1 00:00:10,600 --> 00:00:14,160 Speaker 1: Hello, and welcome to another episode of the Odd Thoughts Podcast. 2 00:00:14,320 --> 00:00:19,000 Speaker 1: I'm Tracy Allaway and I'm Joe Wisenthal. Joe, I feel 3 00:00:19,040 --> 00:00:24,280 Speaker 1: like has been such an unusual and crazy year with 4 00:00:24,320 --> 00:00:26,920 Speaker 1: a lot of things going on, that there's actually some 5 00:00:27,000 --> 00:00:32,120 Speaker 1: pretty important news that hasn't gotten as much attention as 6 00:00:32,159 --> 00:00:35,720 Speaker 1: it would normally. If it was any other year, I 7 00:00:35,760 --> 00:00:37,640 Speaker 1: think a lot of people would be reading about this 8 00:00:37,720 --> 00:00:40,720 Speaker 1: and talking about this, at least in this sort of 9 00:00:40,800 --> 00:00:45,680 Speaker 1: investment industry. Yeah, it's kind of like how, uh, you know, 10 00:00:45,800 --> 00:00:48,600 Speaker 1: news you might like put out on a Friday and 11 00:00:48,640 --> 00:00:51,960 Speaker 1: no one really notices it. It's like all of is 12 00:00:51,960 --> 00:00:54,400 Speaker 1: like the Friday news dump because you could put there's 13 00:00:54,440 --> 00:00:57,640 Speaker 1: so much all their stuff to pay attention to, the 14 00:00:57,760 --> 00:01:01,960 Speaker 1: virus obviously, the econ aomic shock on the election, that 15 00:01:02,160 --> 00:01:05,920 Speaker 1: no one really has had the bandwidth for anything else. Yeah, 16 00:01:06,040 --> 00:01:08,319 Speaker 1: that's a really good way of putting it. So the 17 00:01:08,400 --> 00:01:11,360 Speaker 1: event that I'm talking about that I don't think has 18 00:01:11,400 --> 00:01:14,480 Speaker 1: gotten as much attention as it normally would is basically 19 00:01:14,520 --> 00:01:19,600 Speaker 1: a debt crisis in Africa. And this month, let's see, 20 00:01:19,600 --> 00:01:24,360 Speaker 1: we're recording in November, so this month Zambia actually defaulted 21 00:01:24,600 --> 00:01:27,800 Speaker 1: on some bonds and it's the first sort of COVID 22 00:01:28,000 --> 00:01:32,480 Speaker 1: related default by an African nation, and a lot of 23 00:01:32,480 --> 00:01:35,759 Speaker 1: people expect there will be more. Even though we've seen 24 00:01:36,560 --> 00:01:41,119 Speaker 1: some countries, some creditors, the G twenty agree a few 25 00:01:41,120 --> 00:01:46,040 Speaker 1: efforts to try to help indebted countries in Africa. There's 26 00:01:46,040 --> 00:01:51,000 Speaker 1: a G twenty debt service suspension initiative. But even with 27 00:01:51,280 --> 00:01:56,000 Speaker 1: that aid, people are expecting distress in Africa's debt market 28 00:01:56,080 --> 00:02:00,480 Speaker 1: to get probably worse before it gets better. I I 29 00:02:00,680 --> 00:02:05,680 Speaker 1: think you're right, like if a zombiean debt default would 30 00:02:05,680 --> 00:02:07,280 Speaker 1: have been the kind of thing they're like, oh, let's 31 00:02:07,280 --> 00:02:12,119 Speaker 1: do an episode on that much earlier. But in a yes, 32 00:02:12,560 --> 00:02:15,880 Speaker 1: it's certainly gotten less attention than I think it's lost. 33 00:02:16,520 --> 00:02:17,800 Speaker 1: You know, it's one of those things where I'm sure 34 00:02:17,880 --> 00:02:19,760 Speaker 1: even saw the headlines on it, and I meant to 35 00:02:19,760 --> 00:02:22,000 Speaker 1: ask more questions in a meeting one day, and I 36 00:02:22,080 --> 00:02:24,040 Speaker 1: meant to click on it and learn more, and I 37 00:02:24,120 --> 00:02:27,160 Speaker 1: didn't because again I probably had, like, you know, some 38 00:02:27,280 --> 00:02:29,880 Speaker 1: question about what's going on with the presidential transition or 39 00:02:29,919 --> 00:02:34,160 Speaker 1: something that took over my mind for the day. You 40 00:02:34,200 --> 00:02:37,320 Speaker 1: mean you weren't thinking purely of Zambia. Believe it or 41 00:02:37,360 --> 00:02:40,280 Speaker 1: not in a meeting in New York. So in the 42 00:02:40,320 --> 00:02:44,040 Speaker 1: midst of all this debt distress in Africa, there's also 43 00:02:44,040 --> 00:02:47,680 Speaker 1: a lot of attention being paid to China and its 44 00:02:47,840 --> 00:02:51,480 Speaker 1: role in building up that excess debt. But also what 45 00:02:51,639 --> 00:02:55,480 Speaker 1: China is going to do now that Africa is, you know, 46 00:02:55,560 --> 00:02:59,280 Speaker 1: economically stressed. Is China going to let up on some 47 00:02:59,320 --> 00:03:01,600 Speaker 1: of those debt pay amens in the same way that 48 00:03:01,680 --> 00:03:07,160 Speaker 1: maybe multilateral organizations or other creditors are thinking about doing. 49 00:03:07,280 --> 00:03:10,960 Speaker 1: So we're going to get into that side of the 50 00:03:11,000 --> 00:03:14,560 Speaker 1: African debt crisis quite a bit as well. But more 51 00:03:14,639 --> 00:03:17,040 Speaker 1: than that, we're going to talk about how that debt 52 00:03:17,080 --> 00:03:20,040 Speaker 1: build up actually happened, and we're going to do it 53 00:03:20,360 --> 00:03:24,720 Speaker 1: in a slightly different way. We have someone um who 54 00:03:24,960 --> 00:03:28,679 Speaker 1: obviously comes from Africa, from Liberia, and who had an 55 00:03:28,680 --> 00:03:33,160 Speaker 1: official role in the Librarian government and a lot of 56 00:03:33,160 --> 00:03:36,800 Speaker 1: that role involved, you know, being involved in infrastructure projects 57 00:03:36,840 --> 00:03:39,360 Speaker 1: for which you would incur debt you take out a 58 00:03:39,400 --> 00:03:41,640 Speaker 1: loan so you could build a bridge or a road 59 00:03:41,800 --> 00:03:44,360 Speaker 1: or a railway or something like that. And so we're 60 00:03:44,360 --> 00:03:50,560 Speaker 1: going to get a different perspective on Africa's debt problem. Excellent, 61 00:03:50,640 --> 00:03:55,560 Speaker 1: really looking forward to this. Okay, great, so uh without 62 00:03:55,560 --> 00:03:57,880 Speaker 1: further ado, then I want to bring in our guest, 63 00:03:58,240 --> 00:04:01,400 Speaker 1: JUDEA More. He's a scene your policy fellow at the 64 00:04:01,480 --> 00:04:06,240 Speaker 1: Center for Global Development. He previously served as Liberia's Minister 65 00:04:06,520 --> 00:04:10,440 Speaker 1: for Public Works and was also Deputy chief of Staff 66 00:04:10,480 --> 00:04:13,040 Speaker 1: to the President. So, like I said, a lot of 67 00:04:13,080 --> 00:04:16,600 Speaker 1: experience in a government position within Africa, and it's going 68 00:04:16,640 --> 00:04:19,880 Speaker 1: to be fascinating to hear his perspective. Judy, thanks so 69 00:04:19,960 --> 00:04:24,000 Speaker 1: much for coming on h morning, guys, and thanks for 70 00:04:24,080 --> 00:04:27,159 Speaker 1: having me. It's a pleasure to be here. So I 71 00:04:27,240 --> 00:04:30,480 Speaker 1: remember the first time I ever went to Africa. I 72 00:04:30,800 --> 00:04:33,880 Speaker 1: went to Mozambique back in two thousand and ten, and 73 00:04:33,960 --> 00:04:36,400 Speaker 1: one of the things that really struck me, and that 74 00:04:36,520 --> 00:04:39,960 Speaker 1: I found quite weird at the time was if you 75 00:04:40,000 --> 00:04:46,240 Speaker 1: were in Maputo, the capital, everything was Chinese. The cars 76 00:04:46,240 --> 00:04:49,520 Speaker 1: were Chinese, the trucks were Chinese, the stadium was built 77 00:04:49,680 --> 00:04:53,599 Speaker 1: by the Chinese. There were Chinese characters all over the place. 78 00:04:54,320 --> 00:04:58,159 Speaker 1: It's really really striking the extent to which China has 79 00:04:58,279 --> 00:05:05,440 Speaker 1: become involved in the Africa market. Why has that happened? Yeah, yeah, 80 00:05:05,920 --> 00:05:08,920 Speaker 1: And if you had gone to say Ethiopia, you're going 81 00:05:09,000 --> 00:05:10,880 Speaker 1: to add is you would have saying the same thing, 82 00:05:11,080 --> 00:05:14,080 Speaker 1: and across the continent and to a large extent, especially 83 00:05:14,480 --> 00:05:17,400 Speaker 1: even in Zambia that you spoke about, you just saying 84 00:05:17,400 --> 00:05:20,440 Speaker 1: the same thing. There's been an extensive growth in terms 85 00:05:20,440 --> 00:05:23,960 Speaker 1: of Chinese presence and the deepening of Chinese relationship with 86 00:05:24,000 --> 00:05:27,120 Speaker 1: African countries. A part of that, I guess it's historical. 