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41. Billion-Dollar Exposure: Investor-State Dispute Settlement in Mozambique’s Fossil Fuel Sector

Author:
Lea Di Salvatore and Maria Julia Gubeissi
Publication Date:
02-2024
Content Type:
Special Report
Institution:
Columbia Center on Sustainable Investment
Abstract:
Mozambique is endowed with extensive untapped natural resources, particularly gas and coal. The country’s gamble on fossil fuel-based economic growth comes with signiicant economic risks and crowds out investments in the country’s enormous renewable energy potential. ◆Mozambique faces a substantial economic risk due to its exposure to investor-state dispute settlement (ISDS) claims by foreign investors in its coal, oil, and gas sectors. The investment protections in the country’s international investment agreements and contracts, combined with ISDS, expose Mozambique to multi-billion-dollar financial liabilities. Even conservative estimations show that potential ISDS liabilities from oil and gas projects would cover almost a decade of Mozambique’s government expenditures for SDGs. ◆ Mozambique’s international investment agreements and publicly available oil, gas, and coal contracts allow foreign investors to bypass the national judicial system and bring multi-billion-dollar ISDS claims against Mozambique. Such claims can result in significant costs for the country, and they also have a considerable chilling effect on any new public-interest regulation in areas such as health, environment, community rights or labor protections. ISDS can undermine attempts to adopt meaningul legislation to transition away from fossil fuels and achieve sustainable development goals. This regime can therefore contribute to locking the country into a high-carbon economy. ◆In addition, multiple stabilization clauses in the analyzed contracts lock the operations into specific legal and fiscal regimes for the duration of the contracts. Stabilization clauses protect investments from unexpected regulatory changes or new fiscal rules. If a host state does introduce such changes, stabilization clauses allow investors to demand measures or compensation that would ensure their same profitability absent such changes. These clauses thus exacerbate the limits to – and chilling effect on – states’ public interest regulation. ◆Mozambique and other countries can take actions to remove ISDS from their contracts and treaties, replacing the mechanism with alternative dispute resolution mechanisms. They can also take steps to terminate investment agreements in force. Home countries of Mozambique’s foreign investors have a responsibility to support such action, especially as they, themselves, remove ISDS from their own treaties.
Topic:
Natural Resources, Gas, Investment, Fossil Fuels, Coal, and Disputes
Political Geography:
Africa and Mozambique

42. Engaging Indigenous Peoples in Elections

Author:
Rebecca Aaberg
Publication Date:
02-2024
Content Type:
Special Report
Institution:
International Foundation for Electoral Systems (IFES)
Abstract:
About 5 percent of the world’s population identify as Indigenous, including more than 5,000 cultures that speak over 4,000 languages. The first global report on Indigenous Peoples and elections since the adoption of the United Nations Declaration on the Rights of Indigenous Peoples, “Engaging Indigenous Peoples in Elections: Identifying International Good Practices through Case Studies in Guatemala, Kenya, and Nepal” is a collaboration of the Endorois Indigenous Women Empowerment Network (EIWEN – Kenya), Fundación Guillermo Toriello (FGT – Guatemala), the National Indigenous Disabled Women Association Nepal (NIDWAN), and the International Foundation for Electoral Systems (IFES). Developed with support from the Swedish International Development Agency (Sida) and the United States Agency for International Development (USAID), the report provides new insights into the political life of Indigenous Peoples globally, grounded in primary source evidence from Guatemala, Kenya, and Nepal, as well as interviews with international experts. A collaboration between IFES and Indigenous Peoples Organizations, the report includes recommendations for duty-bearers such as election management bodies (EMBs) and rights holders. The report contains sections on international human rights frameworks; voter registration; voter education; polling; representation, candidacy, and leadership; and intersectionality and indigeneity. Barriers experienced globally by Indigenous Peoples are provided for each section, for example: Exclusion of traditional and customary Indigenous institutions from state decision-making; The need to travel long distances or through difficult terrain to register; Lack of information about elections in Indigenous languages, including Indigenous sign languages; Polling stations often inaccessible to Indigenous persons with disabilities and lack assistive devices for voting, reducing access to secret balloting; Discrimination against Indigenous candidates; Scant representation of Indigenous Peoples, including Indigenous persons with disabilities, Indigenous women, and young Indigenous persons, in local and national legislative offices.
Topic:
Governance, Elections, Indigenous, and Engagement
Political Geography:
Kenya, Africa, South Asia, Nepal, Central America, and Guatemala

