East Africa to Get a New Port

Sunday

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If you ever had it in mind to see the pristine northern coast of Kenya, and especially Lamu island with its UNESCO world heritage site old town and the Lamu archipelago, you had better get there soon. Africa is changing. Industrialization and development is coming to East Africa on a scale heretofore unprecedented. Now the project has officially gotten underway (Lamu port project launched for South Sudan and Ethiopia) and it is likely that the way of life in the region will be changed forever.

It would be difficult to name all the ways in which the planned port and its associated infrastructure will impact East African economic development. You can see on a map of Kenya’s road network that Lamu has been off the beaten track. The main A109 road of Mombasa to Nairobi follows pretty much the same path as existing rail infrastructure. The Lamu Port and Lamu Southern Sudan-Ethiopia Transport Corridor (LAPSSET) will involve road, rail, and oil pipeline connections to Lamu (as well as a port at Manda Bay, an oil refinery at Bargoni, three airports, and three resort cities). The map above shows some existing infrastructure as well as regions of Kenya slated for petroleum exploration. You can read a fairly detailed sketch of the petroleum geology of the region at the Africa Oil Corporation website. The company appears to be based in Vancouver B.C. In the map below you can see the proposed development, with the road, rail, and pipeline network passing through the area to be explored and connecting South Sudan and Ethiopia to Africa’s newest Port.

While many of the businesses in Lamu no doubt welcome the development, many in Lamu are concerned for their future, and rightly so. (Cf. Audio slideshow: Kenya dhow captain fears new port, Kenyan town awaits port with trepidation, and Save Lamu) It is likely that nothing will ever be the same again. Even if the governments involved in the project are good their word in attempting to retain the character of Lamu’s tourist area and in protecting the environment, economic development on this scale cannot fail to alter the way of life in the region. Construction crews will arrive, and they will need places to eat and sleep. They will also take time off, and they will have money to spend. All the familiar camp followers and profiteers will seek to relieve these construction workers of their paychecks, and in so doing they will make their own contribution to the economy of the area.

After the facilities are built and operational, different economic forces will come into play. There will be regular jobs with regular salaries, and their will be foreign experts and consultants who come. The burgeoning economies of India and China, and indeed many growing economies around the Indian Ocean, will have a growing appetite for oil, and as oil both increases in cost and begins to flow from South Sudan through Kenya and from Lamu’s port into ships that will sail the world’s oceans, the sheer volume of money involved in such transactions will influence life in the region as well. With money come bankers and financial services industries. With trade connections through the region come international relations and the need to be involved in the affairs of other nation-states.

LAPSSET is being billed as the largest infrastructure project ever undertaken in Africa. It is not likely to be the last. Africa’s infrastructure has lagged substantially behind that of the industrialized world. This has retarded economic development. As Saudi oil money in the later twentieth century was re-lent out for infrastructure projects through the developing world, now in the twentieth century China’s capital generated from its rapid industrialization needs to find investment opportunities. Many of these are likely to be in Africa. There has been a steady stream of stories in the financial press of Chinese money and Chinese expertise employed in large development projects in Africa. I wrote about this in Unintended Consequences in Africa, and more recently the Chinese financed and Chinese built African Union Headquarters in Addis Ababa was inaugurated by Chinese President Hu Jintao.

It is easy to read sinister implications into China’s involvement in Africa, as it was easy to read sinister implications in the disposition of Saudi oil money during the 1970s (think of what the term “petrodollars” means to most people). Money, like industrial development, takes on a life of its own. Both can be controlled (to a limited extent) and regulated (with more or less success), but neither can be wished away. Africa and China are today becoming locked into a “special relationship” because of historical contingencies that cannot be changed and must find some form of expression. It is in the interest of those nation-states that are already industrialized to contribute constructively to the development of Asia and Africa, rather than to respond with fear and apprehension.

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Note added 17 March 2012: There is an interesting article in the East African Standard, Lamu port deal leaves Khartoum feeling put out, describing Khartoum’s growing sense of isolation as a result of being denied membership in the East Africa Community (EAC) and the initiation of the Lamu port project, which includes a pipeline from Juba (in South Sudan) to Lamu. The Sudanese are even pursuing a case of “economic sabotage” at the African Union. Apparently, Sudanese officials haven’t read Hume’s argument about jealously of trade, or they would know that have a thriving East African Community on their border could only be good for the Sudanese economy.

