Kenyan train to nowhere reveals China’s debt trap diplomacy
Since Chinese engineers routed a $4.7 billion railway through the Kenyan village of Emurutoto, residents no longer worry about being cut off by flooding. Or being hit by a train.
After soaring over their valley on vast concrete pillars, the tracks stop dead in a maize field. Goats graze on weeds between the concrete sleepers, and the railway bridge has become a multimillion-dollar walkway.
Emurutoto has done well out of China’s African investment project, which promised to connect the Kenyan port in Mombasa to neighbouring Uganda, and far beyond.
Local incomes had relied on small-scale farming or the nearby town of Duka Moja (which means “one shop” in Swahili) before the Chinese arrived in 2016, and set up camp.
Samuel Kiseentu, who at the time was a goatherd, was taken on as a labourer. “After some months I had savings for this,” he said, patting the motorbike beneath him.
There were hundreds of jobs for locals who benefited from a new dirt road and extended water pipes. Farmers with land along the route were given three million Kenyan shillings ($18,114) per acre in compulsory purchase agreements.
“Life became better here,” said Isaac Shonke, 30, who was trained as a steel fixer and made enough money to have his children to schooled privately.
By 2017, the first half of the Kenya-Uganda line was operational, though losing money. In April 2019, work in the Great Rift Valley stopped. As alarms were raised about the mounting costs of the line, and secrecy around borrowing terms between Beijing’s banks and other African countries struggling to repay debts, China balked at financing the final 200-mile stretch linking Nairobi to the border with Uganda.
The single most expensive infrastructure project in Africa had become a case study in China swamping poorer nations with colossal debt. “The managers told us there was no more money to finish, and they went,” Shonke said.
The Times’s arrival in the village drew a small crowd asking for news that work would start again. A watchman living in rusting tin huts with his family had stuck around since the Chinese departed. The spoils of a three-year building flurry that had sucked investment away from basic services were dwindling.
Most of those gathered said they had never seen a train, let alone the huge, pristine station 15 miles up the tracks at Suswa, where rolling stock is plastered with slogans boasting prematurely: “Connecting Nations. Prospering People.”
Passengers on the 55-mile journey back to Nairobi were in festive mood. It was the last day of term and children on primary school outings were crammed into seats that cost 150 Kenyan shillings (91p) for a child’s day return.
For a few miles near Mai Mahiu station, the train runs parallel to the century-old line built by the British, which was known as the Lunatic Express for its huge cost to both the Westminster government and a workforce preyed upon by disease and lions.
Kenya had deliberated for years on whether to renovate the old railway or invest in a new one. A report by the World Bank was among many that said the route chosen in the 1890s was still the best and recommended upgrading the existing network. But a new one with a wider gauge was settled on, designed, funded and built by China with no competitive tendering. A stretch of the old line is now being untangled from the bush to get cargo, offloaded on to older rolling stock, to the Ugandan border.
The Chinese train leaves the Great Rift Valley through the Ngong Hills. East Africa’s newest and longest tunnel helps to explain why the line runs at such a great loss. The darkened windows draw alarmed wailing and prayers before the carriage emerges, its inhabitants cheering and blinking, on the other side. In another engineering phenomenon, the train is soon soaring over Nairobi National Park along a four-mile bridge high enough for a giraffe to comfortably pass underneath.
As the sun lowers on the capital’s skyline, someone shouts: “Elephant!” It is not clear whether they mean a white one.
Win-win? Xi’s project has had mixed results
If one policy is synonymous with President Xi’s China, it is the Belt and Road Initiative (Richard Spencer writes). Descriptions are awash with the Chinese Communist Party’s favourite slogans — “win-win co-operation” and “China meets the world” — but its underlying ideology is Xi’s.
The initiative poured huge sums of China’s surplus foreign exchange holdings into potential trade partners, particularly those in the global south. State-led by both Chinese and partner governments, it would also involve private enterprise and the market economy.
The “win-win” was obvious. Countries short of cash would receive an infusion of investment, while China would have faster access to natural resources and bigger potential markets for its manufacturing industries.
The side-effects would also, Xi hoped, be useful for China. It would show off Beijing as an alternative “hegemon” to the United States and its western allies — and one that did not ask questions about human rights. It would also confirm the potential of China’s state-led economic model, a more attractive proposition to many governments than the West’s present insistence on privatisation.
Belt and Road has undoubtedly had some successes. Chinese companies have built ports in Latin America and railways in Indonesia. Trade has flourished. Three quarters of Brazil’s soybeans, for example, are now exported to China, the quantity more than doubling in eight years.
However, just as the Chinese economy has had a poor few years — particularly since Covid-19 exposed flaws in Beijing’s “command, control and no questions asked” system of government — so Belt and Road has also had problems. Kenya’s financial crisis, in part owing to debts incurred on Belt and Road projects, is one example.
Other countries were also taken aback by the unsentimental approach of their Chinese partners. Loans were handed down with tough terms, often disguised from voters by secretive contracts.
In Sri Lanka, a port built with Chinese money could not repay the debt and was eventually leased to a Chinese company instead. As Sri Lanka fell into a broader debt crisis, China was blamed, though its loans were only a tiny fraction of the total.
With Chinese banks wondering how many projects would offer a return on their money, and governments growing wary of the leverage China now had over them, the scheme began to wind down, or at least focus on smaller projects.
As with much of Xi’s legacy, many Chinese people are proud of Belt and Road’s results, but it is not only the Chinese Communist Party’s western critics who have noticed cracks starting to appear.
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