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Zimbabwe’s vice president on Wednesday said the country has lost more than $150 billion due to sanctions imposed by the European Union and countries such as the United States following reports of election rigging and human rights abuses in the early 2000s.

Speaking to protesters rallying against the sanctions, Vice President Constantino Chiwenga said the measures were also hurting the entire southern Africa region.

He called the sanctions an “albatross” around Zimbabwe’s neck, as they include financial restrictions that isolate Zimbabwe from global access to capital.

“Since 2001, we estimate that Zimbabwe has lost or missed over $150 billion through frozen assets, trade embargos, export and investment restrictions from potential bilateral support, development loans, IMF and World Bank balance of payments support and commercial loans,” Chiwenga said, calling the sanctions “heinous and illegal.”

Stevenson Dhlamini, an economics professor at National University of Science and Technology in Zimbabwe, said the figure of $150 billion is consistent with what the Zimbabwean government has been saying over the years.

“The cumulative effect of the sanctions by the U.S., EU and the U.K. do have a cumulative impact that could be to that level,” Dhlamini said.

Not everyone agrees. 

Prosper Chitambara, senior economist with the Labor and Economic Development Research Institute of Zimbabwe, said multiple factors have affected the country’s economy, not just the sanctions.

“How do you then separate the effects of sanctions, say, from the effects of corruption, or from the effects of external shocks or climate-induced shocks?” he said, “Coming up with a number is a very difficult and tedious exercise to do.”

After the protest, which attracted mainly civil servants and ruling Zanu PF supporters, Chiwenga vowed that Zimbabwe’s economy will prevail over the sanctions.

“Sanctions are really hurting Zimbabweans,” he said. “By now, we could have gone far in terms of our economic growth. Our sin is that we took land [from white commercial farmers] and gave it to our people. Nothing else. The rest they are talking about is nonsense.

“But we think outside the box,” he said. “So, sanctions or no sanctions, Zimbabwe will prosper.”

Hopes of lifting the sanctions were dashed after many observer missions to Zimbabwe’s August 23 general election, including the Southern African Development Community, said the polls were not credible.
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Billions of dollars in international economic aid will be needed to reverse decades of border closures, military operations and de-development in Gaza, according to a report published Wednesday by the United Nations Conference on Trade and Development, UNCTAD.

“While lifting all restrictions is a necessary condition for sustainable recovery, it is by no means sufficient,” the report said.  

“Donors and the international community need to extend significant economic aid to repair the extensive damage Gaza has experienced under prolonged restrictions and closures and frequent military operations, which has stifled the economy and decimated infrastructure,” it said.

The report documents economic conditions in the Occupied Palestinian Territories through the end of 2022, prior to the current chain of disastrous events triggered by the October 7 assault on Israel by Hamas militants.

“The economic consequences of the current and ongoing humanitarian crisis in Gaza are important to determine,” said Richard Kozul-Wright, UNCTAD director, division on globalization and development strategies.

He said it was incredibly difficult to assess the damage.  

“It is buildings.  It is hospitals.  It is very difficult to make a proper assessment until the fighting stops but it has got to be in the billions of dollars … in the tens of billions of dollars,” said Kozul-Wright. “What I think the report emphasizes is the worrying trend in aid to the Palestinian economy, plus its inability to generate its own fiscal revenues in an independent way.”

The report says Israel’s decades-long blockade of Gaza has hollowed out its economy, leaving 80% of the population dependent on international aid. It also says nearly half of Gaza’s population is unemployed and that real GDP per capita is close to its lowest level since 1994.

Authors of the report note that since three-quarters of Palestinian trade is with Israel and the Israeli shekel is the main currency in circulation, Israel has a lot of control over the Palestinian Authorities’ fiscal policy.

“Israel collects Palestinian trade taxes because all Palestinian import and export goes through Israel or through Israeli controlled borders,” said Mutasim Elagraa, coordinator of UNCTAD assistance to the Palestinian people.

“Israel effectively controls two-thirds of Palestinian tax revenue and transfers it to the Palestinian government,” he said noting that Israel sometimes delays the transfer or even freezes the transfer, which “makes Palestinians fiscally vulnerable.”

On October 21, Israel partially lifted its siege of Gaza, allowing several convoys of food, water, and medical supplies to enter the territory.  However, the Israeli government has refused to allow fuel into the Gaza Strip, claiming that Hamas has fuel that it is hoarding for use in military operations.

“Lack of fuel will have a profound impact on the humanitarian support that the U.N. is currently providing and is an essential lifeline of many of the inhabitants of Gaza,” said Kozul-Wright.  “So, I think the impact will be immediate on the ground, but it will be difficult to know what its longer-term impact will be on the Gazan economy.”

In its concluding remarks, the UNCTAD report recommends that the “vicious circle of destruction and partial reconstruction [of Gaza] needs to be broken by negotiating a peaceful solution, based on international law, and relevant United Nations and Security Council resolutions, to end hostilities.”

While increasing donor support will be important for the recovery of Gaza’s economy, the report notes that this “should not be viewed as a substitute for ending restrictions and closures” and calls on Israel and all parties “to bear their responsibilities under international law.”
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Nigerian authorities are praising a London high court ruling Monday that overturned $11 billion in damages stemming from a collapsed gas project between Africa’s largest economy and a private company.

In a statement, Nigerian President Bola Tinubu lauded the London Business and Property Court’s ruling in the 2010 gas deal, calling it a victory for what officials termed the “long exploited” African continent.

“Nation states will no longer be held hostage by economic conspiracies between private firms and solitary corrupt officials,” Tinubu said.

Nigeria and Process and Industrial Developments, a firm based in the British Virgin Islands, signed the contract to construct a gas processing plant in Nigeria’s oil-rich region.

The deal, however, fell through, and P&ID took the Nigerian government to court in Britain.

In 2017, an arbitration tribunal ordered Nigeria to pay a $6.6 billion contract award and interest to P&ID.

The government appealed that decision.

The court on Monday said the company had in 2010 paid a bribe to a Nigerian oil ministry official in connection with the deal.

The court also said that P&ID did not disclose that information when the deal failed to materialize and that two British lawyers defending the company stood to benefit if the court ruled in favor of the firm.

Nigerian political analyst Rotimi Olawale said the decision is a relief for Africa’s biggest economy.

“Nigeria literally dodged a major bullet, knowing the foreign exchange issues the country is facing at the moment,” Olawale said. “Getting a judgment of $11 billion would’ve been a big blow to Nigeria’s financial situation.”

The company’s lawyers say they’re disappointed by the outcome and are considering next steps. The firm has denied the fraud allegations and accused Nigeria of incompetence.

Nigeria’s economy has been struggling with spiraling inflation and mounting debts for years. More recently, government reform policies have seen Nigeria’s foreign exchange reserve dwindle significantly, increasing the scramble for U.S. dollars and weakening the local tender.