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Trouble Brewing in the Desert

Monday

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The aftermath of the fall of Gaddafi and the violent transfer of power in Libya is beginning to make itself felt through the region. Several stories have come out of Libya itself of conflict between tribes and factions within the country over predictable issues of power sharing, the division of spoils, and acts of revenge and reprisal, as well as conflicts between and among these groups. The transitional government is weak and inchoate, if it could even be said to exist at all. Weakness means vulnerability in the state of nature than exists among nation-stats, and it is inevitable that outside powers will seek to influence events in Libya. One must suppose that spooks and spies from all over the region have been dispatched to Libya, and that some of the disorder in the country is the work of agents provocateurs.

On 11 February 2012 the BBC story Libya’s Saadi Gaddafi threatens to lead uprising reported that Muammar Gaddafi’s son Saadi Gaddafi (who had previously tried to flee to Mexico) appeared on television on Niger threatening to lead a rebellion against the transitional government in Libya. The next day there was a much more detailed story in the Financial Times by Borzou Daragahi in Tripoli, Libya on alert after warning from Gaddafi’s son, which had some interesting information on the strained relations between the transitional government in Libya and the nation-states of sub-Saharan Africa. Muammar Gaddafi had curried favor in the region by spreading Libya’s oil money around; that largess has come to a screeching halt, with the predictable consequence that nation-states in the region are suddenly sentimental for the ex-Libyan strongman.

Muammar Gaddafi liked to dress the part: here he is seen with other now-deposed North African heads of state, who chose the Western business suit look. Is Saadi Gaddafi seeking the constiuency once served by Mubarak, Zine el Abidine Ben Ali, and others?

Interestingly, in this television appearance Saadi Gaddafi is wearing an expensive-looking Western business suit, sitting in a large overstuffed leather chair, and surrounded by symbols of wealth, opulence, and power. He looks, to put it plainly, like he is seated in an office of executive power. This is clearly meant to send a signal, and that signal is this: I’m alive, I’m in control, I have money and backers and influence and you can’t touch me. While this is a powerful signal, it is also not exactly what I would have expected. His father made much of cultural appeals, often dressing the part with theatrical panache. when the elder Gaddafi wanted to appeal to Arabs, be positioned himself as a Arab and dressed as one. When he wanted to appeal to Saharan and sub-Saharan Africans, he positioned himself as an African and dressed the part, and would engage in heated anti-Arab diatribes. So what is Saadi Gaddafi’s intended constituency when dressed as a Westernized businessman? The obvious answer would be “western businessmen,” but in this case I do not think that the obvious answer is the correct one. I will wait for more clues before I hazard any more guesses on this head.

In the map above I have put numbers in the nation-states indicating the number and location of Muammar Gaddafi’s surviving children: Saadi Gaddafi is in Niger, Saif al-Islam is at home in Libya, a prisoner of the transitional government, and in Algeria there are Muhammad al-Gaddafi, Hannibal Gaddafi, and Ayesha al-Gaddafi. Interestingly, the Gaddafis in Algeria have been quite silent, whereas Saadi in Niger is in front of television cameras — precisely the reverse of what I expected. And then I put a star in Mali to represent the clashes there.

Meanwhile, elsewhere in the Sahara, Tuareg tribesman who served as Muammar Gaddafi’s mercenaries for many years (read: well-trained and well-armed) have returned to their native regions, mostly in Northern Mali but, being nomads, they travel across Algeria, Niger, Chad, and Libya as well, and are reinvigorating an old insurgency of Tuaregs against the Malian government based in Bamako. I say, “based in Bamako,” because if you look at a map you will see that there is a lot of desert between Bamako and the Mali-Algerian-Niger border region. It will be extraordinarily difficult for the government of Mali to effectively project power in this periphery, and especially so against desert nomads who call the region home. Strategic Forecasting has published an excellent analysis of the Tuaregs in Mali, Mali Besieged by Fighters Fleeing Libya, which details some of the problems that Malian government is having and will have.

