INTERVIEW-China a boon for Africa but must be a team player
05 Nov 2006 08:15:24 GMT Source: Reuters
By Alan Wheatley, China Economics Editor BEIJING, Nov 5 (Reuters) - Chinese lending to Africa is welcome because it helps to fill a financing gap left by the West, but Beijing needs to be more of a team player in the continent's development, a senior World Bank official said. The United States and others have voiced concern that African countries whose debts have been written off by the international community may be taking on excessive new burdens due to a burst of lending by countries including China and India. The issue was in the spotlight at this weekend's China-Africa summit in Beijing, where President Hu Jintao offered $5 billion in loans and credits, along with a doubling of aid by 2009, to boost China's access to the continent's oil and mineral wealth. Critics say that, because such money comes with few strings attached, China is undermining the efforts of the World Bank and other lenders to improve economic management in Africa and root out graft by attaching conditions to their loans. John Page, the World Bank's chief economist for Africa, said it was important to help countries assess whether they can afford to service any new loans on offer and whether the terms are attractive. But, speaking before Hu unveiled China's latest package, Page said Africa's needs greatly exceeded what the continent's traditional lenders and donors were able to provide. "Given the development needs in Africa, having a partner like China that's willing to come in and provide a measure of subsidised lending in the case of countries that can actually afford to borrow is important," Page told Reuters. "The tent is big enough for all the providers." He said he had spent much of the last year "looking for the Gleneagles money" -- a reference to a pledge made by the Group of Eight leading nations at their 2005 summit in Scotland to double aid to the world's poorest countries. "The unmet development finance needs in Africa are very, very large, and, while it's always possible to have a debate about the ability of these economies to absorb the money, the credibility of the programmes and so forth, I've seen far too many missed opportunities in the last year," Page said. WORKING BETTER China, with its impressive growth record and a history vastly different from that of traditional lenders to Africa, had a lot to offer the continent. "A contest in the marketplace of ideas is not necessarily a bad thing," Page said. But he said he would like to see China work more closely with the rest of the development community by participating in donor groups that coordinate aid for recipient countries. "The Chinese have to ask themselves: what is it that we're doing that benefits development in Africa, and how do we strengthen that? "Part of that will have to be, given the way the rest of the international community has come to this conclusion, 'working better with others'," Page said. China, for example, could pass on lessons it has learned in how to boost farm productivity and improve public administration. One reason why Asia has outperformed Africa is that it does a better job disseminating knowledge, especially in manufacturing. Whereas an African country might have a single best-of-class company in a particular industry, Vietnam or China has dozens. Exactly why this happens is a puzzle, but Page said China could help transfer expertise through more co-investments. Compared with, say, Indian firms, Chinese enterprises are relatively isolated from the African economies where they have invested, Page said. "If I were a policy maker in a well-performing African country, I'd be looking to see what I could to to promote more joint ventures or other forms of network-type activity," he said.
