China and the African Union: Infrastructure and Trade Deficits in Strategic Infrastructure in the Horn of Africa

Benedikt Kamski and Nizar Manek
2021, Routledge Handbook on the Horn of Africa (11-pages)

Introduction

Policy makers have recognized regional infrastructure development as a pivot for economic growth and structural transformation in Africa. Adequate transportation, energy, and communication infrastructure is an essential component for successful regional and economic integration. The Programme for Infrastructure Development in Africa (PIDA) was launched against this background in 2012 as the African Union’s (AU) common framework for infrastructure development. However, the African Infrastructure Development Index (AIDI) and Logistic Performance Index (LPI) both provide clear indications for existing infrastructure deficits and how regional trade is affected by limited cross-border transportation links especially across the Horn of Africa.
The nexus between infrastructure and growth has received considerable attention in the academic literature on development and a large body of work has dealt with the importance of infrastructure as a catalyst for peace and poverty reduction in Africa. Considerable literature has been published on the positive effects on trade and economic efficiency stemming from improved transportation infrastructure. Several case studies provide evidence on the ‘symbolic meaning’ and ‘practical effects’ for governments of large-scale physical infrastructure in developing states such as Ethiopia In the literature on the Horn of Africa, Djibouti’s critical geo-strategic position as the core transportation gateway from the Red Sea and an a entrepôt for world powers and the development of hydropower dams in Ethiopia takes a prominent place, while more recent attention has focused on individual projects such as the Lamu Port South Sudan Ethiopia Transport Corridor (LAPSSET) and the Addis Ababa-Djibouti Railway. Moreover, the strategic importance of Africa’s eastern maritime countries for China’s Belt & Road Initiative (BRI) has been explored in several studies and considerable literature has been published on China’s engagement in the construction and transportation sectors in Africa. However, far too little attention has been paid to the overlapping objectives of BRI and PIDA and potential scenarios stemming from the competing priorities of Beijing and the AU in developing strategic transport and maritime infrastructure in the Horn of Africa.
The goal of the present chapter is to provide an overview of major regional infrastructure projects in the Horn of Africa and their politico-economic interlinkages. Focusing on transportation infrastructure, we review existing continental, regional, and national initiatives and policies that guide the planning, financing, and implementation of these large-scale interventions. Besides assessing the state of trans-boundary rail and road links, this chapter pays special attention to the role of seaports and maritime corridors and how the construction of new harbours is likely to affect regional trade and transportation dynamics. The case studies presented in this chapter, constructed from author interviews with ranking officials in Djibouti, Ethiopia, Eritrea, and Somaliland from 2016-19, do not exhaustively consider the large-scale infrastructure projects in the region. We restrict the geographical scope of our analysis mainly to Djibouti and Ethiopia and focus on the transport sector.
The chapter begins describing the background and implementation strategy of PIDA as well as related national and regional development priorities in the Horn of Africa. We then review institutional arrangements of the BRI and the role of the private sector for infrastructure development. While the third section also delves into selected case studies, the final section discusses potential scenarios and challenges related to the expansion of transportation infrastructure across the Horn of Africa.

https://www.taylorfrancis.com/chapters/edit/10.4324/9780429426957-63/china-african-union-benedikt-kamski-nizar-manek

Sudan's International Relations in Regime Change

Jean-Baptiste Gallopin and Nizar Manek
October 2020, Konrad-Adenauer-Stiftung (18 pages)

https://www.kas.de/en/web/poldimed/single-title/-/content/spotlight-on-sudan-sudan-s-international-relations-in-regime-change

