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Competition for Resources Fuels Rapid Infrastructure Development for Kenya

Discussion in 'Kenyan News and Politics' started by Smatta, Apr 15, 2010.

  1. Smatta

    Smatta JF-Expert Member

    Apr 15, 2010
    Joined: Nov 5, 2008
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    Competition for Africa's vast natural resources has intensified between two of Asia's economic giants. As China and Japan vie for access to east Africa's growing market, Kenya, the region's economic hub, is reaping the benefits.

    The Kenyan economy is poised for major growth as billions of dollars in infrastructure development projects have poured into the country in the past few years. But the money has not come from the county's traditional sources of funding, North America and Europe.

    Instead it is relative newcomers to Africa, China and Japan, who are funding infrastructure development in the east African nation.

    It was announced Tuesday the Export-Import Bank of China would loan Kenya more than $97 million to increase geothermal energy production in the country through the construction of a new power plant.

    This announcement comes on the heels of a $300-million loan from the government of Japan for geothermal production, which was unveiled last month.

    Resources play a major factor in both countries' interests in Kenya. Economically, Kenya is the gateway to trade for its landlocked neighbors.

    Countries such as Uganda, Rwanda, Burundi, the eastern Democratic Republic of the Congo and Ethiopia rely on Kenya to export their vast deposits of oil and minerals. Infrastructure development in Kenya is crucial to the economic prosperity of the entire region.

    Southern Sudan also hopes to benefit from Kenya's growth. The oil-rich region already relies on Kenya's ports for export. But a 2011 referendum, which could grant the south independence, would allow southern Sudan more control over its resources, meaning more oil through Kenya.

    Japan and China have taken notice. Toyota Tsusho, a trading subsidiary of the Toyota Group, recently declared its interest in building a $1.5-billion pipeline from the Kenyan coast to Juba, the capital of southern Sudan. China has also expressed interest in the project, and has offered to cooperate.

    Though many believe the nations are motivated primarily by oil, an analyst on the Kenyan economy, Robert Shaw, says Kenya stands to benefit tremendously from the projects.

    "One should not assume that every single deal is a good one for both countries, but I think these are areas that need some development," said Robert Shaw. "If we can improve our infrastructure, for example at the port, at the railways, at the oil pipeline, that alone will boost the country's economy enormously."

    But there is more at stake than just resources and development. China's aggressive outreach to Africa is seen by many as an attempt to expand its sphere of influence to a region that much of the world often takes for granted.

    Africa's 53 nations form the largest regional voting block in the United Nations, and according to a lecturer at the University of Nairobi's School of Diplomacy and International Relations, Gerrishon Ikiara, economic ties to Africa could prove useful to China in the international sphere.

    "Most of the countries, they are interested in having influence internationally," said Gerrishon Ikiara. "When it comes to the U.N. debates in a number of issues you can see China, sometimes, voting against the mainstream Western countries. All these countries require friends who can support it. Having those kind of friends is useful and one way of creating that friendship is through economic interaction."

    But not everyone is excited about China's relationship with Kenya. China's recent promise to fund the construction of a $3.5-billion port at Lamu, an island off of Kenya's north coast, has drawn criticism.

    While the economic benefits are expected to be significant, many worry the port's construction will destroy the ancient culture of the people who live there.

    The island of Lamu is one of the last remnants of traditional Swahili culture in Kenya. The island's inhabitants have fished the waters off its coasts for centuries, but construction could destroy the traditional breeding grounds of fish there, forcing many to find other means of subsistence.

    The proposed port will be the largest in east Africa and will greatly expand the region's capacity to export oil from southern Sudan and Uganda. While proponents of the project say it will create jobs for Kenya, many worry that Lamu's way of life will be forever altered.

    The development of infrastructure in Kenya is expected to provide vast benefits for hundreds of millions in the east African region, but it remains to be seen how the government will balance the need for rapid growth with traditional ways of life.