Africa

China is emerging as a major financer of infrastructure projects in Africa, as documented in Building Bridges, a report released this week by the World Bank.  This is a very welcome development because Africa has an infrastructure deficit and China has both the financial resources and the construction industry capacity to help meet the demands.

Sub-Saharan Africa lags behind other developing regions on most standard indicators of infrastructure development, prompting African leaders to call for greater international support in this sphere. By far the largest gaps arise in the power sector, with generation capacity and household access in Africa at around half the levels observed in South Asia and about a third of the levels observed in East Asia and Pacific. Unreliable power supply leads to losses in industrial production valued at 6 percent of turnover. In China’s coastal cities, similar losses are typically less than 1 percent. The result of poor infrastructure is that many business services are much costlier than those available in other regions. For example, road freight costs in Africa are two to four times as high per kilometer as those in the United States, and travel times along key export corridors are two to three times as high as those in Asia.

David Dollar and I have both posted recently about lessons from China for Africa.  Here is one more view, from Joe Remenyi who recently served a stint as Research Director for the International Poverty Reduction Center in China (IPRCC).  IPRCC was one of the main organizers of the Experience Sharing Program on Development between China and Africa which David and I wrote about last month.

I pretty much agree with Joe’s observations and conclusions.  On the poverty reduction front, I would only add that if one uses a “cost-of-basic needs poverty line”, the reduction in incidence of poverty in China is even more dramatic, dropping from 64% of the population in 1981 to 6%-7% in 2007.  We’ll be featuring this in the new World Bank Poverty Assessment that will be released soon. 

Last week I posted some reflections from the field visit portion of last month’s Experience-Sharing Program on Development between China and Africa.  The program covered key aspects of China’s development experience including agricultural and rural reforms, infrastructure development, the process of opening-up the economy through trade and foreign direct investment, and China’s growing engagement with Africa.  David Dollar has also posted some thoughts about the program.

Thirty African officials visited China for 12 days in May on a pilot South-South knowledge exchange organized by the Chinese government with assistance from the World Bank.  My colleague, Phil Karp, has written about the program, including the study tour around China that he accompanied.  I met the officials in Beijing both before and after their travels and would like to add some personal reflections.  Most of the officials had never been to China or had only attended a conference in a big city.  Visiting farms, local governments, economic zones, and enterprises was a real eye-opener.

I recently had the pleasure of accompanying a group of 15 senior officials from East and Southern Africa on a field visit to Guangxi Autonomous Region and Guangdong Province.  Prior to the field visit, the officials had spent three days in Beijing at a workshop on China’s development experience. The visit to Guangxi and Guangdong gave them a chance to see the results of China’s reforms for themselves, and to interact with local government officials, farmers, villagers, and entrepreneurs.  As one participant noted, “I’ve never been so reminded of the old saying that seeing is believing.  I came here a bit skeptical of all of the hype about the Chinese miracle, but now I’ve seen for myself what they have achieved in terms of poverty reduction and development”.  

Apart from the formal briefings and visits to farms and factories, the field visits afforded a few light-hearted moments, including an impromptu sing-along led by the Vice Governor of Guangxi Autonomous Region, and a mock-wedding ceremony in a Yao-minority village in Guangxi with two of the African officials serving as grooms.