87 00:05:27,839 --> 00:05:30,800 Speaker 1: One is that, um, you know, at the turn of 88 00:05:30,839 --> 00:05:34,600 Speaker 1: the century, when you know, would worried about why two 89 00:05:34,680 --> 00:05:40,680 Speaker 1: K China is entering the w t O. But and 90 00:05:41,040 --> 00:05:45,719 Speaker 1: China also on veils is first going out strategy and 91 00:05:46,279 --> 00:05:49,720 Speaker 1: the only uncontested region in the world in which Chinese, 92 00:05:49,800 --> 00:05:52,240 Speaker 1: because they weren't as powerful as they are now, could go, 93 00:05:52,800 --> 00:05:54,560 Speaker 1: was the region of the world in which, you know, 94 00:05:54,680 --> 00:05:58,240 Speaker 1: most Western policy toward Africa at the time was filtered 95 00:05:58,680 --> 00:06:02,760 Speaker 1: through the lenses of humanitarian assistance and development. Africa wasn't 96 00:06:02,800 --> 00:06:05,120 Speaker 1: seen as a place to go and do business, and 97 00:06:05,200 --> 00:06:10,640 Speaker 1: for China it worked out perfectly because there wasn't a 98 00:06:10,680 --> 00:06:14,320 Speaker 1: peer competitor there. I mean, there were some European engagement, 99 00:06:14,400 --> 00:06:17,080 Speaker 1: but it wasn't to the extent that the Chinese would do. 100 00:06:17,520 --> 00:06:19,640 Speaker 1: The second thing was just the need that was on 101 00:06:19,720 --> 00:06:23,279 Speaker 1: the continent and what China could provide um so, even 102 00:06:23,360 --> 00:06:26,680 Speaker 1: up to today, Africa still lags every other region of 103 00:06:26,720 --> 00:06:29,960 Speaker 1: the world in terms of the provision of infrastructure, mainly 104 00:06:30,040 --> 00:06:33,240 Speaker 1: paved roads and power. More than six hundred million people 105 00:06:33,240 --> 00:06:36,800 Speaker 1: in the continent still lack access to electricity, and so 106 00:06:37,000 --> 00:06:41,680 Speaker 1: China had this excess capacity in providing infrastructure and and 107 00:06:41,800 --> 00:06:47,640 Speaker 1: normally provide infrastructure at costs. Right. So, before the arrival 108 00:06:47,640 --> 00:06:50,400 Speaker 1: of the Chinese, the infrastructure space in Africa had been 109 00:06:50,440 --> 00:06:55,000 Speaker 1: dominated by European firms. We're talking about your your breed, 110 00:06:55,400 --> 00:07:01,400 Speaker 1: your if I've the large Vincy, the larger French, spanishi 111 00:07:01,440 --> 00:07:07,039 Speaker 1: and and to certain extents extent Italian firms. But the 112 00:07:07,279 --> 00:07:10,440 Speaker 1: cost of of infrastructure from those firms tended to be high. 113 00:07:10,520 --> 00:07:13,560 Speaker 1: And the Chinese came and were able to First, Chinese 114 00:07:13,560 --> 00:07:17,320 Speaker 1: firms where state sponsored um and so the state owned 115 00:07:17,640 --> 00:07:21,200 Speaker 1: firms and could therefore they had access to capital that 116 00:07:21,320 --> 00:07:24,960 Speaker 1: was much cheaper and could provide infrastructure um so at 117 00:07:25,560 --> 00:07:28,040 Speaker 1: cost that they were competitive in terms of costs. The 118 00:07:28,080 --> 00:07:31,720 Speaker 1: second reason was simply because they brought money with them. 119 00:07:31,920 --> 00:07:34,080 Speaker 1: In a lot of instances, there were African countries who 120 00:07:34,080 --> 00:07:37,240 Speaker 1: couldn't afford um to pay for this upfront, and the 121 00:07:37,320 --> 00:07:41,120 Speaker 1: Chinese were willing to extend loans to them. Uh and 122 00:07:41,200 --> 00:07:44,280 Speaker 1: so for for a lot of African countries which at 123 00:07:44,280 --> 00:07:46,880 Speaker 1: the time didn't have access to international financial markets to 124 00:07:46,960 --> 00:07:51,160 Speaker 1: issue sovereign bonds and stuff for home development, financing from 125 00:07:51,200 --> 00:07:56,440 Speaker 1: the model lateral institutions was just not enough, especially concessional financing, 126 00:07:56,920 --> 00:07:59,480 Speaker 1: and and so with nowhere else to go, they were 127 00:07:59,520 --> 00:08:02,680 Speaker 1: happy for a partner who seemed not to worry too 128 00:08:02,760 --> 00:08:06,760 Speaker 1: much about public financial management, who seemed not to care 129 00:08:07,320 --> 00:08:10,840 Speaker 1: about the quality of governance in terms of corruption, and 130 00:08:10,960 --> 00:08:14,160 Speaker 1: who said those things were internal and they had nothing 131 00:08:14,160 --> 00:08:17,680 Speaker 1: to do with that. And so there was this a 132 00:08:17,720 --> 00:08:20,400 Speaker 1: confluence of interest between what China wanted to do at 133 00:08:20,400 --> 00:08:22,640 Speaker 1: the time and what Africas did were and so because 134 00:08:22,720 --> 00:08:26,119 Speaker 1: of that we saw a huge ramp up in terms 135 00:08:26,120 --> 00:08:28,840 Speaker 1: of African debt. The final thing I would say to 136 00:08:28,880 --> 00:08:32,280 Speaker 1: that also was that it coincided with this huge build 137 00:08:32,320 --> 00:08:35,680 Speaker 1: up in terms of a boom for commodity exports, and 138 00:08:35,800 --> 00:08:42,120 Speaker 1: most African economies were growing at you know, seven two, two, 139 00:08:42,800 --> 00:08:46,800 Speaker 1: nine percent and and and China seemed to have an 140 00:08:46,840 --> 00:08:50,200 Speaker 1: insatiable appetite for for African commodities, and so it's like 141 00:08:50,400 --> 00:08:53,560 Speaker 1: everybody was invited to the party, and the party went 142 00:08:53,760 --> 00:08:57,240 Speaker 1: really well for a while, So lots of things came 143 00:08:57,280 --> 00:09:00,960 Speaker 1: together in sort of an ideal manner for both parties 144 00:09:01,080 --> 00:09:04,800 Speaker 1: or for multiple parties. What years, just to help us 145 00:09:04,840 --> 00:09:07,120 Speaker 1: frame the conversation, we talked about this boom, and we 146 00:09:07,200 --> 00:09:10,080 Speaker 1: talked about this build up, this eventual debt build up. 147 00:09:10,520 --> 00:09:13,920 Speaker 1: What years are we talking about in terms of when 148 00:09:14,000 --> 00:09:16,080 Speaker 1: this really got going and when the sort of really 149 00:09:16,160 --> 00:09:20,439 Speaker 1: hit it hit it transactional pig Yeah, So I would 150 00:09:20,480 --> 00:09:23,800 Speaker 1: say it started in two thousand at the first FORKAK. 151 00:09:24,280 --> 00:09:27,319 Speaker 1: So the FORECACH is the Forum of China Africa Cooperation. 152 00:09:27,880 --> 00:09:31,560 Speaker 1: Is this UM is held every three years when and 153 00:09:31,640 --> 00:09:34,120 Speaker 1: the first one, I think forty three African has a 154 00:09:34,200 --> 00:09:37,000 Speaker 1: state in governments arrived in China and it's been held 155 00:09:37,080 --> 00:09:39,520 Speaker 1: every three years, and this is when China says, over 156 00:09:39,559 --> 00:09:42,000 Speaker 1: the next three years we're going to invest you know, 157 00:09:42,679 --> 00:09:46,680 Speaker 1: UM five billion, twenty billion. It went up at the 158 00:09:46,760 --> 00:09:52,319 Speaker 1: last two forecascas China pless to spend up to sixty 159 00:09:52,400 --> 00:09:55,760 Speaker 1: billion dollars in Africa. So the ramp up starts maybe 160 00:09:55,840 --> 00:09:58,880 Speaker 1: around two thousand and six. In terms of the numbers 161 00:09:58,920 --> 00:10:02,040 Speaker 1: begin to increase around and then, but the Chinese arrival 162 00:10:02,240 --> 00:10:06,559 Speaker 1: in this form that we're seeing begins around two thousand 163 00:10:07,000 --> 00:10:11,640 Speaker 1: and then the financial crisis of two thousand and AID 164 00:10:11,800 --> 00:10:16,120 Speaker 1: basically left China unchallenged. Uh. I mean, I think a 165 00:10:16,160 --> 00:10:19,240 Speaker 1: lot of the global recovery was driven by the Chinese 166 00:10:19,400 --> 00:10:23,439 Speaker 1: uh spending on capital projects and and at the end 167 00:10:23,480 --> 00:10:26,719 Speaker 1: of that, China was left with this exx capacity that 168 00:10:26,880 --> 00:10:29,120 Speaker 1: had to go somewhere, and I think a lot of 169 00:10:29,120 --> 00:10:31,800 Speaker 1: that is what drove even the Belt and Road initiative. 170 00:10:31,920 --> 00:10:35,480 Speaker 1: But with that excess capacity, we saw an even significant 171 00:10:35,559 --> 00:10:38,160 Speaker 1: ramp up of Chinese spending. So you go back and 172 00:10:38,160 --> 00:10:41,400 Speaker 1: look at Zambia as a debt profile in terms of 173 00:10:41,440 --> 00:10:44,600 Speaker 1: the accumulation of death in a place like Zambia, well, 174 00:10:44,760 --> 00:10:49,000 Speaker 1: most African countries were beneficiaries first of the debt debt 175 00:10:49,040 --> 00:10:53,959 Speaker 1: waivers on the hippoc right and did jubilie the activity 176 00:10:53,960 --> 00:10:59,760 Speaker 1: around waiving debt and so come around, a lot of 177 00:11:00,000 --> 00:11:03,080 Speaker 1: the countries suddenly have significant space to borrow a gain. 178 00:11:03,440 --> 00:11:08,760 Speaker 1: And so with China left with this excess capacity, we 179 00:11:08,880 --> 00:11:13,520 Speaker 1: see this significant ramp up of Chinese lending for infrastructure 180 00:11:13,600 --> 00:11:33,880 Speaker 1: on the company. So this is one thing I always wondered, 181 00:11:33,960 --> 00:11:36,600 Speaker 1: But well, actually, okay, I have two questions. So first 182 00:11:36,640 --> 00:11:38,920 Speaker 1: of all, could you maybe describe a little bit more 183 00:11:39,800 --> 00:11:44,040 Speaker 1: what uh what these Chinese infrastructure deals actually look like 184 00:11:44,160 --> 00:11:47,240 Speaker 1: and how they work. So you had things operating under 185 00:11:47,760 --> 00:11:52,280 Speaker 1: official state sanctioned banners like the Belt and Road Initiative, 186 00:11:52,640 --> 00:11:56,240 Speaker 1: but you also had private Chinese companies who would come 187 00:11:56,240 --> 00:12:01,079 Speaker 1: in and tender offers alongside European and American companies or 188 00:12:01,160 --> 00:12:04,640 Speaker 1: companies from anywhere in the world. How did those actually work? 189 00:12:04,679 --> 00:12:09,040 Speaker 1: And then secondly, if China was financing a lot of 190 00:12:09,040 --> 00:12:15,320 Speaker 1: this infrastructure build, Africa is still enormously behind on infrastructure obviously, 191 00:12:15,360 --> 00:12:19,560 Speaker 1: Like why didn't it make more of a difference. Why 192 00:12:19,640 --> 00:12:24,720 Speaker 1: aren't there you know, bridges and railway railways and airports 