Africa is famous for its extreme poverty. People of many countries in Africa are suffering from hunger and unemployment. The governments here cannot generate enough wealth internally and they are dependent on foreign aid and loans. European countries have provided loans in the past and some of them have even forgiven the debt owed by African countries too. However, European governments are not providing substantial amount of new loans to the African countries. Africa was never a top priority for US government. International financial institutions like IMF and World Bank are also not to keen to invest in Africa. So, for the African countries, there are not too many places to look for getting fresh loans for their development projects. Fortunately. China and India have come to the rescue.
I just read an interesting report titled ‘New money flowing to Africa from China and India signals global economic shift’ at Canoe.com. To give you an idea of the support of China and India, I am quoting from the report:
“During a trip to Africa this summer, Chinese Premier Wen Jiabao agreed to give Ghana, one of the countries benefiting from the Group of Eight's debt relief deal earlier this year, a loan of about US$66 million for its communication network and other projects. He also signed an agreement to gave Egypt a $50-million loan and a $10-million grant.
India's state-run oil exploration firm Oil & Natural Gas Corp. is investing $6 billion in building a power plant and railroads in Nigeria.
African countries, pressed for funds to build their infrastructure - in many cases destroyed by years of warfare, are happy to get the money.”
African countries are very happy that China and India have come forward to their rescue. On the other hand, China and India are happily supporting the African countries as they have the ambition now to become super powers. However, not every one is happy. World Bank is very unhappy that African countries are recklessly borrowing money and thus, they run into the risk of being into more debt. U.S. Treasury Secretary Henry Paulson is unhappy too and he termed this as "irresponsible borrowing."
World Bank may be unhappy but African countries are very happy. African countries are also happy that China and India are not putting too many conditions like World Bank while giving loan. I feel that there should be a balanced approach from all the sides. World Bank should relax their conditions for giving loan. China and India should become more cautious in this regard. Most of all, African governments should give more importance to effective use of loan.
It was the westerners who were lending their hands most of the time before. But now, look who's doing it. Maybe after 50 years or more, it will be the asian nations who will be giving aids and funds to the poorer western civilization. Let's just cross our fingers.
Posted by: nepspeed82 | September 25, 2006 12:13 PM | Permalink to Comment