Alazar Kebede
The Western Balkan economies are all small and underdeveloped, which should make them too small for far-away China’s attention. Not so. Due to their geographical position, these countries, Albania, Bosnia and Herzegovina, Kosovo, Montenegro, North Macedonia and Serbia, are an important piece of the Silk Road puzzle. China is building up assets in the region at cheap prices. It has no qualms to take on Western actors in the region in order to increase its own political influence.
According to Eurobarometer, at present, the EU is the main trade partner for the Western Balkans, accounting for 73% of its trade. China’s share of trade with the region is much lower, accounting for 5.7% of the overall trade in the region. The EU is also the main investor in the region, with more than 60% of the total FDI. By comparison, Chinese FDI in the region remains low for now, accounting for only 3% of the total stock to date. Serbia is the only Western Balkan country to date that has attracted sizable FDI from China.
Several economic analysts strongly argued that just looking at FDI numbers does not provide the proper analytical frame. In a way, China flies “under the radar” with its approach, which relies heavily on loans, not actual investments. The Chinese view the Western Balkans as a ripe target for more than one reason. The region suffers from a huge infrastructure gap and is cash-strapped and already debt-burdened, which does not concern the Chinese much, if at all. In addition, the Chinese are attracted by the loose regulation practices, lax public procurement rules and labor regulations which prevail in the Western Balkans.
Valbona Zeneli, Chair of the Strategic Initiatives Department at the George C. Marshall European Center for Security Studies stated that the main form of Chinese economic cooperation in the Western Balkans is lending for infrastructure projects, mainly in transportation and energy. Beijing has announced the building of two highways in North Macedonia and one in Montenegro. Overall, Chinese projects focus on Serbia, which has the region’s largest economy and accounts for 44% of regional GDP. The country has been pinpointed for projects worth more than 2.5 billion euros. The most significant project is the upgrade of the Belgrade-Budapest railway.
Valbona Zeneli noted that by modernizing the railroad, China would establish a transportation corridor between Piraeus in Greece and Western Europe via North Macedonia, Serbia, and Hungary. According to the original plans, the first train should have rolled through Hungary by 2017, but construction on the Hungarian side has not started yet. The main obstacle appears to be concerns of the EU Commission about the lack of transparency in the financial agreements between Hungary and China.
Valbona Zeneli further elaborated that in contrast to projects involving Hungary, Belt and Road Initiative infrastructure projects related to the Western Balkans are, of course, not bound by EU standards and regulations, which also look at the financial sustainability of projects. Absent such an evaluation, China’s much looser approach risks to create fiscal instability for the governments in the region, especially in view of entering large debt obligations. Many of the projects lack transparency and public debate on the open procurement procedures.
Professor Martin Hicks of Leeds University stated that contrary to the general narrative of Chinese “checkbook diplomacy,” the EU’s combined funds for infrastructure and economic development are larger and cheaper for recipient countries. The EU actually provides grants, while China’s financial involvement is limited to loans. Unfortunately, the EU’s offer is less appealing than the Chinese one because of cumbersome bureaucratic rules attached to EU funding. Of course, these rules have been developed over time to reduce the risk of financial opaqueness and save countries from reckless governments often serving their own corrupt interests. In that sense, Chinese loans and, still prevailing, practices in at least some of the Western Balkan countries fit like hand in glove.
According to Professor Martin Hicks, the reality is even worse. The famous Chinese “no-strings” mantra is anything but. While Western loans come attached with strings of conditionality in good governance and transparency, the Chinese funding is conditioned on the implementation of projects by Chinese companies which is mostly State Owned Enterprises, as well as the employment of Chinese workers. None of that helps develop the local economies. But that, of course, is never the interest of the Chinese side. It just seeks to export economic demand any which way it can, whether by goods exports, or “projects exports.”
But the Chinese are keen to cover their tracks. Throughout the Western Balkans, they have established cooperation in non-economic areas, such as in culture, education and science. The clear purpose is to increase bonds between China and each individual government, to balance for the lack of FDI.
