With the escalation of US sanctions against Iran after the withdrawal of Donald Trump from the nuclear deal between two countries and lower oil prices in world markets, Iran’s oil revenues, which is the main source of its income, have fallen sharply and has increased inflation and recession in the country. To deal with such problems; Iran is seeking new incomes to expand its cooperation with China and is currently seeking to finalize a 25-year trade cooperation agreement with China.
However, for China, this is an opportunity to consolidate its economic influence in Iran more than before, and more importantly, it may be able to overcome the new trinity of power, which includes India, the United States, and China.
China and India have long sought to expand their markets in Asia. China has already found a place in the markets and politics of the African continent.
China’s is drowning developing countries in debt and. It has had successful responses in countries such as Djibouti and Sri Lanka, and here is a brief look at China’s experience in Djibouti. Where China established its first foreign military base.
The Djibouti experience can give us a prospect of the Iran-China agreement. Djibouti is a small country with a population of nearly one million people located in an area called the Horn of Africa. Djibouti is close to the Middle East, located on energy transit routes and on the shores of the Bab al-Mandel Sea, all of which have made the country geopolitically attractive to the west and east.
On January 8, 1979, China and Djibouti signed an agreement. Since then, China has offered its aid projects to Djibouti in the form of building a stadium, a monument, housing projects, a foreign office building, and several other projects.
Cooperation between the two countries began in 1982, and by the end of 2002, 478 cooperation agreements had been signed. Chinese companies like “the China Civil Engineering Construction Corporation (CSCEC)”, “the China Civil Engineering Construction Corporation”, and some other Chinese companies have involved in the Djibouti projects.
In 1998, China and Djibouti signed a trade agreement between the Government of the People’s Republic of China and the Government of the Republic of Djibouti. The deal increased trade between the two countries to $ 49.83 million in 2002, of which $ 49.81 million was China’s exports and
$ 20,000 was Djibouti’s exports.
Two months after the opening of the port of Durala, China and Djibouti celebrated again for the completion of another building: China’s first military base outside the country, just a few kilometers from the port of Doraleh. Doraleh military facility built for the People’s Liberation Army (PLAN) navy It is also reported that at least one of the port docks is used exclusively by the Chinese. PLAN is now able to overlook one of the world’s most important trade zones: the Gulf of Aden and the Strait of Bab al-Mandeb, where it is estimated that up to 20% of world trade passes from there.
According to the Africa Report, Djibouti’s spending on port and rail projects is estimated at $ 12 billion, while the country’s GDP in 2017 was only $ 1.85 billion. This variance prompted the IMF to warn about debt stability in the country.
In 2018, Djibouti President Ismail Omar Guelleh called the Djibouti International Free zone, a $ 3.5 billion Chinese-funded investment, the hope of thousands of job seekers.
“Yes, our debt to China is 71% of our GDP,” Djibouti Foreign Minister Mohammad Ali Youssef said in a phone interview during a meeting in New York.”But we needed that infrastructure. It was natural that we increased our cooperation with China; Neither the United States nor Europe was ready to build the infrastructure we needed. We are looking for the progress of the country and the well-being of the people.”
In 2019, the ratio of the country’s total debt to its GDP exceeded 100%. A large portion of these debts was created by China to improve its ports and various investments. Djibouti’s debt to China exceeded what Djibouti could afford it.
Critics of Chinese debts claim that vulnerable and developing countries fall into China’s debt trap, emptying government coffers and creating a generation of taxpayers with giant bills, and In case of non-repayment of debts, Chinese banks will take ownership and control of their structures at strategic points.
Although African governments deny such an occurrence; This is what happened in Sri Lanka. In 2017, Sri Lanka gave the Chinese a large port after failing to pay its debt to them. The Sri Lankan government borrowed $ 1.5 billion from China to develop the port of Hambantota, which failed to repay, and to reduce its debt burden, provided it to China under a 99-year contract, and the company took over the port. CMport is; The same company that contracted to build the port of Doraleh!
Chinese merchants own a 23.5 percent share in a Djibouti holding company related to the Durala port terminal, including the Doraleh dry port and the Doraleh multi-purpose port, the latter of which was built with a $ 580 million loan from the Chinese company Eximbank.
Overall, according to research by Ernst & Young, Chinese companies doubled their investment between 2014 and 2018, spending $ 72.2 billion.
According to Johns Hopkins analysis, African countries have borrowed about $ 130 billion from China since 2000, and the amount of loans has tripled since 2012.
Djibouti officials, however, have always indicated that they have a good ability to repay their loans and will maintain control over these ports.
The head of the Djibouti Ports Fund, Abu Bakr Omar Hadi, said the money came mainly from China, but that we had our assets.
Of course, Djibouti cannot be compared to Iran because Djibouti does not have the capabilities of Iran for monetization and even needs to import to supply its basic needs. While Iran has great potential in many fields like energy, agriculture, tourism, and the like, these days all of these capabilities are overshadowed by unprecedented political relations and unprecedented sanctions, and as Iran’s hostility to the West deepens, it’s become more possible for Iran to trapped in Eastern debt.