The $11 billion would have been about one-third of Nigeria’s foreign exchange reserves.

Ebenezer Oyetakin, founder of the Anti-Corruption Network, said the ruling couldn’t have come at a better time.

“It is an example of how many African countries have been mortgaging their economy,” he said. “Definitely it would be of huge help to the dwindling Nigerian economy as we’re witnessing currently. But we should not rest on our oars. We should continue to absolutely stand against corruption.”

Olawale said Nigeria and all of Africa must address institutional corruption.

“The judgment should also give us an opportunity to tidy our home front,” Olawale said. “I feel that Nigeria, like many developing countries, goes into all kinds of dubious contracting. It is on us as a nation to ensure that we do our due diligence and that we harmonize the process in which we do contracting with other parties.”

Reports say the London court could decide to send the case back to arbitration or abandon it without delay.
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The International Monetary Fund is cautioning African nations about the possibility of a regional economic downturn and the ripple effects that China’s slowing economy could bring.

Africa and China have forged economic ties over the past 20 years, making the Asian giant the continent’s largest trading partner. Africa exports metals, minerals and fuel to China, while importing manufactured goods and machinery from that country.

The IMF says the partnership is threatened by China’s economic slowdown and aging population, trade tensions, geopolitics and the ongoing impacts of the COVID-19 pandemic.

Kenya-based businessman Adan Ibrahim, who imports vehicle parts from China, said it was difficult for a long time to access Chinese companies due to COVID-19 regulations, including visa restrictions that allowed relatively few people into the country per month.

“Up to now they have not reopened well,” Ibrahim said. “In terms of movement of people within the country, they even restricted when you travel to China. You [had to] undertake serious checks on health issues. There were … challenges, both economic and health wise.”

In December 2022, China lifted coronavirus restrictions that had prevented easy movement of goods and people.

Gerrishon Ikiara, an international economics lecturer, said the economic problems faced by China and African countries affect their trade relations.

“When African economies are affected either by drought or other problems that may affect various sectors, the negative effect is felt in China,” Iriara said. “If it’s … happening in China, the negative effect is felt in Africa.

“So, it’s important that both the Chinese and African economies are doing well to create a more healthy trading relationship,” he said.

Ibrahim said that as China shifts away from COVID-19 controls, the price of goods has increased and they go unsold.

“The goods that we used to buy with the relatively cheap prices before the COVID are now triple the price that we currently buy with,” he said.

China’s economic recovery from the pandemic slowed in recent months due to a sluggish property market and weak consumer spending. China’s trade data showed that exports and imports continued to decline as demand for Chinese goods waned.

Ikiara said Africa needs to find new trading partners to develop its economies.

“If the Chinese economy is slowing down, Africa needs to diversify its trading partners and to diversify either imports or exports to Asia, other parts of Africa, Latin America and the U.S.,” he said. “If there is a problem with our exports to China, we need to look for new markets.”

The IMF is urging African governments to diversify their economies, increase regional trade integration and create a favorable business environment so that local and international corporations can thrive.
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South Africa is hosting a summit for participants in the U.S. government’s duty-free Africa Growth and Opportunity Act from November 2 to 4 as the act comes up for renewal. Kate Bartlett spoke to the owners of one South African company about how the trade initiative — which benefits more than 30 countries on the continent — helped them grow their business and enter the U.S. market. VOA footage by Zaheer Cassim.
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All of West Maui except for burned-out sections of historic Lahaina will reopen to tourism on Nov. 1 following the deadliest U.S. wildfire in more than century, the mayor of Maui County said Monday.

Mayor Richard Bissen said he made the move after talking about it with his Lahaina advisory team, the Red Cross and other partners.

West Maui has about 11,000 hotel rooms, or about half of Maui’s total. Travelers evacuated those hotels after the Aug. 8 fire raged through Lahaina town, killing at least 99 people and destroying more than 2,000 buildings.

Hawaii Gov. Josh Green last month declared West Maui would officially reopen to tourism on Oct. 8 to bring back badly needed jobs and help the economy recover. Bissen modified the governor’s declaration with a phased plan, allowing a small section on the northern edge of West Maui to open first with the rest to follow at an undetermined date.

The community has had an impassioned debate about when to welcome travelers back to the disaster-stricken region. Some residents drafted a petition opposing the return of tourists, saying the community wasn’t ready.

Bissen said Monday that workers are ready to return to their jobs while acknowledging “this isn’t for everyone.”

Those who aren’t prepared to go back to work on Nov. 1 should talk to their employers and “continue to seek the help and attention that they need,” Bissen said at a news conference in Lahaina that was livestreamed online.

The mayor said many residents are also concerned about not having child care. He said the county’s partners are working on that issue.

Residents who have been staying in West Maui hotels and other short-term accommodations after losing their homes in the fire won’t lose their lodging, the mayor said.

“We’re assured by the Red Cross that their housing will not be in jeopardy,” Bissen said.

The mayor said the reopening schedule was voluntary and said some properties have already reopened on their own. 
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Fifty years after the 1973 Arab oil embargo, the current crisis in the Middle East has the potential to disrupt global oil supplies and push prices higher. But don’t expect a repeat of the catastrophic price hikes and long lines at the gasoline pump, experts say.

The Israel-Hamas war is “definitely not good news” for oil markets already stretched by cutbacks in oil production from Saudi Arabia and Russia and expected stronger demand from China, the head of the International Energy Agency said.

Markets will remain volatile, and the conflict could push oil prices higher, “which is definitely bad news for inflation,” Fatih Birol, executive director of the Paris-based IEA, told The Associated Press. Developing countries that import oil and other fuels would be the most affected by higher prices, he said.

International benchmark Brent crude traded above $91 a barrel on Thursday, up from $85 per barrel on Oct. 6, the day before Hamas attacked Israel, killing hundreds of civilians. Israel immediately launched airstrikes on Gaza, destroying entire neighborhoods and killing hundreds of Palestinian civilians in the days that have followed.

Fluctuations since the attack pushed oil prices as high as $96.

The price of oil depends on how much of it is getting used and how much is available. The latter is under threat because of the Hamas-Israel war, even though the Gaza Strip is not home to major crude production.

One worry is that the fighting could lead to complications with Iran, home of some of the world’s largest oil reserves. Its crude production has been constrained by international sanctions, but oil is still flowing to China and other countries.

“In order to get a sustained move (in prices), we really would need to see a supply disruption,” said Andrew Lipow, president at Lipow Oil Associates, a Houston-based consultant.

Any damage to Iranian oil infrastructure from a military strike by Israel could send prices jumping globally. Even without that, a shutdown of the Strait of Hormuz that lies south of Iran could also shake the oil market because so much of the world’s supplies goes through the waterway.

Until something like that happens, “the oil market is going to be like everyone else, monitoring the events in the Middle East,” Lipow said.

