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Harnessing China belt

In 2013, Chinese president Xi Jinping announced China’s intention to develop the Belt and Road Initiative (BRI).

The initiative aims to connect Asia with Africa and Europe via land and maritime networks along six corridors to improve regional integration, increase trade and stimulate economic growth.

According to the Chinese government, the BRI will promote development not only in China but around the world.

The transport corridor comprises a Silk Road Economic Belt—a trans-continental passage that links China with Asia, Russia and Europe by land—and a 21st century Maritime Silk Road, a sea route connecting China’s coastal regions with Asia, the South Pacific, the Middle East and Africa, all the way to Europe.

The $6 trillion initiative will involve more than 65 countries, reaching roughly  4.4 billion people  or 62 percent of the world’s population.

To finance the BRI, the Government of  China pledged $113 billion in special funds in 2017. This is about eight times the Chinese financial sector’s outward foreign direct investment (OFDI) flow in the same year.

Wholly State-owned financial institutions—the Silk Road Fund (SRF), the China Development Bank (CDB), and the Export-Import Bank of China (China Exim Bank)—received a majority of the funds pledged.

BRIcountries need to prioritise different types of infrastructure and investments depending on their needs and circumstances.

Choosing the right type of infrastructure investment is crucial if countries are to eradicate poverty and achieve the SDGs.

BRI priority areas provide opportunities for Malawi to achieve economic development. The BRI third priority highlights actions in transportation and energy infrastructure.

The initiative has the potential to assist this country achieve the Malawi Growth and Development Strategy (MGDS III) which is designed to contribute to Malawi’s long-term development aspirations. The MGDS III has five key priority areas, including energy and transport.

The strategy recognises that energy generation has been inadequate to satisfy the current demand both for industry and domestic use.

It further recognises that for Malawi, high costs and poor access to reliable transport and ICT infrastructure characterise the country and remain an important threat to faster economic growth.

Studies show that 89 percent of the country’s energy is still sourced from traditional biomass mainly fuel wood, contributing to excessive carbon emission.

Only 10.8 percent of the population have access to electricity—one percent in rural areas and 46 percent in urban localities.

Power Africa’s Southern Africa Energy Programme (2017) estimated that the country has installed capacity of 439 megawatts (MW), 384 being hydroelectricity and 55MW from diesel-powered plants. This is lower than the current demand estimated at 598 MW.

This leads to load shedding by the electricity supplier; consequently, electricity supply in Malawi is unreliable and micro and macroeconomic activities are significantly affected.

Being landlocked, Malawi transport infrastructure and services are recognised as key drivers of economic growth and poverty reduction, which ought to provide better connectivity to local, regional and international markets.

The country’s transport system is dominated by road transport which is considered too expensive, thereby constraining the development of business. Road transport handles more than 70 percent of the internal freight traffic and 99 percent of passenger traffic. Similarly, the road sector handles 90 percent of the international freight and passenger traffic.

Malawi’s transport costs remain among the highest in the Southern African Development Community (Sadc) region.

However, the Government of Malawi, with support from the World Bank, has developed the National Transport Master Plan, which provides a clear framework for delivering sustainable interventions to enhance the transport sector across Malawi for the period between 2017 and 2037.

The Master Plan can take advantage of the BRI for implementation.n

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