43. The Congolese Fight for Their Own Wealth

Author:
Tricontinental: Institute for Social Research
Publication Date:
06-2024
Content Type:
Working Paper
Institution:
Tricontinental: Institute for Social Research
Abstract:
The DRC’s vast mineral wealth contrasts with its extreme poverty, caused by exploitation and conflict. The dossier emphasises sovereignty and dignity, echoing Congolese activists’ visions for freedom.
Topic:
Poverty, Sovereignty, Conflict, Minerals, Exploitation, and Activism
Political Geography:
Africa and Democratic Republic of the Congo

44. Stabilisation and the Central Sahel

Author:
Ekaterina Golovko and Kars de Bruijne
Publication Date:
05-2024
Content Type:
Policy Brief
Institution:
Clingendael Netherlands Institute of International Relations
Abstract:
The international community hasn’t been successful in its efforts to support ‘stabilisation’ in the central Sahel. To learn lessons from recent engagement, this policy brief seeks to make three contributions to an already long list of ‘strategic misfits’. First, that ‘stabilisation responses’ are built on the wrong assumption “to bring back the state” and “expand state presence”, without serious work on how to reform the state that had to be brought back. Second, that external actors – and in particular Western governments – consistently overestimated their ability to influence and effect real change in the region and have to become more modest in their objectives. Third, that there is an urgent need to apply these lessons to the new area of policy attention: coastal countries of West Africa and the fight against violent extremism. This policy brief calls for a stronger reflection on what decades of largely failing Sahelian policy can tell us about how to engage with Coastal West Africa.
Topic:
Foreign Policy, Countering Violent Extremism, and Stabilization
Political Geography:
Africa and Sahel

45. Exploring the risk of violent extremism along the border between Northern Benin and Nigeria

Author:
Kars de Bruijne
Publication Date:
06-2024
Content Type:
Special Report
Institution:
Clingendael Netherlands Institute of International Relations
Abstract:
For over a decade, researchers and politicians feared a link between extremist groups in the Sahel and the Lake Chad Basin. Since 2014, studies have pointed to Benin’s unfortunate potential to serve as a geographical hinge. So far, evidence has been largely absent. While violent extremism in northern Benin is typically regarded as a “spillover” from the Sahel our report “Dangerous Liaisons: Exploring the risk of violent extremism along the border between northern Benin and Nigeria” warns that a large violent extremism problem has emerged in North West Nigeria that now threatens Benin. In the cross-border Borgou region (Benin), a collaboration between Nigerian and Sahelian insurgents is in the making along Benin’s border with Nigeria. These signals are extremely concerning, and action is needed. Nigeria and Benin should cease the d’entente between Talon and Tinubu and intensify cooperation. This should take the form of information exchange, arranging hot-pursuit and consider joint action. But also Western donors and programming need to break stove-piped responses in the Sahel and Lake Chad respectively. The two conflicts appear to merge and a more united and flexible response is needed.
Topic:
Security, Foreign Policy, Violent Extremism, and Borders
Political Geography:
Africa, Nigeria, and Benin

