has also been involved in a brawl with the West after being charged by the International Criminal Court (ICC) for crimes against humanity. President Uhuru Kenyatta added that dependence on foreign financing was a “profound handicap and an impediment to the continent’s momentum”. According to Kenyan President, it is time for Africa to affirm “its independence and sovereignty more robustly”.

AU analysts argue that a financially viable AU would make this institution administratively and financially dependent. Major donors like Egypt and Libya would not have to chip in huge amounts of money for the running of AU projects and operations. Pan-African Youth Union (PYU) leader adds that the AU would thus be in a better position to make strategic and speedy decisions. He adds that “In case of emergencies like Ebola, we need to have the means to intervene quickly and without having to wait for foreign money. Money from donors always comes with strings attached.”

It is thus a laudable idea for African leaders to make the AU financially independent, but the truth is that such a plan remains an illusion for several reasons. Although African leaders have agreed to this ambitious plan, deducting these taxes is not a matter of right but voluntary. What most member states would do is to impose heavy taxes on visitors and citizens. Besides this worry not all member states will adhere to this new measure. For several years now several African states have not been able to furnish financial nor material support to the running and functioning of the AU reason why this institution has shamefully depended on foreign assistance.
Member states must seek for a holistic approach to making the AU financially viable. Charity begins at home so African states must speed up their industrialization process and infrastructure development to attract more businesses and thus more money. The private sector needs to be revamped in all African states which may would also reduce unemployment and boost African economies speedily. African states cannot continue to neglect the agricultural sector and focus more on the mineral sectors.

African governments have to also stop illicit financial flows which is really crippling African economies, despite the much talked about African renaissance. The money the continent loses can indeed make the AU financially independent rather than relying on foreign assistance and taxes.

Asanji Burnley is a Cameroonian diplomat by training and Masters Graduate from the International Relations Institute of Cameroon (IRIC). He is also co-founder of the Cameroon based Central African Centre for Libertarian Thought and Action (CACLiTA). In 2015 he was unanimously voted as President of this newly created think tank which advocates for limited government and free markets particularly in the central African region.

 
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Posted by on February 17, 2015 in Africa Development, African Union

 

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BRICS bank pillars could be ready next year: Brazil, by France 24, 30 JULY 2013 – 23H26


The statutes of the new development bank planned by the BRICS group of five emerging powers could be ready next year, Brazil’s foreign minister said here Tuesday.

“We made good progress during the last meeting in Durban and the expectation is that in the 2014 meeting in Brazil, enough progress has been made to conclude the statutes of the bank,” Antonio Patriota told reporters.

He made the remarks after discussing the issue here with his South African counterpart Maite Nkoana-Mashabane.

At their March summit in the South African city of Durban, leaders of the BRICS — Brazil, Russia, India, China and South Africa — failed to launch the much-anticipated bank.

Instead of a $50 billion fund, the leaders agreed only that the initial capital contribution would be “substantial and sufficient for the bank to be effective.”

“There was an agreement to establish such a bank. Our ministries of finance are busy with the final modalities because the viability has been checked, even economists from the World Bank have come out to say there is space for such a bank,” Nkoana-Mashabane said here.

The proposed bank is meant to rival Western-dominated institutions like the World Bank.

Key sticking points included how projects would be distributed and where the bank would be based.

 
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Posted by on August 1, 2013 in Africa Development

 

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Solar group to World Bank: Give us gas and oil’s $12B, and we’ll cool planet, By Mark Halper, SmartPlanet, 22 November 2012


 

Square these two sentences:

  • Earlier this week, the World Bank called for urgent action to stop catastrophic global warming.
  • Over the last 6 years, the World Bank has financed $12 billion worth of fossil fuel projects – the sort of thing that stokes the planetary thermometer –  according to renewables energy group Desertec Foundation.

Scratching your head?

So is Desertec, the Hamburg, Germany international outfit that wants to build solar power plants in the deserts of North Africa, the Middle East, China, the U.S., Australia and elsewhere to wean the world off of fossil fuels.

The group’s director, Thiemo Gropp, has issued an open proclamation under the headline, “$12 billion in World Bank funds would be better invested in desert power than in fossil fuels.”

Read more at Solar group to World Bank: Give us gas and oil’s $12B, and we’ll cool planet

 
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Posted by on November 22, 2012 in Uncategorized

 

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Developing countries to receive over $400 billion in remittances in 2012, says World Bank report, By Panorama, 20 November 2012


Remittance flows to the developing world are expected to exceed earlier estimates and total $406 billion this year, an increase of 6.5 percent over the previous year, according to a new World Bank brief on global migration and remittances.

Remittances to developing countries are projected to grow by 7.9 percent in 2013, 10.1 percent in 2014 and 10.7 percent in 2015 to reach $534 billion in 2015.

Worldwide remittances, including those to high-income countries, are expected to total $534 billion in 2012, and projected to grow to $685 billion in 2015, according to the latest issue of the Bank’s Migration and Development Brief, released today.

However, despite the growth in remittance flows overall to developing countries, the continuing global economic crisis is dampening remittance flows to some regions, with Europe and Central Asia and Sub-Saharan Africa especially affected, while South Asia and the Middle East and North Africa (MENA) are expected to fare much better than previously estimated.

The top recipients of officially recorded remittances for 2012 are India ($70 billion), China ($66 billion), the Philippines and Mexico ($24 billion each), and Nigeria ($21 billion). Other large recipients include Egypt, Pakistan, Bangladesh, Vietnam, and Lebanon.

