
Joyous Africans Take to the Rails, with China’s Help - e15ctr0n
https://www.nytimes.com/2017/02/07/world/africa/africa-china-train.html
======
bcks
I was surprised that the NYT article did not have a map of the route. Luckily,
WikiPedia has it covered:
[https://en.wikipedia.org/wiki/Addis_Ababa–Djibouti_Railway](https://en.wikipedia.org/wiki/Addis_Ababa–Djibouti_Railway)

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rjeli
"Empire of Dust" (1:15) follows a Chinese developer working in Africa.
Interesting glimpse into local difficulties with culture and industry.

[https://www.youtube.com/watch?v=A0C4_88ub_M](https://www.youtube.com/watch?v=A0C4_88ub_M)

~~~
ice109
i wonder how good this guy's chinese is.

edit: this guy speaks 4 very different languages - english, swahili, french,
and chinese. that's quite impressive.

~~~
et-al
There's an accent, but it's actually significantly better than most (white)
American expats I've met in China.

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r00fus
Great news for fans of rail and Africans alike. Also: environment is happier.

I'm just amazed at how China is moving forward where other countries (looking
at you, USA) simply cannot. What's their secret?

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matt4077
– They can finance stuff like this on credit unchecked by ny public opposition
to growing national debt

– Having started later than western countries, their public debt (41% GDP) is
much lower

– High GDP growth rates further lower the effective burden of their debt

– They can act largely unencumbered by the historic debt of colonialism, while
western countries face opposition both internally as well as locally in the
project countries

– They have less qualms of working with some regimes with less-than-stellar
records on human rights

– Lower regard for human rights means lower risk of political tensions between
China and the host countries, which could otherwise endanger investments.
Western countries, conversely, want to avoid a situation where they have to
compromise on morals to protect their investments (c.f. China)

– China has a lot more experience with large infrastructure projects than any
other country.

– China brings their own workers to these projects, which are paid far below
any construction workers you could find anywhere in industrial countries

– The politics of China allow for "Grand Plans" and their quick approval.
Democratic processes would almost certainly stop any such project in a western
country because it's impossible to write a reliable business plan for them.
These are bets made on a whim and to a certain degree driven by politics and
emotions.

– Western democratic countries generally regard such projects to be the
provenance of the market.

~~~
markdown
> They have less qualms of working with some regimes with less-than-stellar
> records on human rights

Citation needed.

US corporations not only readily work with dodgy regimes, they also work with
drug cartels. China has horrible human rights records, but US corporations
readily deal with the Chinese govt when there is money or market-share to be
gained.

~~~
akiselev
Since when do US corporations represent the people of the United States and
their government? The US has done, and continues to do, some evil shit but
there is clearly a much more effective feedback loop between American
politicians and their constituents than between the Politburo and the Chinese
population. That feedback loop includes peoples' beliefs in the principles of
the United States and the Constitution, even though a tiny minority (corporate
executives) clearly do not.

~~~
markdown
I get your point, but I fail to see the relevance here.

Chinese corporations work with despots and unsavoury regimes. US corporations
work with despots and unsavoury regimes.

~~~
akiselev
Sorry, I'm conflating the Chinese government with the corporations that do the
actual work on the ground and generate the revenue. The US does get involved a
lot in foreign affairs on behalf of American companies (i.e. reporting on
Airbus's attempted bribery of Saudi officials in order to benefit Boeing) but
if my experience in Russia is indicative of how it works in China, the
government and corporations are far more intertwined. In Russia, to get stuff
done like get building permits or guarantee reliable logistics, you quite
often have to resort to bribes and anything at the scale of large corporations
requires complex relationships between the business owners and
politicians/bureaucrats because the latter can easily use "legal" means to
take control of the company and reprivatize it to their cronies. These are
broad strokes but there are plenty of publicly known examples like Sergei
Magnitsky, who died in a prison cell after discovering that high level
officers took control of a foreign investment firm and claimed hundreds of
millions of dollars in tax returns from the government.

Based on my understanding of this expansion into Africa, the Chinese
government is heavily involved in negotiating mineral rights and uses its
might to enforce the security of investments that are made by corporations,
which are effectively state owned or at the very least can become so on the
whims of the Politburo.

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luckystartup
Does this open up any investment or business opportunities?

I feel like the shipping and railroad industry is enormous and impenetrable,
but there must be some smaller opportunities in here. Even if it's something
sort of intangible, like "increasing transparency and fighting corruption".
Because you know some percentage of this money went into the wrong pockets.