46. From Catastrophe to Famine: Immediate action needed in Sudan to contain mass starvation

Author:
Anette Hoffmann
Publication Date:
02-2024
Content Type:
Policy Brief
Institution:
Clingendael Netherlands Institute of International Relations
Abstract:
The conflict in Sudan has a substantial impact on the country’s food system and hinders people’s ability to cope with food shortages. As the country shows the worst hunger level ever recorded during the harvest season (from October to February), which is usually a period when food is more available, the severity and scale of hunger in the coming lean season (mid-2024) will be catastrophic. This policy brief argues that rather than the inevitable consequence of war, this food crisis is the result of the generals’ deliberate destruction of Sudan’s food system and the obstruction of people’s coping mechanisms. Based on available data and famine literature, accounts from hunger sufferers, as well as discussions with experts in and on Sudan, this policy brief outlines scenarios that look several months beyond currently available food insecurity forecasts. According to the most likely scenario, seven million people will face catastrophic levels of hunger by June 2024 (IPC5), with mass starvation being the prospect. The window by which to significantly reduce the impact of what is becoming the world’s largest hunger crisis in decades is rapidly closing. Besides increasing diplomatic and economic pressure to stop the war, the EU, its member states, the US, the UK, and Norway, as well as the UN and INGO partners must urgently and massively scale up meaningful assistance by: i. Declaring the risk of famine for Sudan; ii. Injecting mobile cash directly to local producers, as well as to consumers and local aid providers (Emergency Response Rooms); iii. Immediately scaling up food aid and WASH (Water, Sanitation and Hygiene) support.
Topic:
Civil War, Humanitarian Aid, Famine, Food Security, Humanitarian Crisis, and Armed Conflict
Political Geography:
Africa and Sudan

47. Stabilization Policies After the Sahel Coups

Author:
Florence Schimmel and Armin Schäfer
Publication Date:
06-2024
Content Type:
Commentary and Analysis
Institution:
German Council on Foreign Relations (DGAP)
Abstract:
The Sahel is increasingly ruled by authoritarian military regimes; co-­operation with them towards goals such as stability and peace is becoming more and more difficult for Germany. Following the recent coups in Mali and Niger in particular, the question now is whether and how the previous stabilization policies can be continued. For around ten years, Germany, together with the Netherlands, the United Kingdom, and the United States, has been pursuing stabilization policies that focus on strengthening fragile governments. In the future, Germany must more clearly define which partners are considered legitimate and which fundamental principles should apply, notwithstanding the high degree of context-specificity.
Topic:
Security, Foreign Policy, Coup, and Stabilization
Political Geography:
Africa, United Kingdom, Germany, Sahel, and United States of America

48. Race Politics and Colonial Legacies: France, Africa and the Middle East

Author:
Hisham Aïdi, Marc Lynch, Zachariah Mampilly, Baba Adou, and Oumar Ba
Publication Date:
05-2024
Content Type:
Research Paper
Institution:
Project on Middle East Political Science (POMEPS)
Abstract:
In February 2020 – the eve of the COVID-19 pandemic – the Project on Middle East Political Science held a preliminary meeting at Columbia University in New York to explore the origins of the Africa-Middle East divides that treat North Africa as part of the Middle East and neglect states such as Sudan and Mauritania. Columbia was an appropriate place to begin such a dialogue. Two decades ago, when two of us (Aidi and Mampilly) were graduate students at Columbia, the Institute of African Studies was in serious crisis. The Ugandan political theorist Mahmood Mamdani arrived and launched an initiative to decolonize the study of Africa to counter Hegel’s partition of Africa by transcending the Saharan and red Sea divides, and by underscoring Africa’s links to Arabia, Asia and the New World. To that end, we co-organized a second conference on racial formations in Africa and the Middle East looking at race-making across these two regions comparatively, including the border zones often left out of both African and Middle Eastern Studies: the Sudans, Amazigh-speaking areas in the Sahel, Arabic speaking areas on the Swahili coast and Zanzibar. This workshop represents the third in our series of transregional studies across the Africa-Middle East divide.
Topic:
Politics, Post Colonialism, Race, History, Colonialism, Islamophobia, and Racialization
Political Geography:
Uganda, Africa, Europe, Sudan, Middle East, France, Libya, Lebanon, Syria, Tunisia, Mauritania, and United States of America