It is a real game in which everybody is for themselves. Unfortunately, there is no public debate in the Western Balkans about the opportunities and challenges related to increased Chinese presence in the region. Dr. Bianca Stevens of Oxford University stated that the public does not have any real perspective of the governance model in China, and the geographical distance plays into China’s favor. With an increased investment of Beijing in soft power tools such as media, think-tanks, Confucius institutes, popular perceptions are shifting towards being more favorable to China. Some more far-sighted observers, especially in Serbia, describe China’s influence in the region as a new form of “neo-colonization.” The Chinese, for their part, are not much concerned about such criticism, as long as the majority of the Serbian population, for example, considers China the second-most important player and “credible investor,” right after Germany.
In 2017, the EU warned that “the Balkans can easily become one of the chessboards where the big power game can be played.” That is now a reality. China is intent on using the Balkans as an entry point into the European market and, to solidify its gains to date, even tries to promote its own political model in the countries of the region, exploiting their weak governance.
The question here is, is it EU’s own fault? Without clear prospects of EU membership, the Western Balkan countries could very well shy away from the costly normative alignment with the EU and the pain of good governance reforms. According to official statement of the EU, the latter require a long view, in a region that is very much consumed with meeting its own needs over the short term. Little wonder people look towards the Chinese with favor. After all, getting a loan now always sounds good, as the pain only materializes later.
In any case, China’s increased engagement in the Western Balkans is driven by a geo-economic and political logic. China’s main aim is to use the region as a gateway and a commercial platform to Western Europe, where the real Chinese interests lie, in its insatiable search for markets, technology and knowledge. The Chinese foothold in the Balkans does not have to be necessarily at odds with the European interests, as Chinese investment in the region increases connectivity and market integration. But due to a combination of factors, including the region’s political economy, prevailing public debt levels and spending restraints, economic competitiveness and deepening divergences on other security issues, China could become a challenging factor for the European future of the Western Balkans.
The Silk Road and The Balkan Region
Healthcare entrepreneur
The Jack Ma Foundation has just announced 50 outstanding African entrepreneurs who applied to the foundation’s charitable initiative Africa’s Business Heroes (ABH), which annually spotlights, trains, supports and gives African entrepreneurs grant funding totaling to 1.5 million USD, coupled with publicity and networking across Africa. One of these entrepreneurs is Helen Habteslasie Keleta.
Helen Keleta is the Founder and CEO of East Africa Hafeshawi Medical Center, a well-established health centre that was started in January 2018 in a convenient and highly accessible location in Kampala, Uganda. She is a mother of four, and an Eritrean Refugee living in Kampala since 2016. By profession she is an engineer and up until 2016 has been working with different family construction companies. After she came to Uganda she started living among the refugees in Kampala and noticed there is a language barrier amongst them and Ugandans. Especially when it came to health, this language barrier made it worse because ‘right patient-right information-right care-at the right time’ works well in life. This idea triggered Helen to invest in the medical care industry by getting different native professional doctors and nurses.
Helen established her business with a 5 bed capacity medical centre and expanded up to 25 bed capacity and opened two branches in different areas in order to reach all the refugees to reduce transport costs. At this time the company was exposed to international laboratory systems. Helen is good at interacting with different communities and loves to do what is asked of her to under her capital limit. Helen’s and her company vision is: To be the healthcare ‘’Provider of Choice’’ in terms of giving safe, quality, affordable high level health service and health awareness in East Africa. The company’s mission is to continually put the “care” and to provide respect, comprehensive, trusted, compassionate and integrated healthcare services that exceeds costumer’s expectations. Today, the business employs 40 people.
Capital spoke to founder Helen Keleta to learn more about her very unique entrepreneurial journey, her mission to make a positive difference to the lives of those in need of good, affordable healthcare, and her nomination for the ABH 2023. Excerpts;
Capital: Can you tell us about East Africa Medical center, its background and its focus?
Helen Habteslasie Keleta: First, my name is Helen Habteslasie Keleta, CEO, East Africa Medical Centre. I am an Eritrean Refugee living in Kampala, Uganda since 2016 and a mother of four children.
