China's exim-bank, World Bank to cooperate on Africa http://www.reuters.com/article/companyNewsAndPR/idUSN2136700620070522
Mon May 21, 2007
By Lesley Wroughton
WASHINGTON, May 21 (Reuters) - The World Bank and the Export-Import Bank of China on Monday signed a memorandum of understanding to improve cooperation, a major step in better grasping the Asian giant's interests in Africa.
In an interview with Reuters, World Bank Vice President for Asia, Jim Adams, said initial cooperation would focus on road and energy investment projects by China's exim-bank in Africa.
He said it was important that if China wanted to be a major investor in Africa it became part of the global donor system.
"This is a way to begin to work within that donor system," Adams said, referring to the agreement with the World Bank.
The exim-bank is China's state bank that provides financing for exports, overseas construction and investment projects, and the only arm to issue low-interest loans.
After $50 billion in debt write-offs for impoverished countries mainly in Africa last year, Western donors have worried that China's growing trade and business links with the continent could rack up their burdensome debts all over again, although there is no hard evidence it is happening.
The lack of transparency by China on details of its investment and aid in Africa has left Western donors uneasy and calling for Beijing to ascribe to globally accepted rules, relating to human rights and the environment. Last week, Premier Wen Jiabao fended off criticism that China's courtship of the world's poorest continent was to secure oil and mineral wealth for its own booming economy.
He pointed to Beijing's pledge in November to double aid to Africa by 2009 and to establish a $5 billion development fund. It is understood that the agreement with the World Bank will initially focus on Uganda, Ghana and Mozambique, three of Africa's fast-developing countries.
Adams acknowledged that concern over African countries' debt sustainability had been discussed with China.
"We've agreed that we will share our analysis of the debt work that we do in individual countries that we are working together in and that has been agreed," he said.
He said the World Bank had exchanged information with China's exim-bank over the past year on such issues as financial management, procurement, environmental and social impact analyses.
"Our Beijing office has been working with the exim-bank to give them background on the way we approach investments and the way we work in Africa," he said, "And we also hope to be able to receive staff from the exim-bank to work directly with our Africa region in Washington." Adams said the World Bank hoped to have similar agreements with export-import banks from other large developing nations.
China has argued that is own rapid growth and experience in lifting over 400 million people out of extreme poverty over the past 20 years could provide valuable lessons to Africa.
"The solution to all kinds of development challenges is to have economically sustainable growth," said Li Ruogu, president of China's exim-bank, who is part of a Chinese delegation led by Vice Premier Wu Yi visiting Washington. "We welcome this memorandum of understanding and the opportunities for collaboration towards this end that it represents," he added.
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