Is China ready for state-building duties?

This is from the Journal, reporting on the recent deaths of Chinese peacekeepers in South Sudan:

Inside China’s government, differences have emerged about how to use the military overseas, said people familiar with the discussions. The prevailing view in the foreign ministry, they said, is that China should rapidly expand peacekeeping activities to show global leadership, as Mr. Xi demands.

Many military commanders, they said, by contrast want to move more slowly, conscious of their troops’ lack of experience and sensitive to domestic and international criticism.

China’s foreign ministry declined to comment. A senior defense official denied there were differences within the government.

The tragedy speaks to a pillar of Mr. Xi’s political agenda. Last year, he pledged to build an 8,000-strong standby peacekeeping force, adding to 2,600 Chinese deployed today. China is the second-biggest funder of U.N. peacekeeping after the U.S. and the biggest troop provider of the five permanent Security Council members. U.N. insiders said China is lobbying for one of its officials to head the U.N. peacekeeping office next year.

This is the all-important paragraph:

One of Mr. Xi’s goals is to protect the nation’s expanding global interests and citizens abroad. China’s leaders were “stunned” by the deaths in Juba, said one senior Western diplomat involved in discussions with China on South Sudan. “They’re fast realizing you cannot be a commercial giant without being an imperial power in some way.”

If China follows through on Xi’s dreams, will Chinese interventions and state-building efforts be any different than what the EU and the US are already doing? Does China really believe that an 8,000 strong standby force will be enough (even just for South Sudan)?

Also, this anecdote suggests that China will need to build a robust pension system before it can deploy large numbers of troops in dangerous hotspots abroad:

The cohort comprises mostly children raised under China’s one-child policy, so fatalities are likely to leave parents with no one to support them in old age.

South Sudan: A runaway kleptocracy or a gradual evolution towards statehood with an encompassing interest?

The Sentry, a project co-founded by George Clooney and John Prendergast, has a nice report that details corruption at the highest levels of the South Sudanese government.

How do President Kiir’s children afford to live in such apparent luxury? Corporate records for Combined Holding Limited (CHL), a South Sudanese holding company incorporated in February 2016, provide one clue. These records reveal basic information about the company: the date of incorporation, names of shareholders, their contact information and a copy of their passport. One of CHL’s shareholders is a 12- year-old child with the surnames “Salva Kiir Mayardit” whose passport lists his occupation as “Son of President.” But, this hardly makes this child unique among members of President Kiir’s immediate family.

In total, The Sentry found that at least seven of President Kiir’s children have held stakes in a wide range of business ventures, especially in the extractive and financial sectors. Corporate filings obtained by The Sentry show that South Sudan’s first family appears to be active in the country’s oil and mining industries. Another document obtained by The Sentry, dated June 26, 2015, indicates that Thiik Kiir—the president’s 28-year-old son—owned 35 percent of Nile Link Petroleum. Adocument filed in 2014 lists Mayar Kiir—Thiik’s 29-year-old brother whose passport also confirms he is the president’s son—as owner of half of Oil Line & Hydrocarbons Limited, with the remaining shares held by three Kenyan businessmen.

A document dated May 25, 2015, lists Mayar Kiir as a 50 percent shareholder in Specialist Services Co. Ltd., a company that describes itself as being involved in “oilfield services and petroleum supply.” Another document indicates that Adut Salva Mayar, the president’s daughter, has owned shares of Rocky Mining Industries Limited. Yet another document reports that Anok Kiir, President Kiir’s 29- year-old daughter, has held a 45 percent stake in CPA Petroleum. And, according to another corporate record, Winnie Salva Kiir, the president’s 20-year-old daughter, held an 11 percent stake in Fortune Minerals & Construction. The same document indicates that, as of March 2016, the three largest shareholders of Fortune Minerals are Chinese investors.

You should read the whole thing here.

You’d be interested to know that Salva Kiir and Riek Machar live screen-shot-2016-09-12-at-4-55-03-pmonly a short drive from each other in Nairobi, Kenya.

The idea that the leaders of South Sudan are stealing state resources left, right, and centre is totally abhorrent. Tens of thousands have died since the resumption of civil conflict. Millions are in dire need of humanitarian aid.

The international community has its work cut out for it. South Sudan lacks a functional state apparatus. It is yet to get to the point of stationary banditry.

