Vice-Chairman, Belt and Road Institute in Sweden
The White House staff edited the transcript of the remarks given by U.S. President Joe Biden during his meeting at the White House on September 25 with Prime Minister Mark Brown of the Cook Islands before meeting with Pacific Islands Forum leaders that day in Washington. The Pacific Islands countries are the Federated States of Micronesia, Fiji, Marshall Islands, Palau, Papua New Guinea, Solomon Islands, and Vanuatu. The edited text of Presidetn Biden’s remarks reads as follows:
“The second point I’d like to make is economic development. Strong growth begins with a strong infrastructure. So, today, I’m pleased to announce we’re working with Congress to invest $40 billion [million] in our Pacific Islands Infrastructure Initiative. We call it the PG- — PI- — anyway, it doesn’t matter what we call it, but that’s what it is. (Laughter.) I was going to get back to acronyms, and I’m going to — I’m going to — withstand not doing that.”
I completely agree with President Biden that economic growth starts with a strong infrastructure, and that the required investments in the Pacific Islands nations should be no less than US$ 40 billion. However, the White House staff and President Biden’s economic advisors disagree with both of us. Hence, the forced editing of the statement of the President of the United States of America, the leader of the most powerful military power on this planet. If President Biden is not allowed to utter such correct facts, the reader may imagine the level of deterioration of American democracy and freedom of expression, and also the level of ignorance of American and consequently Western economic thinking.
The 3-digit difference between billions and millions is the difference between reality and delusion(*) when it comes to measurements of the necessary investments to both guarantee the survivability of today’s societies, sustain their future economic prosperity, and above all ridding the developing nations off poverty. The recent flooding in the city of New York, happening for the second time in three years, is not a result of climate change but the lack of investment in the now aging infrastructure of this great city. The estimated requirements of investments in infrastructure globally for ensuring the sustainability of human societies and elimination of poverty is at least US$ 40 trillion!
A comparison between U.S. and China
The ridiculousness of the small-thinking of the U.S. Administration is everywhere to be seen in the minimalistic view of reality exposed by the proposals made to the U.S.-Pacific Islands cooperation. Any mention of “commitment” and “work with Congress” should be excluded from the calculation as they are a pie in the sky subject to changes of the political atmosphere in the close-to-civil-war conditions in the U.S. Congress. Thus, the real number of investments promised is around US$ 40 million. Most of this money will not be allocated to real infrastructure projects in these multiple nations. They are dedicated to “political reform”, “human rights”, and other exotic political projects related to “climate change”. These funds will be channelled through USAID and The Millennium Challenge Corporation (MCC), which are tools of American political and intelligence power.
Compare this to China’s involvement in one single nation in Africa, Djibouti, one of the tiniest nations of the continent with a population of only 1,2 million people and a land area of merely 23,200 square kilometres. Let’s read what the World Bank, an institution which is dominated by the U.S., said about the economic development in Djibouti in its April 2019 “economic update” for Djibouti. It states: “The medium-term economic outlook is positive, as the Government’s strategy of positioning the country as a regional trade, logistics, and digital hub gains traction. GDP growth is expected to reach 7.0 percent in 2019 before accelerating to 8.0 percent in 2020-2023. Growth will be supported by exports of transportation, logistics, and telecommunication services, as the country harvests dividends from its ambitious investment program”.
Another World Bank report, “Djibouti Country Overview,” published in October 2019, states:
“Djibouti’s US$2 billion city-state economy is driven by a state-of-the-art port complex, among the most sophisticated in the world. Trade through the port is expected to grow rapidly in parallel with the expanding economy of its largest neighbour and main trading partner, Ethiopia….
“Thanks to massive, public debt-financed investments in infrastructure, Djibouti has seen rapid, sustained growth in recent years, with per capita GDP growing at more than 3 percent a year on average and real GP at 6 percent. Growth is expected to reach 7.5 per cent in 2019…”
Some people might get scared by the usage of the term “public debt-financed”, but in reality the correct term is public “productive credit-financed” investments in infrastructure.
