Chinese deals pie in the sky

via Chinese deals pie in the sky – The Zimbabwe Independent 5 September 2014 by Owen Gagare

WHILE significant investment deals, worth about US$4 billion on paper, were signed during President Robert Mugabe’s visit to China last week, members of the president’s delegation to Beijing say most of them are just pie in the sky as they may not be implemented due to viability problems.

Officials who briefed the Zimbabwe Independent this week after Mugabe’s return say there is nothing to celebrate from the trip as the agreements are speculative and would depend on whether bankable projects would be initiated from Harare or not.

“By and large it was a good trip, as we signed a number of agreements which can help Zimbabwe move forward mainly in the energy, infrastructure and transport sectors, but the reality is also that these agreements depend on the viability of proposed projects,” a minister who was part of Mugabe’s delegation said this week. “In other words, we got promises of development projects, not money.”

Mugabe was reportedly only given a paltry US$24 million in cash which won’t change anything. Chinese, as a practice, give visiting leaders such “pocket money”, the official said.
This comes as Mugabe has been trying to cheer up the nation after his return from China, although he has failed to give concrete details of his agreements and deals.

Mugabe was yesterday in Kariba, after briefing cabinet and the Zanu PF politburo about this trip this week, to launch the Kariba South Power Station extension project. The project, set to be completed in 2017, is expected to cost about US$533 million, of which China Export-Import Bank, which has funded several local developments, will provide US$320 million.

After launching the project, Mugabe took the populist route to address thousands of locals, including his Zanu PF party supporters at Nyamhunga Stadium in the underdeveloped town where he briefed them on his visit to China to give the impression his trip was an economic game-changer.

However, another official who accompanied Mugabe to Beijing, said yesterday what was not said from the trip was that
the Chinese were sceptical about Zimbabwe’s path and were thus behind the scenes gravely concerned about a number of things, including the country’s low credit rating and political risk. The Chinese were also worried, the official said, about Mugabe’s age and instability within the ruling Zanu PF, factors which contribute to complications businesses and government may face as a result of any political changes that may destabilise the country and operating environment.

Although the government has been celebrating the signing of the Memorandums of Understanding, officials say only when the projects are found to be viable after the feasibility studies would funds be released.

Finance minister Patrick Chinamasa, who played a critical role in negotiating with the Chinese deals, confirmed in parliament on Wednesday that the Chinese would only fund bankable projects, although he did not want to give MPs details.

“What we have been able to achieve was serious engagement with the Chinese authorities. We got a commitment from the highest authority to fund bankable and viable projects,” said Chinamasa.
“China does not give budgetary support to any country. It is interested in giving infrastructural support. We came back with commitment that they are prepared to fund bankable projects.”

Vice-President Joice Mujuru signed a series of deals with China in 2006, but none of those materialised. However, trade between China and Zimbabwe has been growing, while China has funded several projects and given Harare soft loans.

COMMENTS

WORDPRESS: 13
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    the Chinese know Mugabe and zanu are losers.

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    The final vountdown

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    sillyWho? 8 years ago

    The projects to generate additional electricity are probably not ‘viable’ for the reason that a large percentage of electricity generated now is being stolen or freeloaded in some fashion. To invest money to generate electricity that will not be paid for by the users is foolishness of the highest order. No one knows what the demand figures are as it has been several years since supply has equalled demand through a 24 hour cycle. A demand figure of 2200 mw is bandied about in the press, but it is at best ‘political speak’, or alternatively idle speculation. As long as the thieves and freeloaders are allowed to continue, the downward spiral of the utility will continue. Eventually only privately generated power will exist in Zimbabwe. Restore the industrial base with that if you may.

    Some of the other problems besetting Africa is managerial and technical competence, which also includes a lack of ethics, and respect for the rule of law. A willingness to employ and use foreign professionals (or expats) would go a long way to solving this problem but not until the rule of law is reestablished will it work.