The refugee society in Uganda faces a major problem which is language barrier. And when it comes to health services, it becomes worst. Even though professionals can find out the result of a sickness through different investigations, which requires paying a lot of money, getting the right treatment, follow-ups and the right prescription is a challenge. Most of the refugee have financial problems and are unable to cover their transportation, consultation fee, examination and medication fee. Furthermore, the lack of communication is another big hurdle for them.
After finding out the main problem, I embarked on a business journey to establish the East Africa Hafeshawi Medical Centre. Launched with only 5 bed capacity, the medical center has now reached 25 bed capacity with two more branches inside Kampala. The medical center has created 40 jobs opportunities for Eritrean, Ugandan and Somalians doctors and nurses and serves refugees and local Ugandans.
- East Africa Hafeshawi Medical Centre is a well-established health centre started in January – 2018 in a convenient and highly accessible location in Kampala.
- Delivers information from government health centres and gives them a space to use it freely like vaccination and health awareness.
- Provides different types of health education and awareness through social media and through different religious institutions.
- The company has its own marketing department and reaches out to refugees by distributing fliers at places where they can be found.
- Leads the society to interact with Ugandans through blood donation and some other activities like environmental hygiene.
- The company expanded and opened different departments and increased the number of beds in order to avoid multiple referrals.
- Opened two branches to minimize transport cost and reach more number of clients and solve their problems.
- Exposure to international laboratory systems in order to get highly qualified professionals and meet the right standard. This increases the trust and revenue of the company.
Capital: What prompted you to participate in the Africa’s Business Heroes (ABH) 2023 edition?
Helen: I applied for ABH to promote my company and all the milestones I have been able to achieve throughout my journey as a refugee, get recognized and also connected to fund raisers. ”If ABH Lift ME Up, I can Lift up Others”. Getting this chance opens incredible opportunities and also positively inspires other refugees, especially women and mothers like me. And as a woman and mother of four, it will minimize my effort and time cost.
Capital: What attributes do you reckon have led to your shortlisting?
Helen: I have a forward-looking vision and the mission is excellent. This has been supported by great milestones showing great leadership in my community through various activities. This has been articulated well in my application.
The company is tackling a huge crisis with refugee language barrier and lack of communication. I am able to impact 15, 000 lives positively in such a short period of time and I was applauded by ABH judges for that.
My unique and inspiring story as a refugee has also made me uniquely qualified to understand the challenges that refuges face on their healthcare and ways of addressing them. The fact that my endeavour is associated to UN SDGs and with a sustainable business model has also significantly contributed to my shortlisting.
Capital: What does it mean to be among the top 50 finalists in a competition that is open to thousands of entrepreneurs from across Africa?
Helen: It was really unexpected for me! It inspires and encourages me to work hard more than ever. That is very uplifting. I have learnt that no idea is small in this world. Even small ideas can be bigger given time and consistency.
Capital: Does the government support you in any way?
Helen: Not at the moment.
Capital: What does the future hold for East Africa Medical Centre and how would you give back to your country?
Helen: On top of everything, our vision is to be the ‘’Provider of Choice’’ in terms of giving safe, quality, affordable, high level health care services and health awareness in East Africa. And our company’s mission is to continually put the ‘’care’’ and to provide respect, comprehensive, trusted, compassionate and integrated healthcare services that exceeds our costumer’s expectations.
We respect individuals by demonstrating a high regard for the value, needs and dignity of every patient, their family, associates and physicians. We value service over self-interest and always stay accountable to those we serve. We also provide service and care with continued respect for the holistic needs of individuals in our community by giving free medical camps, first aid services at events, vaccinations, health education and awareness, plus sponsoring artists and football teams to indicate that ‘Health is our priority’’.
Our future plan is to
- Expand and open up more branches to reach more beneficiaries and to grow the company
- Expand our pharmacy
- Work with Insurance companies to attract regular clients
- Offer additional medical services like imaging (x-ray, MRI and city scan), ambulance services and home care services among others
- Comply with the ISO standards and management system
- Open a nursing school with the cooperation of some universities
- Upgrade to a hospital level
Capital: Any advice to other women who would want to advance and succeed in your career path?