If you were just a programmer from a western country, how would you even begin
to get started in developing markets? Not just this railway project, but
Africa and Asia in general. I'm reading things like this [1]:

> China, India and the rest of the developing world will eclipse the west in a
> dramatic shift in the balance of economic power over the next 50 years.

So I want to be where the growth is happening. How do I do that? Do I need
millions of dollars before I can achieve anything? Should I learn Mandarin,
Hindi, or Swahili? In the past, I would have had to visit some of these
countries and talk to some local entrepreneurs. Now I can just do my own
research, meet people online, and have Skype calls. There's really no need to
travel in order to find opportunities.

EDIT: I just watched the "Empire of Dust" documentary... That's really eye-
opening. I hate to think about how much all of those workers are being paid.
Even the Chinese managers. I guess business is business, and they just pay as
little as possible. It also seems like it is very difficult to get anything
done.

[1] [https://www.theguardian.com/global-
development/datablog/2012...](https://www.theguardian.com/global-
development/datablog/2012/nov/09/developing-economies-overtake-west-2050-oecd-
forecasts)

[2]
[https://www.youtube.com/watch?v=A0C4_88ub_M](https://www.youtube.com/watch?v=A0C4_88ub_M)

~~~
fegul
This opens up a lot of investment/business opportunities.

Ethiopia is land-locked and given its not-so-great relationship with Eritrea,
uses Djibouti as its primary port. The time-savings of the railway will bring
down port-to-Addis shipment times to 12 hours which is awesome considering it
can take 3 days now (although the customs process will need to be improved to
really speed it up)

It will also reduce the costs necessary to repair the roadways that trucks
take to get to Djibouti and back. The incoming lane on these roads is often
rutted like crazy due to the weight of the goods and truck drivers are not
always the most reliable people.

Ethiopia is also home to one of the fastest growing economies in the world and
it is extremely import-dependent. The lower the costs for transit, the lower
the costs for the consumer.

RE: wanting to be where the growth is, you really need to be here to see it (I
spend most of my time in Ethiopia) You don't have to know the local language
and you don't need millions of dollars but you need to have an appetite for
risk and be an extremely patient person. Nothing generally works out the way
you think it will here so be open to other outcomes and be resilient through
it all.

PM if you have any questions.

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kevindong
> For Djibouti, the debt is especially daunting, amounting to 60 percent of
> its gross domestic product.

This seems absolutely insane to me.

~~~
ww520
GDP is per year while debt is spread over time, like 30 years. Assuming 5%/yr
for the amount of interest and principle repayment, 5% x 60% = 3% of GDP for
debt service per year. Not too bad. Assuming the project adds 1% to GDP
growth, it would boost the GDP by 35% at the end. Adding 2% would boost by
81%. And the effect will continue after the debt has been paid off. That's a
good investment.

~~~
ezzaf
I don't think you're accounting for interest in that calculation. If they have
borrowed 60% of GDP at an interest rate of 3%, it would take a 1.8% annual
increase in GDP just to match the interest on the loan.

That is also ignoring the fact that you can't just take the entire GDP growth
and use it to pay the loan, you have to collect fares and taxes which can only
be a proportion of that growth. If you collect more in fares than the increase
in GDP, you're leaving the country poorer than they would be without the
railway.

Djibouti is going to need to see some pretty big additional growth from the
railway to make the project worthwhile. Not to say they won't, be it's easy to
underestimate just how big of a debt burden it is for a small country.

~~~
ww520
The sample 5%/year loan payment already includes the interest and principle
repayment, where the interest rate incidentally is about 3%. Annual debt
service is 5% x 60% of GDP = 3% of GDP. As the GDP grows, the portion of the
debt service each year becomes less and less, 2.9%, 2.8%, ...

The train system presumably generates revenue, where the operating income can
be used to pay off the debt, rather than paid by tax on the GDP. A train
system has transformative benefits to a nation. The benefits are still there
long after the debt is gone. The ROI period is way longer than 30 years.