    The most serious problem besetting Africa is the well known IQ gap which has been distorted with political correctness until just about everyone not a specialist has been confused about the subject. On the bell curve, there is about a 15 point spread between europeans and africans. The spread is greater when east asians are considered, for the chinese are smarter than europeans. I understand how difficult this is for the africans to swallow, and I sympathize with them. Nevertheless it is true and must be brought into the open and discussed. If this barrier can be overcome all others will diminish and be solvable.

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      sav101 8 years ago

      Zimbabweans have possibly the highest IQ average on the continent. Also we have a broad skilled labour force in both blue and white collar industries. Zimbabwe is plagued by the things you mentioned, a lack of accountability, respect for rule of law and managerial discipline and competence but a lack of IQ is not one of our issues.

      What’s more, investing in reliable electricity is mainly for industrial resuscitation so it is indeed a bankable project if it is (as it is) anticipated to increase production. The moment industry picks up the domino effect inevitably occurs, people are now more employed and able to pay their bills.

      Lets avoid generalizations and observe facts and statistical analyses.

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        Parangeta 8 years ago

        Zimbabwean ‘blacks’ have the highest
        IQ in Africa, among other blacks.

        However, among all races, Asians included,
        this comparison is academic.
        There is no comparison, just look at the
        fact, just the facts!

        Not a generalization either!

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    The Mind Boggles 8 years ago

    Little bit harsh @Silly-who , I can’t really accept this IQ thing as a general rule but do believe the average leader/ruler in Africa to have particularly low IQ’s.

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    JRR56 8 years ago

    China is no different to the West in that they will not lend to a country billions when they know the liklyhood of being repaid is zero. They will build palaces and stadiums that they feel they will get advantage from and employ Chinese (probably emptying thier jails) to do the labour. The West will not lend billions either as they have already accumulated enough bad debt, they do however support education and health in a huge way that is never appreciated by the ruling elite rather expected with bad grace. Chinese are smart, they do visible projects that make them seem magnanmous.

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      Parangeta 8 years ago

      I like that JRR56, ‘bad grace’, right on.

      You are correct, the billions spent by
      the USA, UK and EU on food, health, education
      and shelter in Zimbabwe and the rest of Africa,
      is not appreciated by Mugarbage and cronies…

      …because they can’t easily steal it!

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    JOHNSON 8 years ago

    the truth is that any bankable project will finf funding, even locally. What will change to make projects bankable. What the Chinks are in fact saying is that Zimbabwe’s projects have not been bankable before so they are bound to be skeptical about WHAT can make them bankable. In fact the Chinese are betting that nothing bankable will come from Harare a perennial loan defaulter and beggar. Nxxxxx! Shame Sterek! So we will start doing bankable projects becoz the Chinese asked for them…for the sake of pleasing the Chinese. But What are we lacking to stoop so low. These looters are going too far.

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    roving ambassador. 8 years ago

    I hear Mugabe is writing a book, ‘How To Be A Colony Again’. Hoping it will make money for the Zanu conference in December.
    On a more serious note, The Chinese are smart enough to know that the political atmosphere is not stable at the moment for them to put there money in. They would like to see a clear indication that their man Mnangagwa is given the reigns to secure their interest. Know wonder their stooge Bob is showing leanings towards Mnangagwa.
    Mujuru’s leanings towards the west will be her downfall since the Chinese are in control.
    Se what happened to Ukraine when the Kiev started appeasing the west instead of Russia. Total chaos.
    If Mnangagwa looses there will be total chaos in Zim.
    These are desperate times in Zanu.
    Sell outs.

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    I am still to be convinced as to why the Chinese would choose Mnangagwa over anyone else to succeed Mugabe. On what basis is this preference based? The actual allure eludes me.

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      roving ambassador. 8 years ago

      He is an obedient servant. He has managed to convince the Chinese that he holds the power in the Defence and security sector, which is why they feel their interests are protected.
      He has managed to spear head the useless deals with the Chinese for the building of the military intelligent college and helped them in controlling the diamond mines.
      I could go on and on.
      He is their man.

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    Tongoona 8 years ago

    More fairy tales from Zpf and China. The Chinese are not smart enough because they don’t see a great distance from their noses. Elections are due in 2018 and who knows Zpf will win again this time. The day of reckoning is coming for the Chinese.