Which is why I think that it would be misguided to presume that the key problems with South Sudan are endemic corruption or the lack of “good governance.”

Should we really expect the president of a (struggling) oil producing 5-year old state to make $60,000 a year and not dip into state coffers once in a while? After all, Kiir’s *perceived* peers are likely not some low-level bureaucrats here in DC but other leaders of the world and the Davos crowd. This is not to say that if Kiir were paid more he would necessarily be less corrupt. The point is that I am not particularly shocked that Kiir and his collaborators in the pillaging of South Sudan want and have acquired the same material comforts that most leaders in the world have.

The historically inclined might even argue that this is South Sudan’s enclosure movement.

Should one take that view, then the solution to the current problem would not be the *relative* impoverishment of the South Sudanese putative “upper class,” but investments in the expansion of this social category so that there is sufficient intra-elite accountability across the different socio-cultural groups in the country. The strategy of integrating rebel leaders into the SPLA could have served this purpose, but the downside is that it incentivized the proliferation of warlordism in the hope of being bought off by Juba.

Perhaps one of the most important questions to ask about South Sudan is how the international community can help Kiir and his henchmen invest their (ill-gotten) wealth in Juba instead of Nairobi or Kampala.

If left alone, South Sudan will likely remain to be a runaway kleptocratic failed state instead of gradually moving towards a stable state with sufficient coercive powers.

The student of the political economy of institutions in me is somewhat convinced that horizontal intra-elite accountability is probably the best way out for South Sudan (if they can establish intra-elite political stability to begin with). The hope that vertical accountability through regular “free and fair” elections will help keep a globalized elite running a fractious post-conflict state honest and accountable is phantasmic. At the moment the domestic audience costs for engaging in corruption are very low for Kiir and other elites, and will likely stay that way for the foreseeable future.

And don’t even mention “political will.” There are no “good” leaders in the world. Just properly incentivized individuals.

Again, definitely read the report.

The EAC: A Model for Boosting Intra-Africa Trade?

The Economist reports:

Since its resurrection in 2000, officials are more often found toasting its success. A regional club of six countries, the EAC is now the most integrated trading bloc on the continent. Its members agreed on a customs union in 2005, and a common market in 2010. The region is richer and more peaceful as a result, argues a new paper* from the International Growth Centre, a research organisation.

Many things boost trade, from growth to international deals. The researchers use some fancy modelling to pick out the effect of the EAC. They find that bilateral trade between member countries was a whopping 213% higher in 2011 than it would otherwise have been. Trade gains from other regional blocs in the continent are smaller: around 110% in the Southern African Development Community (SADC), and 80% in the Common Market for Eastern and Southern Africa (COMESA).

Planned infrastructure links over the next decade should add a positive shine to these figures.

Now if only regional integration had a similarly sanguine implication for democratic consolidation among the member countries of the EAC…

Uganda chooses Tanzania over Kenya in pipeline deal

The Business Daily reports:

Uganda will take its oil to the market through Tanzania’s Tanga port, leaving Kenya to build its own pipeline to Lamu, if the positions taken at the just-ended talks in Kampala are maintained.

It turns out that Kenyan negotiators showed up without having done their homework. For example:

….. it has also emerged that the Kenyan officials participating in the Kampala talks may not have had all their facts right as they tried to address the concerns raised by Uganda over the northern route for the pipeline.

This is odd, given Amb. Amina Mohamed’s chops. Or should we be asking questions of the energy ministry?

Screen Shot 2016-04-16 at 5.04.17 PMUganda’s decision should be treated as new information on the capacity of the Kenyan state to execute large scale infrastructure projects. Kenya really wanted this deal, and the fact that the negotiators could not seal the deal with Uganda suggests that there is no there there as far as Nairobi’s capacity to execute on LAPSSET is concerned. This will undoubtedly impact the Kenyatta administration’s ability to originate new projects related to the $25b LAPSSET development plan.

The economics of the choice of pipeline appeared to not have mattered:

A joint pipeline between Kenya and Uganda would have had an initial throughput of 300,000 barrels per day (200,000 barrels for Uganda and 100,000 barrels for Kenya). This could have earned the pipeline companies $1.66 billion a year, which would be shared between the countries according to throughput.

