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China’s decision to create the new bank is evidence of its emergence as an aid donor and its desire to put a stamp of its own on its development assistance. When viewed by Western value standards, China’s ODA program is problematic in a number of respects, as typified by its resource diplomacy in Africa. At the same time, however, China’s ODA has been offering opportunities for meeting needs that have not been effectively addressed by the international aid community centered on the OECD Development Assistance Committee and the World Bank (Shimomura and Ohashi 2013). Dambisa Moyo, an economist from Zambia, notes: “The West sent aid to Africa and ultimately did not care about the outcome.... China, on the other hand, sends cash to Africa and demands returns. With returns, Africans get jobs, get roads, get food, making more Africans better off” (Moyo 2009, 152).
Put Japan’s Experience to Work in the AIIB
When we consider the particulars of China’s ODA, we find much that is similar to Japan’s aid program in the past. Japan joined DAC in 1961 and has a history of over 50 years as a donor. Japan’s ODA has focused on developing industry through human resources development, provision of technology, and infrastructure investment based on a long-term perspective.
Japan deserves high marks for the major contributions it has made to industrial
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development in places throughout Asia, but given the fiscal constraints that our country now faces, we need to shift from being a big donor to a “smart” donor, making effective use of the limited budget available for aid. Japan need not imitate Western countries’ prioritization of poverty relief and humanitarian assistance but should pursue its own strategy, focusing on developing human resources, providing technologies, investing in infrastructure, developing supporting industries, and extending financial support. It should aim for synergistic coordination between the official aid program and direct investment by the private sector (Kurosawa and Otsuka 2015).
Japan’s experience confirms the crucial importance of infrastructure investment in development assistance. But it is wishful thinking for donors to believe that simply building infrastructure will be enough to create the necessary environment for investment by private companies and successfully achieve industrialization. As suggested by the experience of countries like Thailand and Indonesia, where assistance from Japan promoted successful industrialization, infrastructure investment must be conducted in tandem with assistance in other areas, such as human resources development, the provision of technology, the development of supporting industries, and financial support; only with this sort of multifaceted approach can industrialization be achieved.
It is not yet clear what sort of lender the AIIB will become. If, true to its name, it specializes in infrastructure investment, then Japan should tap its strengths to cooperate with it from the outside. And if Japan becomes a member, it should make good use of the bank as a channel for the implementation of development strategies based on its own experience. Whether it joins or cooperates from outside, Japan should act with firm conviction, confident in the knowledge that drawing on its store of experience can promote the success of the new bank.
Kurosawa, Suguru, and Keijiro Otsuka, eds. 2015. Kore kara no Nihon no kokusai kyoryoku (Japan’s International Cooperation in the Future). Tokyo: Nippon Hyoron Sha.
Marukawa, Tomoo, and Kai Kajitani. 2015. Cho taikoku Chugoku no yukue 4:
Keizai taikokuka no kishimi to inpakuto (The Future of Superpower China :
Tensions and Repercussions of China’s Emergence as a Major Economic Power). Tokyo: University of Tokyo Press.
Moyo, Dambisa. 2009. Dead Aid: Why Aid Is Not Working and How There Is a Better Way for Africa. New York: Farrar, Straus and Giroux.
Shimomura, Yasutami and Hideo Ohashi, eds., with the Japan Institute of International Affairs. 2013. Chugoku no taigai enjo (China’s Foreign Aid). Tokyo:
Nihon Keizai Hyouronsha.
September 1, 2015 Oil and the City Hope, Expectation, and Development in Ghana ThienVinh nguyen How does “oil money” shape a city? ThienVinh Nguyen, a Sylff fellowship recipient at Columbia University now enrolled in a doctoral program at University College London, used an SRA grant to observe how profits from oil are spent for the “development” of a port city in Ghana. During her eight-month-long research in the city, she saw oil companies spend enormous amounts on infrastructure development. Her report raises the question of who are the real beneficiaries of such spending.
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Introduction After a century of minor oil discoveries, in 2007 President John Kufuor announced that Ghana had discovered commercial quantities of oil in the Jubilee Fields off the coast of Sekondi-Takoradi. The International Monetary Fund estimates that oil and gas revenues from the Jubilee Fields alone could earn the Ghanaian government a cumulative $20 billion between 2012 and 2030, a figure that certainly makes an impact in Ghana’s national budget (Gary, Manteaw, and Armstrong 2009).
The question on everyone’s mind was: Will this be a blessing or a curse? Indeed, oil has been regarded by some as a dark, evil, corrupting resource. My research moves beyond this stereotype to explore the nuances of how the emergence of an ThienVinh Nguyen Sylff Fellow, 2010, Columbia University. Is now a PhD candidate at University College London. Conducted research on urban governance in SekondiTakoradi in 2013–15 with partial funding from an SRA grant.
oil industry transforms a city. Sekondi-Takoradi continues to change, as do cities all over the world, but the oil boom and the narratives around it enable new, ambitious, and fantastical development-driven visions for the city.
At the same time, we see an increase in citizens advocating for basic amenities and provisions—water, sanitation, electricity, and education—which the city has been slow to deliver in spite of the scale of oil-driven developments. Three major development projects are being promoted: the construction of a luxury shopping mall, the renovation of urban roads, and the expansion of Takoradi Many of Ghana’s offshore oil fields are located in the Western Region, whose capital is Sekondi-TaPort. koradi. Image courtesy of Hufstader/Oxfam America, 2008 Case Studies There is a small mention of the need for a mall in the current draft of the city’s development plan, and a South African developer has proposed the construction of a mall valued at between $65 million and $90 million (Ampratwum-Mensah 2015). Even though the local government and some residents support the project— seeing it as a sign of “modern progress”—others believe that there should also be a focus on ensuring that local citizens have access to basic services and provisions.
