US trashes Chinese aid to Malawi

A leaked cable by former US ambassador to Malawi Peter Bodde to Washington has trashed Chinese aid to Malawi, describing it as a ‘Big Bark, Small Bite’. The cable says by contrast, America’s annual assistance to Malawi now stands at over US $100 million.

“And it already far exceeds China’s projected aid totals over the next three years, even before our expected MCC compact with Malawi,” says Bodde in the cable.

The cable, dated February 13, 2009 but released on August 30 last year, says since December 2007, when Malawi established diplomatic ties with the People’s Republic of China, there has been a lot of rumour and speculation about the amount of aid China would provide to Malawi.

Public Affairs Officer for the US Embassy to Malawi David Cowhig said he cannot comment on confidential US government communication without proving its authenticity.

But the cable claims both the Government of Malawi and the media continued to play up the significance of this new relationship with the world’s second biggest economy, thereby perpetuating what he described as “exaggerated expectations”.

“The GOM (Government of Malawi) created overly optimistic expectations when it unveiled its strategic switch from Taiwan to (mainland) China … The reality is that the Chinese have only agreed to complete two projects that the Taiwanese government had started,” wrote Bodde in the cable from WikiLeaks.

It adds: “Media reports have also played up increasing bilateral trade between China and Malawi, but here too reality is less than the hype.”

But responding to the cable, Director of Political Section in the Chinese Embassy Wang Junchao said since this information was written sometime back, it is clear that the cable is misleading as the Chinese government has set aside more resources for big projects in the country.

He said such new projects include the construction of primary and secondary schools, the sinking of boreholes and the biggest being the construction of a multi-million kwacha Agricultural Demonstration Centre in Salima.

“Both sides are working on the first ministerial meeting on China–Africa cooperation that took place in July to ensure that the Malawi government continues enjoying assistance from China,” said Wang.

He said China will be doing one project after another in Malawi in line with their capacity as well as priorities according to requests coming from the Malawi government.

Government spokesman Moses Kunkuyu said the government is satisfied with Chinese assistance to Malawi.

He said the New Parliament Building, the Bingu International Conference Centre and the five-star hotel, the Malawi University of Science and Technology, the Karonga- Chitipa Road and the proposed new stadium in Lilongwe are projects that reflect on the cordial relationship between the two countries.

“The relationship between the two countries is cordial and we stand to benefit more. They have left their door open and soon we hope to sit down with the Chinese government for a second phase of assistance,” said Kunkuyu who is also the Minister of Information and Civic Education. “We hope to benefit more from the relationship that exists between the two countries.”

But the leaked cable insists that the Malawi government has created an impression that China “represents a new, virtually limitless source of development grants and a similarly unlimited market capable of absorbing all of Malawi’s output.

“In fact, China has committed to fund only two projects – a road and the new Parliament building – and will offer concessionary loans to finance a few other projects,” said Bodde in the cable.

Washington’s former top envoy in Lilongwe also talks of a meeting he had with the former Chinese Ambassador to Malawi Lin Songtian on China’s aid levels to Malawi. The cable quotes Lin as acknowledging that China was committed to only two projects that will be funded as grants.

One is the completion of the Karonga- Chitipa Road at the cost of US $70 million (K23.25 billion) and other is the completion of the new National Assembly building in Lilongwe at the cost of US $41 million (K13.6 billion) noting that both project had been previously funded by Taiwan.

The cable quotes Lin as stating that the US $110 million in total funding for these projects represented an unusually large amount of assistance for China to provide to an African country.

Lin is also quoted as telling Bodde that although there are 350 million smokers in China, the Chinese prefer flue-cured tobacco in their cigarettes, not the burley type that represents the vast majority of Malawi’s production.

“Anyone expecting that Chinese demand for Malawian tobacco will absorb larger production at higher prices is bound to be disappointed,” the cable concludes.

It also mentions the current President Joyce Banda who was Foreign Affairs Minister at that time when she hosted a dinner in honour of the visiting Chinese Foreign Minister and gushed over China’s aid to Malawi in general.

The cable says Bodde had a conversation with Peter Mutharika who, according to the cable, initially commended the speed and magnitude of Chinese foreign assistance to Malawi, but upon further discussion admitted that most of it was in form of concessionary loans and could not be compared to US grants