7 ms·

Skyscrapers, trains and roads: How Addis Ababa came to look like a Chinese city

72 points by tintinnabula 8y ago

thomasedwards 8y ago
Fantastically miss-used image before/after sliders, not actually showing before or after?
- nthnclrk 8y ago
  Just had the same thought, came back to the comments and here we are. I couldn’t agree more. Surely the convention—generally—is to indeed use these for before/after comparisons? Especially if you set a precedent by doing so correctly at the start.
- detritus 8y ago
  Add to that a map of labelled "Cities with more than 1m people" which clearly misses out... well, quite a few. "Cities with more than 1m people in China and Ethiopia" on the other hand... .
adventured 8y ago
The US has a lot of experience - both successful and unsuccessful - at nation building, actively and passively via trade and investment, over the last ~70 years or so. When you get it right, the results are spectacular. If China can invest half a trillion dollars plus into Africa over two decades and it turns out really well, and they can help lift hundreds of millions of people out of poverty, then that will be a tremendous outcome. They'll be contributing back to the virtuous cycle that their own development over the last few decades has been part of. More and more countries become net contributors and the pace of eradicating extreme poverty quickens. The debt trap concerns are legitimate, ignoring the propaganda side of that for a moment. That's a pretty obvious potential problem for very poor countries when taking on massive development loans etc. Ghana for example has a $40-$50 billion GDP, and China recently agreed to lend them $15 billion to try to develop their natural resources (bauxite mining for one) for China's use. When you're borrowing that large of an amount of capital vs the size of the economy that has to repay the debt, it's obviously risky. Ghana's vice president optimistically referred to it as a Marshal plan for Ghana. The pessimistic retort by a member of their parliament: > "How much of our natural resource are they leveraging in that agreement for the $15 billion facility? If you’ll remember, former President Kufuor did the same thing when we were constructing the Bui dam. He went to China and mortgaged our cocoa for a loan agreement. Today we ship the country’s cocoa to China to service the debt,” he said. All of these examples come with that double sided risk/reward concern, with debt and what you put up in exchange for the development capital. The other giant issue I rarely see these articles discuss, is practical sustainability. That's every bit as important as the debt concern. The US could hand Albania an advanced, $11 billion nuclear aircraft carrier, that doesn't mean it's a good idea matched to their level of development and what they can afford to maintain. Skyscrapers are very expensive to maintain across decades. Ethiopia has a GDP per capita of $700. To be clear, I'm not saying what does or doesn't make sense for Ethiopia. Rather, it'd be interesting to see an analysis of what a country like Ethiopia can support economically. There's a sustainable process to economic development. You can accelerate it a bit, if you try to leap too far you run the risk of causing dramatically worse problems than the nation otherwise would have experienced had it developed more organically or at a more measured pace. If it goes south, you not only have the debt to deal with, you have expensive infrastructure you can't afford to maintain, a double blackhole. China can dump immense sums of capital into trying to leap a country like Ethiopia forward. If they get that wrong, Ethiopia is stuck with trying to upkeep that infrastructure. It makes me wonder if there are elaborate studies done by Ethiopian authorities before allowing major projects funded by China to go forward, when it comes to estimated 30-50 year type maintenance costs.
- baybal2 8y ago
  >Ghana for example has a $40-$50 billion GDP, and China recently agreed to lend them $15 billion to try to develop their natural resources (bauxite mining for one) for China's use. When you're borrowing that large of an amount of capital vs the size of the economy that has to repay the debt, it's obviously risky. Ghana's vice president optimistically referred to it as a Marshal plan for Ghana. The pessimistic retort by a member of their parliament Bauxite mine is not a unpredictable source of future income. Much like crude oil, even if it is the end of the world tomorrow, it is really, really hard to not to make any money out of it. Another like these are their electric station projects in Pakistan: a very populous country, but their British era grid is beyond repair. Loans given for these stations had high interest, but at the same time Chinese put in sensible conditions like force-majeure insurance, and that the project will largely be done by Chinese state companies guaranteeing that not a single Pakistani bureaucrat had opportunity to steal the funds. Given current electricity prices, there is no chance that they will ever be under water for on loan. A lot of projects are said to be financially engineered to be self-repaying. Effectively, these are not loans, but misnamed leasing agreements. The concern should be over ones that aren't. Saying that China just litters money around without hoping to get anything in return, is simply beyond naive. I can admit, Chinese officials are inept at it. Lots of bureaucrats working on those projects do look for making a name for themselves over having the project succeed. Their competence is being questioned. Every time I'm seeing a watercooler talks of officials during industry events, it always comes to "facepalm manoeuvre" when their talks cross over "a yet another multi-gigabuck loan to another god forsaken country." I assure you, even within the party itself, these projects, at least, make people scratch their heads.