193 00:12:24,720 --> 00:12:29,920 Speaker 1: and things like that all over everywhere. I think, first 194 00:12:30,320 --> 00:12:32,319 Speaker 1: I have to really good question. I think first, it's 195 00:12:32,400 --> 00:12:36,640 Speaker 1: just the baseline I mean we're coming from. You have 196 00:12:36,760 --> 00:12:43,200 Speaker 1: to remember towards end between and say the year two thousand, 197 00:12:43,760 --> 00:12:46,600 Speaker 1: that the country, the continent is ravaged about a number 198 00:12:46,640 --> 00:12:49,319 Speaker 1: of crises. Right first, there are a significant amount of 199 00:12:49,360 --> 00:12:52,839 Speaker 1: civil wars, the Liberian Civil War, the Syrian Union Civil War, 200 00:12:53,440 --> 00:12:58,400 Speaker 1: UM the rewinding general side mulga tissue, even Mozambique. We 201 00:12:58,440 --> 00:13:01,200 Speaker 1: talked about this significant amount of wars and a lot 202 00:13:01,240 --> 00:13:05,400 Speaker 1: of infrastructure is either not built or destroyed during these 203 00:13:05,400 --> 00:13:09,840 Speaker 1: wars right and then, and because of those those wars, 204 00:13:09,880 --> 00:13:14,080 Speaker 1: we saw a lot of humanitarian crisis right and and 205 00:13:14,160 --> 00:13:17,840 Speaker 1: but at the same time, we had an AIDS pandemic 206 00:13:18,080 --> 00:13:21,640 Speaker 1: that was wiping out a significant number of the population 207 00:13:21,720 --> 00:13:24,920 Speaker 1: across Center and Southern Africa, and so a significant amount 208 00:13:24,960 --> 00:13:27,960 Speaker 1: of money that was available went towards the health crisis, 209 00:13:28,360 --> 00:13:31,880 Speaker 1: went towards just basically beating needs, and not a lot 210 00:13:32,040 --> 00:13:35,000 Speaker 1: was done in terms of infrastructure. And so the baseline 211 00:13:35,040 --> 00:13:37,440 Speaker 1: from which we come means that in spite of all 212 00:13:37,480 --> 00:13:40,880 Speaker 1: the ramp up we did, we only just scratch the surface. 213 00:13:40,920 --> 00:13:45,040 Speaker 1: The African development back now puts the gap in terms 214 00:13:45,040 --> 00:13:48,000 Speaker 1: of infrastructure finance into around up to a hundred and 215 00:13:48,040 --> 00:13:50,840 Speaker 1: three billion dollars a year. So so you can imagine 216 00:13:50,840 --> 00:13:52,960 Speaker 1: how how deep the whole was in terms of what 217 00:13:53,120 --> 00:13:56,000 Speaker 1: was available and the way it worked. You're right, there 218 00:13:56,000 --> 00:14:00,760 Speaker 1: were like three UM nodes of Chinese engagement where your 219 00:14:01,080 --> 00:14:04,040 Speaker 1: large state owned companies UM that were owned by the 220 00:14:04,080 --> 00:14:07,439 Speaker 1: central government UM and then there were your provincial companies, 221 00:14:07,960 --> 00:14:10,520 Speaker 1: and then finally you had these like quais that profit 222 00:14:10,840 --> 00:14:16,120 Speaker 1: private companies. Each of them came with the promise of 223 00:14:16,320 --> 00:14:18,800 Speaker 1: the back end of Chinese policy banks. So they were 224 00:14:18,800 --> 00:14:21,840 Speaker 1: always promised that they could get you access to financing 225 00:14:22,200 --> 00:14:24,920 Speaker 1: once the government. I mean, what the required was a 226 00:14:25,000 --> 00:14:29,480 Speaker 1: sovereign guarantee. They needed the government to back that loan 227 00:14:29,520 --> 00:14:31,960 Speaker 1: and if the government did. And because you have so 228 00:14:32,000 --> 00:14:35,040 Speaker 1: many actors, it would seem to me, you know, I 229 00:14:35,480 --> 00:14:38,280 Speaker 1: don't know that as much about how the Chinese system 230 00:14:38,320 --> 00:14:41,320 Speaker 1: works on their side. But for example, if I went 231 00:14:41,360 --> 00:14:43,840 Speaker 1: to the World Bank, UH said the Ministry of Public 232 00:14:43,840 --> 00:14:46,440 Speaker 1: Works engaged the Work Bank. Most of that engagement would 233 00:14:46,480 --> 00:14:48,920 Speaker 1: happen through the Ministry of Finance the Work Bank. We 234 00:14:49,040 --> 00:14:51,320 Speaker 1: didn't look at like the areas that portfolio and be 235 00:14:51,400 --> 00:14:54,920 Speaker 1: able to say you can't afford this. Right on the 236 00:14:55,040 --> 00:14:58,120 Speaker 1: Chinese side, it just seemed not to work like that. 237 00:14:58,400 --> 00:15:01,680 Speaker 1: So you had multiple Chinese pinis that are competing. So 238 00:15:01,840 --> 00:15:07,920 Speaker 1: there's a provincial company, construction company that is access in finance. Somehow, 239 00:15:08,120 --> 00:15:10,120 Speaker 1: it has a line of credit that it can extend. 240 00:15:10,720 --> 00:15:13,600 Speaker 1: UH it's working through the local the provincial branch of 241 00:15:13,640 --> 00:15:15,720 Speaker 1: the X and bank, and then you have the large 242 00:15:15,720 --> 00:15:18,560 Speaker 1: Stadia company, and it seemed as if there were in 243 00:15:18,640 --> 00:15:22,960 Speaker 1: some sort of a central node that process all of 244 00:15:23,000 --> 00:15:24,680 Speaker 1: it to be able to say no, it looks like 245 00:15:24,800 --> 00:15:26,640 Speaker 1: Zambia has taken a lot more debt than the ZIM 246 00:15:26,720 --> 00:15:28,640 Speaker 1: that can afford you see what I mean? Like that 247 00:15:28,640 --> 00:15:30,600 Speaker 1: that didn't seem to be if they're were, it was 248 00:15:30,680 --> 00:15:34,960 Speaker 1: almost maybe it was ignored or it just didn't exist. Whatever, 249 00:15:34,960 --> 00:15:38,520 Speaker 1: the reason was a lot of countries, as a few countries, 250 00:15:38,600 --> 00:15:40,800 Speaker 1: not a lot of them, like Ya, Zambia as your 251 00:15:41,440 --> 00:15:45,720 Speaker 1: UH South today and and and and Angola were allowed 252 00:15:45,760 --> 00:15:49,440 Speaker 1: to ramp up significant amount of debt UH that was 253 00:15:49,520 --> 00:15:53,160 Speaker 1: tight and to be honest to UH, commodity exports that 254 00:15:53,200 --> 00:15:55,320 Speaker 1: seemed to be going up and up and up. And 255 00:15:55,360 --> 00:15:59,320 Speaker 1: so I would like to add though that beyond the 256 00:15:59,520 --> 00:16:04,440 Speaker 1: just huge infrastructure deficits, there was another thing driving Africa's 257 00:16:04,480 --> 00:16:08,320 Speaker 1: need to borrow from China to finance this. Everywhere else 258 00:16:08,400 --> 00:16:12,080 Speaker 1: in the world, as a population has either stabilized or 259 00:16:12,440 --> 00:16:17,080 Speaker 1: its declining, right except in Africa, where the population continues 260 00:16:17,120 --> 00:16:20,160 Speaker 1: to grow, where more than fifty percent of the population 261 00:16:20,200 --> 00:16:23,920 Speaker 1: I think is on the nineteen and because this of 262 00:16:24,040 --> 00:16:27,600 Speaker 1: this huge increase in the population, governments are under significant 263 00:16:27,600 --> 00:16:31,200 Speaker 1: pressure to provide both you know, hard physical infrastructure and 264 00:16:31,240 --> 00:16:34,640 Speaker 1: social infrastructure for for these and so they are all 265 00:16:34,680 --> 00:16:37,720 Speaker 1: of these. And then Africa's exports tend to be largely 266 00:16:38,120 --> 00:16:42,880 Speaker 1: on processed natural resource UH products and because of that, 267 00:16:42,920 --> 00:16:47,240 Speaker 1: there's were so low down the value chain that what 268 00:16:47,400 --> 00:16:50,400 Speaker 1: accrues to us as value from our exports it's just 269 00:16:50,480 --> 00:16:53,800 Speaker 1: not enough to be able to finance our infrastructure. And 270 00:16:53,840 --> 00:16:57,280 Speaker 1: so because of that, like all of these pressures on 271 00:16:57,480 --> 00:16:59,520 Speaker 1: governments and the faint I thing I would say to 272 00:16:59,560 --> 00:17:02,280 Speaker 1: that is all. So it seems kunto intuitive, but it 273 00:17:02,360 --> 00:17:05,639 Speaker 1: was like the more the more democratic a country became, 274 00:17:05,960 --> 00:17:08,840 Speaker 1: the closer it came to China. Why because when we 275 00:17:08,920 --> 00:17:12,240 Speaker 1: ran our elections, we you know, promised people that we 276 00:17:12,280 --> 00:17:15,480 Speaker 1: would build infrastructure because that was the largest need. And 277 00:17:15,520 --> 00:17:18,159 Speaker 1: so when the election has ended and we needed to 278 00:17:18,200 --> 00:17:20,560 Speaker 1: deliver on the promises we made, China was one of 279 00:17:20,600 --> 00:17:23,800 Speaker 1: the few who had both the appetite for our risk 280 00:17:23,960 --> 00:17:26,720 Speaker 1: and the resources to be able to lend us money 281 00:17:26,760 --> 00:17:29,640 Speaker 1: to build the infrastructure we needed. And so all of 282 00:17:29,680 --> 00:17:34,119 Speaker 1: these I guess all of these forces and and factors 283 00:17:34,600 --> 00:17:38,600 Speaker 1: sort of just created this perfect I don't want to 284 00:17:38,600 --> 00:17:41,760 Speaker 1: call it a store. We just created a perfect circumstances 285 00:17:42,400 --> 00:17:46,480 Speaker 1: m for for for this Chinese lending to to Africa 286 00:17:46,760 --> 00:17:50,639 Speaker 1: and UH and in Africa borrowing from from China. So 287 00:17:50,720 --> 00:17:55,040 Speaker 1: there was no entity, whether it's on the provincial or 288 00:17:55,160 --> 00:18:00,639 Speaker 1: policy bank side in China or the government of the 289 00:18:00,720 --> 00:18:04,400 Speaker 1: various African countries that were the recipients of this UH 290 00:18:04,720 --> 00:18:08,560 Speaker 1: loan money and infrastructure capacity, no one had an incentive 291 00:18:08,840 --> 00:18:12,480 Speaker 1: to do any sort of meaningful UH debt sustainability. And 292 00:18:12,560 --> 00:18:15,639 Speaker 1: now it sounds like that, doesn't it. It just seems 293 00:18:15,680 --> 00:18:18,159 Speaker 1: it seems that well, on our side in Liberia, we 294 00:18:18,240 --> 00:18:21,879 Speaker 1: really didn't have We didn't really have the option to 295 00:18:22,000 --> 00:18:24,600 Speaker 1: do that because you see, we we just come out 296 00:18:24,640 --> 00:18:27,240 Speaker 1: of war and almost five billion dollars of our debt 297 00:18:27,440 --> 00:18:30,240 Speaker 1: had been waived. But that meant we had to enter 298 00:18:30,240 --> 00:18:33,440 Speaker 1: an IMF program, which meant at the Ministry of Finance 299 00:18:33,480 --> 00:18:35,600 Speaker 1: in Liberia there was a person there from the i 300 00:18:35,760 --> 00:18:39,159 Speaker 1: m F who reviewed our debt profile and UH and 301 00:18:39,240 --> 00:18:42,200 Speaker 1: in Liberia we have something called the Debt Management Committee 302 00:18:42,520 --> 00:18:47,520 Speaker 1: that reviewed every application for for debt from say an 303 00:18:47,600 --> 00:18:52,040 Speaker 1: agency of government ministry and measured that against our death 304 00:18:52,080 --> 00:18:54,600 Speaker 1: stock and and this death servicing, and we just come 305 00:18:54,640 --> 00:18:57,280 Speaker 1: back to say we just couldn't afford this. It doesn't 306 00:18:57,359 --> 00:19:01,600 Speaker 1: seem that that kind of infrastructure and that kind of 307 00:19:01,680 --> 00:19:06,480 Speaker 1: you know, institutional arrangement existed across the continent, and instances 308 00:19:06,560 --> 00:19:09,280 Speaker 1: where it did, it just seemed like the incentives were 309 00:19:09,280 --> 00:19:11,639 Speaker 1: in alligned for people to actually give it the power 310 00:19:11,680 --> 00:19:14,960 Speaker 1: to operate at its shoot. Then on the Chinese side, 311 00:19:15,400 --> 00:19:19,520 Speaker 1: it just um, you know, um, there didn't seem to 312 00:19:19,680 --> 00:19:23,480 Speaker 1: be a significant effort. It looks like that's changing now 313 00:19:23,560 --> 00:19:27,360 Speaker 1: that it started to change around the eighteen FORCAC, when 314 00:19:27,480 --> 00:19:31,439 Speaker 1: the sum being began talking about you know, we're no 315 00:19:31,520 --> 00:19:34,119 Speaker 1: longer going to finance you know, advantage of projects or 316 00:19:34,160 --> 00:19:39,399 Speaker 1: political projects called them. I think something started to change 317 00:19:39,480 --> 00:19:42,000 Speaker 1: about it. It might have been because of domestic reason. 318 00:19:42,040 --> 00:19:44,840 Speaker 1: It might have been China's own position in terms of 319 00:19:44,840 --> 00:19:47,800 Speaker 1: how much capital it had to be able to expand overseas. 320 00:19:47,840 --> 00:19:50,679 Speaker 1: Something began to change. But in those you know, in 321 00:19:50,720 --> 00:19:53,480 Speaker 1: the heyday of of borrowing that has us in the 322 00:19:53,520 --> 00:19:55,919 Speaker 1: crisis that we're in now. In a number of African countries, 323 00:19:55,960 --> 00:19:59,120 Speaker 1: I would say maybe like seven in which Chinese debt 324 00:19:59,240 --> 00:20:03,000 Speaker 1: is actually a either of debt distress, um that that 325 00:20:03,080 --> 00:20:05,480 Speaker 1: didn't seem to be on the Chinese side, and some 326 00:20:05,560 --> 00:20:08,040 Speaker 1: sort of coordination to be able to take And the 327 00:20:08,400 --> 00:20:10,080 Speaker 1: final thing I would say on that is that we 328 00:20:10,200 --> 00:20:13,720 Speaker 1: know that China has been sort of like a reluctant multilateralists. 329 00:20:14,119 --> 00:20:16,520 Speaker 1: That China was not a member of the Paris Club, 330 00:20:17,080 --> 00:20:20,199 Speaker 1: and the Paris Club of Rich countries had had des 331 00:20:20,280 --> 00:20:23,280 Speaker 1: sustainability rules, and because China wasn't a part of it, 332 00:20:23,280 --> 00:20:27,960 Speaker 1: it wasn't really subject to this rules. Reluctant multilateralist is 333 00:20:27,960 --> 00:20:30,239 Speaker 1: a great way of putting it. UM. I want to 334 00:20:30,320 --> 00:20:34,480 Speaker 1: I want to talk more about how China's approach might 335 00:20:34,520 --> 00:20:38,480 Speaker 1: be changing, especially the summer during the debt crisis. But 336 00:20:38,560 --> 00:20:40,720 Speaker 1: before we do, I mean, I think we have to 337 00:20:40,760 --> 00:20:42,720 Speaker 1: talk a little bit more about the loans. So there 338 00:20:42,800 --> 00:20:47,040 Speaker 1: is a perception that China's loans tend to be or 339 00:20:47,080 --> 00:20:50,720 Speaker 1: its financing tend to be unfair in some way, or 340 00:20:50,760 --> 00:20:53,960 Speaker 1: they come with a lot of strings attached, and that 341 00:20:54,080 --> 00:20:58,760 Speaker 1: you know, China maybe doesn't necessarily care about debt sustainability 342 00:20:58,880 --> 00:21:03,199 Speaker 1: because it's trying to um, how do I put it, 343 00:21:03,280 --> 00:21:07,200 Speaker 1: like it's trying to get a hook into a particular 344 00:21:07,240 --> 00:21:12,560 Speaker 1: country or into a particular resource or a strategic port 345 00:21:13,000 --> 00:21:16,240 Speaker 1: or something like that. So it's not necessarily worried about 346 00:21:16,240 --> 00:21:21,119 Speaker 1: getting paid back. So how much is that reputation deserved 347 00:21:21,600 --> 00:21:25,080 Speaker 1: in your view? So I think it was First it 348 00:21:25,200 --> 00:21:28,400 Speaker 1: was an Indian writer writing an outfit in an Indian 349 00:21:28,560 --> 00:21:34,120 Speaker 1: paper who coined the phrase dead trapped diplomacy. And then 350 00:21:34,359 --> 00:21:38,840 Speaker 1: the US in its uh great power competition with the 351 00:21:39,240 --> 00:21:42,320 Speaker 1: with the Chinese simpler ramp ramp that up. And thing 352 00:21:43,200 --> 00:21:46,000 Speaker 1: my understanding of the narrative of that trap diplomacy is 353 00:21:46,040 --> 00:21:50,280 Speaker 1: that the whole plan is for China to ensnare is 354 00:21:50,359 --> 00:21:55,360 Speaker 1: as um is putitive partners in this unhealthy relationship as 355 00:21:55,359 --> 00:21:58,200 Speaker 1: a means of being able to take over flagship infrastructure 356 00:21:58,440 --> 00:22:00,800 Speaker 1: like ports and airports just off like that. And the 357 00:22:00,880 --> 00:22:05,520 Speaker 1: example that gets bandied about is Humbun data, you know, 358 00:22:05,560 --> 00:22:09,280 Speaker 1: in in the UH is Sri Lanka, Yeah, in Africa. 359 00:22:10,040 --> 00:22:13,360 Speaker 1: So there's been a lot of studies. They China Africa 360 00:22:13,640 --> 00:22:18,119 Speaker 1: Research Initiative at the Johns Hopkins University has done a 361 00:22:18,160 --> 00:22:20,640 Speaker 1: study on this, and there's no real there's no evidence 362 00:22:20,640 --> 00:22:23,280 Speaker 1: for this. It gets repeated often, but there's no real 363 00:22:23,359 --> 00:22:25,639 Speaker 1: evidence for this. The second thing I would say on 364 00:22:25,680 --> 00:22:29,080 Speaker 1: this question is that about seven countries in Africa, seven 365 00:22:29,160 --> 00:22:34,879 Speaker 1: or eight the dead crisis they have currently, the dead distress, 366 00:22:35,359 --> 00:22:38,440 Speaker 1: China plays a role, right, so in terms of Africa's 367 00:22:38,440 --> 00:22:42,480 Speaker 1: student deaths that China is responsible for about UM about 368 00:22:43,240 --> 00:22:46,960 Speaker 1: of it. So it's sort of seems like we we've 369 00:22:47,000 --> 00:22:50,439 Speaker 1: become so consumed we're talking about and not focused on 370 00:22:50,480 --> 00:22:55,560 Speaker 1: the right. A significant portion of the debt UH is 371 00:22:55,600 --> 00:23:01,199 Speaker 1: old to domestic UM creditors and to private creditors, and 372 00:23:01,240 --> 00:23:05,360 Speaker 1: then the rest of it is UH the multilateral UH 373 00:23:05,680 --> 00:23:10,760 Speaker 1: lending agencies, and so I it's worked really well to 374 00:23:10,800 --> 00:23:14,280 Speaker 1: the US is advantage in terms of painting China as 375 00:23:14,320 --> 00:23:18,720 Speaker 1: this irresponsible lender who's out to take over UM. The 376 00:23:18,760 --> 00:23:22,240 Speaker 1: infrastructure of the countries is supposedly UH it is working 377 00:23:22,280 --> 00:23:25,400 Speaker 1: with that that it hasn't really borne out in terms 378 00:23:25,480 --> 00:23:29,000 Speaker 1: of the evidence that this is what the Chinese. But 379 00:23:29,040 --> 00:23:33,919 Speaker 1: the question is, I think the critique of Chinese lending 380 00:23:34,560 --> 00:23:38,359 Speaker 1: at a scale and pace that was just completely sustainable, 381 00:23:38,480 --> 00:23:42,760 Speaker 1: especially for for economies who were dependent on commodity exports, 382 00:23:42,920 --> 00:23:47,720 Speaker 1: knowing the fluctuations of commodity exports. I mean, I think 383 00:23:47,800 --> 00:23:50,800 Speaker 1: COVID nineteen simply ended up being an excellerent of a 384 00:23:50,880 --> 00:23:54,520 Speaker 1: crisis that was coming anyway, right, and and so we 385 00:23:54,600 --> 00:23:56,800 Speaker 1: just didn't expect it to be this shock, but it 386 00:23:56,920 --> 00:24:00,280 Speaker 1: was coming anyway, and and and Zambia had all has 387 00:24:00,320 --> 00:24:02,640 Speaker 1: been there. I would also like to point out that 388 00:24:02,720 --> 00:24:06,120 Speaker 1: Zambia is a bit different right from from other countries 389 00:24:06,160 --> 00:24:09,240 Speaker 1: in terms of how quickly the debt ramped up in 390 00:24:09,320 --> 00:24:12,080 Speaker 1: Zambia and how much that it actually had, and how 391 00:24:12,160 --> 00:24:17,040 Speaker 1: dependent it is on a single export um copper. I 392 00:24:17,080 --> 00:24:20,800 Speaker 1: think we were fortunate enough that the picture out of 393 00:24:20,880 --> 00:24:24,640 Speaker 1: Africa after the Zambian debt default is going to be mixed. 