The government of Mali claims that the Tuareg rebels are affiliated with al Qaeda in the Islamic Maghreb (AQIM), while the Tuaregs make the counter-claim that they will be a bulwark against AQIM. In other words, AQIM is in play in Mali. At the same time, other al Qaeda identifying representatives have urged support for the rebels against the Syrian government. The relationship of this to North Africa is distant, but, I think, still significant. Notwithstanding the fact that Syria is ruled by the minority Alawites, who are Shia, and al Qaeda affiliated groups tend to be predominately Sunna (which would make the al Qaeda support of Syrian rebels comprehensible under any circumstances, and therefore not surprising), one can see this as a preemptive move by rump al Qaeda elements to get back in the game after having had most of their apex leadership killed. The relation to the Sahara is that a similar dynamic could emerge here, with al Qaeda shifting its focus from its traditional preoccupations to supporting the overthrow of regimes of all kinds, so that the ensuing chaos might be exploited. With this stance comes the popular sympathy and street cred of having sided early with rebels who are ignored by other powers, and therefore being in a position of disproportionate influence should those rebels prove successful.

We now recall, in this context, that the elder Gaddafi himself tried to play both sides of the al Qaeda card, at one moment warning the Western powers (essentially), “Après moi, le déluge,” while at another moment trying to hijack popular Islamic sentiment by seeming to align himself with the goals of al Qaeda. Thus one message that Saadi Gaddafi’s business suit may be intended to send is that, “I’m not al Qaeda,” but, of course, he could change that with his next television appearance. And, also of course, there is a diplomatic advantage to being unpredictable, especially when acting against the predicable purposes of established nation-states.

In The Gaddafi Diaspora I suggested that:

“…North and Central Africa are complex crossroads, made all the more complex by recent events. With all these forces in play, the Sahara Desert may become a periphery that decides the fate of the political centers of the region. The momentum of history, at least in Africa, has passed into the vast emptiness of the interior of the continent. This will be a theater to watch in coming years.”

I continue to think that the Sahara may yet prove a disruptive theater in future African affairs.

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My Spaceflight Utopia

Tuesday

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In my account of the 100 Year Starship Study Symposium Day 3 I touched on the utopian character of many of the presentations. This utopianism was not limited to those who presented in the philosophical and religious track, but was perhaps most obvious in those discussing the institutional, organizational, and financial aspects of a starship project.

In my own presentation (which I discussed in 100 Year Starship Study Symposium Day 2) I explicitly foreswore utopianism, emphasizing that the future of civilization as I saw it was in no sense a utopian endeavor; even if we do not destroy ourselves or suffer a crippling failure of nerve that keeps us from striving toward greater things, the long-term human future as a spacefaring species will be as mixed as the human record on the earth.

After my presentation a fellow approached me and asked what I thought was the best approach to initiating a spacefaring society. I said that open markets, commercial competition, and low barriers to entry are the best bet for our future in space. Some of the earlier speakers had expressed their open suspicion of market-based economies, and when there was an open discussion after the presentations I grabbed the microphone for long enough to say that no planned economy has ever functioned efficiently. Stuart Brand began to take issue with this, and I added that there are, of course degrees of planning. In any case the point is that more planned economies are almost always less efficient than less planned economies, with the result being that unplanned economies almost always overtake planned economies, and this is one reason the plans of utopian communities almost always go awry and the utopia is transformed into a dystopia.

In any case, when I was pressed for more details by the fellow who was asking me questions after my presentation (I’m sorry I didn’t get his name), I responded, “Here’s my own personal utopian vision for human spaceflight.”

I went on to mention the African Space Research Program, that I previously wrote about in An African Space Program, and I suggested that if one of the Persian Gulf oil Sheikdoms such as Qatar or the UAE or Kuwait, looking for a place to put their billions, invested a large amount of money in the ASRP that the latter could afford to buy the equipment that they need and to hire the outside expertise that would make the difference.

Many of the Gulf oil Sheikdoms are awash in money from high oil prices, many of them are looking to invest that money, and many of them spend vast amounts of money on futuristic cities in the deserts of the Arabian Peninsula. It seems to me like the perfect opportunity to invest in a project with potentially great rewards in the future, to demonstrate one’s forward-thinking by becoming involved in a space program, and to do all this without the bureaucratic, institutional, and regulatory entanglements that threaten to smother the older and more established space programs of the Western world.

It would be a real competitive shot in the arm to the state-sponsored space programs of the US, Europe, Russia and China to be blindsided by the effort like this. Chris Mnamba of the ASRP has shown that he has the vision; the Gulf Sheikdoms have the money; to me it looks like a match made in the heavens. And one would think that at least one of the sheikdoms would like to add a spaceport to their gleaming modern cities.

