It's great to see economic cooperation working out so well on so many levels!
Yes, Chinese contractors are having a big boom (banks, stadiums, airports & roads)
There's a shortage of foreign currency due to the mega projects underway - medicine, electronics, car prices have nearly doubled
What about salaries? Is the net result positive for you?
Could you elaborate? How is there a shortage if there's a ton of foreign investment coming in?
Beside there is a deficit between export and import leading to currency shortage.
https://www.reuters.com/article/ethiopia-energy-idUSL6N0N91Q...
Same issue that all booming cities face, whether it is New York, San Francisco, London, Hong Kong, Tokyo, or anywhere else.
Some manage it better than others.
The fact that they're a strong economy with a strong military and have a government wary of imperialism bodes well, as long as the can keep the number of revolutions and civil conflicts low. Stability is the key.
The continent of Africa remains the last frontier in outsourcing manufacturing, but right now it's not competitive: transport costs are high, there are issues with utilities, capricious governments, and no established concentration of expertise. The Chinese involvement is working hard on improving these for other reasons, but ironically it may enable Ethiopia to begin to take on roles that China has now in the global supply chain. It may also be deliberate: during a gold rush, most money was made by those who enabled the prospectors, not the prospectors themselves.
China will cause the country to become indebted to it and when they can't make the repayments offer to helpfully take full control of it.
More broadly, taking on debt to build the infrastructure needed to level up industrial capabilities isn't exploitation. Building better energy grids, transportation, and communication infrastructure is expensive. It's fundamentally no different than software startups taking on fundraising rounds to enable growth. As long as the leadership isn't irresponsible about it, there's nothing wrong with it and it should easily pay for itself.
The important thing for debt-for-infrastructure planning is to keep corruption manageable, so you don't wind up borrowing to build boondoggles that are for the personal enrichment of the the well-connected rather than the good of the country.
At any rate, China is no more predatory in this regard than the IMF, the World Bank, or other western financial institutions. They have a surplus of capital and need to invest it somewhere. The goal is not imperialist, but rather capitalist.
Yes it's exactly/similar behaviour to the IMF. Doesn't make a difference though to the people.
Is Ethiopia in a lot of debt trouble? From [1], figure 1.17, doesn't seem too troubling, especially when considering its growth rate.
Your assertion that China plans to overload countries with debt also seem to be based on the heavily promoted Sri Lanka story while ignoring any other data points. The Center for Growth Development has a report, [2], Examining the Debt Implications of the Belt and Road Initiative from a Policy Perspective. They find that for the 68 countries analyzed, only 8 are at risk. Your story also contradicts the many times China has provided debt relief.
> In countries suffering from debt distress, the Chinese government has provided debt relief in an ad hoc, case-by-case manner [...] The IMF estimates that China has delivered over 80 percent of what it is expected to provide under HIPC. It was a creditor to 31 of the 36 HIPC countries, and the most recent publicly available information indicates that it provided relief in at least 28 of them, including 100 percent forgiveness for several (e.g., Burundi, Afghanistan, and Guinea). […] China has also demonstrated a willingness to provide additional credit so a borrower can avoid default. A prominent example is China's agreement in early 2017 to extend an RMB 15 billion swap line to Mongolia for three years in support of an IMF Extended Fund Facility.
[1] African Economic outlook: https://www.afdb.org/en/knowledge/publications/african-econo...
[2] PDF Warning: https://www.cgdev.org/sites/default/files/examining-debt-imp...
You honestly can't tell me you don't see that as a loaded statement...And based on your replies to other commentators, doesn't seem like you intended that either.
It has a little graphic showing China owning Pakistan, Kenya, Djibouti, Myanmar and Sri Lanka.
A family member on a recent flight between Chad and Addis Abeba told me that 85% of passengers on the flight were Chinese.
Contractors and private companies are just tip of iceberg. A lot of hi level government cooperations , government sponsored think tank activities[1] which might play a more important role than private business activities. Chinese are coaching Ethiopia to build a nation.
It's the same journey that China itself experienced for last 30 years. The nation building expertise partially comes from tons of competing local government policy makers fighting for the prosperity of their home cities on the vast experiment field of 1.3 billion people, but in early years of struggle also from Hongkong,Taiwan entrepreneurs and even a foreign government with their management expertise when China was as poor as many Africa countries and with no expertise. During the time (in 1996) I created the first web site for CS-SIP[2], I witnessed local Chinese government officials learned from Singapore coaches like pupils.
Why Ethiopia? Because although it's a democracy but the Ethiopian political ecosystem is closer to an "Orwellian regime" that makes building nation possible. It's totally not because Chinese particularly like a regime. Actually Chinese are ideology agnostic and pragmatic. Chinese have a better understanding that this kind of "oppressive" governance creates less chaos. For example Chinese construction contractors almost always hire Chinese worker from China. The real reason is those are the only qualified teams[3] be able to get the job done. However in a democratic countries some sponsored NGO and activists will speak out the "true" that Chinese companies have job discrimination against local people. Then there are massive protests by local people Th Projects can not continue. These incidents happened many times in non-regime countries.
Why quite? Isn't nation building expertise is more valuable and worth to promote than business building expertise so larger population can benefit from? There are a couple of reasons:
1.Western journalists are almost all belief driven people with a little different mindset of HN readers with proof driven thinking. Most of them are activists in the guise Journalist who want to promote their own ideology. They mentally deny the real cause of fast growth in Ethiopia because both governments are regimes so they unintentional hide the truth.
2.Chinese government don't want to be to visible so the nation building is less likely to be interrupted. The international community won't see Chinese effort as an mutual beneficial economic activity but as an expansion to gain regional influence like Soviet Union or Iran because international community is largely brain washed by Orwell's works like 1984 which used to be valid many years ago and still valuable but not applicable everywhere any more.
[1]I have a old friend did consulting job helping policy making for Ethiopia
[2] https://en.wikipedia.org/wiki/Suzhou_Industrial_Park
[3] https://twitter.com/elonmusk/status/968608879914270721?lang=...