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Forum for the Future of Aid

Southern Voices for Change in the International Aid System Project

The Forum on the Future of Aid is an online community dedicated to research and opinions about how the international aid system currently works and where it should go next

organised by ODI

China-Africa Economic Relations: The Case of Zambia

By Inyambo Mwanawina, AERC, February 2008

This study provides information on the size, structure and significance of China-Zambia relations. It examines the nature and scope of Chinese investment in Zambia, looking at the pattern and magnitude of trade between them as well as the characteristics of Chinese development assistance to Zambia.
China’s engagement with Zambia is based on the Forum on China-Africa Cooperation, which has created new opportunities and challenges in Zambia’s development effort. The opportunity provided by China to tap on its experience in acquiring technology and financial resources needed to scale up the country development effort and move rapidly towards increased wealth creation and the achievement of the Millennium Development Goals. The challenge lies in turning and regulating Chinese interests in the country to the mutually benefit of both China and Zambia without endangering the country’s social-cultural heritage and environment.

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Lending Policies of the IMF: HIPC and Debt Relief in Africa

By Nancy Dubosse, AFRODAD

As the issue of aid effectiveness takes centre stage in the context of the looming deadline of the Millennium Development Goals, a spotlight shines on the International Monetary Fund (IMF) lending practices to low-income countries; particularly those in Africa.
This paper provides a brief survey of Africa’s indebtedness and the Highly Indebted Poor Countries (HIPC) programme and an identification of the main conceptual points of disagreement with the Poverty Reduction and Growth Strategy (PRGF) programme, which is a requirement of HIPC, demonstrated with country examples, and recommendations.

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New Developments in South-South Cooperation: China ODA, Alternative Regionalisms, Banco del Sur

By Isabel Ortiz

South-South cooperation is becoming increasingly important given criticisms on the current process of globalization. Since the 19th century, non-hegemonic countries and regions forged alliances as a strategy to reduce dependency and dominance from Northern powers. At the beginning of the 21st century, Southern countries remain associating to promote South-South cooperation. This article focuses on new developments in South-South Bilateral ODA and Investments (Emergence of China), the alternative regionalism in the South (Emergence of MERCOSUR and ALBA) and South-South multilateral Banks (Arab Development Banks, CAF and the potential of Banco del Sur)

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China in Africa: lending, policy space and governance

Author: Martine Dahle Huse and Stephen L. Muyakwa

This report aims to raise awareness on the issue of debt and new lenders in Africa, focusing particularly on China. It briefly introduce the role of China in Africa, highlighting some of the differences between China and the traditional lenders. The report looks at China’s lending modalities to African countries, its impact on governance and the issue of debt sustainability, presenting a case study on the relationship of Zambia and China.
The research found that China’s aid modalities are characterised by lack of conditionality but also lack of transparency and accountability. It also alerts about the potential nega¬tive impact on debt sustainability and the possible contribution to debt crisis in countries where governance is week.
The report stress the urgent need to establish internationally recognised legal standards for responsible lending. Additionally, it set down recommendations with a particular focus on the Zambia case.

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The Bank of the South Initiative

By Ruth Espínola Soriano de Mello

The author provides a summary of the conflicts and challenges in defining the Bank of the South’s foundation. Delays on defining key issues, such as objectives, structure and guidelines, among others, are related with important differences that exist among the countries.
Key areas of potential conflict have to do with the Bank’s role (regional central bank or traditional development bank), the composition of the capital stock, and the decision-making system (“one country-one vote” opposed to “one dollar-one vote”).
The establishment and consolidation of this new regional financial entity depends on the negotiations currently underway. Since so far the Bank’s foundations have been defined by the national executive branches, one of the major challenges is to incorporate legislative bodies, civil society, and social movements into the dialogue.

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