Helen: I would love to say that women need to follow their passion and always try to create ideas and think big. Women don’t have to be afraid of starting a business with any amount of money (small or big).
Capital: What do you say is the contribution of competitions like Africa’s Business Heroes (ABH) to fostering the entrepreneurship ecosystem in Africa?
Helen: It is impressive and motivating to have such opportunities which significantly contributes to the entrepreneurship ecosystem of Africa. Africa’s Business Heroes (ABH) competition opens an opportunity and guides to introduce African companies to the world. I am personally thankful to ABH and the opportunity it is providing to African entrepreneurs.
Capital: Anything else you would like to say?
Helen: I would love to thank APO Group and ABH for facilitating this exposure to my company. I would like to say that we Africans can make a difference to Africa, let’s just work hard and cooperate with each other.
THE HORN
The ‘Horn of Africa’ consists of the countries of Djibouti, Eritrea, Ethiopia, and Somalia. Out of these four, Ethiopia covers the lion’s share of the geographical space. Ethiopia’s land area is estimated to be about 1.1 million square kilometers, while the smallest, Djibouti has 23 thousand square kilometers. Somalia’s land mass is just over half of Ethiopia’s, while that of Eritrea’s is around 117 thousand square kilometers. Population wise; Ethiopia again dominates the region, with about 120 million people. Somalia is next with about 16 million and then comes Eritrea with about 6 million. Djibouti’s total population is roughly one million. Collectively the Horn houses a total human population of about 143 million!
In regards to ethnic composition; Djibouti is predominantly Somalis (60%) and Afaris (35%). Eritrea is mostly Tigrays and Tigres, making about 85% of the population. These groups belong to the Semitic branch of the Afro-asiatic speaking people. The rest are from the Cushitic segment of the Afro-asiatic speakers. Somalia is 85% Somalis of various clans, and the rest are mostly of Bantu stock. Ethiopia is a kaleidoscope of ethnicity. Diverse ethnic groupings collectively number around 80. About 90 languages and dialects are spoken in Ethiopia. In regards to religion, 99.8% of the Somalis and 94% of the Djiboutian practice Islam. In Eritrea, the Christians number is around 63% while the Moslems are around 36%, according to recent compilation by the Pew Research Center. 34% of Ethiopians are Moslems and 62% are Christians, amongst which 43.5% belong to the Ethiopian Orthodox Church.
The Horn is a semi-arid region, to a very large extent. Climate change, environmental degradation (loss of top soil, vegetation, etc.) as well as population explosion continue to affect all the territories of the Horn. These are common challenges that need serious cooperation by all states and peoples of the Horn. Limited agriculture is practiced in Somalia and Eritrea. The significant arable land in the region is found in Ethiopia. Even here, and given the ever-rising population, climate change, etc., structural food deficit has become an entrenched phenomenon. On top of these or may be because of these, wide spread droughts have become frequent and severe across the region. To arrest the ongoing and visibly increasing conflicts, which can easily lead to regional instability, serious collaborative initiatives must be braved by all and sundry. For a start, Horn wide meaningful population stabilization program must be launched in earnest. Feeding the existing 143 million strong is not easy; to say nothing about the future!
A lot must be done to bring lasting peace and harmony to the Horn. The sought after development of the region (always dangled in front of us) must be based on realistic assumptions predicated on the specificity of the locale. Cookie cutter proposals will not do, as we increasingly face the grave consequences of man-made and natural calamities. Make-believe narratives that do not hold water, should not be allowed to inform our major policy decisions. The nonsensical economic growth dogma, which doesn’t take into account the various limits to growth, must be replaced by more resilient paradigm. Admitted or not, deprivation is the order of the day in our so-called rising Africa. Daily, thousands of economic refugees flee Africa, desiring to enter the European Union. They feel their prospect at home is quite bleak. Such mass migration is obviously not sustainable.
Diversity is not always a problem, though it is always a challenge to manage it. Ethiopia remains one of the most diverse countries on earth and so far it had managed, willy-nilly, to survive. In contrast, relatively homogenous Somalia has been in utter chaos for the last three decades. Granted, bringing lasting peace/harmony to the Horn will be a formidable challenge. On the other hand and unlike before, the dominant interests of our world system seem to have reached a loose consensus as to the future of the Horn. If this assessment of ours is correct, what remains is: Can the Horn collectively leverage its strategic position to accrue peace and other dividends, going forward?