Executive summary

Sudan is navigating a difficult political transition. In 2019, a revolutionary uprising brought on by an economic crisis and decades of authoritarian rule prompted a military coup against then President Omar al-Bashir. In a power sharing agreement sealed in August 2019, the political opposition agreed to share power with the generals who overthrew Bashir.
Regime change in Sudan took place at a momentous time for the country’s neighborhood. Politics in the Horn of Africa and the Persian Gulf – long considered distinct strategic regions – have become increasingly entangled. In parallel, growing inter-state competition and a predominance of bilateralism have become defining facts of regional interactions.
In the unsettled balance of power of the region, the direction of the Sudanese transition and the foreign orientation of the transitional regime have become stakes for the power plays of outside powers. Sudanese factions have sought the support of, and faced pressure from, regional states and global powers which are seeking to shape Sudan’s positions in salient issues – in negotiations over Nile waters, on the question of Arab normalization with Israel, and also in the rivalries pitting Iran, Turkey and Qatar against the so-called “Arab Troika” (the United Arab Emirates, the Kingdom of Saudi Arabia, and Egypt).
Regional intervention decisively shaped the initial direction of Sudan’s transition in 2019, when Saudi Arabia and the UAE provided critical support to the junta that overthrew Omar al-Bashir, allowing it to resist popular demands for civilian rule and accountability for the crimes of Bashir’s government. Sudan now stands firmly in the Arab Troika’s orbit.
But the demands of the Arab Troika and those of the United States have caused tensions among the components of Sudan’s transitional authorities and placed obstacles on the country’s path to economic recovery. In October, President Donald Trump finally announced he will ask Congress to lift the State Sponsor of Terrorism (SST) Designation which has hampered economic normalization between Sudan and Western countries, but Sudan’s economy has now collapsed and the prospects for further political destabilization are rising.

The Political Economy of A Sector in Crisis: Industrial Policy and Political Connections in the Egyptian Automotive Industry

Amirah El-Haddad, Jeremy Hodge and Nizar Manek
June 2017, Economic Research Forum (49 pages)

http://erf.org.eg/publications/the-political-economy-of-a-sector-in-crisis-industrial-policy-and-political-connections-in-the-egyptian-automotive-industry/

Abstract

The Egyptian automotive industry developed under the country's policy of import substitution industrialization (ISI). It mainly catered to Egypt's small domestic market. The Open-Door Policy of the seventies opened up the sector to joint ventures and imports with further liberalization with the Economic Reform and Structural Adjustment Program (ERSAP) in the nineties. Despite some liberalization, the main features of the seventies' import substitution policies remained in place. Both assembly and feeder industries were protected through relatively high effective rates of tariff protection and local content requirements. The sector has faced a series of setbacks since the January 2011 revolution and then again in 2015, the latter including maximum caps on dollar withdrawals and deposits imposed by the Central Bank of Egypt (CBE). The sector's influential businessmen have developed a draft law for a series of non-tariff trade barriers to protect their assembly and manufacturing roles in the industry. Unable to compete in the global environment, if not protected these firms would turn into importers and distributors. This study documents the evolution of the sector since the Nasser era. It also discusses the interconnected network of politically connected firms and its influence over the policy making process in Egypt. The first part of the paper examines the protective environment within which the automotive sector has grown and the way it has shaped industry structure and market players. The second analyzes state-business relations and the interlinked network of power within the industry.

Executive summary

The Egyptian automotive industry has evolved as part of the country's import substitution policy, which is mainly aimed at Egypt's small domestic market. The open-door policy of the 1970s opened the sector to joint ventures and imports with further liberalization with the economic reform and structural adjustment programme of the 1990s. Despite some liberalization, the main features of import substitution policies in the 1970s remained. The assembly and feeder industries were protected through relatively effective rates of protection of tariffs and local content requirements. The sector has faced a series of setbacks since the January 2011 revolution and again in 2015, including the maximum catch for dollar withdrawals and deposits imposed by the Central Bank of Egypt. Influential businessmen in the sector have drafted a bill for a series of non-tariff trade barriers to protect their role in assembly and manufacturing in the industry. Because of the inability to compete in the global environment, if not protected, these companies will become importers and distributors. This study documents the development of the sector since the time of Gamal Abdel Nasser. It also discusses the position of politically relevant companies and their impact on egypt's policy-making process. The first part of the paper deals with the preventive environment in which the automotive sector has grown and the way in which it shaped the structure of industry and market actors. The second analyzes state-to-state relations and trade relations.