The ZAMBIA Story .

NEW York Times: “Zambia and Its New President Are Still on Their Honeymoon.” And adds: “Hakainde Hichilema is hailed as a miracle worker for turning around the fortunes of the southern African country. But with his opposition neutralized and a corruption drive focused on his predecessors, some are uneasy.” I guess, there will always be a problem. Meanwhile, Zambia stays as an arena for America vs China tug of whatever. Sadly, that’s how things are in mostly “smaller” nations.

       The fact of the matter is, Zambia’s economy is modest per African standard. Its 3.8 percent GDP growth rate is along the region’s 3.6 percent average, and while unemployment at 12.6 percent is high per global rates, that is a lower than the region’s 20+ percent average. For example, joblessness in Eswatini is 26 percent; Djibouti, 28 percent.

       Perhaps “good” in Zambia means no war? Primal peace is primal heaven for Zambia’s 19.5 million humanity. Not until some proxy war invites strife again, or Mr Hichilema misbehaves?

As we speak though, China and its state-owned lending institutions are battling it out per loans with the West’s International Monetary Fund. 🇿🇲🇿🇲🇿🇲

ZAMBIA’s chief industries include copper mining and processing, construction, emerald mining, beverages, food, textiles, chemicals, fertilizer and horticulture. Top trading partners: Switzerland, China, Congo, Singapore and South Africa for exports; South Africa, China, United Arab Emirates, India and Congo for imports.

       What hugs the country’s economic marquee these days though is the heightened competition between Beijing and IMF. Early in September, Lusaka secured a zero-interest loan of $1.3 billion with a grace period of five-and-a-half years, and a final maturity of 10 years, from the International Monetary Fund.

       Meanwhile, later in the month, some 300 Chinese and Zambian companies (with 90 participating online) met for a two-day event in Lusaka bombastically billed "China-Zambia Trade and Investment Forum in the New Era: All-weather, All-Dimensional and High Quality Friendship.” The opening ceremony was attended by Zambian President Hakainde Hichilema and Chinese Ambassador to Zambia, Du Xiaohui.

       No economic amount has been disclosed yet but it is expected that Beijing will waive a comnsiderable chunk of Lusaka’s debt, which is roughly 30 percent of Zambia’s total foreign debt. 🇿🇲🇿🇲🇿🇲

WHILE China zooms in on its characteristic FDI mojo in Africa, the United States stays focused on aid: Political/economic matters and humanitarian issues. USAID has committed $44 million to agricultural development programs in Zambia, promising diversification and increased female empowerment in the country’s economic recovery. That amount though is a lot lower than what the top 15 USAID recipient-countries get annually.

       U.S. officials believe diversification will yield benefits in the country’s economic growth and food security. Just three sectors – retail trade, mineral extraction and construction – constituted almost half of Zambian GDP before the pandemic.

       USAID’s focus on agricultural development will be welcomed in a country where population growth outstrips domestic agricultural production. In the short term, it is hoped that an $8.5 million export deal with agricultural companies Zdenakie and NewGrowCo will also help to relieve pressure on East African grain importers suffering the consequences of the war in Ukraine.

       This is the sort of “competition” that I favor when superpowers U.S. and China sink their teeth in poorer countries. Trade, just trade. Economics, no war. Or no war intrigue. 🇿🇲🇿🇲🇿🇲

The PAKISTAN Story.

Previously posted on my Facebook Page.

New York Times: “Battered by Floods and Trapped in Debt, Pakistani Farmers Struggle to Survive.” / “A Strong Dollar Is Wreaking Havoc on Emerging Markets. A Debt Crisis Could Be Next.” The West easily blames climate change but for Pakistan’s farming population, 42 percent of the country’s labor force, the recent flooding is a natural disaster that happens all the time and destroys agricultural lands and livelihood. Which means, small farmers in sharecropping arrangements are further buried into debt with their landlords.

       And then comes a rampaging U.S. dollar on a mission. On its path, low-income countries (such as Pakistan), already struggling per Covid pandemic, are severely hit. The dollar’s strength is adding to their woes.

       Site of several ancient cultures, Pakistan is historically resilient. It is bordered by nations that could offer aid in trade. India to the east, Afghanistan to the west, Iran to the southwest, and China to the northeast. It is separated narrowly from Tajikistan by Afghanistan's Wakhan Corridor in the north, and also shares a maritime border with Oman.

       Pakistan has served as China's main bridge to the Islamic world, and also played an important role in bridging the communication gap between China and the West. The relations between Pakistan and China have been described by Pakistan's ambassador to China as "higher than the mountains, deeper than the oceans, stronger than steel, dearer than eyesight, sweeter than honey, and so on."

       However, the United States remains as Pakistan’s chief export trading partner, despite the fact that more than half Pakistan’s 220 million humanity consider the U.S. to be an enemy. China is the top importer. 🇵🇰🇵🇰🇵🇰

Pakistan's economy is expected to grow by only 2 percent next year from 2022’s 3.5 percent but current indications aren’t hopeful. The country faces a 12 percent unemployment rate and rising. And with a debt crisis surfacing as a result of the stronger dollar, expect bleakness some more.

       Islamabad’s external debt is feared to spike to $138.568 billion as interest rates soar. Manufacturing is Pakistan’s chief industry. With the surging U.S. dollar, domestic manufacturers hoping to sell goods overseas amid red-hot inflation are facing dark days.

       As expected, China looms as Pakistan’s possible lifesaver. Compared with America that is viewed negatively, 75 percent of Pakistanis have a positive outlook of China. In turn, an almost equal 73 percent Chinese are cool with Pakistan.

       Economic trade between Pakistan and China has been recently increasing, and a free trade agreement has been signed. Military and technological transactions continue to dominate the economic relationship between the two nations, and China has pledged to increase their investment in Pakistan's economy and infrastructure.

       As expected, Beijing and Islamabad’s economic agreements are sealed via China’s centerpiece project Belt and Road Initiative, especially with regards the China–Pakistan Economic Corridor. 🇵🇰🇵🇰🇵🇰

China comes to the rescue via BRI’s China–Pakistan Economic Corridor. CPEC will connect Pakistan with China and the Central Asian countries with highway connecting Kashgar to Khunjerab and Gwadar. Gwadar Port in southern Pakistan will serve as the trade nerve center for China, as most of its trade especially that of oil will be done through the port, which is operated by the China Overseas Port Holding Company, a state-owned company.

       Currently, 60 percent of China's oil must be transported by ship from the Persian Gulf to the only commercial port in China, Shanghai, a distance of more than 16,000 kilometers. The journey takes two to three months, during which time the ships are vulnerable to pirates, bad weather, political rivals and other risks. Using Gwadar Port instead would reduce the distance and possibly the cost.

       While China focuses on economics, the U.S. is consistent on politics—and Pakistan is no exception. Islamabad has been a major non-NATO ally of Washington since 2002. Yet after Pakistan's participation in the Afghan peace process and Taliban (re)takeover of Afghanistan in 2021, a sizeable number of U.S. policy makers are revisiting the United States relations with Pakistan. That could be vague though under President Biden.

       I don’t think Biden likes Pakistan, regardless of Islamabad’s positive push for a new geo-economic vision. Biden's hawkish foreign policy approach views Pakistan as a major hub of international terrorism and jihadism. And so it appears redefining U.S.-Pakistan relations isn’t going to be quite easy. Of course, White House obligatorily urged the world to help “underwater Pakistan.” 🇵🇰🇵🇰🇵🇰

Visuals: BBC. Medium. Unctad.