- toyg 8y ago
  The US, France and other Western countries have used debt as a leash on poorer countries for a century. If “we” reduced this strategy in the last few years, it’s mostly for our own benefit (there is less money to spare, and debt-aid has become an internal political issue). Resenting China for following in our footstep is a bit disingenuous. I think the onus, now, is on the receiving countries, that hopefully have learnt how these faustian pacts work. The problem is not China financing poorer countries for its own benefit, but rather Western inability or unwillingness to give them a better deal. We bribed quite a few governments during the Cold War, but recently the only thing we seem to be doing is “violent peacekeeping”, if you catch my drift.
a008t 8y ago
>Lina Benebdallah, assistant professor of politics and international affairs at Wake Forest University, North Carolina, however, cautions that the China-Africa relationship is "asymmetric." In 2016, for example, China exported $88 billion in goods to Africa, but only imported $40 billion from the continent. And what is the problem with that? If China wants to subsidize African development or consumption, what is the problem with that? If China loans more to African nations than they can repay, it is a loss for China, not for the African nations. The real problem, it seems, is that China has an excess of USD that it does not know what to do with. It is afraid to let Yuan appreciate and let the Chinese people enjoy increased consumption, as while the economy is shifting from export to internal consumption there would be a period of instability - the status quo bias. It is also afraid of buying assets in the US and Europe as it cannot guarantee that these assets will not be seized if need be for political reasons. Furthermore, it does not want to do anything that would reduce the value of the remaining dollars it holds. Trying to establish a resource base in Africa where they can build relationships, influence, enforce their property rights and protect trade routes, seems like a reasonable choice.
- baybal2 8y ago
  >Lina Benebdallah, assistant professor of politics and international affairs at Wake Forest University, North Carolina, however, cautions that the China-Africa relationship is "asymmetric." In 2016, for example, China exported $88 billion in goods to Africa, but only imported $40 billion from the continent. 88 : 40 = 2.2. At the ratio of 2.2, Africa does better on trade balance with China than most of Western nations... >It is also afraid of buying assets in the US and Europe as it cannot guarantee that these assets will not be seized if need be for political reasons. Furthermore, it does not want to do anything that would reduce the value of the remaining dollars it holds. Trying to establish a resource base in Africa where they can build relationships, influence, enforce their property rights and protect trade routes, seems like a reasonable choice. Have you come to that conclusion yourself?
  - nraynaud 8y ago
    Careful with this comparison, Africa is still mostly a continent of primary resources and factories, so it would more natural that their trade balance be positive.
baybal2 8y ago
A fine propaganda pieces: https://www.youtube.com/watch?v=k42eqzZWg5A https://www.youtube.com/watch?v=k42eqzZWg5A https://www.youtube.com/watch?v=9A9HEVkXoJ4 https://www.youtube.com/watch?v=9A9HEVkXoJ4 You see, there are not many "golden statue" boondoggles, though no denial there were a few of them... You see three prominent areas: 1. pay-per-use infrastructure (public transit for example, those train lines in Africa will be paying a lion share of profit to for loan repayments for decades,) 2. factories - that's self explanatory, 3. cultural facilities - for propaganda value.
- taobility 8y ago
  I think we all know what to be called investment. Building highway, high speed train, subway, are all investments, which are called win-win, for local people, they got the better public transit, and for Chinese developers, they got the profit.
Fuxy 8y ago
Well the incentive for China is simple since it uses all Chinese sources so the costs get higher than necessary but it's a foreign government flipping the bill so they don't care plus there is no competition. The risks in Africa are great but when China has got your back as a company the math is different. Not to mention we're talking Chinese concrete here that building will be turning to dust in less than 5 years they do the same in China after all and that's why it's not smart to buy property long term there although it's culturally necessary to be able to have a family there. They may be building grand buildings but they use sub par materials so they are no build to last so I predict the debt will last longer than what they offered for it. I works in China because the handle the supply and demand internally but it's a different story when they start exporting that.
jpatokal 8y ago
One piece missing from the story is that Ethiopia is politically structured very much like China: an overbearing, notionally Communist [1] state that operates basically as a dictatorship and is mortally afraid of losing power. It's no surprise that they're turning to China for help. [1] https://en.wikipedia.org/wiki/Ethiopian_People%27s_Revolutionary_Democratic_Front#Ideology https://en.wikipedia.org/wiki/Ethiopian_People%27s_Revolutio...
- g8oz 8y ago
  Indeed - Ethiopian (and other African) officials are regularly sent to China for training on governing. It's a very effective soft power tactic. https://www.brookings.edu/blog/africa-in-focus/2016/07/05/political-party-training-chinas-ideological-push-in-africa/ https://www.brookings.edu/blog/africa-in-focus/2016/07/05/po...