394 00:24:24,960 --> 00:24:28,959 Speaker 1: So on Friday, at a Thursday of Friday called Devoir 395 00:24:29,160 --> 00:24:33,399 Speaker 1: went to the market, becoming the first African country I 396 00:24:33,440 --> 00:24:37,040 Speaker 1: have since COVID to issue your bonds and it was 397 00:24:37,160 --> 00:24:41,639 Speaker 1: five times oversubscribed. So it appears that the market is 398 00:24:41,920 --> 00:24:45,880 Speaker 1: being really nuanced and sophisticated about the risk that African 399 00:24:45,880 --> 00:24:49,240 Speaker 1: countries present. And there still seems to be some sort 400 00:24:49,280 --> 00:24:53,320 Speaker 1: of appetite for for African debt. And so I think 401 00:24:54,119 --> 00:24:57,880 Speaker 1: China as as a factor in Africa. Again we're talking 402 00:24:57,920 --> 00:25:02,080 Speaker 1: about fifty four economy is in China being a significant 403 00:25:02,080 --> 00:25:07,200 Speaker 1: imp up part of maybe seven or eight. And then 404 00:25:07,320 --> 00:25:11,679 Speaker 1: if you take out Angola, China's influence drops in elect 405 00:25:11,760 --> 00:25:16,320 Speaker 1: significantly because a significant portion of Africa's debt to China 406 00:25:16,480 --> 00:25:20,000 Speaker 1: is actually Angola's debt to China. And then of course 407 00:25:20,080 --> 00:25:23,239 Speaker 1: you have your Kenya that's changing because you know, at 408 00:25:23,280 --> 00:25:27,720 Speaker 1: the last forecast, Kenya went with the hope of getting 409 00:25:28,840 --> 00:25:32,320 Speaker 1: more money for this second and final portion of the 410 00:25:32,520 --> 00:25:35,320 Speaker 1: standard gage rail from you know, it's currently it comes 411 00:25:35,320 --> 00:25:38,360 Speaker 1: from ambassador to Nairobi is supposed to go further than that, 412 00:25:39,040 --> 00:25:43,840 Speaker 1: and and the Chinese played hardball and didn't because first 413 00:25:43,920 --> 00:25:47,600 Speaker 1: the current one is not able to pay his bills, 414 00:25:47,760 --> 00:25:50,240 Speaker 1: is the debt is very difficult for them to service. 415 00:25:50,320 --> 00:25:53,480 Speaker 1: In fact, there was a committee in the Kenyan parliament 416 00:25:53,480 --> 00:25:56,120 Speaker 1: who suggested go back to the Chinese to say, look, 417 00:25:56,119 --> 00:25:59,240 Speaker 1: we're in over our heads. We can't do this. Um 418 00:25:59,560 --> 00:26:03,400 Speaker 1: the DS as I you mentioned, Kendya initially didn't want 419 00:26:03,440 --> 00:26:06,480 Speaker 1: to participate because Kenya still wants to retain his access 420 00:26:06,560 --> 00:26:11,159 Speaker 1: to markets. But Kenya is strongly reconsidering that decision at 421 00:26:11,200 --> 00:26:16,119 Speaker 1: the moment. So I and I think, uh, just paint 422 00:26:16,280 --> 00:26:19,399 Speaker 1: China as the driver of debt, especially with you know, 423 00:26:19,480 --> 00:26:23,359 Speaker 1: nefarious intense. It's just the evidence just really really doesn't 424 00:26:23,359 --> 00:26:27,719 Speaker 1: bear that up. So Chinese debt is an important contributor 425 00:26:27,760 --> 00:26:30,600 Speaker 1: to the total of dead stock, but it's not the 426 00:26:30,640 --> 00:26:33,720 Speaker 1: only story. I want to go back to something you said, 427 00:26:34,440 --> 00:26:36,360 Speaker 1: Um a little bit earlier on, and we were talking 428 00:26:36,400 --> 00:26:41,240 Speaker 1: about this perfect storm of there being an opportunity um 429 00:26:41,320 --> 00:26:45,119 Speaker 1: China looking at Africa and saying there wasn't really any 430 00:26:45,200 --> 00:26:49,080 Speaker 1: sort of other main entity there from a business standpoint. 431 00:26:49,119 --> 00:26:51,879 Speaker 1: Most of the Western dollars came more from a born 432 00:26:51,880 --> 00:26:55,960 Speaker 1: aid perspective than an investment perspective. Is there a strategic 433 00:26:56,000 --> 00:26:58,960 Speaker 1: opportunity now? Or is it just never made any sense? 434 00:26:59,000 --> 00:27:02,120 Speaker 1: I mean, if if the countries where China has been 435 00:27:02,240 --> 00:27:07,600 Speaker 1: very active um in lending or largely commodity exporters, obviously 436 00:27:07,680 --> 00:27:13,000 Speaker 1: China has this voracious demand for these commodities, Do other 437 00:27:13,520 --> 00:27:15,800 Speaker 1: sort of Western players, whether it's the U S or 438 00:27:15,840 --> 00:27:19,200 Speaker 1: countries in Europe, have much of a sort of strategic 439 00:27:19,280 --> 00:27:24,480 Speaker 1: business reason to invest aggressively in Africa or do they 440 00:27:24,520 --> 00:27:28,720 Speaker 1: just not have the same UH calculations that would lead 441 00:27:28,760 --> 00:27:30,640 Speaker 1: them there in the first place due to their sort 442 00:27:30,640 --> 00:27:34,359 Speaker 1: of different needs of their economists. Sure, and just quickly 443 00:27:34,400 --> 00:27:37,080 Speaker 1: before I responded out, just at that. Part of what 444 00:27:37,280 --> 00:27:41,400 Speaker 1: drove you know, China's investment in African resources was also 445 00:27:41,520 --> 00:27:45,040 Speaker 1: the needs to have access to the resources at source, right, 446 00:27:45,040 --> 00:27:47,679 Speaker 1: because China could always buy them on the international marketing 447 00:27:47,680 --> 00:27:52,160 Speaker 1: to buy them from Glencore, right. But but they certain 448 00:27:52,359 --> 00:27:55,920 Speaker 1: mineral resources will consider strategic and and and they want 449 00:27:55,920 --> 00:27:59,720 Speaker 1: the Chinese companies controlling them, and so that that drove that. 450 00:28:00,240 --> 00:28:03,120 Speaker 1: I think this is a question. I'm glad you bring 451 00:28:03,200 --> 00:28:07,040 Speaker 1: up this question about, you know, beyond China or is 452 00:28:07,040 --> 00:28:10,320 Speaker 1: there a strategic reason for others to to be engaged 453 00:28:10,320 --> 00:28:12,639 Speaker 1: with the continent now. So one of the things that 454 00:28:12,880 --> 00:28:15,920 Speaker 1: we that we've seen is the rise of these continent 455 00:28:16,000 --> 00:28:19,159 Speaker 1: sized economies, right that dominant the global landscape now in 456 00:28:19,280 --> 00:28:22,560 Speaker 1: terms of the political economy of the world. So you 457 00:28:22,600 --> 00:28:26,159 Speaker 1: have the United States, you have the combined EU, you 458 00:28:26,240 --> 00:28:30,159 Speaker 1: have your China, you have India and in their dominant 459 00:28:30,720 --> 00:28:34,359 Speaker 1: and compared to Africa, where you have fifty four fragmented, 460 00:28:34,840 --> 00:28:37,840 Speaker 1: very small states. I mean, the largest economy in Africa 461 00:28:37,920 --> 00:28:41,040 Speaker 1: is Nigeria, but Nigeria's GDP is still smaller than the 462 00:28:41,080 --> 00:28:46,040 Speaker 1: Washington DC area, right, So it's I mean, it might 463 00:28:46,080 --> 00:28:48,800 Speaker 1: be large for Africa, but in terms of a global scale. 464 00:28:48,920 --> 00:28:51,000 Speaker 1: It's it's really not. I mean, it's just how it 465 00:28:51,040 --> 00:28:52,840 Speaker 1: has a lot of people. And then up to ninety 466 00:28:52,880 --> 00:28:58,200 Speaker 1: percent of Nigeria's revenue come from oil exports. So Nigeria's 467 00:28:58,360 --> 00:29:02,480 Speaker 1: large economy is is pretty fragile, especially because now we're 468 00:29:02,480 --> 00:29:06,240 Speaker 1: going to a post carbon economy. So what the African leaders, 469 00:29:06,720 --> 00:29:11,840 Speaker 1: but they understood their inherent weakness of acting as individual units, 470 00:29:12,080 --> 00:29:14,719 Speaker 1: and so they decided to create something called the African 471 00:29:14,760 --> 00:29:19,000 Speaker 1: Continent of Free Trade Area, who would combine all of 472 00:29:19,040 --> 00:29:22,040 Speaker 1: their markets into a single market. And we just by 473 00:29:22,120 --> 00:29:26,080 Speaker 1: doing that become a three trillion dollar market. So now 474 00:29:27,080 --> 00:29:30,640 Speaker 1: it makes Africa attractive as a place to invest because initially, 475 00:29:30,680 --> 00:29:33,520 Speaker 1: if you were going to invest in any country, you 476 00:29:33,600 --> 00:29:36,160 Speaker 1: had to and wanted to scale up across the continent, 477 00:29:36,240 --> 00:29:39,400 Speaker 1: you had to, you know, deal with fifty four if 478 00:29:39,440 --> 00:29:41,840 Speaker 1: you wanted a presence in our countries. But fifty four 479 00:29:41,880 --> 00:29:45,720 Speaker 1: regulatory environments that it's just way too expensive and and 480 00:29:46,280 --> 00:29:49,720 Speaker 1: you know, the payout the dividend doesn't seem to match 481 00:29:49,800 --> 00:29:52,880 Speaker 1: the cost. But because now it's going to be a 482 00:29:52,880 --> 00:29:57,160 Speaker 1: single market, um, it might be more attractive, right, And 483 00:29:57,240 --> 00:30:01,080 Speaker 1: so I think with that change, it's really really important 484 00:30:01,480 --> 00:30:04,080 Speaker 1: that people begin to take a second look at Africa. 