Made in Asia – China and Japan in North Africa, Saudi-style revolution
By Farah Halime, Rebel Economy
Egypt is to China and Japan, what Pick ‘n’ Mix is to an eager child.
The North African nation has a diverse selection of attractions for Asia, such as its proximity to Europe and the rest of Africa, its huge labour force and access to the Suez Canal. All of that comes at a relatively good price and with a favourable tax climate.
That is why, during the revolution, Asian countries (especially China) continued to pour money into the country while others were wary.
The stamp of China and Japan is obvious if you look closely. Ambulances and police vehicles are sometimes adorned with the grateful badge “From the People of Japan/China”.
Ed Giles, a visual journalist based in Cairo, captured the above image showing how that infrastructure investment has spread to Cairo’s subway system. Meanwhile factories are popping up on the outskirts of Cairo specialising in the re-assembly of Chinese cars.
Bridges, roads and other infrastructure continue to be created with investment from Japan and China, and it hasn’t stopped at Egypt.
Over the weekend, the Tunisian central bank governor said Japan will provide a $600 million loan guarantee to support Tunisia’s democratic transition and economic recovery.
The reason for the interest in North Africa is simple: Japan and China are driven by a desire to gain a strong foothold in key African markets positioned at the juncture of three continents. It has put Asian corporate giants such as Shanghai Construction Group of China and Mitsubishi of Japan in countries others consider as too risky including Angola, Libya and Sudan.
Asia’s desire and need for oil and other natural resources outweighs the political risk of investing in those markets.
China and Japan’s role in the region has led many to question the motives, with critics saying these countries only exploit resources displacing domestic workers and companies with their own.
But the truth is (if we are talking about China specifically because it has much more influence than Japan), Asian investment has become too important for Africa to miss out on for fear of exploitation, especially for those countries that are transitioning after rocky revolutions.
This useful round-up from Carnegie why this is so. One indicator is clear:
“China has become a major source of foreign aid to Africa, complementing its trade and investment activities. The volume of Chinese aid is undisclosed, but according to some estimates, its concessional loans to Africa have grown from a cumulative total of $800 million in 2005 to a commitment of $10 billion between 2009 and 2012. By contrast, the World Bank’s annual lending to Africa has averaged $4.5 billion a year since 2006.“
Every little helps.
That is how Egypt appears to be coping with its gas shortages that led to among the worst power outages in years this summer.
Dana Gas, the United Arab Emirates energy company, said over the weekend its Egyptian affiliate had started commercial output at a natural gas liquids (NGL) plant in the North African country, with the first propane cargo loaded on October 1, Reuters reported.
The Ras Shukheir plant will have a production capacity of 120,000 tonnes a year of propane and butane using gas feedstock supplied by Egyptian General Petroleum Corporation, the state-run oil company.
Dana Gas said the plant will market butane inside Egypt and export propane. Residual gas will be supplied to Egypt’s national gas grid.
More strike action is taking place, and this time it’s Egypt’s tourist guides. They say the Ministry of Tourism has ignored their long-time demands for better unemployment and health benefits, Al-Ahram reported.
The head of Egypt’s Syndicate of Tour Guides, Moataz El-Sayed, has called on all governmental authorities to respond to the tour guides’ demands or they will escalate their strike.
Meanwhile, Egypt’s new tourism minister, Hisham Zazou is on another wavelength entirely. He projected a 20% increase in tourism numbers this year and continued to reel out numbers that point to a big revival in the industry post-revolution.
It is optimistic considering if you talk to any employee working directly in the tourism industry they will tell you the same thing: work is slow, tourists are few and far between and they are having to look at second jobs to pay the bills.
This disconnect between the bureaucracy and the sector is a story all too common in Egypt.
Most of the time the Morsy administration responds by saying they will come to it, but it’s not a priority right now. But here’s the counter argument:
– Tourism is one of the few dominant foreign currency earners in Egypt. Opening up a few old pyramids to visitors, like the government has done in recent weeks isn’t going to have a dramatic impact. The whole industry needs an overhaul, which Rebel Economy has touched on in the past.
– The government is clearly not listening to the growing calls from the labour movement. This isn’t just workers complaining about money. It’s about a better quality of life through better health benefits, through longer-term contracts that give employees some confidence they won’t lose their jobs or have to work night shifts weeks in a row. The government does not need to double salaries for everyone, but it does need to address what people need in life – stability.
A simple story that has been done many times before, but this is one of the best I’ve read. Robert Worth, of the New York Times, writes about the emergence of Saudi Arabia’s Twitter revolution.
The annual National Day holiday last month, for instance, elicited a gale of criticism. On the day before the holiday, the interior minister, Prince Ahmed bin Abdul Aziz, released a statement noting that “we enjoy a luxurious lifestyle.” The statement was meant to be patriotic.
But on Twitter, many Saudis said they saw the prince’s “we” as an arrogant reference to the royal family, not the nation. The minister, upset, posted a defense. That drew more angry denunciations, including the following: “Remember that we have no medical insurance, no jobs. Prince Salman” — Prince Salman bin Abdulaziz al-Saud, the heir apparent — “has billions of dollars, and don’t forget all the fenced-in lands belonging to the royal family.”
Farah is a business journalist and founder of Rebel Economy, a blog focused on how regional economies are rebuilding after the Arab Spring.