…… If the two countries go for a standalone pipeline, Uganda will lose $300 million every year due to an increase of $4.07 in tariff per barrel, and Kenya will lose $250 million per year due to the increased tariff of $6.96 per barrel.

All else equal, this is probably a net positive development for the future of the East African Community (EAC). It is obviously a big financial and political loss for Kenya (and for that matter, Uganda) but it will dampen the idea of a two-speed EAC — with Kenya, Uganda, and Rwanda in the fast lane and Tanzania and Burundi in the slow lane.

 

An East African Geopolitical Dilemma: Which pipeline route makes most sense for Uganda?

Bloomberg reports:

Screen Shot 2016-03-25 at 9.34.21 AMKenya is competing with Tanzania to build the pipeline from oilfields in Hoima, western Uganda. It would either traverse northern Kenya’s desert to a proposed port at Lamu, near the border with Somalia, or south past Lake Victoria to Tanga on Tanzania’s coast. A third option would be through the southern Kenyan town of Nakuru.

Tanzanian President John Magufuli said earlier this month he’d agreed with Museveni to route the conduit via his country at a cost of about $4 billion, with funding from Total SA. The Kenyan option favored by Tullow, which has oil discoveries in Uganda and Kenya, may cost $5 billion, according to an estimate by Nagoya, Japan-based Toyota Tsusho Corp.

Uganda is in a rush to get its oil to market. It also wants to make sure that it does not tie its hands in an obsolescing bargain with Kenya. Being landlocked, the country already depends a great deal on Kenya as an overland route for its imports and exports. The pipeline would add to Nairobi’s bargaining power vis-a-vis Kampala.

In an open letter to President Yoweri Museveni, Angelo Izama, a Ugandan journalist (and a friend of yours truly) articulates these concerns and concludes that it is better for Uganda to build the pipeline through Tanzania in order to minimize its political risk exposure:

It is not rocket science that routing both commercial traffic and oil through Kenya would give Nairobi near total influence on economic matters and would, added to Kenya’s already considerable market penetration in Uganda, leave little wiggle-room for unforeseen and some predictable hazards. The Ugandan domestic commercial and industrial community as well as consumers remember well how helpless they were when disruptions followed the Kenyan election of 2007 (even when some of us had urged the government earlier to restock fuel in anticipation of political violence). Many also live with the challenges of a single port to our import-addicted economy and the cost to family fortunes whenever Nairobi pulls bureaucratic red tape. Obviously being landlocked is not a “non-issue” as you framed it in Kyankwanzi. It needs to be placed in a detailed context. I have some reservations over your optimistic take on political and market integration, and that said, clearly having one member, in this case Kenya, within this greater EAC community with more power and influence than the rest is not an advantage to the growth of the community and may in fact prove rather dangerous. This as I recall has been the common fear cited in our neighbourhood about Uganda’s aggressive military spending (to which the Kenyan government responded with its own expenditure in the decade ending 2018).

The official reason given by Uganda for considering the Tanzania option (see map) is that construction of the Kenyan pipeline would be delayed (due to corruption, expensive land [Kenyans and land!], security threats from al-Shabaab, and the fact that the Lamu Port is yet to be completed).

All these are reasonable concerns.

Plus, it would have been foolish for Uganda not to strengthen its bargaining position by CREDIBLY demonstrating that it is considering BOTH options.

But Uganda must also know that whatever the outcome, this is an obsolescing bargain. Once the pipeline is constructed, it will be at the mercy of the host country government.

It is for this reason that it should seriously consider the kinds of future governments that might be in office in Nairobi and Dodoma/Dar es Salaam.

To this end Ugandan policymakers need to ask themselves the question: Would you rather deal with a government that partially answers to private sector interests and operates in a context of weak parties; or do you want to be at the mercy of a party-state in which some politically-motivated party stalwarts can actually influence official policy?

Understood this way, Uganda’s concern should be about what happens after the deal has been sealed; rather than the operational concerns that have thus far been raised by Kampala.

Notice that Kenya has been able to protect its existing oil pipeline well enough. Rioters may have uprooted the railway in 2007, but that was because they felt that Museveni was supporting their political opponent (Museveni could be more discreet in the future). Also, it is a lot harder to uproot a pipeline buried in the ground. The construction delays due to land issues can also be solved (and in Kenyan fashion, at whatever cost) — notice how fast Kenya is building the new standard gauge (SGR) railway line from Mombasa to Nairobi despite the well documented shenanigans around land compensation (More on this in a World Bank report I co-authored in my grad school days here).