49. Unveiling Dissent: Eritrean Diaspora Festival Turmoil and Social Media Mobilization

Author:
Yonatan Tewelde
Publication Date:
03-2024
Content Type:
Journal Article
Journal:
Brown Journal of World Affairs
Institution:
Brown Journal of World Affairs
Abstract:
Amidst the TikTok videos that inundated the Eritrean digital landscape during the summer of 2023, a tapestry of dissent unfolds. A wounded protestor, his head swathed in bandages, is ushered into an ambulance: a powerful testament to the toll of resistance. A striking photograph captures a black man in a blue shirt adorned with the raised fist logo of Birgade Nhamedu (a new, diaspora Eritrean, youth-led movement). He is handcuffed and escorted by three stern riot police officers, his silent defiance echoing louder than words. Videos depict intense street clashes between two factions in Israel, one clad in blue shirts and the other in red, hurling projectiles amidst tear gas clouds, their battlegrounds emblazoned with the fervor of discord. The lens then shifts to scenes of vulnerability, with two young women kneeling before the police, one clad in the emblematic blue shirt, the other brandishing the Israeli flag and a gallon of milk, a poignant plea for justice. Across borders, from Ontario to Seattle, a sea of blue-shirted protestors unites in dance, protest, and celebration. However, the more forceful videos paint a vivid picture of upheaval; festival venues overrun, tents ablaze, and the clash between the dissenting blues and the establishment’s red emblematic of a struggle that transcends geographical boundaries. These TikTok vignettes, widely shared and discussed with viral fervor, capture the essence of a burgeoning movement of global dissidents led by young Eritrean refugees. Their resistance is motivated by their opposition to an authoritarian government that has been in power since 1991. This movement represents a visceral reaction to the years of forced military conscription from which the prostestors sought refuge. The struggle unfolds as a response to a range of egregious acts, including enslavement, imprisonment, enforced disappear- ance, torture, persecution, rape, and murder. These inhumane acts have been systematically carried out since the Eritrean government authorities assumed control of the territory in 1991. The United Nations has since condemned these actions as crimes against humanity.1
Topic:
Diaspora, Social Media, Dissent, and Mobilization
Political Geography:
Africa and Eritrea

50. Resurgence of Military Coups in Africa: Can the African Union and Regional Organizations Defend and Consolidate Democracy?

Author:
Joshua O. Bolarinwa
Publication Date:
03-2024
Content Type:
Journal Article
Journal:
Brazilian Journal of African Studies
Institution:
Brazilian Journal of African Studies
Abstract:
This research evaluates the contemporary increase in military coups in Africa and analyses the effectiveness of the African Union (AU) and other regional institutions in safeguarding and promoting democratic government following existing frameworks and policies. The African Union’s framework for Unconstitutional Changes of Government (UCG) and its subsequent execution have faced significant problems in response to the recent revival. The African Union has garnered commendation for its stance in opposition to military coups. Nevertheless, it has been noted that the organization has exhibited inadequate engagement and delayed responsiveness in addressing instances of the unconstitutional exercise of power. Numerous historical figu-res have exhibited a proclivity for disregarding established institutions that have played a pivotal role in facilitating their ascent to positions of authority.
Topic:
Democracy, Coup, African Union, Military, and Regional Organizations
Political Geography:
Africa

51. The Future of Japan-Africa Cooperation: TICAD

Author:
Habib Badawi
Publication Date:
03-2024
Content Type:
Journal Article
Journal:
Brazilian Journal of African Studies
Institution:
Brazilian Journal of African Studies
Abstract:
Africa will remain relevant to Japan as a necessary means to achieve some of its long-term political, economic, and strategic goals. Additionally, Japan seeks to expand its relations with the continent. However, it is diffi-cult to view Japan’s participation in Africa as part of an integrated policy or a well-thought-out long-term strategy, but only as a set of goals and some of the tools and mechanisms used to achieve those goals. This is largely reflected in Japan’s failure to prioritize its economic and political interests in its relationship with Africa. While Japan views Africa primarily through an economic lens, it has other major political interests. As Japan strives to bolster the dynamism of its ongoing development, production, and trade through a manufacturing and trade strategy designed to adapt to circumstances and mitigate crises, the nation has concurrently hei-ghtened its ambition for strategic hotspots, including resources and wealth. This is evident in its keen interest in the African continent and the ongoing competition between European and American powers for control over it.
Topic:
Foreign Policy, Development, International Cooperation, Economy, Trade, Strategic Interests, and Resources
Political Geography:
Africa and Japan