Even with its supporters, however, the mall project has faced serious challenges.
For one thing, the developers had to seek the support of the mayor, local government officials, and the police force to relocate the auto mechanics who had been “illegally” operating on the land. Some argue that these mechanics created a thriving local economy, while the developer and others say the mall will create new jobs and new public spaces.
Another development focus has been on roads. Roads are particularly helpful in getting political parties elected. With money from the oil boom, Sekondi-Takoradi has been improving its roads, especially those frequented by oil and gas companies and foreigners. The Jubilee Partners—the consortium of oil companies operating on the Jubilee Fields—also paid for the renovation of a roundabout they use frequently. A number of civil society organizations that I interviewed mentioned that while the paving of roads is welcome, the city is prioritizing development based on aesthetics that serves particular privileged groups, rather than meeting such community needs as water, sanitation, and electricity.
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Sekondi-Takoradi has historically been and continues to be an important port, shaped by the shipments of resource minerals through the city. Currently, Ghana is investing heavily into the Takoradi Port Expansion Project, with the first and second phases of the project budgeted at well over US$300 million. Financing comes in the form of loans: €197 million from KBC Bank N.V. and about US$176 million from the China Development Bank (“Takoradi Port Expansion: Breakwater Nears Completion” 2014). A core feature of this expansion project is catering to the needs of oil and gas companies, including the creation of an oil storage area. This impressive expansion project will continue to shape the city, with new mineral wealth flowing in and out of the city.
Amidst heightened economic activity and growing possibilities, President Kufuor and other politicians—including US Presidents George W. Bush and Barack Obama, who have both made visits to PHoTo by THienVinH nguyen, 2015 Ghana—promote the idea of hope and economic prosperity in the light of the oil discoveries, juxtaposing the promise in Ghana with narratives about weak states and the resource curse in Africa. These expectations are embedded in a context where Ghana is seen as a potential exemplar African state, capable of moving beyond the “tragedy” of resource mismanagement by continuing on its path as an Sekondi-Takoradi, like many other cities, is going through change, where the new and old converge and international-investor-friendly, demo- where different visions of development affect everyday cratic nation. Citizens recognize that life and the urban form of the city.
oil is a valuable commodity (despite declining oil prices) and that perhaps it has the potential to transform the income trajectory of all Ghanaians.
Over eight months in Ghana, I conducted interviews with civil society organizations, traditional authorities, Ghanaian government officials at various levels, local businesses, and transnational companies, including oil-related companies from Britain, the United States, France, and South Africa, among others. Although China provided the Ghanaian government with a $3 billion loan to build natural gas infrastructure (see: Mohan 2010), I learned through my interviews that most of the money was spent outside of the city: in building a major ECOWAS (Economic Community of West African States) highway and constructing the infrastructure for a natural gas pipeline farther west on the coast. There were also
wealth. Narratives about the potential for growth highlight how the city will be “one of the modern cities of the world,” with “skyscrapers, six-lane highways and malls” (Walker 2011).
I asked all of my interviewees how the city has changed. Some commented on how there has not been enough change and that money has not “trickled down”— meaning that they would welcome further social and infrastructural development and that the city is still very much lacking. There remain “slum areas,” with many residents lacking access to water, sanitation, and electricity. With regard to electricity, despite having offshore oil and gas, Ghana is undergoing an energy crisis, where the load shedding schedule is 24-hours off/24-hours on.
The city’s central Market Circle consists of an organized, though seemingly
chaotic, indoor and outdoor market areas, where one can find practically anything:
from live animals and produce to cheap imported goods. This area, though, lacks proper plumbing and trash collection—despite the fact that vendors here pay fees to the city for being there.
Others contend that the city has indeed changed, for better and for worse. With more foreigners in the city, rents and food prices have gone up, and there is increased road congestion. There are large, newly built villas, hotels, and bank buildings in the city. While a public school teacher or taxi driver makes less than US$300 a month, monthly rents for a three-bedroom house in the wealthier neighborhoods range from $2,000 to $5,000.
Given the myriad development issues facing Sekondi-Takoradi, the question is not if change will take place but how, at what rate, and who will benefit from this oil boom.
Ampratwum-Mensah, Akwasi. 2015. “EPA Holds Public Hearing on Proposed Takoradi Mall.” Accessed May 30. http://graphic.com.gh/news/general
Gary, Ian, Steve Manteaw, and Clive Armstrong. 2009. “Ghana’s Big Test: Oil’s Challenge to Democratic Development.” Oxfam America. Ghana Statistical Service. 2014. “Gross Domestic Product 2014.” Ghana Statistical Service. www.statsghana.gov.gh/docfiles/GDP/GDP_2014.pdf.
Hufstader, Chris. 2008. “The Coming Oil Boom in Ghana.” Oxfam America. October 1. http://www.oxfamamerica.org/explore/stories//the-coming-oil-boom
Mohan, Giles. 2010. China in Ghana: Easing the Shift from Aid Dependency to
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Oil Economy?(ARI). Real Instituto Elcano. http://biblioteca.ribei.org/1965/1/ ARI-149-2010-I.pdf.
“Takoradi Port Expansion: Breakwater Nears Completion.” 2014. May 16. http:// www.ghanaweb.com/GhanaHomePage/business/artikel.php?ID=309576.
Walker, Rob. 2011. “Oil Boom Changes Face of Ghana City.” BBC, March 8, sec.
Wilde, Alberto, Ishmael Adams, and Brian English. 2013. “Fueling the Future of an Oil City: A Tale of Sekondi-Takoradi in Ghana.” Global Communities. http:// www.globalcommunities.org/publications/2013-ghana-fueling-the-future-of