Sunday Times 2
Belt-and-Road Initiative opens up unprecedented opportunities
It was the best of times, it was the worst of times. A tale of two world leaders, U.S. president Donald Trump and China president Xi Jinping—both of whose countries have among the world’s best economies right now. But whereas Xi is playing Santa Claus to the rest of the world, doling out loans to finance-starved countries, Trump is playing Scrooge, waging an economic war with Canada, the European Union, China and others.
Respected economist Art Laffer, whom I’ve written about before, has always supported leaders who ignite global trade rather than close off its borders. A full-blown trade war, Laffer said recently, would be a “curse” on the U.S. economy.
Post-World War II, it was the U.S. that led global trade and infrastructure build-out—the Marshall Plan in Europe, the Interstate Highway System domestically. Both projects required massive amounts of commodities and raw materials, and employed hundreds of thousands of people.
Today, of the two leaders mentioned above, it’s Xi who has a clear foreign policy when it comes to trade and infrastructure.
Case in point: This Monday and Tuesday, Beijing hosted the Forum on China-Africa Cooperation (FOCAC). The summit, which takes place once every three years and was attended by representatives from 52 African countries, touched on areas as diverse as technology, trade, infrastructure, diplomacy, culture and agriculture.
During the last forum, in 2015, China pledged as much as $60 billion toward Africa’s development in interest-free loans. The Asian country, in fact, has increased its investments in the continent around 520 percent over the last 15 years, according to Global Trade Magazine.
As just one example, Kenya agreed to let China finance and build a standard gauge railway (SGR) connecting two major cities at a cost of $3.8 billion. Contracted by China Road and Bridge, the Mombasa-Nairobi SGR is Kenya’s largest infrastructure project since it declared independence from the U.K. in 1963.
Meanwhile, U.S. fund flows to Africa have been receding, and they’re expected to slow even more during Trump’s administration.
Xi isn’t doing this out of the goodness of his heart, of course. China, having been Africa’s largest trading partner for nine consecutive years now, likely expects its investments to pay diplomatic and economic dividends for many decades to come.
Even Trump’s own commerce secretary, Wilbur Ross, acknowledges that the U.S. must do more in Africa. “By pouring money into Africa,” Ross wrote on CNBC recently, “China has seen an opportunity to both gain political influence and to reap future rewards in a continent whose economies are predicted to boom in the coming decades,” due mainly to young demographics.
The most well-known among China’s projects is the Belt and Road Initiative (BRI), one of the most ambitious undertakings in human history. The biblical-size trade and infrastructure endeavor—a sort of 21st century Silk Road—could cost 12 times as much as what the U.S. spent on the Marshall Plan to rebuild Europe following World War II. The BRI has the participation of 76 countries from Asia, Africa and Europe, and is poised not only to reshape globe trade but also raise the living standards for more than half of the world’s population.
According to the International Monetary Fund (IMF), the “BRI has great potential for China and participating countries. It could fill large and long-standing infrastructure gaps in partner countries, boosting their growth prospects, strengthening supply chains and trade and increasing employment.”
The BRI, announced in 2013, will have a strong presence in Eastern Europe, also a prime destination for China FDI, as the countries there offer a wealth of metals, minerals and agricultural products.
According to Stratfor, Chinese companies have invested as much as $300 billion in Eastern Europe over the past decade. Last May, China and Ukraine agreed to cooperate on joint projects valued at nearly $7 billion, and in November, it was announced that China Railway International and China Pacific Construction would build a $2 billion subway line in the Ukrainian capital, Kiev. More recently, Chinese engineers with China Harbour Engineering completed a $40 million dredging operation in Ukraine’s Yuzhny Sea Port, allowing it to receive larger ships.
Like the Marshall Plan before it, the BRI will require tremendous amounts of commodities, metals and fuel.
In 2011, members of our investment team and I had the opportunity to see one of China’s high speed trains firsthand. The train averaged 185 miles per hour during our 923-mile trip from Shanghai to Beijing. As I wrote then, “I’ve traveled to all corners of the world and have seen many things during my travels, but viewing China’s explosive growth as it flies by you is something I will never forget.”
GUNASEKERA, IRENE – Dearly beloved wife of late Edmund. Most precious mother of Kamini, Gayathri, Chandrika and Kirthi. Loving mother-in-law of Nalaka, Amitha, late Nihal and of Sepalika. Beloved sister of late Bertram Dassanayake and Leela Cooray. Much loved grandmother of Nirosha, Seuvandhi, Rishikulya and Thisarana., passed away peacefully on 30th July 2018. Funeral was held on 31st August amongst family and friends. 4/99 P Thalakotuwa Gardens, Colombo 5. STM 611133
AL HAJ AZHAR MUNSOOR (Azhar Haji). Beloved husband of Fathima Zenia Loving father of Azhara, Shibry (Kenya), Arshad (Qatar) and Shaznin. Loving father in law of Rafi Careem, Aroos Kiyabdeen (Japan), Diana and Shaamina. Beloved son of Late Al Haj Mansoor Zainudeen and Late Sithy Rafeeka. Son in law of Late Al Haj I.L.M. Zanoon and Late Sithy Saduna. Grandfather of Aqeelah & Ifthikaar, Ammaarah & Husny, Ammaar, Aqeel, Dawood, Dawish, Raniya, Zahin, Humaira, Aaminah and Sajjaad. Great grandfather of Hannah, Yousuf, Hayaa and Daania. Brother of Bareeha, Zainulabdeen (Mamu), Khadeeja, Nilam, Iqbal (UK), Fathima, Late Zuhurdeen, Ayesha and Dr Safiullah Munsoor (Austria) Brother in law of Late Naufal Zanoon, Dr. Rizvy Zanoon, Rafi Zanoon (Canada), Late Nahas Zanoon, Shira Muees and Ayesha (Canada), Late Zuhfer, Zulaiha, Late Fouze, Sherine, Razeena, Naufal, Gaffoor and Dr. Husna (Austria) Burial took place on the 7th Septemebr at Jawatta Jumma Masjid Burial Grounds 18/11, Evergreen Park Road, Dabare Mawatha, Colombo -05. STM 629235
DICKSON-Carl Ivor Patrick, Ex Navy Beloved Husband of Ramona. Son of Late Milton & Pearl. Brother of Late Milroy, Doreen, Pam, Tula, Christopher. Deanna (Australia). Loving Father of Mario, Rochelle & Angelo (Australia). Father-in-law of Vasanthi, Errol, Tarita. Loving Grandfaher of Jake, Jeanelle, Jade, Shenelle, Zia & Zai. Loving uncle of Asta, Collin, Paul, Mark & many nieces and nephews. Cortege leaving 53 Nawala Road Nugegoda, On 09/2018 3.30 pm for burial of G.C. Kannate. (Anglican Section) STM 629264.
MAGILIN NONA RANASINGHE – wife of Retd. Police sergeant (Retd. Teacher-Central College-Veyangoda) Ranjith, Sunanda & Palitha (Businessman) and mother-in-law of Priyanthimala (S.L. Insurance EKumari Expired. Cremation on 9th Sunday at 4pm at Malwatte Crematoriyam. 181, Whitewell Estate (opposite-Police Station) Veyangoda 033-2292144. STM 629172.