52. Atlantism Under Maintenance: A Review of the Brazil-Cape Verde Partnership During the Dilma Rousseff Administrations (2011–2016)

Author:
Tatiana Raquel Reis Silva and Leandro Chaves Batista
Publication Date:
03-2024
Content Type:
Journal Article
Journal:
Brazilian Journal of African Studies
Institution:
Brazilian Journal of African Studies
Abstract:
From a holistic perspective, Brazil’s foreign policy towards the African continent has historically been marked by moments of greater proximity and others of relative distance. Authors such as Barriviera (2016) and Costa (2015) claim that there’s been a downturn in Brazil-Africa relations since Dilma Rousseff became president. It is essential to situate the relations established between Brazil and the various African nations as a phenomenon integrated into the logic of South-South Cooperation (SSC), a segment of Internatio-nal Development Cooperation (IDC) that encompasses political, diplomatic and commercial ties between developing countries, guided by the principle of horizontality, with an emphasis on mutual benefits. With regard to the cooperation established with the archipelago of Cape Verde, it is important to note that it is supported by a basal document: the Basic Agreement on Scientific and Technical Cooperation, signed in 1977.
Topic:
Foreign Policy, Bilateral Relations, Dilma Rousseff, and Atlantism
Political Geography:
Africa, Brazil, and Cabo Verde

53. Government, State, and National Wars in Africa

Author:
Nathaly Silva Xavier Schütz and Hernán Olmedo González
Publication Date:
03-2024
Content Type:
Journal Article
Journal:
Brazilian Journal of African Studies
Institution:
Brazilian Journal of African Studies
Abstract:
To what extent were internal wars in African countries after World War II conditioned by their limited levels of governmental entrenchment and statehood? This is the central issue guiding the following research, which focuses on African countries in the post-World War II period, a period in which the system of sovereign States — with its origins in modernity and formally in Europe with the Peace of Westphalia treaties of 1648 — reached the vast majority of the international system. To achieve this objective, the following article is structured as follows.The first section aims to present, in the first instance, empirical information about the relative weight that internal national wars had on the international system in general and in Africa in particular, followed by a presentation of the different propositions about the conditioning factors of this type of war in the international system and African States, and, finally, establish guiding hypotheses for the empirical research of the study. The second section describes the methodological project followed to test the hypo-theses defined in the first section. The third section presents the empirical results of the research and the data analysis. Finally, the article develops a conclusion that systematizes the main aspects of the study.
Topic:
Government, History, State, World War II, and International System
Political Geography:
Africa

54. Skimming the East African Community Regional Force in the Kivu: Another Test Case of ‘African Solutions to African Problems’

Author:
Jean-Marie Kasonga Mbombo
Publication Date:
03-2024
Content Type:
Journal Article
Journal:
Brazilian Journal of African Studies
Institution:
Brazilian Journal of African Studies
Abstract:
Regional integration is premised on the principle of subsidiarity enshrined in the Charter of the United Nations Organisation which empowers regional bodies to resolve conflicts in their jurisdictions (Chapter 8, Article 52). It implies cooperation among states sharing a geographic proximity. In Africa, such regional organisations include the Economic Community of West African Countries (ECOWAS), Economic Community of Central African States (ECCAS), Common Market for East Africa (COMESA), East African Community (EAC), and Southern African Development Community (SADC) to name but a few. However, the end of the Cold War witnessed the rise of intrastate conflicts worldwide, which many analysts associated with donor fatigue toward aid-dependent states (Thomas and Mazrui 1992; Bayart 2009; Bates 2008; Solomon 2015). These new wars of the 1990s were more pronounced in resource-rich countries such as Liberia, Sierra Leone, Sudan, Chad, and the Democratic Republic of Congo (Kaldor 2006; Collier 2008). As a result, many economic communities established relevant protocols to boost regional integration and foster peace on the African continent: ECCAS Protocol of Peace and Security; ECOWAS Protocol relating to the Mechanism for Conflict Prevention, Management, Resolution, Peacekeeping, and Secu-rity (1999); SADC Protocol on Politics, Defence and Security (2001); EAC Protocol on Peace and Security (2013).
Topic:
Economics, Regional Integration, Regional Organizations, and East African Community (EAC)
Political Geography:
Africa and East Africa