One reason 1970s-style gas lines are unlikely: U.S. oil production is at an all-time high. The U.S. Energy Information Administration, an arm of the Energy Department, reported that American oil production in the first week of October hit 13.2 million barrels per day, passing the previous record set in 2020 by 100,000 barrels. Weekly domestic oil production has doubled from the first week in October 2012 to now.

“The energy crisis of 1973 taught us many things, but in my mind, the most critical is that American energy strength is a tremendous source of security, prosperity and freedom around the world,” said Mike Sommers, president and CEO of the American Petroleum Institute, the U.S. oil industry’s top lobbying group.

In a speech Wednesday marking the 50th anniversary of the 1973 oil embargo, Sommers said current U.S. production contrasts sharply with “America’s weakened position during the Arab oil embargo.” He urged U.S. policymakers to heed what he called the lessons of 1973.

“We cannot squander our strategic advantage and retreat on energy leadership,” said Sommers, who has repeatedly criticized President Joe Biden’s policies restricting restricting new oil leases as part of Biden’s efforts to slow global climate change.

“With an unstable world, war in Europe, war in the Middle East, and energy demand outstripping supply, energy security is on the line,” Sommers said in a speech at the Hudson Institute, a Washington think tank.

“American oil and gas are needed now more than ever,” Sommers said. “Let’s take to heart the lessons we learned from 1973 and avoid sowing the seeds of the next energy crisis.” 

For now, the crisis isn’t a repeat of 1973. Arab countries aren’t attacking Israel in unison, and OPEC+ nations have not moved to restrict supplies or boost prices beyond a few extra dollars.

There are several wild cards in the energy market. One is the supply of Iranian oil. Eager to avoid a spike in gasoline prices and inflation, the U.S. has quietly tolerated some exports of Iranian oil to destinations such as China instead of going all in on sanctions aimed at Iran’s nuclear program.

If Iran, which has warned Israel not to undertake a ground offensive, escalates the Gaza conflict — including a possible attack by Hezbollah militants in Lebanon supported by Iran — that might change the U.S. stance. “If the U.S. were then also to enforce the oil sanctions against Iran more strictly again, the oil market would tighten noticeably,” say commodities analysts at Commerzbank.

Lawmakers from both parties have urged Biden to block Iranian oil sales, seeking to dry up one of the regime’s key sources of funding.

Another wild card is how Saudi Arabia would respond if Iranian oil is restricted. Oil analysts say that while the Saudis may welcome recent oil price hikes, they don’t want a massive price spike that would fuel inflation, higher central bank interest rates and possible recession in oil-consuming countries that ultimately would limit or even kill off demand for oil.

A third unknown is whether more oil will reach the market from Venezuela. The U.S. agreed Wednesday to temporarily suspend some sanctions on the country’s oil, gas and gold sectors after Venezuela’s government and a faction of its opposition formally agreed to work together on election reforms.

Venezuelan production could increase in 2024. In the next six months, however, production could ramp up by some 200,000 barrels a day, a relative drop in the ocean, according to Sofia Guidi Di Sante, senior oil market analyst at Rystad Energy.

Wyoming Sen. John Barrasso, the top Republican on the Senate Energy and Natural Resources Committee, slammed the U.S. action as a “gimmick” that appeases a brutal regime in Venezuela.

“Joe Biden’s energy policies put America last,” Barrasso said, citing the Democratic president’s decisions to kill the controversial Keystone XL oil pipeline and sell off significant portions of the nation’s Strategic Petroleum Reserve, taking it to its lowest level since the 1980s. The Energy Department said Thursday it will seek offers to start refilling the oil reserve in December, with monthly solicitations expected through May 2024.

“He eased sanctions on Iran, which funds terrorism across the Middle East. Now with Israel under attack, Biden is desperate for anything to mask the consequences of his reckless policies,” Barrasso said. “America should never beg for oil from socialist dictators or terrorists.”

The Treasury Department says it has targeted nearly 1,000 individuals and entities connected to terrorism and terrorist financing by the Iranian regime and its proxies, including Hamas, Hezbollah and other groups in the region.

“We will continue to take action as appropriate to counter Iran’s destabilizing activity in the region and around the world,” Treasury said in a statement.
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China remains the single leading source of imports to Kenya, accounting for over 20% of total imports, according to the country’s bureau of statistics. Many local manufacturers say the Chinese imports are hurting their bottom line. Juma Majanga reports from Nairobi, Kenya. Camera: Jimmy Makhulo.
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In Cambodia’s capital of Phnom Penh, 62-year-old produce seller Sok Ul is sanguine, despite the threat that a Belt and Road project could uproot him from his neighborhood. Construction will soon begin on a $60 million bridge that spans two of the city’s bustling southern sections along the Tonle Sap river, and Sok Ul’s modest vegetable farm may need to go.

“I am happy to see a bridge to ease traffic congestion,” he said, speaking with VOA’s Khmer Service from his roadside stall, where he sells cabbages and other produce. If he’s forced to move, he just wants a fair deal for his land.

The debt debate

The bridge is among dozens of projects across the country being funded by China as loans under Beijing’s Belt and Road Initiative, or BRI.

Prime Minister Hun Manet is leading a Cambodian delegation to join representatives from more than 150 countries in Beijing for a two-day forum to mark 10 years of China’s BRI on October 17 and 18. 

The initiative has invested billions of dollars globally, with many low-income Asian countries such as Cambodia seeing an outsized windfall, but BRI projects also account for a healthy chunk of Phnom Penh’s foreign debt.

The initiative is the central component of Chinese President Xi Jinping’s economic diplomacy as the communist party seeks to make China a global counterweight to the United States. 

The U.S., locked in a global rivalry with China, has warned countries against taking on large debts under China’s BRI infrastructure strategy. Some critics warn about a debt trap where China would gain economic and political leverage by lending more than what a country can pay. 

“The big risk arising from Cambodia’s engagement in the BRI is overreliance on Chinese investments and loans which might potentially induce Cambodia to fall into a debt trap,” say political scientists Vannarith Chheang and Heng Pheakdey in their 2021 paper “Cambodian Perspective on the Belt and Road Initiative.”

That, they warn, could result in “the loss of trust and autonomy as a sovereign state and the deterioration of its relations with other ASEAN member states.”

However, Jayant Menon, a former lead Asia Development Bank economist now at Singapore’s ISEAS – Yusof Ishak Institute, came to a different conclusion in his March paper, “The Belt and Road Initiative in Cambodia: Costs and Benefits, Real and Perceived.”

“In the case of Cambodia, concerns over possible debt traps and debt diplomacy associated with the BRI appear to be misplaced, even after factoring in the effects of the pandemic,” he wrote.

While recognizing the short-term damage to local communities and the environment, Menon said the costs of BRI projects were more than justified.

“This infrastructure development has increased the competitiveness of the tradable goods sector, boosted exports and lowered prices to consumers and producers in Cambodia,” he wrote.

