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China brings dams back to Africa

Chinese investors have broken a boycott on investment in African dams – and loosened the grip of the environment lobby. This is good news for the continent, water expert Mike Muller tells Olivia Boyd.

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Mike Muller is a South African water expert, engineer and writer on development issues. He is also commissioner at South Africa’s National Planning Commission and a visiting professor at the University of the Witwatersrand in Johannesburg; a member of the Global Water Partnership’s Technical Advisory Committee and an advisor to the UN World Water Assessment Programme. He was previously director general of South Africa’s Department of Water Affairs and Forestry.

Olivia Boyd caught up with him on the sidelines of a water conference in Oxford, where he was speaking about China’s role in African hydropower development.

Olivia Boyd:  You argue that China has broken an “investment boycott” when it comes to hydropower in Africa. Can you explain what that means?  What was the boycott, and what caused it?

Mike Muller: The multilateral organisations and a lot of the bilaterals were essentially blocked from investing in large water infrastructure because environmental concerns had dominated the agenda. Western NGOs had actually constrained lending policy This is well-documented in the case of the World Bank, but equally true for a lot of other agencies.

The arrival of China as a significant investor in Africa has seen the emergence of a bilateral discussion about China’s interests and [African] national interests. And quite often out of that, power constraints have been identified as a priority, together with the opportunity to address those power constraints through hydropower.

The rash of projects that have been identified as soon as that opportunity opened is impressive and provides empirical evidence of the obstructions that existed before. The evidence is compelling that that it was Chinese engagement that has succeeded in removing the obstructions. As a consequence, you now see some of the other multilaterals, like the World Bank in Cameroon, relaxing what were previously very onerous conditions, and beginning to invest in water infrastructure again.

OB:  What were the impacts of the boycott, in your view?

MM: It essentially ensured that Africa stayed underdeveloped in terms of cheap and reliable and green hydropower. The figures show that Africa is the continent which has the least of its hydro-potential developed. And in many countries, as in the case of the Bujagali dam in Uganda, that opportunity – by far the most sensible approach to energy development – just wasn’t available because the finance required couldn’t be supported from local countries and had to be sourced from multilaterals and they wouldn’t give it.

In the case of Bujagali, there was a five-year delay [before it could move ahead]. We know electricity deficits caused a 2% GDP drop over that period. We can track what the GDP drop did to poverty rates. We can track what the poverty rates did to infant mortality. And I think it’s reasonable to say that in Uganda, on that one project, 10,000 children died because the country was prevented from using the best available energy source.

OB:  You say Chinese investors in Africa have broken this damaging pattern, but they have also come under attack – for riding roughshod over local interests, ignoring environment and labour standards, tying up with harmful regimes. Are such criticisms invalid? Is Chinese investment purely positive?

MM: No, but I think that Chinese investment has very clear rules. The rules seem to be that “we will talk to you as partners, and we will respect your preferences and your ideas”. Now, if you have a regime that doesn’t care very much about labour standards or environmental standards, or indeed care about the quality of work done, you’ll get poor infrastructure and you’ll probably get poor performance. I think what this does is throw the responsibility back onto Africans and their governments to decide what they want and then to argue about how to get it.

So I don’t think that all Chinese projects are good by any means. I’ve driven on some fairly appalling Chinese-built roads in various parts of the [African] continent. But equally, where countries have decided they want a good road, they’ve got a very good road. And I think what the Chinese relationship is doing, which is what the aid-effectiveness relationship is supposed to do more globally, is forcing countries to take responsibility for the outcomes that they get, rather than protecting them from themselves, which just enables them to always blame outsiders for their problems rather than looking to themselves for the changes that they need to make.

OB:  You have complained about a single-minded focus on environmental concerns and that worries about a particular Environmental Impact Assessment, for instance, can end up delaying a project.  Presumably your solution isn’t to do away with EIAs, so how do you get the right balance between environmental concerns and other concerns?