Perhaps more importantly, the Kenyan option is attractive because Kenya also has oil, and will have to protect the pipeline anyway. This scenario also guarantees a private sector overlap between the two countries — in the form of Tullow or whoever buys its stake — that will be in a position to iron out any future misunderstandings.

Tanzania is also an attractive option. The pipeline will be $1 billion cheaper. Because it passes through largely uninhabited land, construction will be speedy. And the port at Tanga is a lot further from the Somalia border than Lamu, and should be easier to protect.

All this to say that the operational concerns raised by Kampala are a mere bargaining tool. These issues can be ironed out regardless of the host country. The big question is what happens AFTER the pipeline is constructed.

And here, I don’t see why Tanzania is necessarily a slam dunk.

The history of the EAC (see here for example) tells us that Kenya tends to subject its foreign policy to concentrated private interests. Tanzania on the other hand has a record of having a principled an ideologically driven (and sometimes nationalist) foreign policy with significant input from well-placed party officials. Put differently, the calculation of political risk in Kenya involves fewer structural veto players than in Tanzania. Ceteris paribus, it seems that it would be cheaper to manage the long-run political risk in Kenya than in Tanzania.

That said, the Tanzania option makes a lot of sense in a zero sum game. As Angelo puts it:

I have some reservations over your [Museveni’s] optimistic take on political and market integration, and that said, clearly having one member, in this case Kenya, within this greater EAC community with more power and influence than the rest is not an advantage to the growth of the community and may in fact prove rather dangerous.

But even this consideration only makes sense in the short run. Assuming all goes well for Tanzania, in the long run the country’s economy is on course to catch up to Kenya’s. Dodoma will then have sufficient political and economic muscle to push around land-locked Uganda if it ever so wishes.

To reiterate, the simple question Museveni should ask himself is: who would you rather negotiate with once the pipeline is built?

I don’t envy the Ugandan negotiators. And they have not helped themselves by publicly stating their eagerness to get their oil to market ASAP.

Some Africanist inside baseball

Screen Shot 2015-12-01 at 8.58.24 PM

Does Kenya have too many MPs?

An article in the Daily Nation asked this provocative question. In the article, the author examined the cost per capita of legislatures in several countries; and concluded that legislatures in OECD democracies tend to be relatively more representative (seats/million people) as well as cost effective (per capita cost/east) than their counterparts in the developing world.

Of course, linking per capita income to the density of representation has its pitfalls. An assumption that countries with smaller economies should have smaller assemblies, regardless of population size, implicitly undervalues the political voice (and rights) of citizens of poor countries. At the same time, setting an arbitrary upper bound on the remuneration of legislators (and general resourcing of legislatures) has the potential to limit the continued professionalization of legislatures in emerging democracies. Under-resourced legislatures find themselves in a bad equilibrium of high turnovers, weak institutionalization (lack of experience), inability to check the executive or effectively legislate, and a whole lot of dissatisfied voters who invariably choose to go with erstwhile challengers.

How break out of this bad equilibrium is one of the key questions I grappled with in the dissertation (and in the ongoing book project). But I digress…

legseatsThe standard metric in Political Science for comparing the density of representation was developed by Rein Taagepera in the early 1970s. The Taagepera formula predicts that assembly sizes tend to approximate the cube root of the total population of states. In the dissertation I looked at how African states faired according to this metric (see figure) and found that the vast majority of countries on the Continent have relatively smaller assemblies than would be predicted by their population sizes (the figure only captures the sizes the lower houses). Somalia, Uganda, Sudan, the DRC, South Africa, and Ethiopia are the clear outliers. Incidentally, Kenya’s National Assembly is right on the parity line.

The usefulness of this metric (at the national level) diminishes beyond a certain population size. For countries with hundreds of millions of people or more, it makes more sense to apply the formula with respect to sub-national assemblies, if they exist. This is for the simple reason that beyond a certain number of seats the legislature would become too big to reasonably be able to conduct its business (see Nigeria).