Hun Manet has also been optimistic about Chinese investments since taking the reins from his father in August.

“For Cambodia, BRI has provided many benefits to people, especially in the field of transportation and logistics,” he said while addressing the 26th ASEAN-China Summit in Jakarta, Indonesia in September.

Heated debate

BRI benefits and pitfalls have sparked heated debates in many BRI member countries.

“I acknowledge that China has helped build a lot of roads, but the quality is still limited,” Em Sovannara, a political science professor in Phnom Penh, told VOA Khmer. “Some roads are just built and then broken and need to be repaired.”

The BRI “has provided benefits to Cambodia, but it is not like what politicians brag about,” he said.

The Phnom Penh-based Future Forum estimates as of June 2021, China had built eight bridges and 3,287 kilometers (2,042 miles) of roads totaling more than $3 billion in Chinese concessional loans, which are loans with more favorable terms such as lower interest rates when compared to those available on the market.

Cambodia’s total foreign debt stands at almost $10 billion, 41% of which is owed to China, according to a bulletin from Cambodia’s Ministry of Economy and Finance in December.

China’s loans and investments have transformed the Cambodia skyline, with a major expressway from Phnom Penh to Sihanoukville, a sprawling special economic zone in Sihanoukville with an energy plant to power it, a new airport in Siem Reap and dozens of smaller projects. 

The projects have benefited the ruling Cambodian People’s Party, offering tangible proof that it is modernizing the country, Vannarith Chheang and Heng Pheakdey wrote.

“The BRI helps strengthen the material capabilities as well as the legitimacy of the regime in Cambodia, which has greatly benefited from the influx of Chinese investment capital and development assistance,” they wrote.

However, the Cambodian academics noted the economic benefits don’t always reach the population these projects are built for.

“Even though Chinese investment is bringing wealth to Cambodia, this wealth is mainly kept within Cambodia’s Chinese community. Chinese residents and visitors in Cambodia buy from Chinese businesses, eat at Chinese restaurants and stay in Chinese hotels. The trickle-down effect to local businesses is minimal,” they wrote.

People vs elites

Sihanoukville has become a symbol of the risks and rewards of Chinese investment. While development and construction have skyrocketed, crime and casinos are also on the rise. The rapid development has also pushed up property costs, forcing many residents and business owners to move outside the city.

“The BRI needs to take into account the ‘people’ rather than solely focusing on ‘elites’ if it is meant to achieve a meaningful impact in Cambodia,” Chhay Lim, a visiting fellow at the Center for Southeast Asian Studies at the Royal University of Phnom Penh, wrote in an email to VOA Khmer.

He said the expected return on Chinese investment has been clear.

“We have observed that Cambodia has been offering support for key Chinese foreign agendas as well as the newly proposed narratives and slogan politics, including those of the Community of Shared Future, Global Security Initiative, Global Development Initiative, and Global Civilizational Initiative.”

Hun Manet visited Beijing last month to strengthen ties with China, picking up where his father Hun Sen left off. Hun Manet said Cambodia’s new government will maintain an “unchanged stance” on Beijing’s “One China” policy, and a “noninterference policy” toward China.

China’s leaders affirmed continued support for economic development and the improvement of people’s livelihoods in Cambodia through projects such as rural roads, bridges, water supplies, schools and hospitals, according to a joint statement out of the meeting.

China and the future

Menon said there was also evidence that China was becoming more mindful of the social and environmental impact of its projects, perhaps to correct for local pushback over the past decade.

Menon and Chhay Lim agreed Hun Manet’s government would be well advised to ensure that it does not become overly reliant on China in the years ahead.

“The increasing reliance on a single country for both its economic and noneconomic needs carry obvious risks,” Menon wrote. “As the China growth juggernaut starts to slow, diversifying trade and investment partners can spread risk by reducing vulnerability to country-specific shocks.”

That may not be an easy feat, given Phnom Penh’s strained relations with the West over its democratic backslide in recent years, said Chhay Lim.

“It’s significant to note that Cambodia must ensure diversification and avoid sole reliance on China while simultaneously enhancing relations with the West without antagonizing China,” he said. “To achieve this balance, Cambodia must formulate both a robust China strategy and a Western strategy, which, in my opinion, Cambodia has not yet fully developed.”

Sok Ul, the vegetable farmer in Phnom Penh, is confident that China will not pressure Cambodia to repay its debt.

“We can pay it back when we have it,” he said, adding his belief that Beijing will forgive Phnom Penh if his country cannot pay on time.
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Nigeria’s inflation rate has risen to its highest level in two decades, 26.72%, according to the national statistics bureau. The latest figure keeps millions of people in Africa’s largest country struggling to cope with economic challenges that, analysts say, are exacerbated by government reform policies. 

Nigeria’s inflation rate in September rose for a ninth consecutive month from an already high 25.8%, recorded in August.

On a year-on-year basis, the inflation rate was 5.94% higher than when compared to the 20.77% recorded in September of 2022.

The National Bureau of Statistics says the trend was caused by an increase in prices of food items like bread and cereals, meat, vegetables, milk, cheese, tubers, fish, fruit, oil and fat.

But economic observers say recent government policies, including the elimination of fuel subsidies in May, are to blame for the surge and predict the trend might continue.

“The policies were not handled properly. When you’re doing reforms, there’s what we call sequencing of reforms,” said Ogho Okiti, the chief executive officer of ThinkBusiness Africa. “What is happening is that they’re learning on the job. We may actually reach 28-29% going by the pattern we’re seeing. The reason is simple: until the exchange rate stabilizes, inflation will not stabilize in Nigeria. We now have the value of naira devalued by over 100% between June and today, within the space of four months.”

Nigerian President Bola Tinubu embarked on bold policy reforms since entering office in May, scrapping the expensive fuel subsidy payments — a package that ensured fuel was kept within affordable limits at pumps.

The president, soon after that, floated the national tender — the naira — against other global currencies, causing it to lose more than half its value.

The reforms hurt the economy, triggering criticism of the government.

This month, a Nigerian workers union shelved plans to embark on a nationwide strike to protest the government policies after a meeting with authorities.

Okiti said pressures will continue to mount on government policymakers and consumers alike.

“The three kinds of pressures — social, political and economic pressures on the government,” Okiti said. “My hope is that this does not boil over into something very catastrophic, because there’s also this illusion that Nigerians will just accept [these realities]. That may not be the case.”

But economic analyst Emeka Okengwu argues Nigeria’s economy could have been worse without the president’s policy reforms.

“If he didn’t remove the fuel subsidy and you’re spending over 100% of your total revenue to be able to just support a social service, what do you think would’ve happened to the economy?” Okengwu asked. “It would’ve collapsed. You won’t be talking about inflation anymore, you’ll be talking about perflation. Sometimes economic development is a difficult thing, sometimes we need to pay some very hard prices.”

