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Archive for the tag “Doraleh Container Terminal”

Opinion: The Chinese claims the loans to developing countries is not to trap them – I beg to differ!

Today, there was an interesting thing coming through my feed that captured my eye. It was a headline from the Philippines News Agency. It was claiming that the Chinese was not making developing countries in debt slaves or putting them into debt traps by taking up huge loans for extensive spending on infrastructure projects. Now in March 2019, the Chinese are claiming that they are just giving viable loans and not to much.

However, I will beg to differ, but before I do so. Let see what the Chines spokesperson said. Which I have to say is not true.

Guo Weimin, spokesperson of the second session of the 13th National Committee of the Chinese People’s Political Consultative Conference (CPPCC), said extending Chinese loans to developing countries aims to facilitate infrastructure projects that are expected to bring development and boost the economic growth of these nations. “Chinese investments only account for a very small share to their total debt. And our projects are mostly infrastructure, which can support the long-term development of those countries,” Guo said. “Yet some say, this is a great debt trap. But this doesn’t make sense,” he added” (Kris Chrismundo – ‘No debt trap for developing countries: CN political advisory body’ 02.03.2019, link: http://www.pna.gov.ph/articles/1063438).

Let’s me just take the first victim of the debt trap made by the Chinese is in Sri Lanka where the Chinese has taken over and lease the Hambantota Port for 99 years in 2018. While in Zambia, the Chinese has taken over ZESCO, the state electricity company, majority ownership of the Zambian National Broadcasting Company, and if the Republic fails more on their debt. The Zambian state might loose the ownership of Kenneth Kaunda International Airport as well.

In Kenya, the government have loaned massive funds for the Standard Gauge Railway Part 1 and 2. Now, they are on the limb and its speculated that the Port of Mombasa can be taken as collateral for the possible failing loans.

There are warning signs of the total loans given to Tonga, Fiji, Samoa, Papua New Guinea, Maldives, Ghana, Liberia Philippines and so on. They are clearly strategic about it. There should also be worrying about the loans given to the Democratic Republic of Congo, Uganda, Tanzania and so on. The Chinese has loaned for massive projects and not small-pocketed money. Which the Chinese would like to have back paid.

This is just small examples of what that is coming. Because the states are taking up gigantic loans, which they can possibly default with. That is why the Chinese has been smart enough to sign for collateral, which usually is important parts of infrastructure or mobility. So, that the Chinese can trade and also control vital parts of the economy. They are not joking around and seemingly taken a soft approach to neo-colonize the developing countries. Because they can and have the ability to do so.

We can wonder if there will be more like this. There are also the battle happening in Djibouti over the Doraleh Port, who went from DP World Port Company to a Chinese Company. That was because of the debt that the Republic of Djibouti had. Just like the port in Sri Lanka went to them as well. Both very strategic and important ports in their regions. Therefore, the Chinese has gotten good infrastructure and possible revenue streams in these Republic for their defaulting loans.

There will be more to come out of this. That is why I don’t believe the Chinese, saying the developing countries can manage the amount of loans, as the Chinese are planning to takeover something to get repaid for their services. Peace.

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Is the UAE using DP World Ports Deals to get diplomatic leverage now?

The Dubai based port and container company, that has catched a lot of flack within this week. Both with their devious deal, that the Federal Republic of Somalia dismissed, after Somaliland, Ethiopia and DP World went into a co-venture over the Berbera Port. If that isn’t enough internal and diplomatic squabble, nothing is. As the United Arab Emirates are even trying influence more politicians over deal on the Horn of Africa. As they have already had the power to get a 30 year deal in Somaliland.

However, that deal has been under fire and people have wondered if the Mogadishu government has accepted it or done so with a favor. Since, this is still a government facility and important hub. That other nations like Ethiopia would like to have their stake in. Secondly, DP World has already another agreement on the horn in the port of Doraleh Container Terminal (DCT). That deal was done in 2006 and got binned by the government of Djibouti late February. So, the 30 year deal in Djibouti has already gone south and if the UAE government business want to interfere on the horn, they still have leverage in Somaliland. Where similar deal was made and the same concession of the port. Therefore, in the similar time-span and leadership, you can wonder if the Somaliland leadership signed similar agreement as the Djibouti counterparts, who has now canceled it there.

As that is happening, there is news of building and operating a Banana Port in the Democratic Republic of Congo, where the agreements and the plans between Kabila’s government and DP World is appearing. Where the state will generate development and roads into the interior from the port, so the state can ensure the port that gets the containers and exports into the DRC. This is a big deal with amazing amount of funds going both to the Kabila cronies and the spending from DP World to upgrade the port there.

Since the writings notes of the 21st February 2018 Council of Ministers said about it:

The 5 texts on the Construction of the Banana Deep Water Port (the Proclamation of Harmonization of Views on the Contract Clauses of the Collaboration Agreement and the Shareholders’ Pact) and the Collective Agreement on Delegation of Service Public: the draft decree approving the Banana Deep Water Port Construction Agreement, the Muanda-Banana Estate Industrial Estate Decree and the Shareholder Corporation’s Shareholder Agreement. Banana Deep Water Port), the Council decided to visualize the project at its next meeting prior to any final decision on it” (COMPTE RENDU DE LA 8 ème REUNION ORDINAIRE DU CONSEIL DES MINISTRES, 21.02.2018).

Therefore, the DRC Government is planning to finalize an agreement with DP World, who has already had questionable agreements in Somaliland and Djibouti. This is not also to extend the arm of the company, but also give the UAE more involvement on the continent. As they have already ports agreement in Senegal and Somaliland, as they lost the one in Djibouti. Therefore, this would be possible now in the DRC.

We can now, see the diplomatic arm and business goes hand in hand, this through the port and UAE are using means of giant sums of infrastructure building, to get the government happy and ready to sign over their port control to the company, who happens to be state-run. This gives Dubai more power and also more control over the container business and handling of goods in these countries. As well, as the questionable dealings, are gaining the political elites, but not giving back to the community as a whole.

We can just wonder if this is a useful tool for Dubai and UAE to gain more political leverage in and around on the African continent, clearly it is working and getting reactions. We have to see if the Federal Government of Somalia, will do more than just canceling and dismissing the tripart agreement between Somaliland, Ethiopia and DP World. Just have to see how this can affect the relationship between FSG, Somaliland and DP World. Also, if the DP World really making itself ready to takeover the Banana Port. They are clearly, making influences and throwing money around to gain important infrastructures, like the ports. So, they can have leverage when concerning political games like in the Qatar Crisis. Peace.

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