72 points by tintinnabula 8y ago

thomasedwards 8y ago

Fantastically miss-used image before/after sliders, not actually showing before or after?

nthnclrk 8y ago
Just had the same thought, came back to the comments and here we are. I couldn’t agree more. Surely the convention—generally—is to indeed use these for before/after comparisons? Especially if you set a precedent by doing so correctly at the start.
detritus 8y ago
Add to that a map of labelled "Cities with more than 1m people" which clearly misses out... well, quite a few. "Cities with more than 1m people in China and Ethiopia" on the other hand... .

adventured 8y ago

The US has a lot of experience - both successful and unsuccessful - at nation building, actively and passively via trade and investment, over the last ~70 years or so. When you get it right, the results are spectacular. If China can invest half a trillion dollars plus into Africa over two decades and it turns out really well, and they can help lift hundreds of millions of people out of poverty, then that will be a tremendous outcome. They'll be contributing back to the virtuous cycle that their own development over the last few decades has been part of. More and more countries become net contributors and the pace of eradicating extreme poverty quickens. The debt trap concerns are legitimate, ignoring the propaganda side of that for a moment. That's a pretty obvious potential problem for very poor countries when taking on massive development loans etc. Ghana for example has a $40-$50 billion GDP, and China recently agreed to lend them $15 billion to try to develop their natural resources (bauxite mining for one) for China's use. When you're borrowing that large of an amount of capital vs the size of the economy that has to repay the debt, it's obviously risky. Ghana's vice president optimistically referred to it as a Marshal plan for Ghana. The pessimistic retort by a member of their parliament: > "How much of our natural resource are they leveraging in that agreement for the $15 billion facility? If you’ll remember, former President Kufuor did the same thing when we were constructing the Bui dam. He went to China and mortgaged our cocoa for a loan agreement. Today we ship the country’s cocoa to China to service the debt,” he said. All of these examples come with that double sided risk/reward concern, with debt and what you put up in exchange for the development capital. The other giant issue I rarely see these articles discuss, is practical sustainability. That's every bit as important as the debt concern. The US could hand Albania an advanced, $11 billion nuclear aircraft carrier, that doesn't mean it's a good idea matched to their level of development and what they can afford to maintain. Skyscrapers are very expensive to maintain across decades. Ethiopia has a GDP per capita of $700. To be clear, I'm not saying what does or doesn't make sense for Ethiopia. Rather, it'd be interesting to see an analysis of what a country like Ethiopia can support economically. There's a sustainable process to economic development. You can accelerate it a bit, if you try to leap too far you run the risk of causing dramatically worse problems than the nation otherwise would have experienced had it developed more organically or at a more measured pace. If it goes south, you not only have the debt to deal with, you have expensive infrastructure you can't afford to maintain, a double blackhole. China can dump immense sums of capital into trying to leap a country like Ethiopia forward. If they get that wrong, Ethiopia is stuck with trying to upkeep that infrastructure. It makes me wonder if there are elaborate studies done by Ethiopian authorities before allowing major projects funded by China to go forward, when it comes to estimated 30-50 year type maintenance costs.

baybal2 8y ago
>Ghana for example has a $40-$50 billion GDP, and China recently agreed to lend them $15 billion to try to develop their natural resources (bauxite mining for one) for China's use. When you're borrowing that large of an amount of capital vs the size of the economy that has to repay the debt, it's obviously risky. Ghana's vice president optimistically referred to it as a Marshal plan for Ghana. The pessimistic retort by a member of their parliament Bauxite mine is not a unpredictable source of future income. Much like crude oil, even if it is the end of the world tomorrow, it is really, really hard to not to make any money out of it. Another like these are their electric station projects in Pakistan: a very populous country, but their British era grid is beyond repair. Loans given for these stations had high interest, but at the same time Chinese put in sensible conditions like force-majeure insurance, and that the project will largely be done by Chinese state companies guaranteeing that not a single Pakistani bureaucrat had opportunity to steal the funds. Given current electricity prices, there is no chance that they will ever be under water for on loan. A lot of projects are said to be financially engineered to be self-repaying. Effectively, these are not loans, but misnamed leasing agreements. The concern should be over ones that aren't. Saying that China just litters money around without hoping to get anything in return, is simply beyond naive. I can admit, Chinese officials are inept at it. Lots of bureaucrats working on those projects do look for making a name for themselves over having the project succeed. Their competence is being questioned. Every time I'm seeing a watercooler talks of officials during industry events, it always comes to "facepalm manoeuvre" when their talks cross over "a yet another multi-gigabuck loan to another god forsaken country." I assure you, even within the party itself, these projects, at least, make people scratch their heads.
toyg 8y ago
The US, France and other Western countries have used debt as a leash on poorer countries for a century. If “we” reduced this strategy in the last few years, it’s mostly for our own benefit (there is less money to spare, and debt-aid has become an internal political issue). Resenting China for following in our footstep is a bit disingenuous. I think the onus, now, is on the receiving countries, that hopefully have learnt how these faustian pacts work. The problem is not China financing poorer countries for its own benefit, but rather Western inability or unwillingness to give them a better deal. We bribed quite a few governments during the Cold War, but recently the only thing we seem to be doing is “violent peacekeeping”, if you catch my drift.