Nigeria has been recording double-digit inflation since 2016. During a national broadcast on October 1, President Tinubu defended his policies and urged Nigerians to be patient.

Last week, the Central Bank lifted a ban on the sourcing of foreign exchange from official markets for the importation of 43 items, including rice, cement, palm oil products, vegetable oils, and processed meat.
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Military rulers in Gabon on Tuesday threatened to arrest the heads of businesses who have collected money for work that was not performed.

While ordering the resumption of work at utility and construction sites after years of abandonment, Gabon’s military-appointed prime minister, Raymond Ndong Sima, told state TV that the junta-led government will ask contractors who abandoned work after collecting money to resume their projects or face arrest.

The announcement was part of a promised crackdown on corruption.

Sima said that scores of companies have resumed work after the central African state’s coup leader, Gen. Brice Oligui Neguema, visited several abandoned road, water and electricity projects in the capital, Libreville, on Saturday.

On Monday, Gabon’s state TV showed images of people celebrating as Nguema visited the sites in several poor suburbs. Women and children embraced and shook hands with Nguema, with some shedding tears. They said it was the first time a Gabonese leader had visited poor suburban neighborhoods, a claim VOA could not independently verify.

Civilians told Nguema that each time elections approached, ousted President Ali Bongo Ondimba would promise drinkable water, electricity and good roads and dispatch equipment to start construction. But after the elections, construction work would be abandoned, and the equipment removed.

Nguema said on TV that an anti-corruption task force created by the military junta has a list of companies that received money from the former regime but never executed projects.

Civilians said several companies resumed work as soon as Nguema left.

Barber Jacques Abossolo, who lives in Bizango-Bibere, said on state TV that some of the projects there had been abandoned for 10 years.

Joseph Dotse, a road construction engineer in Libreville, said Nguema asked his company to resume work it temporarily suspended due to heavy rains. He predicted that in 10 days, his company, Gabon Construction, would complete work on a 6-kilometer stretch of road Nguema visited.

Dotse said that Bongo paid half of the money for the road work and that he expects the military junta to settle the remaining bill.

He said Bongo, his family and friends own companies that never executed projects after receiving money. Bongo’s lawyers deny the accusations.

Gabon’s military-appointed government said that Nguema will visit other towns and villages in the days ahead to make sure work on abandoned sites is relaunched and that contractors who swindled state funds will be arrested if they do not refund the money.

Guy Roger Makongo, a political science lecturer at Omar Bongo University in Libreville, said on a messaging app that Nguema has been respecting the roadmap he set up to restore democratic rule following the August 30 bloodless coup.

Makongo said besides fighting corruption and carrying out consultations to organize a national dialogue by the end of this year, Nguema has set up a constitutional council and appointed a government and members of the senate and national assembly from the opposition, civil society and the army.

Many people, however, are skeptical that Nguema will hand power to civilian rule soon because he has not given a possible date for a return to constitutional order, Makongo said.

Last week, Gabon’s military junta promised to invest more than $10 million of what it called recovered ill-gotten wealth on water, electricity, roads and school infrastructure to improve living conditions, especially in the hinterlands.

The military junta said it also recovered more than 300 luxury vehicles. Both vehicles and money, the junta said, were taken from Bongo family and friends.

The military-appointed government said Sylvia Bongo Ondimba Valentin, the Franco-Gabonese wife of Gabon’s ousted president; Bongo’s son, Noureddin Bongo Valentin; and eight of the deposed leader’s aides and members of his Cabinet have been arrested in an anti-corruption drive launched by the military junta.

They were charged with various crimes that include treason, corruption, embezzlement, money laundering, forgery and abuse of state institutions.
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Since China’s launch of the Belt and Road Initiative 10 years ago, trade with Southeast Asian nations has more than doubled. Beijing has poured billions into helping build rails, airports, ports, and other infrastructure, but the push for more connectivity comes with unintended consequences observers said.

Some key concerns include rising debt, the environmental impact of projects, and an increase in crime said analysts in the region who spoke to VOA’s Mandarin Service. 

According to the U.K.-based International Institute for Strategic Studies, between 2013 and 2021, Southeast Asia was the site of 131 Belt and Road projects, the most in the Asia-Pacific region. 

Chen Shangmao, a professor at the Department of Public Affairs at Fo Guang University in Taiwan, said with such a wide scope, the BRI has had some positive benefits. 

“For example, with respect to the entire economy, trade and investment, we can also see that, in recent years, the trade volume between China and Southeast Asian countries has continued to increase” Chen tells VOA.  

China’s State Council Information Office reported that in 2022 the volume of trade between China and the ten members of the Association of Southeast Asian Nations or ASEAN reached $975.3 billion, up from $443.6 billion in 2013.

What China wants 

One of the signature Belt and Road projects Beijing has completed in Southeast Asia is the China-Laos railway. The $6 billion-dollar 1,000 kilometer semi-high-speed rail line was finished in December of 2021. The project has cut the time of travel between Laos’ capital of Vientiane and China’s southern border.  

Eventually, the rail is expected to connect Beijing with Bangkok and even Singapore.

Pollasak Ruongpanyaroj, Executive Director of Panyapiwat Institute of Management in Bangkok, said the China-Laos Railway has brought only limited potential benefits for one of Southeast Asia’s poorest countries.  

“The high-speed rail between Laos and China has brought very little economic contribution to Laos. Do you see anything in Laos that can be sold to China? The repayment of loans is so high,” said Ruongpanyaroj.  

Fo Guang University’s Chen said this railway is what China, not Laos, needs because before other transportation networks are in place, the railway is currently not of much help to Laos, but the huge debt it has assumed has made the outside world extremely worried.  

“The debt that Laos owes to China accounts for about 60% of its GDP, that is scary” Chen said, adding that it raises other questions, such as: “How are you going to pay it back? What will you do when you can’t pay it back? And then, you may have to allow them to make whatever political demands as they please.”

Drugs, telecom fraud 

With massive investments, an increase in the number of Chinese nationals in the region and connectivity that has come with the BRI, organized crime groups have also followed and grown their footprint in Southeast Asia, analysts said.  

The port town of Sihanoukville in Cambodia, which became a special economic zone under China’s BRI is one place that has been linked to a range of problems from drug and human trafficking to telecom fraud, prostitution and gambling.

“In recent years, the Chinese people have engaged in telecom fraud and online gambling and (have) been cracked down by Myanmar, Cambodia and the Philippines,” said Ruongpanyaroj who described these criminal activities as gray industries. 

“So, those people involved in the gray industries have come to Thailand to open casinos and bars, and they also deal drugs,” he said.

“Trafficking in persons for the purpose of forced criminality to commit online scams and financial fraud, particularly occurring in Special Economic Zones (SEZs) and other areas of Cambodia, Lao People’s Democratic Republic (PDR), and Myanmar, as well as other destination countries (including Malaysia, and the Philippines), has emerged as a new and growing trend.,” stated a report released last month by the United Nations Office on Drugs and Crime.