How COVID-19 pandemic affected South Africa
At present, South Africa is the world’s fifth in the number of coronavirus cases. The epidemiological situation in the country continues to deteriorate, as despite a decreasing number of new cases reported daily, the number of tests has decreased as well. On August 2, 2020 the total number of infected exceeded 511,000, with a daily increase staying at 10,000 – 12,000. The death toll exceeds 8,000. Nevertheless, Health Minister Dr. Zweli Mkhize points out that the percentage of recoveries make up 64% – higher than the world average of 58.2%, which does inspire hope.
Significantly, what hit South Africans the most was the economic consequences of the COVID-19 pandemic. South Africa is de facto the only country where along with the closure of different sectors of the economy after the introduction of a quarantine on March 27th there still exists a ban on the sale of tobacco and alcoholic drinks, including wine, the domestic consumption of which is a major source of the country’s revenues. (In June the government partially lifted the ban on alcohol for one month,, which caused a serious rush among the population and as a result, an upsurge in COVID-19 cases – P.L.) Moreover, the above-mentioned measures have inflicted substantial losses on the restaurant business and the farming sector, triggering severe criticism from trade union movements. Union leaders have warned the South African government that if not lifted the quarantine will result in the loss of jobs for 800,000 public catering workers and for about half a million employees of the wine-making industry. The situation in the tourist sector is as alarming as the country’s authorities keep the decision to close the borders in force. Domestic tourism is also prohibited. All in all, about 3 million people have lost their jobs during the 4-month quarantine and experts predict a growth in unemployment from 30% to 50%.
In addition, the South African society is demonstrating an ever growing criticism of the measures taken by police and military personnel to guarantee anti-pandemic regime. Participation of police and army servicemen is frequently accompanied by disproportionately harsh measures against quarantine violators, particularly residents of informal settlements, known as “townships”. All this sparks sporadic outbursts of protests among poor dark-skinned communities. Meanwhile, shortages of protective masks and other individual protection items have resulted in more cases of law enforcement employees contracting the coronavirus infection, which leads to the closure of many police stations and an increase in crime.
South Africans point out that the government and its anti-COVID-19 committee are unable to cope with the crisis, which becomes clear from a surge in coronavirus cases among the population. Also under question is the country’s healthcare system, which, experts say, will not be able to handle an influx of coronavirus patients at the peak of the epidemic in August-September due to shortages of hospital beds, medical equipment and medicaments. What is particularly frustrating is the numerous cases of the authorities being slow in addressing social issues, especially those related to the preservation and creation of new jobs.
Given the situation, South African experts say, tensions will continue to escalate and as the epidemiological situation deteriorates, there will be more mass protests on the part of the dark-skinned community, particularly residents of “townships”.
Simultaneously, the South African government is pinning hopes on a short lull, – last week the IMF approved the so-called “COVID” loan of 4.2 billion dollars for South Africa. The South African leadership expects these resources to reverse the negative trend by financing the priority program of supporting the country’s population.
Meanwhile, analysts underscore that the government is faced with other, equally pressing issues, including restoration of the economy, restructuring of state-run companies, and creation of jobs. Experts say South Africa is in for hard times, which will require maximum coordination from the authorities to maintain political and social stability amid the continuing social and economic crisis in the country.
From our partner International Affairs
Sashaying to success: Fashionomics Africa helps designers embrace the digital age
From a new digital marketplace to connect Africa’s creatives with global markets, to masterclasses to help designers share and learn, and webinars to inform and inspire: the African Development Bank’s flagship Fashionomics Africa(link is external) initiative has taken great strides this year.
The website and mobile app were unveiled at the Global Gender Summit in Kigali in November, to help Africa’s fashion designers, textile and accessories entrepreneurs grow their businesses, with a focus on women and young people.
“It is all really for connecting business to business, businesses to consumers and ensuring we are putting into place all we need to really transform the clothing and fashion industries in Africa,” Dr. Jennifer Blanke, the Bank’s Vice President for Agriculture, Human and Social Development, said at the launch.
With secure e-commerce and online payment systems, the aim is to connect suppliers, buyers, manufacturers and distributors to consumers and investors – to increase access and grow markets within Africa and across the globe.
“The Fashionomics Africa digital marketplace will be a game-changer for Africa’s fashion entrepreneurs, to be able to reach regional and international markets and increase their revenues,” said Mahlet Teklemariam, Founder of Hub of Africa, an Ethiopia-based fashion platform that promotes African brands.
In February, Fashionomics Africa hosted a masterclass in Nairobi on how to establish successful fashion brands. Organized by the Bank’s Gender, Women and Civil Society Department, more than a dozen fashion industry mentors shared their experiences and expertise with the aspiring entrepreneurs, the vast majority of them women.
“The Fashionomics Africa masterclass has all the right ingredients to add flavour to your fashion business,” said Linda Murithi, founder of Love Fashion Kenya, one of the designers who attended the Nairobi event.
The masterclass – which followed similar workshops held in Addis Ababa, Abidjan, Johannesburg, Kigali and Lagos – discussed business acumen, access to finance, branding, marketing and networking and reflected on the challenges and opportunities African fashion entrepreneurs encounter.