a008t 8y ago

>Lina Benebdallah, assistant professor of politics and international affairs at Wake Forest University, North Carolina, however, cautions that the China-Africa relationship is "asymmetric." In 2016, for example, China exported $88 billion in goods to Africa, but only imported $40 billion from the continent. And what is the problem with that? If China wants to subsidize African development or consumption, what is the problem with that? If China loans more to African nations than they can repay, it is a loss for China, not for the African nations. The real problem, it seems, is that China has an excess of USD that it does not know what to do with. It is afraid to let Yuan appreciate and let the Chinese people enjoy increased consumption, as while the economy is shifting from export to internal consumption there would be a period of instability - the status quo bias. It is also afraid of buying assets in the US and Europe as it cannot guarantee that these assets will not be seized if need be for political reasons. Furthermore, it does not want to do anything that would reduce the value of the remaining dollars it holds. Trying to establish a resource base in Africa where they can build relationships, influence, enforce their property rights and protect trade routes, seems like a reasonable choice.

baybal2 8y ago
>Lina Benebdallah, assistant professor of politics and international affairs at Wake Forest University, North Carolina, however, cautions that the China-Africa relationship is "asymmetric." In 2016, for example, China exported $88 billion in goods to Africa, but only imported $40 billion from the continent. 88 : 40 = 2.2. At the ratio of 2.2, Africa does better on trade balance with China than most of Western nations... >It is also afraid of buying assets in the US and Europe as it cannot guarantee that these assets will not be seized if need be for political reasons. Furthermore, it does not want to do anything that would reduce the value of the remaining dollars it holds. Trying to establish a resource base in Africa where they can build relationships, influence, enforce their property rights and protect trade routes, seems like a reasonable choice. Have you come to that conclusion yourself?
- nraynaud 8y ago
  Careful with this comparison, Africa is still mostly a continent of primary resources and factories, so it would more natural that their trade balance be positive.

baybal2 8y ago

A fine propaganda pieces: https://www.youtube.com/watch?v=k42eqzZWg5A https://www.youtube.com/watch?v=k42eqzZWg5A https://www.youtube.com/watch?v=9A9HEVkXoJ4 https://www.youtube.com/watch?v=9A9HEVkXoJ4 You see, there are not many "golden statue" boondoggles, though no denial there were a few of them... You see three prominent areas: 1. pay-per-use infrastructure (public transit for example, those train lines in Africa will be paying a lion share of profit to for loan repayments for decades,) 2. factories - that's self explanatory, 3. cultural facilities - for propaganda value.

taobility 8y ago
I think we all know what to be called investment. Building highway, high speed train, subway, are all investments, which are called win-win, for local people, they got the better public transit, and for Chinese developers, they got the profit.

Fuxy 8y ago

Well the incentive for China is simple since it uses all Chinese sources so the costs get higher than necessary but it's a foreign government flipping the bill so they don't care plus there is no competition. The risks in Africa are great but when China has got your back as a company the math is different. Not to mention we're talking Chinese concrete here that building will be turning to dust in less than 5 years they do the same in China after all and that's why it's not smart to buy property long term there although it's culturally necessary to be able to have a family there. They may be building grand buildings but they use sub par materials so they are no build to last so I predict the debt will last longer than what they offered for it. I works in China because the handle the supply and demand internally but it's a different story when they start exporting that.

jpatokal 8y ago

One piece missing from the story is that Ethiopia is politically structured very much like China: an overbearing, notionally Communist [1] state that operates basically as a dictatorship and is mortally afraid of losing power. It's no surprise that they're turning to China for help. [1] https://en.wikipedia.org/wiki/Ethiopian_People%27s_Revolutionary_Democratic_Front#Ideology https://en.wikipedia.org/wiki/Ethiopian_People%27s_Revolutio...

g8oz 8y ago
Indeed - Ethiopian (and other African) officials are regularly sent to China for training on governing. It's a very effective soft power tactic. https://www.brookings.edu/blog/africa-in-focus/2016/07/05/political-party-training-chinas-ideological-push-in-africa/ https://www.brookings.edu/blog/africa-in-focus/2016/07/05/po...