Debunking the Chinese “Debt trap Diplomacy” Myth

From its inception in 2013, the Belt and Road initiative(BRI) has provided the much needed infrastructural financing to most poor countries in Africa, Europe,Asia and the Pacific. Chinese state-owned banks have invariably bankrolled the development of these significant infrastructure through loans to countries where infrastructure was virtually non-existent and to some where it was in a moribund state. These tremendous infrastructure include roads,ports, railroads and even the hospitals as well as housing facilities. There is no denying the fact that Africa as a notable beneficiary has received an astronomical facelift in a short period of time. There are roads where there were none,rail infrastructure has suddenly become ubiquitous and massive ports are coming up. However,this strategy has come under intense criticism by some foreign entities who consider it the use of “debt trap diplomacy.” According to most of the critics,”debt trap diplomacy” is a scenario where the Chinese government is purportedly trying to ensnare and trap the poor of the poorest in a never-ending cycle of debt. It also fundamental part of the soft power policy Of the Chinese. Of particular interest is that most of these criticism comes from the west who are arch nemesis to China in the rat race for global economy domination. So it’s better to debunk and know whether what is out there in the media is either the truth or propaganda instigated by the Chinese competitors.A closer look of Chinese investment in Africa particularly during the Belt and Road initiative period shines a light upon the whole Chinese adventure in Africa. The development projects in infrastructure have improved face of Africa massively. Roads have improved,ports, airports,dams and even skylines have sprung up in places where there not before. Most Africans are not bothered by the increase of Chinese in continent since change has been evident. There presence of Chinese has brought with it more goodies than several decades of European influence in the continent. The subsequent evidence of growth in infrastructure which is crucial for overall economic growth has bolstered the relationship between the two countries. A study by Afrobarometer has revealed that 63% of Africans feel the presence of the Chinese has been somewhat positive compared to 60% of the USA. Putting it into context,the USA has been rich all through and has been present in the continent for decades with no positive changes.

A closer look of Chinese investment in Africa particularly during the Belt and Road initiative period shines a light upon the whole Chinese adventure in Africa. The development projects in infrastructure have improved the face of Africa greatly. The value of China-Africa trade has increased rapidly to 22 billion US dollars. A research done by Statista has shown that China constituted about 16% of all the Foreign direct investment (FDI) coming to Africa in the period between 2014 to 2018. It has dwarfed all the others, followed at a distance by the USA and France each at 8%. The presence of Chinese has brought with it more goodies than several decades of European influence in the continent. The subsequent evidence of growth in infrastructure which is crucial for overall economic growth has bolstered the relationship between the two countries and between individual African countries. Development of infrastructure has improved intra-Africa which has been an Achilles heel on the development of the entire continent. A study by Afrobarometer has revealed that 63% of Africans feel the presence of the Chinese has been positive compared to 14% who consider it negative or somewhat negative. Putting it into context,the USA has been rich all through and has been present in the continent for decades with no positive changes. The available data shows that Sino-African relations have been beneficial to all the parties involved.

Claims that debt trap diplomacy is being used China to trap poor countries are unfounded and contrary to the available facts. Chinese loans accounts for only 12% of the $696 billion external debt owed by African countries while western private lenders account for 35%. This show that the constant rants by western media and institutions about Chinese “debt trap” are just propaganda instituted by the fact that Africa finds itself the center of domination struggle among different powers. Chinese loans carry with them lower interest rates as compared to the high rates of western lenders. Average interest rates on loans for Africa by the Chinese is 2.7% while the average interest rates for loans from private western lenders is 5%. From these data one can get a glimpse of who really are helping the continent move forward. Africans feeling that China is a better partner do so because of the evidence of growth since China first widen the scope of their involvement with the continent. The BRI is not actually the first intervention and entanglement between Africa and China. China has maintained close contact with the continent since around the fifteenth century when Admiral Zheng He of the Ming dynasty reached Malindi in his historic voyages. In 1971,26 African countries supported China in its quest to take over the UN seat from Taiwan. Chinese influence is thus motivated by friendship,trade opportunities and diplomacy.

Dambisa Moyo,in her book titled,Dead Aid which was published back in 2009 before the conception of BRI says that one of the ways to move Africa out of its current state is through intensive use of foreign direct investment. This is what China is using as part of it’s playbook in funneling investment to developing nations. Foreign direct investment curtails the ability of corrupt leaders to swindle development funds for their own use. On the contrary, foreign aid which has been used over and over again producing same piteous results by western world has led to the economic deterioration and increase in poverty all around. Political elite use borrowed money for their own benefit and comfort. They use development finances to buy expensive property in the developed world. A good example is Mobutu Ssese Seko,the former dictator of DRC. He swindled the country around $15 billion which was given as foreign aid. Foreign direct investment policy used by the Chinese ensures that there is value for loans. Dams,roads,rails, airports e.t.c. But what does the western world show for their presence?

China does not force any country to take loans from them. There are many institutions and government who are in this loan business. Any country can take loans to finance their development programs from any entity they deem fair. The majority of African countries taking loans from China shows that they view China as a worthy partner when it comes to development investment. The Chinese do not try to impose their will and policies on loan recipients whereas western world loans come with conditions which affect negatively the countries involved. Currently, countries like Kenya and Haiti are forced to abandon subsidy program which was helpful to the citizens of these countries. Life becomes unbearable and anti-government protests ensue which creates instability and lawlessness. Criticisms labelled against China are also worth noting but the blame must fully lie with the recipient country. Chinese loans are shadowed by absolute secretiveness with few people knowing about them because Chinese economy is a closed one. Very little data and information escapes to the public. Any country which doesn’t fancy this must stand up to it and demand that the deals are openly accessible. If the leaders don’t put this issue forward then who would they blame for their incompetence?

The Chinese are far from perfect but it is no denying the fact that their intervention has been positive to the continent. Just one month ago,the Chinese government decided to waive loans from 17 poor countries in an effort to unburden their financial constraint situation. All these efforts point to the fact that they are really trying to foster development among poor countries. The geopolitical world is full of countries trying to get the best deals for their citizens so good leaders must also stand firm with their citizens. Criticism must be substantiated and not be solely based on political propaganda.