Friday, May 3, 2013

Chinese aid to Africa: A detective story


http://www.lowyinterpreter.org/post/2013/05/02/Chinese-aid-to-Africa-A-detective-story.aspx


Chinese aid to Africa: A detective story

By Philippa Brant - 2 May 2013 12:40PM

Philippa Brant is a Lowy Institute Research Associate.

Earlier this week a massive database of Chinese development finance activities in Africa
(warning: big PDF) was launched by <http://www.aiddata.org/content/index>
AidData and the <http://www.cgdev.org/> Center for Global Development.

This endeavour involved a team of researchers and has taken more than 18
months, and sought to find and classify all instances of Chinese development
finance to Africa from 2001 to 2011. Anyone who has attempted to quantify
Chinese aid would know this is no mean feat. Despite recent efforts on the
part of the Chinese Government to release more information about its foreign
aid program, details at a project, sector or indeed country level remain
difficult to determine. This database thus potentially offers a valuable
resource.

 

According to the accompanying report, China's involvement in Africa amounts
to some 1673 'officially financed' projects totaling US$75 billion over the
past decade. This figure includes foreign aid (ODA), 'other official flows'
(OOF), and financing that probably fits in one of these categories. It also
includes 'committed' projects that have not yet (and may never) be started.
It should therefore not be compared directly to the foreign aid data of DAC
donors.

Questions have been raised about methodology. It relies primarily on media
reports of Chinese development activities. China Africa expert Deborah Brautigam summed up her concerns on her blog:

The main problem is that the teams that have been collecting the data and
their supervisors simply don't know enough about China in Africa, or how to
check media reports, track down the realities of a project, and dig into the
story to find out what really happened. You can start with media reports,
but it is highly problematic to stop there.

To be fair, the authors have been at pains to outline the limitations of
their data collection methods. They've published a detailed document
outlining their process step-by-step link is down at time of
writing). Indeed, they should be lauded for developing an open-access
database and encouraging improvements through crowdsourcing. The ability to
disaggregate by sector, country, financing instrument, or project status is
of immense help to other researchers.

The authors admit that this methodology is most effective as a research tool
when (a) the data are made widely accessible to users with the knowledge to
identify errors and (b) it leverages complementary qualitative
data-collection methods (such as in-country fieldwork and outreach with
personnel involved with specific projects) to prevent over-reliance on media
reports.

However, as Brautigam warns, the problem with publishing unclean data is
that it will be reported as gospel. This is already proving true. The
findings have been reported widely. The nuance and caveats are lost. My taxi
driver even quoted the figure to me. Their crucial caveat - 'we issue a firm
warning to all data users: the available reporting on Chinese finance in
Africa is far too nuanced and imperfect for sweeping generalizations' - has
not been heeded.

Understanding and calculating Chinese foreign aid is a challenging task. It
requires a deep understanding of how the Chinese aid system works, how to
classify different forms of financing, as well as the politics surrounding
the reporting of data. In my own research into Chinese aid in the Pacific
and Southeast Asia over the past five years, I have confronted many issues
with quantifying data. I'm still learning. It is crucial to triangulate
data. Media reports are often a great place to start, but you cannot stop
there. An announcement of a Chinese aid loan for US$200 million in 2006 can
turn out to be a commercial loan of Fiji $200 million that wasn't disbursed
until 2009, for example.

You have to be willing to be a detective and 'follow the money', something
the authors of this database acknowledge but haven't yet done to the full
extent necessary (47% of their project records rely on a single source).
What do local budgets report? What about Chinese sources? It may be a matter
of translating a report in Portuguese from a development partner meeting in
Timor-Leste and comparing it with announcements on the Chinese Embassy
website and Timor-Leste Ministry of Finance budget documents. It may be
necessary to go to Papua New Guinea and ask their officials and the Chinese
Embassy to confirm details. Or even better, engage a local partner to
assist. It isn't always easy. It may not always work. But it can be done.

Despite my reservations, I think this database can be a good resource if
used wisely. Now that it is published, I hope other researchers will take up
the authors' call to arms to improve and clean the data. I only wish they
had waited for more accurate data before publishing. Like the  ill-fated Congressional Research
Service data before it, the CGD/AidData US$75 billion Chinese 'aid' figure
will unfortunately be circulated for years to come.

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