Furthermore, according to a report published by the U.S. Congressional Research Service in September 2019 under the title, “China’s Engagement in Djibouti,” we can read the following: “Djibouti is pursuing an ambitious agenda to transform itself into a commercial trade hub for the Horn of Africa region. This effort is being financed largely by the People’s Republic of China (PRC), which is playing a growing role in the tiny country. China’s engagement is multifaceted, ranging from major infrastructure investments to the establishment of its first overseas military base in the country. China considers Djibouti part of its Belt and Road Initiative; in late 2017 the two countries declared that they had established a “strategic partnership.”
According to this U.S. Congressional Research Service publication, China reportedly has provided nearly $1.5 billion in financing for major infrastructure projects in Djibouti since 2000. Among the projects being built by Chinese firms now is a $3.5 billion free-trade zone (FTZ), expected to be Africa’s largest. The first phase was completed in 2018 and is expected to create 200,000 new jobs [Djibouti’s total population was less than one million in 2018!] and handle over $7 billion in trade from 2018 to 2020. Three Chinese companies have stakes in the FTZ, alongside Djibouti’s port authority.
The U.S. Congressional report further stated: “Other Chinese-backed investment projects include the development of port facilities and related infrastructure, including a railway and two airports (a $420 million contract) and a pipeline to supply Djibouti with water from neighbouring Ethiopia (a $320 million contract). Ethiopia, a landlocked country of over 100 million people, which relies on Djibouti for the transit of 90 percent of its formal trade, recently facilitated the construction of a new rail line between the two countries. The line was built and is operated by two Chinese companies and was financed in part by China’s Export-Import Bank”.
So, Djibouti, which was a colony of France from 1883 to 1977—despite its enormous potential—had to wait more than a century to move from being an extremely poor country to start the development process described above with the help of China. The only thing the Western media have been reporting about Djibouti is that “China has built a naval base” there. Yet, the U.S., Britain, Italy, France, and Japan all have had military bases in the country, and the Chinese base just sits next to all the others. Most of the nations of the Pacific Islands are as small or smaller than Djibouti, which makes it extremely easy for such a major economy as the U.S. to make an enormous impact on their economies as China did to Djibouti.
The issue here is that the magnitude of China’s investments and depth of its vision are unmatched by any other so-called alternatives presented by the U.S. or the EU.
Why the West fails repeatedly
I was recently cited in an article by Chinese official news agency Xinhua reporting on this U.S.-Pacific Islands summit in the White House. It references my arguments in an article published recently on the website of our Belt and Road Institute in Sweden regarding the proposed India-Middle East-EU Corridor (IMEC) announced during the G-20 Summit in India last month. “The IMEC is a geopolitical game intended to woo India and attract other countries such as Saudi Arabia, the United Arab Emirates and Israel, said Swedish scholar Hussein Askary in an interview”, Xinhua reported. It further added that “the plan, the scholar added, is entirely out of touch with reality. Politicians pushing the agenda remain steeped in their own ideology, with a limited understanding of economics and a lack of knowledge of geography”.
This latter point was proven by the act of editing of President Biden’s statement referenced above, downsizing the pledged U.S. assistance to all Pacific Island nations from 40 billion to 40 million US$! This three-digit change is the distance between understanding reality and living in a delusional cloud of smoke.
The purpose of the work of our Belt and Road Institute in Sweden is not to ridicule and oppose the U.S. and the EU and praise China, but to bring the former two closer to reality and to cooperation with the latter, China. to help tackle the major challenges of humanity without the colonial luggage of geopolitics and zero-sum ideologies. Global peace and prosperity will depend on this kind of efforts. Our solid-physical economic and historical understanding of world affairs is the basis for our analysis and assessments.
* The term “delusion”, according to Oxford dictionary is “a false belief or judgment about external reality, held despite incontrovertible evidence to the contrary, occurring especially in mental conditions.”