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Why Africa Will Stay Poor - YouTube
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[Music]
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within the interior of east africa
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resides the small but beautiful nation
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of uganda
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[Music]
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however uganda is and has been for a
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long time been a poor country this has
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largely been attributed to major
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political instability since it gained
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its independence in 1962.
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despite this the country has been long
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speculated to be poised for rapid
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economic and development growth on
[30]
account of its significant natural
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resource deposits abundant fertile
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agricultural land and large working age
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population but like all developing
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nations uganda has been in need of
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significant monetary investment to aid
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in the development of heavy industry
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increase public utilities and scale up
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infrastructure to meet the demands of a
[49]
growing economy and population this is
[52]
why uganda laid out an aggressive
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20-year long civil aviation master plan
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to dramatically upgrade the country's
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overburdened and only international
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airport in tebe located 40 miles
[64]
southwest of the capital the goal of the
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project was to make the airport a
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regional hub something particularly
[70]
important for a landlocked country then
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in 2015 the nation started looking for
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potential loan suppliers in order to
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obtain the mountains of capital needed
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for such an ambitious project they found
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their supplier in the chinese national
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export import bank of xm the 207 million
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dollar 20 year long contract secured the
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funding to begin construction at face
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value this seems like a perfectly normal
[95]
and mutually beneficial deal but it
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underpins a much larger and insidious
[100]
scheme by the chinese communist party to
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become a superpower
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with construction at intege well
[110]
underway things were going smoothly
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however the situation soured when the
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ugandan civil aviation authority started
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to look at the fine details of the
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hastily agreed upon contract discovering
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some 13 separate clauses that were
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deemed unfriendly or toxic including
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measures that essentially mortgaged out
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the airport with all channels for
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mediation to be conducted through
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chinese courts and gave china the
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ability to approve and veto budgets all
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this means is that china is in the
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driver's seat of the current contract
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and in control of any modifications to
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that contract in the future under
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pressure from china to make a deal
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quickly ugandan leaders either failed to
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identify these toxic clauses or decided
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to take a risk nevertheless things
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started to erode in 2020 with the global
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economic crash which crippled uganda's
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financial situation in a desperate
[162]
attempt to renegotiate the contract in
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early 2021 the chinese bank rejected it
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by late 2021 it's been rumored that
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uganda has found itself unable to make
[173]
payments which triggered a takeover of
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the airport by china in november while
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the full situation and extent of the
[180]
issue is currently unknown since both
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nations are trying to keep things quiet
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a total takeover of the airport would
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not however be a surprising thing to
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occur in fact china over the last decade
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has seized many valuable infrastructure
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assets of developing countries on the
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back of its belt and road initiative
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[Music]
[203]
hailed is the project of the century by
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chinese president xi jinping the project
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seeks to dramatically expand global
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infrastructure with itself as the
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economic center cementing china is a
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global superpower covering 65 of the
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world's total population in 140
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countries china has enticed specifically
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developing countries with massive loans
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for desperately needed infrastructure
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projects totaling half a trillion
[229]
dollars so far to put that mind-boggling
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figure into some perspective under the
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marshall plan the u.s spent 135 billion
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dollars adjusted for inflation to help
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rebuild western europe after world war
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ii over four times less than the belt
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and road initiative to date however a
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good portion of these loans to
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low-income countries are unlikely to be
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paid off as it appears china does not
[251]
assess the nation's ability to pay back
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the loan when these defaults eventually
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occur the recipient country is then
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forced to release assets to china either
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the project itself like in tibet or some
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sort of other agreement that china
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agrees upon in fact in 2019 uganda's
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southern neighbor kenya almost forfeited
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the port of mombasa the largest port in
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africa and by far the most important
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piece of economic infrastructure in the
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country however in saving the port kenya
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is now overburdened by a mountain of
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chinese debt costing the nation over 40
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percent of all tax revenue to make
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payments one such country that did end
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up losing its port was sri lanka who now
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has to lease out the poor to china for
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the next 99 years not only is this a
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major blow to sri lanka's economy and
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sovereignty but it also has sparked
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fears that china might use the port as a
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naval base a mere 200 miles from its
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geopolitical rival india a similar
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situation occurred in djibouti giving
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china a forward naval base along the
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most important economic shipping lane in
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the world laos who has let external
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debts get out of hand will now be forced
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to cede a majority stake in the national
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power grid effectively putting a
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political stranglehold on the nation
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with huge fixtures of these economies
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being in control by the chinese
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government the developing countries
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become heavily influenced if not
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financially subservient to beijing if
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china owns your only major shipping port
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who do you think you'll have to trade
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with this is called debt trap diplomacy
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and the motivation to utilize it
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ultimately stems from china's current
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economic conundrum
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see china has experienced unbelievable
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growth and industrialization in the last
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40 years however that growth is largely
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attributed to the vast availability of
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very cheap labor as wealth and
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productivity have steadily increased
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that labor is slowly becoming less
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affordable and less competitive on the
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global stage and it's starting to affect
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china's growth this is called the middle
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income trap of which countries such as
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brazil and south africa have experienced
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ultimately stagnating their economic
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growth but china has seen this coming
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for some time and they have aspirations
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to become a superpower their strategy
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which is enabled through the belt and
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road initiative is to relocate wealth
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generation and cheap labor to low-income
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countries specifically in africa while
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transferring the domestic market to more
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complex industrial manufacturing and
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services essentially making africa
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china's new china with africa poised to
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undergo dramatic economic growth in the
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21st century akin to asia's in the 20th
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and an explosion of population to 3.8
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billion by 2100 africa will then become
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the world's new source for cheap labor
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and china wants to be the main
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beneficiary of this economic boom by
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utilizing debt trap diplomacy now china
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can gain access and possession of
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critical and increasingly valuable
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pieces of economic infrastructure in
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asia and elsewhere but the 2020
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financial crash changed everything china
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has pivoted rather abruptly with a
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decreasing desire to unload massive
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amounts of capital abroad due to its own
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domestic fears of financial meltdown
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including the possibility of its largest
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property holder ever grande defaulting
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this has caused china's foreign direct
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investment to slow down even more than
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it already was this is having a ripple
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effect across the world and africa is
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hit especially hard countries that were
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expecting to and relying on securing
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additional funding have found themselves
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cut off a project to connect a
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super-fast rail link between the port of
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mombasa and uganda has run out of money
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in kenya the tracks end abruptly in the
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countryside some 468 kilometers short of
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their destination strapped for cash the
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country is resorting to refurbishing
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19th century colonial british tracks
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that have laid covered by foliage for
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over half a century similar difficulties
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are being experienced in cameroon and
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nigeria as total funding for the
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continent has dropped from 11 billion to
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3.3 billion a drop of over 70 percent in
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just the last three years as these
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countries find out the hard way that the
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free-flowing capital of the last decade
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is not a guarantee and that china is
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utilizing these projects for political
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and economic gain the future of the belt
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and road initiative is now in question
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in the meantime however some countries
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like uganda are having to pay the price
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