485 00:30:04,160 --> 00:30:09,480 Speaker 1: The second thing is, you know, over the last ten months, um, 486 00:30:09,520 --> 00:30:12,920 Speaker 1: the large economies, I mean they've spent close to uh 487 00:30:12,960 --> 00:30:16,320 Speaker 1: it's ten to twelve trillion hours propping up their economies 488 00:30:16,360 --> 00:30:21,760 Speaker 1: against the economic fallout of the coronavirus. It means that 489 00:30:22,160 --> 00:30:25,600 Speaker 1: when the recovery does come for a long time, we're 490 00:30:25,600 --> 00:30:28,440 Speaker 1: gonna see very low or negative interest rates in the 491 00:30:28,440 --> 00:30:31,600 Speaker 1: developed markets. And because of that, I think the risk 492 00:30:31,720 --> 00:30:34,920 Speaker 1: profile or the risk appetat of investors and private money 493 00:30:35,360 --> 00:30:40,640 Speaker 1: will change, and Africa presents an opportunity, especially you know, 494 00:30:40,720 --> 00:30:46,160 Speaker 1: for infrastructure and and the long term returns on infrastructure. 495 00:30:46,160 --> 00:30:49,120 Speaker 1: I just saw it's in the Financial Times that by 496 00:30:49,160 --> 00:30:53,680 Speaker 1: the end of the summer, investors has poured close to 497 00:30:53,760 --> 00:30:57,480 Speaker 1: seventeen trillion dollars into negative year bonds. I mean that 498 00:30:57,680 --> 00:31:03,120 Speaker 1: cannot continue indefinitely. And so I think Africa presents um, 499 00:31:03,160 --> 00:31:07,160 Speaker 1: you know, with you know, five just seven percent interests. 500 00:31:07,480 --> 00:31:11,120 Speaker 1: I think Africa still presents an opportunity for for investments. 501 00:31:11,160 --> 00:31:16,280 Speaker 1: So there is uh that. The second thing is, you know, 502 00:31:17,560 --> 00:31:20,880 Speaker 1: the State Department two weeks ago or about maybe eight 503 00:31:20,960 --> 00:31:25,200 Speaker 1: days ago, released the policy planning Department Bureau at the 504 00:31:25,200 --> 00:31:28,240 Speaker 1: State Department released this report on on the chance that 505 00:31:28,400 --> 00:31:31,520 Speaker 1: the China challenge, and it lists at ten things in 506 00:31:31,600 --> 00:31:34,400 Speaker 1: terms of how the US is going to organize itself 507 00:31:34,480 --> 00:31:38,040 Speaker 1: to that China's conduct is the reason China poses a 508 00:31:38,120 --> 00:31:42,240 Speaker 1: challenge in China's model of leadership and and one of 509 00:31:42,240 --> 00:31:47,680 Speaker 1: the places what we've seen really growth with setbacks sometimes 510 00:31:47,760 --> 00:31:49,959 Speaker 1: yet but in terms of the democratic space has been 511 00:31:50,040 --> 00:31:53,760 Speaker 1: in Africa, and and I've argued elsewhere that the Chinese 512 00:31:53,840 --> 00:31:58,760 Speaker 1: model of governance, it's desirability or applicability is pretty limited 513 00:31:58,760 --> 00:32:02,240 Speaker 1: in Africa. And so I can imagine where the democracies 514 00:32:02,280 --> 00:32:04,760 Speaker 1: of the world, like the US and and and much 515 00:32:04,800 --> 00:32:08,560 Speaker 1: of Europe would see Africa as a place where there's 516 00:32:08,560 --> 00:32:12,840 Speaker 1: some sort of shared community or values of source and 517 00:32:13,160 --> 00:32:16,920 Speaker 1: that itself is reason to to be able to and define. 518 00:32:16,920 --> 00:32:18,880 Speaker 1: The thing I would say is, like you know, as 519 00:32:18,880 --> 00:32:22,000 Speaker 1: I noted in my comments earlier, I mean parts of 520 00:32:22,080 --> 00:32:27,000 Speaker 1: Eastern Europe has been decimated because of the the population question, 521 00:32:27,160 --> 00:32:29,760 Speaker 1: and that's going to affect Western Europe too, and so 522 00:32:29,880 --> 00:32:32,680 Speaker 1: the only place that will be vibrant with a young 523 00:32:32,720 --> 00:32:36,000 Speaker 1: population that's working is going to be Africa. And so 524 00:32:36,400 --> 00:32:38,680 Speaker 1: I think this is something the Chinese saw and the 525 00:32:38,720 --> 00:32:41,400 Speaker 1: we're able to make a long term bet on the 526 00:32:41,440 --> 00:32:45,760 Speaker 1: continent UM twenty years ago when no one saw Africa 527 00:32:45,800 --> 00:32:47,800 Speaker 1: in a place where you could even think of investment, 528 00:32:47,840 --> 00:32:51,080 Speaker 1: and today you know, we're seeing that. So I think 529 00:32:51,240 --> 00:32:54,440 Speaker 1: they're they're there are opportunities for growth, especially in the 530 00:32:54,480 --> 00:32:58,880 Speaker 1: infrastructure space, especially in the agriculture and agric process in 531 00:32:58,960 --> 00:33:04,160 Speaker 1: space that UH one would expect Europe, Africa's neighbor right 532 00:33:04,280 --> 00:33:08,160 Speaker 1: to to have an interest in investing there, and and 533 00:33:08,200 --> 00:33:11,160 Speaker 1: of course UH the United States to invest in there. 534 00:33:11,680 --> 00:33:14,240 Speaker 1: What I do see though, is that China is just 535 00:33:14,360 --> 00:33:18,560 Speaker 1: continuing to deepen its hold. So the Chinese Foreign Minister 536 00:33:19,720 --> 00:33:23,480 Speaker 1: has already promised that China will provide support to the 537 00:33:23,520 --> 00:33:28,120 Speaker 1: African Continental Free Trade UH Area the secretariat or provide 538 00:33:28,120 --> 00:33:33,600 Speaker 1: money for training, and Chinese state media is already entertaining 539 00:33:34,240 --> 00:33:38,640 Speaker 1: the idea of linking the African Continental Free Trade Area 540 00:33:38,840 --> 00:33:41,920 Speaker 1: to the b r I and bringing Africa closer into 541 00:33:42,000 --> 00:33:45,880 Speaker 1: China's here. So I think that there is there are 542 00:33:46,000 --> 00:33:51,720 Speaker 1: reasons both economic and strategic for um UM actors other 543 00:33:51,760 --> 00:34:07,520 Speaker 1: than China to pay attention to what's happened in Africa. 544 00:34:10,440 --> 00:34:12,720 Speaker 1: So I wanted to talk a little bit more about 545 00:34:12,880 --> 00:34:16,920 Speaker 1: what's been happening this year and sort of over the summer. 546 00:34:17,480 --> 00:34:21,520 Speaker 1: So the distress in African debt is well known, and 547 00:34:21,600 --> 00:34:25,240 Speaker 1: we've seen the G twenty react um as I mentioned 548 00:34:25,360 --> 00:34:27,840 Speaker 1: in the intro, but I think one of the sticking 549 00:34:27,840 --> 00:34:30,440 Speaker 1: points are one of the discussion points has been the 550 00:34:30,480 --> 00:34:33,880 Speaker 1: behavior of the Chinese, whether or not they would agree 551 00:34:34,040 --> 00:34:37,600 Speaker 1: to some sort of stand still on on debt payments 552 00:34:37,719 --> 00:34:42,600 Speaker 1: or basically act like other creditors um, like the multilateral creditors. 553 00:34:43,840 --> 00:34:46,200 Speaker 1: How big of an issue is that and do you 554 00:34:46,239 --> 00:34:50,239 Speaker 1: see signs that China might be softening its stants on 555 00:34:50,280 --> 00:34:54,720 Speaker 1: this front. It is a huge issue, and we've heard 556 00:34:55,440 --> 00:34:58,480 Speaker 1: incuragan things, but it's it's yet to be seen. So 557 00:34:59,120 --> 00:35:01,799 Speaker 1: if you go back to this Zambia story, Zambia had 558 00:35:01,840 --> 00:35:06,480 Speaker 1: gone to his creditors, the private creditors, and asked for 559 00:35:06,560 --> 00:35:11,200 Speaker 1: a standstill deferral. They decided they were going to meet. 560 00:35:12,120 --> 00:35:15,560 Speaker 1: They put it off to November thirteenth, and then around 561 00:35:15,960 --> 00:35:18,440 Speaker 1: they came back and said no, and and so the 562 00:35:18,520 --> 00:35:22,760 Speaker 1: design and then the recriminations right so on the Zambian side, 563 00:35:23,120 --> 00:35:28,040 Speaker 1: the Zambian Finance minister said that the private creditors refused 564 00:35:28,080 --> 00:35:31,240 Speaker 1: to sign an n d A, and the private creditors 565 00:35:31,280 --> 00:35:35,120 Speaker 1: wanted to know what kind of arrangement Zambia was having 566 00:35:35,239 --> 00:35:39,160 Speaker 1: with China, because the fear was we would defer the debt, 567 00:35:39,280 --> 00:35:41,640 Speaker 1: we would defer payments and then Zambia is simply gonna 568 00:35:41,640 --> 00:35:45,000 Speaker 1: pay the Chinese. So they wanted to see But China, 569 00:35:45,560 --> 00:35:50,120 Speaker 1: as I noted, as a reluctant multilateralist, and China prefers 570 00:35:50,360 --> 00:35:53,880 Speaker 1: doing these things on a ball at run basis. Unfortunately, 571 00:35:53,960 --> 00:35:56,640 Speaker 1: this is not just one of those times, right and 572 00:35:56,960 --> 00:36:00,400 Speaker 1: because of the scale of the crisis and and the 573 00:36:00,800 --> 00:36:03,759 Speaker 1: number of actors, it is just not amenable to a 574 00:36:03,760 --> 00:36:08,960 Speaker 1: ballad le discussion. But China insists on going the balladd 575 00:36:09,040 --> 00:36:12,400 Speaker 1: ra way, and so because of this, the private creditors 576 00:36:12,440 --> 