Most read posts in 2014

Here are the top posts in 2014

1. Corruption under apartheid South Africa: This post was top partly because of the 2014 South African elections. More on the legacies of apartheid era corruption and rent-seeking in South Africa here.

2. Kenya Security Laws (Amendment) Bill 2014: This bill (now an Act of Parliament) is further evidence of Uhuru Kenyatta’s autocratic tendencies. I personally don’t think that he is an incarnation of Moi or other dictators of years gone. Rather, Mr. Kenyatta is a poor administrator who likes taking shortcuts to get quick results. As I argued in a related post, the Security Laws (Amendment) Act 2014 could potentially severely limit civil liberties in Kenya.

3. Did European Colonialism Benefit Africans? The popularity of this post is perhaps a reminder that more research is needed on the long-run effects of colonialism not just in Africa but in other formerly colonized places as well. So far all the literature tells us is that colonialism was bad, but that the Western institutions that Europeans spread around the globe are good. More recently we’ve seen evidence that pre-colonial institutions in the colonies were pretty resilient in the face of colonial intrusion; and have had lasting effects (also remember that the duration and intensity of colonialism varied widely across the globe). One avenue of research that I have been exploring is how pre-colonial institutions interacted with colonial administrations, and how this shaped the institutions that emerged out of the independence wave of the early 1960s. More on this in the new year.

4. Why Raila Odinga Lost: A sizable proportion of Kenyans still believe that Odinga was robbed in the March 2013 election in Kenya. I disagree. In my own projections on this blog – merging disaggregated opinion polls with historical district turnout rates (perks of having a case with tight ethnic voting) – I found Mr. Kenyatta to be ahead of Mr. Odinga by about 740,000 votes, or 7.2 percentage points (which was close to the final official figure of 6.7% difference between the two).

I don’t think that Kenyatta won in the first round, but do believe that we would have trounced Odinga in a runoff anyway. Which is why I have never come to terms with the unanimous Supreme Court decision granting Kenyatta victory on the basis of less than 9000 votes out of 12.3 million cast.

5. Understanding Uganda’s Military Adventurism Under Museveni: General President Museveni has managed to create an image of himself as the anti-terror hatchet man in the wider horn of Africa region. Ugandan troops are the backbone of the AU mission in Somalia (AMISOM). Since his triumphant entry into Kampala in 1986 Museveni has also been involved in conflicts in Rwanda, the DRC, Sudan, C.A.R, and more recently South Sudan. Because of the degree of militarization of the Ugandan state and recent public displays of intra-elite friction, I think Uganda will continue to inch up in the coup sweepstakes ahead of the 2016 election.

Meanwhile in the Central African Republic

According to Doctors Without Borders (MSF):

We are talking about up to one million IDPs and refugees, out of a population of 4.6 million. This accounts for 20% of the population, which is outrageous when we take into consideration these communities were already very fragile in a disrupted country, where health services outside Bangui would be practically non-existent if not for the presence of MSF in seven different regions. This past year has pushed the population to the edge of the abyss. The deployment of MSF has been huge, spectacular and swift in order to respond rapidly and provide emergency medical care. However the population is still in dire need of more assistance, including medical care. And above all, the population needs safety and security.

CAR is scheduled to hold elections either later this year or early next to speed up the transition to normalcy (France wants out ASAP). The hope, I presume, is that whoever wins the election will bring political order to the former Central African Empire. Fingers crossed?

On a related note, the US recently announced new military aid to Uganda, including four CV-22 Ospreys and an additional 150 Special Operation troops (to join the 100 deployed in 2011) in an effort to step up the hunt for Joseph Kony, leader of the Lord’s Resistance Army (LRA). Kony is suspected to be in hiding in the border regions CAR, the DRC, Sudan and South Sudan. Of course this rather bizarre decision (is Kony really that much of a priority right now in the Great Lakes Region?) is motivated by the need to keep the Ugandan military in top shape and ready to fight in places the US doesn’t want to set foot

What if the US and the EU also had a humanitarian equivalent of Uganda? You know, a country that could be just as well funded with cash and equipment to wade into troubled places like CAR and South Sudan and provide humanitarian assistance backed by credible firepower. What if? It might even help shore up some of the soft power the US (and the West in general) is haemorrhaging fast on account of the developmental interventions from the East in the wider region.