Beijing has been stepping up its efforts to crack down on the problem both in China and with authorities in the region. In 2022, China’s party-backed Global Times reported that authorities resolved 464,000 cases related to online gambling and telecom fraud. 

“In recent years, online gambling and telecom fraud have caused social problems in China as well as in Southeast Asian countries such as Myanmar, Thailand and Sri Lanka, with some Chinese nationals falling victims to murder, kidnapping and human trafficking,” the report said

Environmental concerns  

Environmental concerns also weigh heavily on the residents in the Southeast Asia because of the various industries involved in projects across the region, including mining,

In July, the Indonesian government suspended PT Dairi Prima Mineral’s (DPM) mining license in July to investigate the potential environmental damages the company may have caused, barring it from mining Zinc in Dairi Regency in North Sumatra. China Nonferrous Metal Industry’s Foreign Engineering & Construction Co. Ltd. owns a 51% stake in DPM.  

Tongam Panggabean, executive director of Bakumsu, a legal advocacy group in North Sumatra representing local communities in Indonesia, told VOA, the company hasn’t released any public statements regarding the concerns. 

“As a company that always said that they are system sustainable, they respect the community or something like that, there should be a positive response to the verdict,” Panggabean said. “I assume by not responding openly to the case or to the demand of the community, it indicates that the government of China doesn’t really care about the impact of their company in other countries.”  

US-China competition 

BRI has not only had an impact on the infrastructure of Southeast Asian countries, but also politics in the region, including the gradual challenge of Western values, analysts said.

Felix K. Chang, a senior fellow at the Foreign Policy Research Institute, wrote about the connection between the BRI, politics and economics in an article last month.

“Whatever the path China chooses for the BRI, the more tortuous its economic logic becomes, the more pronounced its political dimension will be. While the BRI’s economic aims may be continuously shifting, its political goals remain focused,” Chang wrote. 

China’s soft power efforts in the region are having mixed results, observers found. 

According to surveys about the state of Southeast Asia released in 2022 and 2023, China was considered to be the most influential country politically and strategically in the region in both years. In 2023, 68.5 % of ASEAN respondents said they were worried about China’s growing regional political and strategic influence, according to a report of the survey by Singapore-based ASEAN Studies Centre at the ISEAS Yusof Ishak Institute. That was down slightly from 76.4 % in 2022.

Siwage Dharma Negara, a senior fellow at the ISEAS Yusof Ishak Institute, does not believe China is using the BRI to forcibly promote communism or authoritarianism in Southeast Asia. People in the region are aware of the political influence that comes with the BRI but that doesn’t mean that they see it as bad.

“As long as it can continue to provide the necessary resources for countries or partner to develop their own economy, their infrastructure, then I think there will be room for collaboration,” he said. 

Considering the intensifying competition between the U.S. and China, Negara said in the future, Beijing may change its approach to the BRI in Southeast Asia.

Adrianna Zhang contributed to this report.
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A Kenyan court has dismissed a case challenging the importation of genetically modified foods, letting stand an earlier court ruling allowing the entry of so-called GMOs.

The Law Society of Kenya, the nation’s premier bar association that petitioned the court, argued that genetically modified food was unsafe for humans and that lifting a ban on its importation was unconstitutional.

But in a decision handed down Thursday, High Court Justice Oscar Angote ruled that the petitioners failed to prove that such food was harmful for human consumption.

Last October, the Kenyan government lifted a ban on the importation of genetically modified foods because of growing food insecurity and the inability of farmers to produce enough food to feed the population.

Genetically modified organisms, or GMOs, are produced using scientific methods, including recombinant DNA technology, which involves using enzymes and various laboratory techniques to manipulate and isolate DNA segments of interest. In animals, it requires reproductive cloning — making a genetic duplicate through somatic cell nuclear transfer.

Angote ruled there was no evidence to show that the modified food can harm human beings.

He also said there is a need for the population to trust the institutions set up to check the quality of food.

There is skepticism on that point. Cidy Otieno, the national coordinator of Kenya Peasants League, a lobby group acting on behalf of peasant farmers, said the country’s regulatory bodies cannot be trusted.

“In Kenya, for over one year, there was a product that was found on the shelves, Aromat,” he said. “It was being sold in Kenya from South Africa, yet it had GMOs, yet the country has not allowed for GMOs.

“So,” he said, “we realize that we have very weak regulations in Kenya.”

Agriculture accounts for one-third of Kenya’s gross domestic product, and farming lobby groups have expressed concerns about the future of agriculture in the country. They argue that U.S. farmers who use sophisticated technology and have government financial support could kill Kenya’s agriculture sector.

Kenya’s acceptance of GMO products also worries its neighbors Tanzania and Uganda, which do not allow them.

Tanzania said it would be vigilant against importing genetically modified food to its country.

The East African region has an agreement through the regional bloc, the East African Community, which allows the free flow of people and goods.

Nason’go Muliro, a Kenyan international relations and diplomacy lecturer, said the importation of GMOs into the region threatens trade relations between Kenya and its neighbors.

“There will be a return to the nontariff barriers because now it will not be about customs, but it will be about standardization,” Muliro predicted. For instance, he said, Tanzania might say, “We may not even accept the cereals from Kenya because of fear of GMO. … And that will bring friction.”

Otieno, of the Peasants League, said the planting of GMO seeds could also bring legal battles among farmers in Kenya and its neighbors.

“Those are some of the issues that we are raising, because a farmer in Busia, Kenya, and a farmer on the Busia border, how will they ensure that there’s no cross-pollination?” he asked. “[What] if I’m on the border and I’m growing GMOs and somebody’s in Uganda and is not growing GMOs and there’s pollination? We are exposing our people to companies so that they can be charged hefty penalties.”

The lobby group said it also has challenged the lifting of bans of GMO products and cultivation in the country, but that case is to be determined later this year.
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China’s exports and imports both fell in September from a year earlier, though they contracted at a slower pace even as global demand remained muted.

Customs data released Friday showed exports for September slid 6.2% to $299.13 billion in the fifth straight month of decline. Imports also slid 6.2% to $221.43 billion.

China posted a trade surplus of $77.71 billion, up from $68.36 billion in August.

Lu Daliang, spokesperson of the General Administration of Customs, said in a press conference Friday in Beijing that the unstable momentum of the global economy’s recovery from the pandemic was the biggest challenge facing China’s exports.

China’s economy has declined at a slower pace after leaders enacted a slew of policy support measures in recent months. China’s property sector, however, remains a drag on the economy, with sales slumping and developers struggling to repay massive amounts of debt.

The central bank has eased borrowing rules and cut mortgage rates for first-time home buyers while providing some tax relief measures for small businesses.