00:36:17,200 Speaker 1: just felt that there just wasn't enough information, especially about 577 00:36:17,200 --> 00:36:20,080 Speaker 1: what China was doing for for them to make any 578 00:36:20,080 --> 00:36:22,920 Speaker 1: decision on that, and so that remains an issue. The 579 00:36:22,960 --> 00:36:27,920 Speaker 1: second thing was China x him. This isn't really a 580 00:36:28,000 --> 00:36:30,400 Speaker 1: huge problem in Africa, but it's a huge problem with 581 00:36:30,400 --> 00:36:35,120 Speaker 1: the dss I total. China is arguing that it's a 582 00:36:35,280 --> 00:36:40,279 Speaker 1: China Development Bank and other policy banks are lending on 583 00:36:40,320 --> 00:36:44,360 Speaker 1: a commercial basis, and so they ought to be treated 584 00:36:45,160 --> 00:36:49,319 Speaker 1: the same way private creditors are being treated. That the 585 00:36:49,480 --> 00:36:54,000 Speaker 1: only Chinese, only Chinese lender who might participate in this 586 00:36:54,120 --> 00:36:58,239 Speaker 1: is probably a China Xim well. But China Development Bank 587 00:36:58,360 --> 00:37:01,680 Speaker 1: is a huge player now in Africa. In Africa it 588 00:37:01,880 --> 00:37:04,840 Speaker 1: lends money into a goal on maybe and so China 589 00:37:05,040 --> 00:37:07,680 Speaker 1: is is just trying to draw a line between what 590 00:37:07,960 --> 00:37:12,320 Speaker 1: is you know, a national a state creditor and what 591 00:37:12,520 --> 00:37:16,360 Speaker 1: is a private creditor. And so because of this, China 592 00:37:16,440 --> 00:37:22,319 Speaker 1: has not been as as you know, eager to participate 593 00:37:22,360 --> 00:37:24,759 Speaker 1: in this process as one would like. The final thing 594 00:37:24,760 --> 00:37:27,120 Speaker 1: I would say is that you know, after the last 595 00:37:27,120 --> 00:37:33,080 Speaker 1: dead crisis, most of the Western Oy City Paris club 596 00:37:33,160 --> 00:37:38,000 Speaker 1: members have moved away from baladteral lending. So I think 597 00:37:38,080 --> 00:37:41,439 Speaker 1: seven to two of of death servicing over the next 598 00:37:41,480 --> 00:37:45,400 Speaker 1: four years are the Chinese lenders. And so because of that, 599 00:37:45,560 --> 00:37:50,040 Speaker 1: China is a dominant player in this new death crisis, 600 00:37:50,200 --> 00:37:53,400 Speaker 1: not just in Africa but just generally, and in China 601 00:37:53,480 --> 00:37:58,160 Speaker 1: has hesitation to two. Part of it is China has 602 00:37:58,200 --> 00:38:01,040 Speaker 1: way more to lose, It's way more leverage right then 603 00:38:01,640 --> 00:38:04,319 Speaker 1: most of the the G twenty. So we keep saying 604 00:38:04,360 --> 00:38:07,959 Speaker 1: G twenty, But if seven seven two is going to China, 605 00:38:08,280 --> 00:38:11,160 Speaker 1: are we is there really a G twenty right in 606 00:38:11,280 --> 00:38:14,280 Speaker 1: terms of the dead question, it's it's really China. However, 607 00:38:14,640 --> 00:38:18,799 Speaker 1: the saudiast who chaired the G twenty now said that 608 00:38:19,360 --> 00:38:22,880 Speaker 1: they had agreed in principle on a framework to handle 609 00:38:22,960 --> 00:38:27,319 Speaker 1: something debt that will be useful going forward, and supposedly 610 00:38:27,400 --> 00:38:30,440 Speaker 1: the Chinese, the Chinese on board on board with this. 611 00:38:30,680 --> 00:38:33,480 Speaker 1: But again, I mean, in the past, China has you know, 612 00:38:33,640 --> 00:38:37,560 Speaker 1: said uh, but they make these general comments that could 613 00:38:37,640 --> 00:38:42,560 Speaker 1: be yes or no or maybe so we were it's 614 00:38:42,640 --> 00:38:46,080 Speaker 1: yet to were yet to see if China is as 615 00:38:46,120 --> 00:38:49,480 Speaker 1: committed to this new framework or if China is going 616 00:38:49,520 --> 00:38:54,160 Speaker 1: to be more active in in in this in this space. 617 00:38:54,239 --> 00:38:57,560 Speaker 1: But it remains that China is such a dominant actor 618 00:38:57,680 --> 00:39:03,200 Speaker 1: here and that China's hesitation to to fully participate is 619 00:39:03,200 --> 00:39:08,120 Speaker 1: a significant storyline in the debt crisis. So does this 620 00:39:08,280 --> 00:39:10,839 Speaker 1: create a sort of I mean, it sounds like there 621 00:39:10,880 --> 00:39:14,759 Speaker 1: was some whole in the existing sovereign debt law or 622 00:39:14,800 --> 00:39:18,960 Speaker 1: some ambiguity the situation that allowed the dispute about whether 623 00:39:19,440 --> 00:39:22,279 Speaker 1: the lending should be characterized as private sector lending or 624 00:39:22,320 --> 00:39:27,560 Speaker 1: official sector lending. What does a sort of updated version 625 00:39:27,880 --> 00:39:33,279 Speaker 1: of sovereign debt law looked like so that going forward, Uh, 626 00:39:33,320 --> 00:39:37,800 Speaker 1: there's more clarity on how these things are characterized. Yeah, 627 00:39:37,880 --> 00:39:41,080 Speaker 1: it just seemed, you know that after the first UM 628 00:39:41,480 --> 00:39:47,080 Speaker 1: more sometime around thirteen that the I M f UM 629 00:39:47,400 --> 00:39:51,600 Speaker 1: would have I think, I'm not even I wasn't even 630 00:39:51,600 --> 00:39:55,200 Speaker 1: finance ministering like there, right, I just happened to sit 631 00:39:55,320 --> 00:39:58,840 Speaker 1: within the presidency and then control of ministry that was 632 00:39:58,920 --> 00:40:02,400 Speaker 1: pretty big. Every time there was an IMF mission in Liberia, 633 00:40:02,600 --> 00:40:05,719 Speaker 1: they met with me as one of the largest spenders 634 00:40:05,760 --> 00:40:09,920 Speaker 1: in terms of the government, and so everybody knew that 635 00:40:10,080 --> 00:40:13,399 Speaker 1: the issue of serving debt, especially for countries that were 636 00:40:13,480 --> 00:40:16,560 Speaker 1: just coming into the market, would be an issue, and 637 00:40:16,600 --> 00:40:20,640 Speaker 1: for some reason there was never sort of nothing created 638 00:40:20,680 --> 00:40:23,120 Speaker 1: in terms of an international mechanism to be able to 639 00:40:23,160 --> 00:40:27,000 Speaker 1: resolve this when it did happen. So this framework would 640 00:40:27,000 --> 00:40:30,400 Speaker 1: be that. But I think the difficulty with with any framework, 641 00:40:30,440 --> 00:40:33,200 Speaker 1: of course, it's going to be when when when could 642 00:40:33,239 --> 00:40:37,960 Speaker 1: bevore cells debt for a billion dollars or billion euros? 643 00:40:39,080 --> 00:40:42,320 Speaker 1: The people buying that debt are you know, pension funds, 644 00:40:42,640 --> 00:40:48,320 Speaker 1: hedge funds, private creditors who you know, have finisher responsibilities, 645 00:40:48,560 --> 00:40:52,399 Speaker 1: responsibilities to their their investors and the people whose money 646 00:40:52,400 --> 00:40:55,560 Speaker 1: and they're investing. So this isn't just countries. I mean 647 00:40:55,600 --> 00:40:58,960 Speaker 1: with countries, well you know, the legislature and there's stifican 648 00:40:59,040 --> 00:41:02,200 Speaker 1: make a decision here. Because of the strange mix of 649 00:41:02,280 --> 00:41:07,239 Speaker 1: creditors we have, it creates this UH difficulty in terms 650 00:41:07,280 --> 00:41:09,799 Speaker 1: of hot one arranges this. So in terms of what 651 00:41:09,960 --> 00:41:13,600 Speaker 1: this looks like, it's it's really unclear to me what 652 00:41:13,600 --> 00:41:17,680 Speaker 1: what what a new mechanism looks like. UH and to 653 00:41:17,760 --> 00:41:20,920 Speaker 1: be able to handle this, because this is going to 654 00:41:21,000 --> 00:41:24,560 Speaker 1: happen as long as these frontier markets continue to have 655 00:41:24,640 --> 00:41:28,680 Speaker 1: access to UH international financial markets in terms of in 656 00:41:28,760 --> 00:41:31,439 Speaker 1: terms of debt, We're going to see this happen again. 657 00:41:31,480 --> 00:41:35,000 Speaker 1: It might be from shops within the economy or external shocks, 658 00:41:35,080 --> 00:41:38,040 Speaker 1: but these are gonna happen. So how we restructure the 659 00:41:38,040 --> 00:41:41,520 Speaker 1: international system so that this doesn't happen? To be honest, 660 00:41:41,600 --> 00:41:43,880 Speaker 1: I don't know. I'm just one of the guys on 661 00:41:43,920 --> 00:41:46,719 Speaker 1: the sideline who's saying, you know, we need to do this, 662 00:41:47,480 --> 00:41:49,520 Speaker 1: And when you ask me how, be like, oh, I 663 00:41:49,520 --> 00:41:52,719 Speaker 1: don't know, um so I think, but I'm confident that 664 00:41:52,760 --> 00:41:56,440 Speaker 1: people who are way smarter than me are thinking about this. UM. 665 00:41:56,719 --> 00:42:01,839 Speaker 1: But insofar as Africa is concerned earned it's investment, it's 666 00:42:01,920 --> 00:42:05,920 Speaker 1: infrastructure gap doesn't go away. It's weakness in terms of 667 00:42:05,920 --> 00:42:09,600 Speaker 1: financing that infrastructure from his budget doesn't go away. And 668 00:42:09,680 --> 00:42:13,600 Speaker 1: so I think, UM, this is just a pause in 669 00:42:14,719 --> 00:42:18,200 Speaker 1: and in an exorable march toward more day and and 670 00:42:18,400 --> 00:42:21,440 Speaker 1: and I think it makes sense that this framework that 671 00:42:21,520 --> 00:42:23,640 Speaker 1: the salady. We're waiting to see what the framework looks like. 672 00:42:23,680 --> 00:42:25,600 Speaker 1: And so maybe