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Unintended Consequences in Africa

Thursday

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The Alsalam Bank Tower under construction in Khartoum. Alsalam Bank Sudan won 'Best bank in Sudan' award for 2008 by Global Finance magazine.

It little known, little realized, and little understood in the West that during the past few years when Western governments have been attempting to put pressure on Sudan because of the events in Darfur that Sudan has not been and is not now just another basket case of an African economy. Throughout the period when it was most strongly condemned by Western governments, the Sudanese economy has continued to grow, and to grow vigorously. Some Sudanese cities are sprouting like oases in the desert, and many buildings are rising in the capital, Khartoum. Needless to say, the Sudanese government can afford its impunity vis-à-vis Western governments under these conditions.

Chinese engineers assemble steel at a construction site in Sudan’s capital Khartoum.

Much of this growth and development has been the result of oil revenue and industries connected with the oil industry. Much of this growth, including the growth of the oil sector, is the result of China seeking energy resources and raw materials for its industries in Africa, including Sudan. There has already been a backlash in some African countries over the high profile of Chinese industrial concerns, but this has done little to slow the involvement of Chinese industry in Africa. There have been some compelling stories and pictures in the Financial Times about this development (not to mention the Korea Times).

The 230 room Burj Al-Fateh Hotel in Khartoum, Sudan.

I like to imagine what it must be like for young Chinese engineers to suddenly find themselves in Africa, working on enormous projects, and in a climate and a society so different from that which they came from. Someday there will be books written about such experiences. I hope they’re taking detailed notes.

I was thinking about economic development in Africa today because of a fascinating article in today’s Financial Times about the Somali diaspora in Kenya. The Financial Times regularly includes extra sections devoted to particular geographical regions or topics. Today’s Financial Times came with an extra section on Kenya, and this included the article Somali factor drives up price of property.

Mogadishu street life.

We all know that Somalia has been without a functioning central government for more than a decade, and that large sections of Mogadishu are in ruins from years of war, but what we perhaps did not know was that the Somali diaspora scattered across Africa has brought its assets to other regions, and they have made a real difference in Kenya. There is a question as to the legality of this money, and we can be sure that at least some of it represents ill-gotten gains. There is in particular the charge that Somali money comes from piracy, and we know that the lawlessness of Somalia has allowed piracy to flourish in some coastal towns.

A hawala version of informal value transfer systems.

But it seems that the Somalis are also active in the traditional money-lending institutions of east Africa. Because of the interest prohibition in Islamic societies, the banking business operates differently in the Muslim world, but banking services are not absent. There is a traditional form of money transfer that takes place throughout east Africa and the Arabian Peninsula by which a closely associated network of individuals, functioning almost entirely upon trust, move money from place to place for a fee with a simple phone call. This is known as the hawala system. For example, say an individual in Mombasa wants to send money to a relative in Muscat. He goes to a local hawala broker, a hawaladar, gives him the money and a commission, this broker then calls another local agent in Muscat and instructs him to give a like amount of money to the individual in question in Muscat, and the agents periodically settle up accounts. Since there is always money coming into and going out of each agent, the system continues to function with periodic adjustments.

Being in banking is usually profitable. We ought to recall that the renaissance banking houses of Italy made possible the financing of lavish renaissance art financed by wealthy families like the Medici, just as early modern banking houses in ultramontane Europe, like the Fuggers and the Rothchilds, financed the growth of European industry and culture north of the Alps. The Somalis, it seems, are tapped into the banking network “Middle World” (to use Tamim Ansary‘s phrase). These networks are sometimes called “Informal Value Transfer Systems” (IVTS), but they are only “informal” in so far as Western banks are not involved and such networks have no formal charter. In so far as the cultural conventions of the societies who use such networks extend, such networks are part of a formal commercial economy.

This Somali access to capital has had unintended consequences, especially for the Eastleigh neighborhood of Nairobi, where property values have been on the increase due to the influx of Somali money. The Somalis have also employed their access to capital to become among the most successful traders in east Africa, sourcing goods directly from east Asia. It is an impressive achievement for a people whose homeland has been devastated, not unlike the feat of the Jews in Western Europe in creating a wealthy diaspora community cut off from its traditional homeland. I personally find it counter-intuitive that these apparently wealthy Somali traders don’t find a way to establish order and security in Somalia, but history is like that sometimes. The only thing one can be sure of is that further unintended consequences will follow.

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