Post by cjm on Aug 6, 2019 7:11:35 GMT
Part of a post already here. Worth highlighting though.
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Finally, Mr Mogajane gets to the World Bank. This is interesting because it is one of the hated Bretton Woods institutions which normally the ANC shuns. But one hopes that Mr Mogajane knows that the WB also only lends for project finance, again mainly for infrastructure. So it’s not really a runner at all. It’s true that Brics also has a Contingency Reserve Arrangement (CRA) which can also lend money – though only to help countries with balance of payment problems. So that’s not much use either. That is to say, what Mr Mogajane is really talking about – but dare not mention by name – is the IMF, the only bank which has sufficient funds to help and which lends not for specific projects but to bail out countries which have got into a mess.
No doubt behind the scenes the government has already run over this possibility and quailed. At which point, of course, the first thought in mind is “surely we could get money from the Chinese?”
This is doubtless the reason for Ramaphosa’s sycophantic siding with China over the Huawei controversy and the extravagant care South Africa takes not to upset the Chinese or Russians on the question of human rights.
However, this week the Chinese ambassador to South Africa, Mr Lin Songtian, gave a long interview to Reuters. In itself this was remarkable. Diplomats – and especially the Chinese – generally shun public speaking and prefer to make demarches behind closed doors. So, without doubt, Mr Songtian wanted to make a very public point.
He started with “President Cyril Ramaphosa is the last hope of this country” which could be translated as “we realise South Africa is in the most appalling mess and the situation is so bad that we are breaking our normal rule of not making public observations about your domestic politics”. Mr Songtian then went to great lengths to explain why South Africa was not attractive to Chinese investment. “To date there are no major infrastructure projects from China here. Why? Because we don’t only need the concept of a project.”
Policies of extending incentives, including tax breaks, to attract foreign capital also did not do enough for Chinese investors who, Mr Songtian said, wanted to see favourable conditions enshrined in an investment law approved by parliament. (Note that Rob Davies’ insistence on getting rid of investment protection laws has cost the country not just Western but Chinese investment as well.) What would bring in Chinese money? Well, it would help if the antiquated railway network was revived, the port of Durban was modernized and Eskom was cleaned up. (Translation: the ANC has destroyed your infrastructure and you can’t expect anyone to help finance such feckless behaviour.)
Previously the China Development Bank lent $2.5 billion to Eskom but Mr Songtian made it clear that this wouldn’t happen again. “Eskom is a debt trap. China gave them some loans before. And now they have become very cautious. Eskom is not an issue of money. It’s the issue of operation mechanisms, management capacity.” (Translation: you have failed entirely to reform Eskom. Ramaphosa has promised a lot but nothing is happening. You people are just not serious.) Mr Songtian then hinted that the IMF was the place to look for money, pointing out that China had helped the Republic of Congo towards an IMF bailout.
“China is always open to working with the IMF”, he said, adding “If it goes for electricity, roads, industrial parks and follows the concept of intensive development, temporary debt is OK and will be paid back when the country gets developed.” (Translation: there is nothing wrong with borrowing from the IMF and we are passing the buck to them.)
It is not difficult to imagine that there must have been some frantic pleas from the Treasury and the Presidency for a great big lump of money from China. It is much the same story as Ramaphosa’s ill-fated investment drive. He seemed to think that you could attract investment simply by sending off emissaries to ask for it. This sort of spoilt child behaviour is based on a sort of South African exceptionalism, the notion that we are special and different and have Madiba Magic etc. This is all very well on occasion for self-congratulatory speeches – it goes with new cities and bullet trains - but to expect it to cut any ice in the real world is simply delusional. In any case, Mr Songtian has now made things crystal clear – his language is amazingly blunt, especially for a diplomat - doubtless at the urging of Bejing.
No doubt behind the scenes the government has already run over this possibility and quailed. At which point, of course, the first thought in mind is “surely we could get money from the Chinese?”
This is doubtless the reason for Ramaphosa’s sycophantic siding with China over the Huawei controversy and the extravagant care South Africa takes not to upset the Chinese or Russians on the question of human rights.
However, this week the Chinese ambassador to South Africa, Mr Lin Songtian, gave a long interview to Reuters. In itself this was remarkable. Diplomats – and especially the Chinese – generally shun public speaking and prefer to make demarches behind closed doors. So, without doubt, Mr Songtian wanted to make a very public point.
He started with “President Cyril Ramaphosa is the last hope of this country” which could be translated as “we realise South Africa is in the most appalling mess and the situation is so bad that we are breaking our normal rule of not making public observations about your domestic politics”. Mr Songtian then went to great lengths to explain why South Africa was not attractive to Chinese investment. “To date there are no major infrastructure projects from China here. Why? Because we don’t only need the concept of a project.”
Policies of extending incentives, including tax breaks, to attract foreign capital also did not do enough for Chinese investors who, Mr Songtian said, wanted to see favourable conditions enshrined in an investment law approved by parliament. (Note that Rob Davies’ insistence on getting rid of investment protection laws has cost the country not just Western but Chinese investment as well.) What would bring in Chinese money? Well, it would help if the antiquated railway network was revived, the port of Durban was modernized and Eskom was cleaned up. (Translation: the ANC has destroyed your infrastructure and you can’t expect anyone to help finance such feckless behaviour.)
Previously the China Development Bank lent $2.5 billion to Eskom but Mr Songtian made it clear that this wouldn’t happen again. “Eskom is a debt trap. China gave them some loans before. And now they have become very cautious. Eskom is not an issue of money. It’s the issue of operation mechanisms, management capacity.” (Translation: you have failed entirely to reform Eskom. Ramaphosa has promised a lot but nothing is happening. You people are just not serious.) Mr Songtian then hinted that the IMF was the place to look for money, pointing out that China had helped the Republic of Congo towards an IMF bailout.
“China is always open to working with the IMF”, he said, adding “If it goes for electricity, roads, industrial parks and follows the concept of intensive development, temporary debt is OK and will be paid back when the country gets developed.” (Translation: there is nothing wrong with borrowing from the IMF and we are passing the buck to them.)
It is not difficult to imagine that there must have been some frantic pleas from the Treasury and the Presidency for a great big lump of money from China. It is much the same story as Ramaphosa’s ill-fated investment drive. He seemed to think that you could attract investment simply by sending off emissaries to ask for it. This sort of spoilt child behaviour is based on a sort of South African exceptionalism, the notion that we are special and different and have Madiba Magic etc. This is all very well on occasion for self-congratulatory speeches – it goes with new cities and bullet trains - but to expect it to cut any ice in the real world is simply delusional. In any case, Mr Songtian has now made things crystal clear – his language is amazingly blunt, especially for a diplomat - doubtless at the urging of Bejing.
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