we can have this conversation again when 673 00:42:25,600 --> 00:42:27,600 Speaker 1: the framework comes out to see if it is adequate 674 00:42:28,040 --> 00:42:31,000 Speaker 1: UM to be able to resolve these kinds of tensions 675 00:42:31,040 --> 00:42:34,600 Speaker 1: when they arise in the future. Judy, I think that's 676 00:42:34,680 --> 00:42:37,640 Speaker 1: that's probably a natural place to leave it. UM. But 677 00:42:37,719 --> 00:42:40,080 Speaker 1: thank you so much. That was a really interesting conversation, 678 00:42:40,200 --> 00:42:44,520 Speaker 1: and really appreciate your perspective. Listen, I am really really 679 00:42:44,560 --> 00:42:47,720 Speaker 1: happy you reached out and I'm glad you have participated 680 00:42:47,719 --> 00:42:50,279 Speaker 1: in this. Thank you. Yeah, that was fantastic. Thank you 681 00:42:50,320 --> 00:43:11,480 Speaker 1: so much. So, Joe, I found that conversation very very 682 00:43:11,520 --> 00:43:14,279 Speaker 1: interesting and timely. And I feel I feel a little 683 00:43:14,280 --> 00:43:16,160 Speaker 1: bit bad because I feel like this is a subject 684 00:43:16,200 --> 00:43:20,320 Speaker 1: that we probably should have gotten to much faster. But again, 685 00:43:20,360 --> 00:43:24,000 Speaker 1: as we discussed, given everything that's happening in there's just 686 00:43:24,080 --> 00:43:28,360 Speaker 1: lots going on. But I also thought Juday's point about 687 00:43:28,680 --> 00:43:33,360 Speaker 1: how China is very active in Africa obviously, but that 688 00:43:33,520 --> 00:43:38,279 Speaker 1: even the sort of private sector deals, loans that were 689 00:43:38,320 --> 00:43:41,880 Speaker 1: coming from companies or you know, deals that were struck 690 00:43:41,960 --> 00:43:44,960 Speaker 1: with with private companies were in some way or another 691 00:43:45,160 --> 00:43:48,480 Speaker 1: they end up being financed by the Chinese state. And 692 00:43:48,520 --> 00:43:51,640 Speaker 1: if you have a private company competing with a state 693 00:43:51,920 --> 00:43:56,760 Speaker 1: funded entity, that cost is almost always going to be uneven, 694 00:43:56,800 --> 00:43:58,960 Speaker 1: and I think the state entity is almost always going 695 00:43:59,000 --> 00:44:02,000 Speaker 1: to win out. And that was that was one reason 696 00:44:02,040 --> 00:44:06,520 Speaker 1: for China's UM I guess advantage in African UM financing 697 00:44:06,520 --> 00:44:10,799 Speaker 1: that I hadn't considered before. Yeah, no, that was that 698 00:44:10,960 --> 00:44:13,919 Speaker 1: was extremely interesting and I hadn't either this sort of 699 00:44:13,960 --> 00:44:17,239 Speaker 1: like straddling the line, I guess and look, I mean 700 00:44:17,560 --> 00:44:21,640 Speaker 1: it fits even when we talk about China domestically and 701 00:44:21,719 --> 00:44:24,520 Speaker 1: this sort of ambiguous nature of the banks and the 702 00:44:24,560 --> 00:44:28,120 Speaker 1: degree to which their private enterprises but also UM but 703 00:44:28,239 --> 00:44:34,440 Speaker 1: also serve policy purposes and policy. Economic policy in China domestically, 704 00:44:34,480 --> 00:44:39,239 Speaker 1: as we've discussed before, is often conducted very directly through 705 00:44:39,320 --> 00:44:42,160 Speaker 1: the banks, and so I get I think it's interesting 706 00:44:42,200 --> 00:44:45,440 Speaker 1: to talk about it from a sort of external standpoint, 707 00:44:45,800 --> 00:44:47,880 Speaker 1: is kind of being the same thing. It's like this 708 00:44:48,000 --> 00:44:54,880 Speaker 1: sort of unique Chinese UM financing approach, and this was 709 00:44:54,920 --> 00:44:56,959 Speaker 1: the sort of the first time we've discussed it sort 710 00:44:56,960 --> 00:45:00,440 Speaker 1: of outside of China's borders, but fundamentally it sort of 711 00:45:00,760 --> 00:45:04,560 Speaker 1: it's the same thing in some way. Yeah, and Juda's 712 00:45:04,600 --> 00:45:08,600 Speaker 1: point about how, you know, we talk about China having 713 00:45:08,640 --> 00:45:11,879 Speaker 1: extended a bunch of money to Africa, but of course 714 00:45:11,920 --> 00:45:14,200 Speaker 1: it's it's much more nuanced than that, and it's really 715 00:45:14,600 --> 00:45:18,640 Speaker 1: seven countries that account for the bulk of that financing, 716 00:45:18,640 --> 00:45:21,400 Speaker 1: and then one in particular, Angola. I think that's a 717 00:45:21,440 --> 00:45:25,120 Speaker 1: point well taken. But I think the reason everyone's talking 718 00:45:25,160 --> 00:45:28,920 Speaker 1: about China now or over the summer is because of 719 00:45:29,160 --> 00:45:33,120 Speaker 1: how it's playing a part in these debt restructuring talks 720 00:45:33,239 --> 00:45:35,839 Speaker 1: right and there. There are even some people complaining that, 721 00:45:35,880 --> 00:45:38,960 Speaker 1: you know, no other creditors are going to agree to 722 00:45:39,120 --> 00:45:42,200 Speaker 1: a deal if they think that China is going to 723 00:45:42,239 --> 00:45:44,799 Speaker 1: be the holdout, and so any money that you know, 724 00:45:45,160 --> 00:45:48,759 Speaker 1: African nations do have ends up getting diverted to China 725 00:45:48,840 --> 00:45:52,239 Speaker 1: before the rest of the group. So it even if 726 00:45:52,320 --> 00:45:56,399 Speaker 1: China sort of has a smaller role than many people think, 727 00:45:56,480 --> 00:46:02,360 Speaker 1: it does have an outsized role in these particular debt negotiations. Yeah. No, 728 00:46:02,520 --> 00:46:05,120 Speaker 1: that's uh, that's really well put. And now I feel 729 00:46:05,160 --> 00:46:08,680 Speaker 1: like that conversation, Um, it cleared up a lot of 730 00:46:08,680 --> 00:46:10,400 Speaker 1: things for me, I would say. And I think also, 731 00:46:10,440 --> 00:46:14,520 Speaker 1: you know, it's obviously that particular sort of dead build 732 00:46:14,560 --> 00:46:19,000 Speaker 1: up and boom, the sort of perfect storm that occurred 733 00:46:19,680 --> 00:46:25,800 Speaker 1: with African commodity exporters voracious demand for commodities from China, 734 00:46:26,320 --> 00:46:30,320 Speaker 1: like that specific set of scenarios may not be repeated 735 00:46:30,400 --> 00:46:34,480 Speaker 1: imminently anywhere else. But I mean, obviously China still has 736 00:46:34,560 --> 00:46:38,920 Speaker 1: um ambitions in terms of expanding its trade and also 737 00:46:39,400 --> 00:46:45,319 Speaker 1: expanding consumer destinations for its own exports of finished goods, 738 00:46:45,400 --> 00:46:49,719 Speaker 1: and so the sort of fundamental questions of how commodity 739 00:46:49,840 --> 00:46:55,960 Speaker 1: Chinese investment works and what makes sense for other countries 740 00:46:56,000 --> 00:47:01,200 Speaker 1: to accept that obviously isn't going away. Yeah, I gotta say, 741 00:47:01,239 --> 00:47:04,640 Speaker 1: I do hope they finished that that railway in Kenya 742 00:47:04,719 --> 00:47:07,279 Speaker 1: because that would be very, very helpful. And I can 743 00:47:07,280 --> 00:47:10,720 Speaker 1: speak from personal experience that when the railways aren't working 744 00:47:10,840 --> 00:47:13,920 Speaker 1: or there is no railway. Actually going along the highways 745 00:47:14,239 --> 00:47:17,960 Speaker 1: can often be a very very stressful um and extremely 746 00:47:18,200 --> 00:47:22,440 Speaker 1: dangerous UM proposition. So I am looking forward to some 747 00:47:22,480 --> 00:47:25,799 Speaker 1: infrastructure development in Africa once we can all travel. I 748 00:47:25,800 --> 00:47:27,400 Speaker 1: hope you get to. I hope you get to. I 749 00:47:27,440 --> 00:47:31,160 Speaker 1: don't see that in my uh, in my path anytime soon. 750 00:47:31,280 --> 00:47:33,600 Speaker 1: But you know we've you're more of a globe trotter 751 00:47:33,640 --> 00:47:36,400 Speaker 1: than me, and so for your sake, I hope you 752 00:47:36,480 --> 00:47:39,520 Speaker 1: get to experience that finished railway. Sometimes you don't think 753 00:47:39,520 --> 00:47:41,880 Speaker 1: I'm going to go on like a Kenyan railway in 754 00:47:43,360 --> 00:47:46,600 Speaker 1: unrealistic maybe two, I don't know, but I'm sure you'll 755 00:47:46,640 --> 00:47:50,320 Speaker 1: have a wonderful Instagram pictures of it regardless. Thank you. 756 00:47:50,920 --> 00:47:54,120 Speaker 1: All right on that note, Uh, shall we leave it there? 757 00:47:54,400 --> 00:47:57,880 Speaker 1: Let's leave it there? Okay. This has been another episode 758 00:47:57,920 --> 00:48:00,640 Speaker 1: of the All Thoughts podcast. I'm Trade the Alloway. You 759 00:48:00,680 --> 00:48:03,799 Speaker 1: can follow me on Twitter at Tricy Alloway and I'm 760 00:48:03,920 --> 00:48:06,120 Speaker 1: Joe wi Isn't all. You can follow me on Twitter 761 00:48:06,280 --> 00:48:09,240 Speaker 1: at the Stalwart, and you should follow our guest on Twitter, 762 00:48:09,360 --> 00:48:12,880 Speaker 1: ju Day More. He's at ju day More. Ju Day's 763 00:48:12,880 --> 00:48:18,200 Speaker 1: about g y U d E underscore More. Follow our producer, 764 00:48:18,280 --> 00:48:22,120 Speaker 1: Laura Carlson. She's at Laura M. Carlson. Follow the Bloomberg 765 00:48:22,120 --> 00:48:26,040 Speaker 1: head of podcast, Francesca Levi at Francesca Today, and check 766 00:48:26,040 --> 00:48:29,040 Speaker 1: out all of our podcasts at Bloomberg under the handle 767 00:48:29,480 --> 00:48:31,320 Speaker 1: at podcasts. Thanks for listening.