55. Rethinking Community Response Against Violent Extremism

Author:
Hippolyt Pul
Publication Date:
05-2024
Content Type:
Working Paper
Institution:
Social Science Research Council
Abstract:
Governments of coastal states of West Africa have responded with military and non-military approaches to stem the southward drift of violent extremist groups (VEGs). However, the extent to which citizens in frontier communities are ready to engage in actions to prevent, pre-empt, protect and respond to attacks by violent extremists and terrorists (VET) in their communities remains an open question. Based on data from primary mixed methods research — in frontier communities in two administrative districts of the Upper West Region of Ghana — this paper argues that citizens’ awareness of the threats of VEGs and their preparedness to prevent, pre-empt, protect and respond to attacks by violent extremists and terrorists (VET1 ) in their communities is a mirage, as the findings from the use of the See Something, Say Something campaign is an ineffective tool for mobilizing citizens for anti-VET engagement. To engage citizens, anti-VET actors must compete with and beat the sophisticated propaganda machinery of VETs in both the traditional and non-traditional media. Critically, it is not enough to communicate facts and figures. Anti-VET messaging must move beyond the cognitive into the affective realm through incorporating the concerns, needs, and interests of citizens in the non-kinetic approaches. For communities along the frontiers, anti-VET activism must address their human and livelihood security concerns of food, income, health, and other livelihood security needs that drive their local political economy. Without this, citizens have little interest in participating in anti-VET actions that may be disruptive to their livelihood systems without the provision of alternatives.
Topic:
Security, Terrorism, Countering Violent Extremism, and Communities
Political Geography:
Africa and West Africa

56. Place-based Policies and Household Wealth in Africa

Author:
Matthew Amalitinga Abagna, Cecília Hornok, and Alina Mulyukova
Publication Date:
02-2024
Content Type:
Working Paper
Institution:
Kiel Institute for the World Economy (IfW)
Abstract:
This paper provides empirical evidence on the impact of a prominent place-based policy - Special Economic Zones (SEZs) - on the economic well-being of African households. We compile a novel dataset on repeated cross-sections of households living in various distance bands around SEZs in 10 African countries over the period of 1990 to 2020. Exploiting time variation in SEZ establishment, the estimation yields that households in the vicinity of SEZs become significantly wealthier compared to the national average after SEZs are established. The effect is most pronounced for households within 10 km and decays rapidly with distance. We show that this result is not driven by the residential sorting of wealthier households in SEZ neighbourhoods. The rise in wealth is strongest towards the middle of the wealth distribution and goes hand in hand with increased access to household utilities, higher consumption of durable goods, higher levels of education, and a shift away from agricultural activities - patterns that we interpret as indicative of an urbanization trend and the strengthening of the middle class.
Topic:
Migration, Economic Growth, Special Economic Zones, Labor Market, Wealth, Opportunity, and Household Income
Political Geography:
Africa

57. What role for Chinese FDI in Africa? New survey evidence from Ethiopia and Ghana

Author:
Charles Ackah, Alemayehu Geda, Holger Görg, and Federico Merchan
Publication Date:
04-2024
Content Type:
Working Paper
Institution:
Kiel Institute for the World Economy (IfW)
Abstract:
Foreign investments bring in not only new employment but also novel technology, managerial skill and know-how, that may also dissipate into the local economy. It is not clear whether this effect differs by the nationality of source countries, in particular between Chinese and non-Chinese firms. Based on a firm level survey on Ethiopia and Ghana, we found that all types of firms are engaged in limited R&D and innovation activity and their transfer to host countris in both countries. There is little difference between Chinese and non-Chinese foreign firms in such technology and managerial skill transfer once controlling for firm size and industry characteristics in the majority of metrices (R&D activities, horizontal & vertical spillover, directly adopting techniques). However, we found for Ghana that Chinese firms have more suppliers but are less likely to transfer technology to them. Chinese firms are more likely to transfer managerial skills than non-Chinese firms in Ghana though not in Ethiopia. Also, there is little evidence that foreign firms transfer technology via horizontal or backward spillovers in either countries. Finally, Chinese firms are much more likely to receive host country policy support than other foreign firms in Ghana but not in Ethiopia.
Topic:
Science and Technology, Foreign Direct Investment, Economy, and Technological Transfer
Political Geography:
Africa, China, Ethiopia, and Ghana