Demand for Chinese exports weakened after the Federal Reserve and central banks in Europe and Asia began raising interest rates last year to cool inflation that was at multi-decade highs. 
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Although weary of Beijing’s political ambitions and concerned about over-reliance on China, some Central Asians tell VOA they also see the benefits of the Belt and Road Initiative, or BRI, launched in 2013 as China’s global infrastructure endeavor.

Since its launch, China has funded at least 112 projects in Central Asia. Many of the projects were aimed at boosting transportation and connectivity such as the Qamchiq mountain highway.

“This mountain pass is where I make my living,” said Uzbek taxi driver Majid. The highway connects Tashkent, Uzbekistan’s capital, with the Ferghana Valley and reaches southern Kyrgyzstan and northern Tajikistan. Like others that VOA spoke with Majid was unwilling to give his full name, citing concerns that authorities might retaliate.

Majid drives an Uzbek-U.S. made Chevrolet Lacetti sedan that seats four passengers. He says he usually charges about $14 per person to drive to Kokand, which is about 130 kilometers (81 miles) southeast of Tashkent.

“I aim to make two roundtrips a day, which takes eight to nine hours in lighter traffic. It’s better than working for the government,” he told VOA. “Since this is my own car, I keep most of what I earn in my own pocket to take care of my large family.”

Driving commerce

In Osh, Kyrgyzstan’s second-largest city, on the other side of the Ferghana Valley, China’s economic influence is so widely felt it is common for residents to label any new infrastructure projects “Chinese.”

For Muzaffar, a frequent migrant worker, Beijing is the undisputed “superpower” in this part of the world.

“No other power has as much presence as China, which it pulls off without much publicity. Perhaps China wants us to get used to seeing its influence everywhere,” he wondered, adding that he wants his four children to learn Chinese alongside English and Russian.

In Tajikistan’s second-largest city of Khujand, known for its Panjshanbe bazaar, traders told VOA that they buy and sell mostly Chinese goods.

“They are our lifeline. No commerce is conducted without Chinese merchandise,” which is the easiest to obtain and sell and is the most affordable, according to Mohira, who commutes to Khujand from Ferghana, Uzbekistan, via the Andarkhon-Patar border crossing. “Our Chinese cargo always arrives within a day or two. Very reliable service.”

Yet merchants such as Mohira are unsure about the impact on the local economy of a planned railway project that will connect China with Kyrgyzstan and Uzbekistan. Officials said a feasibility study will soon be completed.

China-Kyrgyzstan-Uzbekistan railroad

The proposed 523-kilometer (325-mile) line will carry passengers and freight between Kashgar in China’s Xinjiang region and Andijan in Uzbekistan by way of Karasu, Kyrgyzstan.

Four months ago, Chinese media reported that construction would start sometime this year, citing a statement by Umidulla Ibragimov, an Uzbekistan Railways official.

Yicai Global, a Chinese state-backed English financial news site, said the railway will give countries in Central Asia the shortest and most accessible passage to global markets, describing it as a bridge between Europe and Asia.

Beijing believes that the new connection will “accelerate the West China Development Project” and “promote the development and use of oil in the Central Asia and Caspian Sea areas, open up new sources of oil imports to China, and change the country’s energy development strategy”—something highlighted at the Shanghai Cooperation Organization’s summit in Samarkand last year, according to China’s state news agency, Xinhua.

Frank Maracchione, a Ph.D. candidate at England’s University of Sheffield who is researching China’s Belt and Road Initiative in Central Asia, said many experts he has interviewed in Uzbekistan saw Beijing’s efforts as an attempt to rebuild the Great Silk Road.

Minerals, trade and beyond

Extraction, processing and transportation of natural resources, including minerals, represent a large chunk of Chinese investment in Uzbekistan, which amounted to $3.8 billion in 2022, just behind Russia’s $4.8 billion.

“A second large area of investment is transport infrastructure mostly for trade purposes to improve regional connectivity,” said Maracchione. He added that China is also focusing on agriculture and technology. That will lead to investments in education and expertise, a boost to long-term development welcomed by Central Asians, said Maracchione.

China no longer regards Central Asia as just the source of raw materials. It is quickly becoming a manufacturing base, Maracchione said. Examples in Uzbekistan, where mainly locals are employed, include the Pengsheng industrial park, the SCO Center for Agriculture in Sirdarya, the Nukus Herbal Technology pharmaceutical producer, the import-export Lanextract Sino-Uzbek joint venture in Karakalpakstan, and the Uzbek-Chinese electric vehicle production cluster in Jizzakh.

Angst growing

In recent years, there has been growing public anger toward Chinese businesses and influence in Kazakhstan and Kyrgyzstan. But Uzbekistan, Tajikistan and Turkmenistan, similarly known for their poor human rights records and tight control of expression and the media, have not seen such clear expressions of anti-Chinese sentiment.

“Why curse those who invest in us? I wish more Chinese companies would come in, so that we could sell off all the stale state assets we’ve been struggling to privatize,” said one retired government official, requesting to be identified only as Qodir.

In an expanding area emerging as New Tashkent, he pointed to a gigantic sports development, the Olympic village. Its construction site bears the logos of Sinomach and CAMCE—the China National Machinery Industry Corporation — and its subsidiary, CAMC Engineering.

Financed by Beijing’s Export-Import Bank, the $289 million project is among several recent deals, including a $440 million chemical plant in Navoi, in central Uzbekistan.

Rights activists have decried poor working conditions at Chinese-owned enterprises in the Uzbek cities of Bukhara and Margilan.

“The pay was low, the working hours were long and there were chemicals everywhere,” Maracchione’s field research found.

In September, Sinomash reached an agreement with the local government in the eastern Uzbek city of Ferghana to produce drinking water from the Kampirobod dam on the Uzbek-Kyrgyz border. The Uzbek side announced that it had signed 32 trade and investment deals with Beijing worth $1.37 billion.

Marrachione said a “controversial aspect of China’s investment in Central Asia is the potential development of patterns of dependency on Chinese investment and unsustainable lending practices leading to excessive debt and a volatile financial situation.”

“This is true particularly in Tajikistan and Kyrgyzstan,” he said. “Starting from the latter, loans from the Export-Import Bank of China accounted for a bit less than half of Kyrgyzstan’s external debt and exactly 42.89% in May 2021, and around 40% of Tajikistan’s external debt.”

China is now the largest bilateral creditor in Uzbekistan, even though last year what Tashkent owes to China accounted for only 17.6% of the external debt.

Talking to VOA at a business forum in Washington, Uzbekistan’s Digital Technology Minister Sherzod Shermatov described China as a convenient investor and partner.

“I’m eager to work with any side that Uzbekistan benefits from. What matters most for us is what we stand to gain, not what America, Russia or China get. We focus on our own interests, Uzbekistan’s interests,” said Shermatov.
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Some 150 countries, many of them in Africa, have signed on to China’s 10-year-old Belt and Road Initiative, also known as the BRI. And while the multibillion-dollar project has helped bring roads, rails and infrastructure to many poor countries, it has also left some of those countries saddled with debt.