Maritime Authority prepares to put forth its fourth bid
By MulukenYewondwossen
After three consecutive bids to liberalize the multimodal operation of the Ethiopian Maritime Authority (EMA) hitting a brick wall, another round of invitation bid in the coming few weeks is set to take place, Capital has learnt.
The upcoming floating process is said to attract more promising companies to the scene.
As per the decision of the government to add four more multimodal operators besides the existing Ethiopian Shipping and Logistics (ESL), which has managed the scheme for almost 12 years, the authority has been floating bids. Unfortunately, the first two were refuted within a short time span while the third one was evaluated in detail, up until weeks ago when the EMA informed participants of the annulations.
According to the information from one of the potential bidders, the authority disclosed that the bid will be issued in the coming few weeks.
Since the government introduced the multimodal scheme in 2011, the ESL was established in the same year with the amalgamation of two long established and one new public logistics enterprises; Ethiopian Shipping Lines, Ethiopian Maritime Transit Service and Dry Port Service Enterprise, respectively. Later on, the Comet Transport, a land transport enterprise also joined the logistics giant.
However, in the grand scheme of things, the multimodal transport of goods proclamation no. 548/1007 does not impose the involvement of the private sector and is still a monopoly of ESL, which has been a point of contention between the private logistics operators and the government.
Cognizant of this, the government has in multiple occasions given its word to open up the sector for competition to which a tangible move was seen when the regulatory body issued a directive to give a license for those who have a capacity to join the scheme as per the pre conditions set on the document.
Despite the move being seen as a step in the right direction, things are yet to materialize.
According to the information Capital obtained from logistics actors who are showing interest to be part of the scheme, the last selecting process that was annulled about four weeks ago was canceled without any clear explanation, “Nonetheless, we were informed by EMA that the bid will be floated in the very near future.”
Bolloré Transport & Logistics Ethiopia, a French based company dominant in African logistics business that came in Ethiopia when the government partly opened the logistics sector on joint venture basis about three and half years ago, TikurAbay Transport Plc, a regional state enterprise,Ethio Djibouti Railways, a company formed by Ethiopian and Djibouti government with the major stake of the first, Panafric Global Plc,one of prominent freight forwarding companies in Ethiopia led by Elizabeth Getahun, the current president of Ethiopian Freight Forwarders and Shipping Agents Association, Gulf Ingot FZC Industries Plc, a UAE based company that operates in Djibouti and Ethiopia and Ethiopian Railways Corporation, which overlooks the Addis Ababa Light Rail Transit and other upcoming national lines, are some of the interested entities that are involved on the bid that was recently suspended.
According to the plan, the government has decided to include additional four multimodal players besides ESL.
According to the sector experts, the first two bidding processes were delayed due to the request from interested participants, who needed more preparation while the third one was almost done before it was suddenly cancelled a few weeks ago.
According to sources the bid is expected to be floated in the coming weeks but the specific date is not disclosed.
Currently, the major share of import commodities is managed under the multimodal scheme, which is a mode of transport scheme that included sea, railway, land or air from the loading port to destination.
There are criterions to be selected as a multimodal operator according to the directive issued about two years ago that includes; the company or enterprise to have a paid-up capital of 350 million birr in cash and other assets, where-in at least 10 percent shall be deposited in cash in a recognized bank.
The other precondition is that the company is expected to have or rent for minimum of 4 years properly fenced and secured minimum 5 hectares of land. “Out of this, a minimum of 3 hectares shall be well-developed terminals and a 3,000 square meter warehouse built with concrete and block,” the directive stated.
The bar set raised major concerns from potential local logistics companies who claimed it is very difficult for them to fulfill all requirements while on boarding a joint venture bases.
Experts on the sector said that on the fresh bidding process that is expected to transpire in the coming few weeks, additional bidders, particularly local players will take part in the bid.
