China, the U.S., and Kenya

This week on the Sinica Podcast, Kaiser and Jeremy are joined by Eric Olander, host of the China in Africa Podcast from the China Africa Project, and by Anzetse Were, a developmental economist based in Nairobi. They explore questions related to Kenyan debt and development, as well as Sino-American competition in East Africa. What to listen for on this week’s Sinica Podcast: 10:33: When did China begin to put concerted diplomatic effort into relations with African countries? What were the optics of China’s push into the African continent? Anzetse highlights three examples that led to China’s success in dealing with businesses and governments: “[Chinese diplomats] are quite humble in their articulation, certainly to African people, saying, ‘While this has been the Chinese experience, we don’t know what you want, what you can learn and what you don’t want to learn.’ So they’re not prescriptive. But of course the biggest thing that African governments like is that they don’t lecture about anything.” 19:05: Is China leading African countries into “debt traps”? What are the primary causes for concern regarding the debts of African governments, and the wider international community? Anzetse explains that it’s a confluence of factors, including transparency issues and the effects of kindling trade relationships with new partners: “There is concern in the global north, particularly Europe and North America, as to reexposure in African governments to debt…and their concern is that they’re doing it with a party that the world does not really understand in terms of how it deals with debt defaults and how it deals with repayments owed. I think that Europe and North America were much more comfortable when debt owed was in their hands, obviously because they had [control], but I think because they had a common understanding on how this would be addressed. They do not know how the Chinese are going to do this.” 42:21: America is restructuring the way it provides aid to the rest of the world through the International Development Finance Corporation (IDFC) and the Better Utilization of Investments Leading to Development Act (BUILD Act), in an attempt to compete with China in the developing world. How effective is this restructuring? Eric provides some insight: “It’s not challenging China at all. It’s not intended to challenge China. Instead, they actually complement each other very, very well. So, a country like Kenya can turn to China for infrastructure and massive loans from the Chinese for a public sector type of development. But then, IDFC and the U.S. come in to fund American business and Kenyan business that can’t get funding anywhere else.” 49:36: What effect is the Belt and Road Initiative having in Africa? What about the African countries that are excluded from the plans, as China has made inroads, for the most part, on Africa’s eastern seaboard? Anzetse states: “I think the Chinese began to understand, ‘We do not want to start dividing African sentiments on China, we’re going to find a way to make sure all the regions in Africa are represented in this Belt and Road Initiative. Whether it will be practical is not clear.” Recommendations: Jeremy: I Didn't Do It for You: How the World Betrayed a Small African Nation and In the Footsteps of Mr. Kurtz: Living on the Brink of Disaster in Mobutu's Congo, both by Michela Wrong. Eric: Competing against Chinese loans, U.S. companies face long odds in Africa, an article in the New York Times by Ed Wong. Anzetse: Rhinocéros, by Eugène Ionesco. Kaiser: Lake Success: A Novel, by Gary Shteyngart.