In Kenya, for example, the Standard Gauge Railway, or SGR, which debuted six years ago, was hailed by Kenyan officials as one of the biggest and most successful local infrastructure projects since the late 1800s.

Travel time from Mombasa to Nairobi used to be up to 10 hours. Now, it takes five to six.

“If you are a businessman, you are going for an interview, it saves you time,” rider Denis Ombuna told VOA last week as he got off the train at the Syokimau Nairobi Terminus station.

Another rider, Dickson Okong’o, complained the seats are not comfortable in economy class but said the train is a safe mode of transport and the scenery is wonderful. “When I was coming today, I was able to see an antelope, an elephant, a zebra. … Sometimes I have to go to Nat Geo [TV] to watch them,” he said.

Kenya borrowed some $5 billion from China to build railway lines connecting the port city of Mombasa to Nairobi and Nairobi to Naivasha.

The lines are part of Chinese leader Xi Jinping’s signature foreign policy. The global infrastructure, trade and telecommunications project includes the goal of connecting Kenya to Uganda, Rwanda and South Sudan.

“The good side is it’s a framework for transportation: transportation of goods, transportation of cargo,” Kenyan economist Victor Kimosop told VOA.

But Kimosop said some elements of the project could have been done differently.

“I wish those responsible for SGR would’ve looked at the repayment,” he said. “It’s a massive investment project … to have repayment being done in 20, 30 years. That was quite ambitious. … The other thing is also our model of development, on compensation. It makes development very expensive … and it also opens up room for corruption.”

During its construction, other critics of the project protested its potential impact on wildlife. A part of the railway cuts through the Nairobi National Park.

On Friday, Kenya Deputy President Rigathi Gachagua told a local radio program that when President William Ruto travels to China later this month, he will ask Beijing for an additional $1 billion loan to complete other stalled road construction projects. Ruto’s plan will also include a request to lengthen the maturity periods of existing loans.

African nations were viewed as natural participants in BRI for a number of reasons, said David Sacks, fellow at the Council on Foreign Relations in New York.

“Africa’s population is growing significantly, and there’s a need on the continent for more infrastructure, and China has the experience and the expertise in its view to provide the roads, railways and ports that African countries are looking for,” he told VOA. “From the Chinese perspective, Africa is desirable because it wants to secure input for its manufacturing sector and, when it looks around the world, a lot of these copper, cobalt or other minerals are found in Africa.”

Countries such as Ethiopia and Zambia have also green-lighted massive Chinese-built infrastructure. But Zambia is struggling with the resulting debt burden. It was the first country to default on its debt during the pandemic.

Zambia President Hakainde Hichilema, who’s been looking to restructure the nation’s loan with China, recently visited his Chinese counterpart.

The West has been critical of China for lending to poor countries and says it must quickly provide relief to those that ended up with unsustainable and unpayable debts.

“Prompt action on debt is in China’s interest,” Janet Yellen, the U.S. Treasury secretary, said earlier this year. “Delaying needed debt treatments raises the costs both for borrowers and creditors. It worsens [the] borrowers’ economic fundamentals and increases the amount of debt relief they will eventually need.”

Sacks said the narrative that China actively goes around the world seeking to ensnare nations into debt traps is simplistic. He noted that many countries joined BRI when economic growth was quite robust and didn’t expect leaner times.

“The first shock was of course the COVID-19 pandemic, which really eviscerated global economic growth but also hit the developing world particularly hard,” he said. “The second one was the war in Ukraine. [For] Africa, major importers of food as well as oil, prices for those commodities have gone up tremendously.”

A recent Boston University study found that lending to Africa by China has dropped to the lowest level in two decades. Analysts say that while the BRI is here to stay, Beijing may be moving toward smaller investments.
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Leading economists gathered in Marrakech, Morocco, on Tuesday for the International Monetary Fund’s annual conference. Their message was clear: The world economy is beginning to slump as fissures between East and West widen. 

“The global economy is limping, not sprinting,” IMF Chief Economist Pierre-Olivier Gourinchas told reporters on Tuesday.

The IMF predicts that global economic growth will slow in 2024 to 2.9% from this year’s 3%. It says that downturn is in part due to the emergence of geopolitical blocs, stifling free trade across the globe. 

Moscow’s invasion of Ukraine in 2022 played a large part, the IMF says, noting that over the past 20 months, the West has issued unprecedented sanctions on the Kremlin and has shifted away from relying on China. 

Analysts say the war between Israel and Iran-backed Hamas insurgents could further expand the rift between East and West — and disrupt commerce in the Middle East, boosting the cost of oil worldwide. Oil prices have already soared in the fallout of Moscow’s invasion of Ukraine. 

“It’s a humanitarian tragedy and it’s an economic shock we don’t need,” World Bank President Ajay Banga told Reuters on Tuesday. 

The fact that many of the biggest oil producers in the region, including Saudi Arabia and the U.A.E., have not come out in support of Hamas indicates that those countries are unlikely to restrict exports — at least for now, analysts say. 

But oil prices have already jumped by about 4% over the past few days as the bloody conflict unfolds in Gaza. 

It’s “too early” to know how the violence in Israel will affect economies abroad, Gourinchas said.

Uncertainty seemed to be a theme throughout the conference. The world has learned over the past three years to expect the unexpected. “[I]t’s too early to jump to any conclusions here,” Gourinchas said, cautioning against panic. 

But if the fighting in Israel drags on, he said, the cost of oil could rise by 10%, global economic growth could take a 0.15% hit, and inflation could hike 0.4%. 

The world economy has shown “remarkable resiliency,” Gourinchas noted, in part because the U.S. Federal Reserve and central banks across the globe have brought up interest rates to hold back inflation. 

The goal of that, economists say, is a soft landing: keeping unemployment low and stabilizing living expenses. Gourinchas said the strategy has been successful so far. 

The IMF expects the U.S. economy to grow by 2.1% this year and 1.5% next year — a significant increase from the 1% it originally forecast. 

While oil prices have been on the rise across the globe, the U.S. economy has fared better than European countries. Economists believe that is because European consumers have spent more conservatively in the post-pandemic era. 

The eurozone’s economy — the group of 20 European countries whose official currency is the Euro — is predicted to grow by a meager 0.7% this year and 1.2% in 2024, the IMF said. Even the German economy — among the largest in the West — is expected to decline this year. 

The Chinese economy, second only to the U.S., is forecasted to expand by 5% this year and 4.2% next year. Those figures are downgrades from the IMF’s predictions just months ago. 

Global trade, the IMF said, will grow only 0.9% this year and 3.5% in 2024. In the 2000s and 2010s, the yearly average was 4.9%.

Some information for this report was provided by the Associated Press and Reuters. 
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