58. The Motives for Chinese and Western Countries’ Sovereign Lending to Africa

Author:
Eckhardt Bode
Publication Date:
05-2024
Content Type:
Working Paper
Institution:
Kiel Institute for the World Economy (IfW)
Abstract:
This paper is one of the first to show systematically that the motives for sovereign lending to African countries differed considerably between China and Western countries during the last two decades. While Chinese lending mainly served its own economic or geopolitical objectives, which is well-known from the existing literature, Western countries’ lending also pursued objectives that appear to be at odds with their self-interests but whose precise nature is not yet well-understood. Using a new, da-taset on loans from China, Western countries and multilateral organizations to African countries, I empirically examine a broad variety of potential motives, aim at separating the motives pursued by the national governments from those pursued by their lending agencies, and employ an estimation strategy with increasingly complex fixed effects that yields additional interesting insights into the specificities of the motives.
Topic:
Economics, Emerging Markets, International Trade and Finance, Financial Crisis, Geopolitics, and Sovereign Lending
Political Geography:
Africa, China, and Global West

59. African Sovereign Defaults and the Common Framework: Divergent Chinese Interests Grant Western Countries a “Consumer Surplus”

Author:
Eckhardt Bode
Publication Date:
05-2024
Content Type:
Policy Brief
Institution:
Kiel Institute for the World Economy (IfW)
Abstract:
• China has become a major player in sovereign lending towards Africa during the past two decades but has recently been faced with increasing defaults. A new African debt crisis is looming. • Differences in the motives of sovereign lending between China and Western creditor countries contribute to preventing effective global sovereign debt management under the “Common Framework for Debt Treatment” in this looming African debt crisis. Chi-nese lending during the past two decades was motivated primarily by its own economic interests while most of the Western countries’ lending appears to be at odds with their self-interests but is not yet well-understood. • Debt settlements under the Common Framework that involve China are less generous than past settlements with the Paris Club alone. This is an obstacle to a rapid and sus-tainable economic recovery of financially distressed African countries. • Western countries derive a kind of “consumer surplus” from the agreements under the Common Framework because they are prepared to make greater concessions than Chi-na. They could transfer this hypothetical surplus as additional (conditional) Official De-velopment Assistance to the defaulted African countries to alleviate social hardship.
Topic:
Emerging Markets, International Trade and Finance, Financial Markets, Lending, Economic Crisis, Sovereign Debt, Consumer Behavior, and Geoeconomics
Political Geography:
Africa and China

60. Optimal Investments in Africa’s Road Network

Author:
Sebastian Krantz
Publication Date:
07-2024
Content Type:
Working Paper
Institution:
Kiel Institute for the World Economy (IfW)
Abstract:
This paper characterizes economically optimal investments into Africa's road network in partial and general equilibrium - based on a detailed topography of the network, road construction costs, frictions in cross-border trading, and economic geography. Drawing from data on 144 million trans-continental routes, it first assesses local and global network efficiency and market access. It then derives a large network connecting 447 cities and 52 ports along the fastest routes, devises an algorithm to propose new links, analyzes the quality of existing links, and estimates link-level construction/upgrading costs. Subsequently, it computes market-access-maximizing investments in partial equilibrium and conducts cost-benefit analysis for individual links and several investment packages. Using a spatial economic model and global optimization over the space of networks, it finally elicits welfare-maximizing investments in spatial equilibrium. Findings imply that cross-border frictions and trade elasticities significantly shape optimal road investments. Reducing frictions yields the greatest benefits, followed by road upgrades and new construction. Sequencing matters, as reduced frictions generally increase investment returns. Returns to upgrading key links are large, even under frictions.
Topic:
Emerging Markets, Globalization, International Trade and Finance, Infrastructure, Economic Growth, Investment, and Roads
Political Geography:
Africa