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brdltbrncle
It's not a totally rosy picture across the continent. In Kenya, Chinese
infrastructure projects are hugely disruptive to local communities and
wildlife and are poorly managed and implemented, seemingly providing short-
term improvement but questionable over the long term.
[http://africanbusinessmagazine.com/region/east-
africa/rising...](http://africanbusinessmagazine.com/region/east-
africa/rising-cost-kenyas-new-railway/)

~~~
privateprofile
Agreed.

The only reason that you see these deals being made is because the Chinese
government is interested in Africa's natural resources [1], Chinese companies
are competitive in construction (not really rocket science, plus slave labour
certainly provides a financial advantage [2] [3]) and government officials
stand to personally make money, as nothing gets done in Africa if you don't
"properly compensate" the right government officials [4] [5] (european
companies know this too, but bribery is sligthly more constrained by their
governments).

The end product is usually low quality, with roads cracking open as soon as
rain pours, but the goal was not to provide infrastructure in the first place,
so no one is remotely concerned about any benefits nor about the impact on
local communities, public safety, wildlife or the environment. Guess what
happens to anyone that tries to protest on behalf of these issues. [6]

These deals are rarely rosy for the general population, who will still lack
water, sanitation, food, jobs and education. Even the few that managed to
survive outside of city centers will see their basic livelyhood (cattle,
farming) disrupted by these "developments".

PS: I've worked in Angola, Kenya and Nigeria.

[1] [http://www.newyorker.com/news/news-desk/china-in-africa-
the-...](http://www.newyorker.com/news/news-desk/china-in-africa-the-new-
imperialists)

[2]
[https://www.theguardian.com/commentisfree/libertycentral/201...](https://www.theguardian.com/commentisfree/libertycentral/2010/jul/29/china-
export-convict-labour)

[3] [https://jamhuri-news.com/how-china-contractors-drove-
kenyan-...](https://jamhuri-news.com/how-china-contractors-drove-kenyan-firms-
out-of-mega-projects/)

[4] [https://qz.com/513090/in-south-africa-corruption-is-a-
public...](https://qz.com/513090/in-south-africa-corruption-is-a-public-
private-partnership-that-protesters-want-broken-up/)

[5] [http://www.standardmedia.co.ke/article/2000175560/eacc-
arres...](http://www.standardmedia.co.ke/article/2000175560/eacc-arrests-
senior-china-roads-managers-for-bribery)

[6] [http://www.reuters.com/article/us-angola-protest-
idUSKCN0X70...](http://www.reuters.com/article/us-angola-protest-
idUSKCN0X70C1)

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ryanqian
They are helping Africans in real, step by step, glad to see the world is
geting better with the help of Engineers.

The People in Africans they deserve the world industry's help , again, in
real.

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throw2016
There is a pattern to evolution of societies. A lot of 'third world' countries
including social structures are a lot like our societies were 100-200 years
ago. Anyone doing even basic research will not fail to see the similarities.
There is basic survival, greed, feudal systems, corruption and the primacy of
religion and traditional social structures.

Prosperity breaks a lot of these and the evolution of the west came first from
economic colonialism and the resulting wealth then spurred on the growth of
technology and newer economic, social and political structures.

Without the benefit of colonialism a lot of emerging economies are 'stuck' and
they have to deal with extremely powerful and organized entrenched power
structures and play by their rules designed to maintain their primacy at all
costs.

Isn't this what 'the great game' is? Its got little to do with human rights,
humanity, environment or social consciousness. Its purely driven by power,
self interest and greed. Its played out in backroom deals, corruption,
financial systems, collusion, dirty tricks, geo politics and wars like we see
in the middle east and Russia. This is the road China is learning to navigate
in Africa. A road already taken by the west 400 years ago. Exciting times
ahead.

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guard-of-terra
"New stations have been built outside city centres"

Is it only me who has problems with this attitude?

As if we didn't have enough frustration from airports located an hour away.

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debt
Seems like Africa would be a good geopolitical advantage for China. An area of
the world ignored by mostly every other country.

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anonyguy1969
Two countries can't be representative of the continent. This title should read
Ethiopians and Djiboutians

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anonyguy1969
Two countries can't be representative of the continent. This title should read
Ethiopians and Djiboutians

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fegul
The title makes me shudder.

1\. Africa != Ethiopia and Djibouti. It's a massive continent 2\. "Joyous
Africans" conjures up some pretty bad stereotypes 3\. The reason they're
"joyous" is only because someone else helped them?

Yikes.

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thisrod
TL;DR: The railway from Ethiopia to Djibouti failed because no one could
afford to maintain it. A few years later, the Djibouti government took out a
loan for the value of 9 months production from the entire country, and paid
some Chinese firms to build them a brand new one.

~~~
kalleboo
Skimming some of the sources in Wikipedia, it looks like the maintenance and
rebuilding of the previous railway stalled not so much due to cost reasons but
rather political reasons in the cooperation between Djibouti and Ethiopia. I
guess it's easier politically to rally around a new shiny railroad than play
"who pays who" for maintenance of a 100-year-old one.