“Some designers feel alone. Fashionomics Africa has created a platform where people share the same language,” said Brendan McCarthy of the Parsons School of Design, and one of the mentors at the masterclass. “They can connect, share experience and create a collaborative community.”
More recently, in a rapid response to the new social and economic environment created by the COVID-19 outbreak, Fashionomics Africa has launched a series of webinars to address the opportunities and threats posed by the pandemic to Africa’s fashion industry.
At the opening webinar in early June, fashion entrepreneurs, investors, industry experts and business insiders, exchanged ideas on the need for a digitally-enabled African fashion industry during and after the COVID-19 pandemic.
“African fashion is rising right now. African designers need to develop their unique business modeland have to be innovative. To do so, digital is key,” Sarah Diouf, founder of made-in-Africa online brand Tongoro, said at the webinar. “It’s a tool that we can truly leverage in our advantage.”
Be it the feel of the fabric, the fit of the design or the vibrancy of the pattern: the fashion business has traditionally thrived on personal attention and face-to-face contact. But the need to reimagine the role of technology as a lever for growth in the industry has been thrown into sharp relief by the COVID crisis.
The containment measures put in place to curb the spread of the virus mean fashion entrepreneurs, like those in other industries, must look to online trading tools and or mobile money platforms to build resilience and prepare for the future. In this, the role of Fashionomics Africa is more vital than ever.
Somalia: An American Media Pundit, Exaggerates and Weaponizes International Aid
Recently, after the Somali parliament removed prime minister, Hassan Ali Kheyre, in an overwhelmingly no-confidence vote, it didn’t only raise my eye borrows but it made me startled to read an opinion article on the matter in the Washington Examiner by Michael Rubin whose writings I usually find quite utopian and unbalanced. The piece titled, The State Department spent $1.5 billion on Somali democracy and built a dictatorship, was full of chunks of inconsistencies, bending the truth, and calumny attacks on the sovereignty of my home country, Somalia, in the disguise of having the right to express an opinion.
Before we delve into the essence of my observations of Mr. Rubin’s article, let me briefly explain why prime minister, Hassan Ali Kheyre, was ousted by the parliament. However, to safe the reader a boring monologue on why and how the prime minister was sacked, I have to go to the point with brevity; the prime minister lost his job after indirectly sabotaging a one-man, one-vote election legislation he was a part of creating it, so that the Somali citizens can directly elect their leaders, a right they lost decades ago, whose opposite is to go back to electing parliament through clan based picks by traditional elders, then the parliament elects the speaker and the president, then the president nominates a prime minister to be confirmed by the parliament, a process tainted with corruption and vote buying, coupled with dangerous foreign interests; the prime minister preferred that old process, but to say the least, the prime minister was a competent figure who did a great job for the public while he was in office, and in his resignation speech, although he did not like how the no-confidence vote was conducted, he left with dignity and a unifying message.
The trick to hoodwink readers Mr. Rubin used in the title of his article was to combine all aid received by Somalia from all sources, even from the United Nations, as a single one of 1.5 billion given by the US State Department alone, which is not the case, and he claimed it as an example for being implicitly one-time payment. Then, he wrote:
“Consider first the sheer scale of the United States’s investment in Somalia: The U.S. has spent tens of billions of dollars on Somalia in recent decades.” But in the title of his article, he tied together the 1.5 billion and what he called building a dictatorship in Somalia in which the reader cannot escape the inference that the US built in Somalia a president Farmaajo dictatorship with 1.5-billion-dollar aid money, a downright lie to discredit Somalia’s resolve not to cave in foreign interference in its affairs, as contrarily evidenced by the weak Somali governments prior to president Mohamed Abdullahi Farrago’s administration. On the other hand, what is so surprising if not disgusting is that Mr. Rubin wrote the following as he cites a biased website that Somali leaders embezzled, a website apparently run by Somalia’s self-proclaimed republic of Somaliland to disseminate anti-Somali news and propaganda; he wrote incoherently as he inserts links, making it an issue, for instance, the international debt relief Somalia deserved so much because of its transparence and good governance, which the international donors praised:
“Under Ambassador Donald Yamamoto, aid to Somalia more than doubled. Over the last year, not only did USAID contribute near $500 million, but Yamamoto successfully advocated debt forgiveness that forced American taxpayers to write off $1 billion in Somali debt, much of which was embezzled by some of the same figures with whom the U.S. now partners. Yamamoto wanted to give Somalia even more.”
Finally, I would say that Somali president, Mohamed Abdullahi Farmaajo, despite his government’s term coming to an end, will nominate a new prime minister, and the new prime minister will be confirmed by the parliament. Somalia will not go back to the corrupted, old system of election. Somalia will succeed and hold a one-man, one-vote election. The sovereignty of Somalia is stronger under president Farmaajo leadership, and as Somalis, we will not let our sovereignty to be compromised by foreign actors. And, Mr. Rubin, I resect your opinion no matter how distorted it can be, but I don’t think the United States government, or the international donors agree with you!
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