MM: I think that environmental protection, and more substantively the achievement of more environmentally sustainable economic and social arrangements, is a priority. We always forget that the Environmental Impact Assessment was originally supposed to be an environmental and social impact assessment. We’ve seen that the social element has largely been lost.  You never hear a substantive argument about the livelihood benefits of a project, you always hear about the environmental benefits and impacts. 

And my concern is that we need to rebalance the discussion to ensure that the loud voices of environmental advocates are heard, but are balanced by equally loud advocates for social equity, which is very important as well as for economic growth, which is a critical enabler of social development. And I think we’ve lost that. 

The Bujagali dam, for me, is just one extreme case where that has occurred.

OB: In China and elsewhere, many say one way to alleviate environmental pressures is to shift to small-scale hydropower as opposed to large-scale dams. What are your views on that? 

MM:  The evidence is that the proliferation of small-scale activity can do as much, and quite often more, damage than large-scale projects. In South Africa, we ban the construction of large numbers of small dams in some areas, because of the water inefficiency that they introduce, because of the additional evaporation. We know that problem has been identified in India as well.

So I think that “small versus large” is a complete red herring. You need to look then at the impact of a thousand small activities, and they are much more difficult to control and they are much more likely to be sub-optimal.

I recently visited the Three Gorges. I visited it when it was under construction and I’ve now visited when it was in operation. Quite frankly, I think in terms of scale, in terms of the amount of green energy you’re getting, in terms of the improved transport efficiencies, in terms of flood control, in terms of all sorts of economic benefits, in terms of the local tourism and employment benefits, you can really look at that project and say look at the costs and look at the benefits. And those kinds of costs and benefits would probably not have been achieved in small-scale projects in the same way that they were achieved there.

“Small versus large” is an important discussion to have. But I think it would be more useful to look substantively at those three pillars – the social, the economic and the environmental – and try to make sure that they are balanced. And my impression is that China has made huge strides in 10 years towards rebalancing their water resource management discussion and I would be very sad to see them moving in the direction of too great a focus on environment. Particularly if that’s then going to impact on their partner countries.

I find it interesting, and there is empirical evidence, that China’s re-focus has completely changed the dams and development debate. The anti-dam advocates are now turning most of their attention to China. They are very concerned about China, they are trying to influence it. I think we should be celebrating China’s contribution to African development in particular, even as we warn about the dangers of careless project implementation. 

Again, in the debates about China’s policy, we need to celebrate the very many benefits that we are getting from it, as well as being careful about the potential damage that it could do, if not properly managed. But the responsibility for that lies primarily with the African partners. And China must demand accountability and responsibility from its African partners and vice versa.

OB: So would that be your message to Chinese investors then?  Demand accountability?

MM: Demand accountability, yes. And if you don’t get it think about the consequences for yourself, and perhaps help your African partners to think through what that means for both parties

Olivia Boyd is managing editor at chinadialogue.

Homepage image by International Rivers. The photograph shows the Tekeze Dam, under construction on the Tekeze River, a tributary of the the Nile in Ethiopia. Funding for the project is being supplied by a joint venture company composed of Chinese and African sources.

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Infrastructure, inequity and impoverishment

The privately financed (implicitly expensive) Bujagali project greatly over-ran its cost projections. It will not generate as much power as projected - water levels have shrunk significantly in Lake Victoria due to Climate Change.

Repaying the project debt will impoverish the majority of Uganda’s population and worsen Uganda’s credit rating. Most of the population can probably not afford to consume the electricity even if it is distributed to them.

The “developer” of the Bujagali project is also the developer of the Amaila Falls project in Guyana, whose forecast cost has likewise greatly increased. Perhaps coincidentally, Transparency International ranks Uganda and Guyana amongst the most corrupt in Africa and America respectively.

Most of the projects which the article addresses are in countries exhibiting inequity, poor governance and democratic deficits. Contrary to what the interviewee suggests, the peoples of those countries are unlikely to have much say in the quality or procurement of these projects.

They are also unlikely to be given a say in their own future – which is largely determined by the greenhouse gas emissions of China, India and their major export markets.