As a percentage of GDP, the top recipients of remittances, in 2011, were Tajikistan (47 percent), Liberia (31 percent), Kyrgyz Republic (29 percent), Lesotho (27 percent), Moldova (23 percent), Nepal (22 percent), and Samoa (21 percent).

“Although migrant workers are, to a large extent, adversely affected by the slow growth in the global economy, remittance volumes have remained remarkably resilient, providing a vital lifeline to not only poor families but a steady and reliable source of foreign currency in many poor remittances recipient countries,” said Hans Timmer, Director of the Bank’s Development Prospects Group.

Read more at Developing countries to receive over $400 billion in remittances in 2012

 
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Posted by on November 20, 2012 in Uncategorized

 

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How to access the e-commerce gold mine of Africa, By Peter Harvey, Buisness Day, 14 November 2012


AFRICA’s financial sector has tremendous potential. The continent is home to 1-billion people, half under 20, and has six out of 10 of the world’s fastest-growing economies. Yet a study last year by the African Development Bank, German International Co-operation and the World Bank found less than 20% of households have a formal bank account, and only 23% of enterprises have loans or lines of credit.

Informal financial arrangements, savings clubs (stokvels) and other independent moneylenders seem to meet the continent’s needs and are often defended as an “African solution to African problem”. However, these are largely imperfect substitutes — unreliable, unsecure and rarely private. These arrangements limit individuals, and hamper the economy as entrepreneurs and businesses are unable to take advantage of opportunities such as e-commerce, which requires a complex ecosystem for making and processing online payments.

Not one African country got into the top 30 on the Global Retail Development Index determining the most lucrative retail opportunities in the world, the top five being China, Brazil, Russia, Chile and Mexico. (China’s vast online retail market secured the top position — the value is estimated at R194bn, second only to the US.)

Even South Africa, despite having the most internet users in Africa, is underperforming with its online retail value sitting at just R2.5bn last year. Surprisingly, telecoms infrastructure is not the only cause. The first step in an online transaction is a person with a valid credit or debit card. Credit card penetration in South Africa is 0.2%, compared to Brazil’s 110%.

Debit card ownership is only slightly higher, with less than one card per South African.

We need our issuing banks to speed up the rate at which they roll out cards to their customers. Debit cards are likely to dominate as most Africans have little experience of handling credit and credit cards carry big risks for banks. The continent will also need a cadre of acquiring banks prepared to accept online payments for their merchant customers.

It remains difficult as an acquiring bank that wants to enter the e-commerce field has to buy the appropriate licences from card associations (such as Visa and MasterCard), install card processing systems, hire skilled staff to manage those systems while still having a firm grasp of the risk of fraud. It’s easier to find a bank that will issue cards than one that will acquire transactions. This has all led to a big imbalance between supply and demand. This may lead to businesses seeking greener pastures overseas.

As an alternative, smaller businesses often turn to “super-merchants” who make their own merchant facilities available to others but the costs are high and the payment cycles are notoriously bad. It can take as long as 30 days to get your money out, damaging the cash flow of a business.

Payment gateways (payment service providers) link customers, merchants, banks and the card associations and can greatly facilitate the growth of this market by educating merchants, sourcing acquiring banks for them and managing their relationships with those banks. In this regard, businesses and the government will have to step up to the plate, pressuring banks to modernise and create opportunities. After all, 1-billion potential consumers is a market too large to ignore.

• Harvey is founder and MD of PayGate

 
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Posted by on November 15, 2012 in Uncategorized

 

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Obama second term: What it means for Africa, Andrew Harding, Africa correspondent, BBC, 7 November 2012


Some people on this continent expected more from the son of man who grew up herding goats in a village in western Kenya.

President Barack Obama made only one, cursory trip to sub-Saharan Africa during his first term, and at the time made it fairly clear that he would not be smothering the continent with attention.

“Africa’s future is up to Africans,” he said in Ghana, in a speech that quietly acknowledged the limitations of American influence in a region that now trades more with China than the US.

So how much will change in Mr Obama’s second term?

That question was, perhaps understandably, barely mentioned in an election campaign that focused on pressing domestic issues and the Arab uprisings.

In his victory speech, Mr Obama again made only passing reference to “a decade of war” and to “people in distant nations… risking their lives right now just for a chance to argue about the issues that matter, the chance to cast their ballots like we did today”.

Behind the scenes US diplomacy will no doubt continue to be furiously in demand.

No ‘Obama doctrine’

In the first term, the focus was on headline-hogging conflicts in Ivory Coast, Somalia, Sudan and South Sudan and even a close-run election in Zambia.

The start of the second term is likely to be preoccupied with more of the same: International efforts to remove al-Qaeda-linked rebels from the north of Mali – by force or negotiation or both – and efforts to ensure that Zimbabwe and Kenya avoid repeating the violence that wrecked their last elections.

If Kenya pulls off a free and fair vote, expect a fairly prompt visit to Nairobi by Air Force One.

So far, there is no sign of a grand “Obama doctrine” for Africa – and perhaps that is a good thing given the diversity and complexity of the continent.

Mr Obama has left it to others to warn about the dangers posed by an insatiable China.

But his second term may give him an opportunity to move away from the distorting, “war on terror” preoccupations of Mali and Somalia, and focus on the broader issues – trade in particular – that he raised three years ago in Ghana.

 
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Posted by on November 8, 2012 in Uncategorized

 

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