Tuesday, September 28, 2010

How Many Africans are Studying in China?

In recent years, I've been pleased to see a lot of African students attending conferences and workshops on China-Africa topics in Beijing and Shanghai. Now I think that the turnout has actually been quite low, if a report by Antoaneta Becker is correct:
"In recent years the Chinese government has encouraged more African students to study in the country, offering thousands of scholarships. In 2009 China had 120,000 students from Africa, ten times more than it did in 2000." 
I'm willing to bet that this number, 120,000 is wrong. The late (and much missed) Professor Li Baoping estimated in a 2006 paper that more than 18,000 African students had at that point received scholarships over the decades from the Chinese government. Hong Kong University expert on Africans in China, Professor Adams Bodomo, estimated in a recent paper that 12,000 African students were currently studying in China under government scholarship, with perhaps 8000 more studying under their own funding.  

Here are the official numbers. Do the math.

           Year        Number of Africa Scholarships/Year
            1983         400
            1986       1600
            2005       2000
            2009       4000
            2012*     5500

*Pledged at the Sharm el-Sheikh FOCAC Meeting, November 2009.  Sources for others are in my book, The Dragon's Gift, p. 121.

Saturday, September 25, 2010

Unpacking China Eximbank's $10.4 Billion Ghana Credit

Ghana-China flags. Ghanaweb.com
On September 22, 2010, as I was flying back to Washington from Beijing, the government of Ghana announced it had signed a $10.4 billion credit package with China Eximbank. The finance is expected to begin disbursing next year (over how many years is not clear). It would be, it is said, at "concessionary" rates (not yet disclosed) and repayable over 20 years. No Chinese source has yet confirmed this, as far as I know, particularly the "concessionary loan" aspect. China Development Bank reportedly has clinched a separate loan for $3 billion which will be targeted toward oil sector development.

The $10.4 billion credit will be repaid with exports, not directly through the budget, according to Ghana's deputy minister for finance and economic planning. Does this sound familiar? It should, if you've been reading my book: see pp. 46-49 of The Dragon's Gift.

Although this is being described in Ghana as a "concessionary loan" I doubt that this finance comes from the Eximbank's concessional loan (you hui dai kuan) window.  And I doubt we can count the package as official development assistance (ODA), or that it will be on terms concessional enough to qualify as ODA.

Eximbank has given several true concessional foreign aid loans to Ghana in the past. Indeed, as research by Isaac Idun-Arkhurst (see his slide #10) has shown us, 42% of Ghana's Bui Dam loan package from China was a true concessional loan, i.e. qualified as ODA, while 58% was an export credit at a preferential commercial rate.

One piece of evidence in favor of Ghana's interpretation (and hope): the credit is said to be payable over 20 years. Concessional loans from Eximbank, or you hui dai kuan, do tend to have 20 years as a repayment period.

However, this is what I expect to see.

As details of the new Ghana deal unfold, it will be revealed as another of the well-priced "long term trade agreements" or deferred payment, resource-backed commercial export credits, where the interest rate will be based on LIBOR plus a margin. Nigeria had an offer of one of these. But when former Nigerian president Yar'Adua and former finance minister Shansuddeen Usman looked more deeply into the "concessionary loan" they thought Nigeria was getting, they found that only the $500 million export credit portion was at a preferential rate. The $2 billion portion was at a commercial rate.

I hope Ghana is getting a better deal than Nigeria was offered. The deal still needs to be approved by Ghana's parliament, which means we should be hearing a lot more about it.

Friday, September 24, 2010

Out from Behind the Great Firewall and Into Switzerland

Africa Pavilion: courtesy The Atlantic.c..
I've been in China (Shanghai and Beijing) for the past eight days. Lots of interesting developments around the topic of Chinese aid in Africa, meetings with Africans in China, and a tour of the Africa Pavilion at the Shanghai Expo (right). But frustrating to be behind the Great Firewall and unable to access my blog & much else.

Next week I will be speaking on my China-Africa research in Geneva September 30th, and Bern October 1st.

Thursday, September 9, 2010

New World Bank Study on Large-Scale "Land Grabs"

More mistaken reports of Chinese investment. photo: farmlandgrab.org

Two days ago, on September 7, 2010, the World Bank released its long-awaited study of large scale land investments. The report overall seems quite balanced and contains the expected mix of concern and pragmatism. In some countries with ample land and low population densities, commercial investment might provide benefits, if done with concern for mitigating social and environmental impact, and within the rule of law. The report emphasizes that far too often, this is not being done, and the potential for harm is immense.

Although I think it will be a helpful contribution, overall I was a bit disappointed in the study, for several reasons.

First, they actually made use of the media reports collected by GRAIN at farmlandgrab.org, put all of them into a database, and performed econometric analysis on them, without checking the veracity of these reports. Yet what does this really tell us about the realities of large-scale land investments when so many of the media reports are wrong?

With regard to Pakistan, for example, World Bank researchers did fieldwork to cross-check the media reports collected by GRAIN: "In none of these cases could any evidence of investment be found" (p. 40). Yet, apparently, even these spurious reports still went into the databases and number crunching.

This seems to me a bit like doing econometric analysis of media reports of all the suspected locations of Saddam Hussein's weapons of mass destruction in Iraq circa 2002 and then saying something useful about the threat these posed to US national security.

Second, the report is very bland and addresses the issue at such a high level of aggregation that for anyone interested in learning specifics about the reality of Chinese activity in agricultural investment abroad, there was nothing whatsoever to learn. This is very different from the report produced by the researchers at FAO, IFAD, and IIEE in 2009 which admittedly had as one purpose looking into the veracity of these reports. Indeed, the researchers at Grain.org criticized the report for the very same reason, saying:
Had the Bank really wanted to shed light on this new investment trend it would have at least peeled back the curtain on the investors. Who are they? What are they after?
But perhaps other readers will have different opinions? Click here for an ongoing discussion on this topic.  

Keywords: China, Africa, World Bank, land grab