Lesotho: Re-Examine Sino-Lesotho Economic Ties - Analysts

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Composite image of the flags of China and Lesotho.

LESOTHO needs to re-examine its relations with China in view of persistent reports concerning Chinese companies who have virtually taken over every facet of the economy, grabbing lucrative tenders for major infrastructural projects thus prejudicing local companies, analysts have said.

There is a growing feeling among different sections of the population that while China is doing a lot to assist Lesotho's development agenda, the assistance has come at the heavy cost of economic opportunities for Basotho.

If it is not the players in the retail industry complaining about the proliferation of Chinese businesses in their sector then it is the wool and mohair farmers complaining that new legislation has made them beholden to the Chinese who have been given a monopoly in the sale of wool and mohair to international markets.

Last week, it was the turn of local contractors to petition the Public Accounts Committee (PAC) to act against what they consider to be the capture of the state through the awarding of major construction tenders to Chinese companies.

PAC chairperson Selibe Mochoboroane also proffered his personal views on the issue, saying that the Chinese dominance of the local economy amounted to a "recolonisation" of the country and the government would do well to rectify the situation before it was too late.

Mr Mochoboroane and Basotho are not alone in asserting that there is a 'new wave of Chinese economic imperialism' as the same arguments have been raised by politicians and analysts in many countries on the African continent.

In Zimbabwe, the leading opposition presidential candidate, Nelson Chamisa, has made it one of his key electoral campaign promises to immediately institute an inquiry into tenders awarded to Chinese companies if elected to power in that country's elections that are scheduled for 30 July this year.

Mr Chamisa has taken a leaf from the late Zambian president, Michael Sata, who a few years ago, came to power on the back of promises to revisit all the tenders that were awarded to the Chinese in his country.

On several occasions, Chinese President Xi Jinping, has himself spoken about the need for African countries to "explore development paths suitable to their own national conditions" which will ultimately contribute to self-reliance.

The Forum on China-Africa Cooperation (FOCAC) is also predicated on the provision of "assistance to Africa's independent and sustainable development for the sake of win-win cooperation and common development".

But local companies and their counterparts on the rest of the continent say the reality is that China has done so much to undermine that "self-reliance" through stringent loan conditions that compel the receiving African countries to accept Chinese companies to undertake the major construction projects.

Such is the entrenchment of Chinese hegemony in Lesotho and elsewhere that even the smallest retail outlet in the remotest village or steeple is said to be owned by a Chinese national.

And analysts who spoke to the Lesotho Times are all in agreement that while assistance from China or elsewhere is necessary for Lesotho's development, it need not come with conditions that deprive local businesses of a stake in the economic opportunities in their own country and ultimately reduce Lesotho to a Chinese dependency.

They say that the government must do more to ensure that local companies benefit from the allocation of quotas in the major projects and locals should also benefit from skills and technology transfer from the Chinese and other development partners.

The analysts say that the twin scourges of corruption and self-interest must be rooted out to ensure that those in government do not tie the country down to undesirable foreign loans just to line up their own pockets.

An economic analyst, Thabo Qhesi, said it was worrying that Lesotho chose to enslave itself by opting for the Chinese loans which came with stringent conditions and yet Lesotho had so many development partners who could provide much more meaningful assistance with less restrictions.

"Lesotho has bilateral relations with many countries and international institutions which include the European Union (EU), America and the World Bank. All these partners offer financial support to Lesotho but we do not see them bringing their own contractors to projects they have funded. So the question is why the government would be interested in the Chinese loans to a great degree?

"The United States of America's Millennium Challenge Corporation (MCC) funded the construction of a lot of clinics in the country, Japan funded schools construction while Kuwait funded roads but we never saw them bringing their own contractors.

"Basotho and the government should jointly shoulder the blame for allowing Chinese business people to take over the majority of businesses in the country. Basotho lease their buildings to the Chinese and further assist them by identifying the civil servants they can bribe to get work permits, even for jobs that can be done by Basotho," Mr Qhesi said.

He said it was therefore necessary for Lesotho to turn to other development partners with far more generous loan conditions, desist from corruption and implement the existing rules and regulations to protect the local economy.

He said such rules included the Public Service Regulations of 2008 which mandate all ministries, government departments and agencies to prepare annual operational plans in accordance with the objectives of the national development plan.

Mr Qhesi said if ministries and public servants were compelled to prepare work plans, this would ensure greater accountability and less corruption which was inimical to economic development.

Another analyst, Nkareng Letsie, said that corruption in successive governments had enabled the Chinese to capture Lesotho's economy by bribing their way up.

He said the fact that Prime Minister Thomas Thabane's economic advisor, Xie Yan, is of Chinese origin had also opened doors for the Chinese business people to win lucrative tenders.

"Our economy has long been taken over by the Chinese and we are only hearing noises about it now because the big local players in the construction industry are now coming out to say that our economy is captured.

"The local construction industry used to be a key player in the country's economic development but recently we have seen the Chinese taking control of the sector through selective tenders. The government argues that locals are incompetent but they have done nothing to capacitate locals. China is colonising Africa because our leaders get into power with empty stomachs which makes them look out for their own welfare over national interests," Mr Letsie said.

He said that the country needed political will to ensure that national interests were considered before all else. He further said there was need for clear polices that gave local companies quotas in every major tender as well as the implementation of already existing regulations for skills and technology transfer to locals.

"We need clear policies which will state that for every job given to a foreigner, 50 percent should be allocated to locals so that there will be skills transfer. The government should negotiate deals where the work is awarded to local companies and international funders are roped in as consultants or overseers. The government should also cut on unnecessary international trips and channel that money into public spending rather than depending on these loans which come with stringent conditions," he said.

Another economist, Thuso Green, has blamed the "recolonisation of Lesotho" on "hungry" ministers and their principal secretaries who can easily be bribed to award lucrative jobs to the Chinese and other foreign investors.

"The fact that ministers and their principal secretaries are given power to oversee major economic projects leaves space for corruption as these people get the top positions while they are still broke and they ultimately look out for their own interests. There is also lack of accountability because most people get top jobs as a reward for their roles in the ruling political parties.

"It is also possible that it may be payback time as it cannot be discounted that some of the ruling parties receive foreign funding during election campaigns."

Mr Green said Lesotho would do well to take away the awarding of tenders from ministries and "establish a national planning board which will oversee all economic developments".

"The national planning board would also map out the country's development plans rather than having incompetent people making final decisions. It would also be difficult to bribe the entire board rather than the current scenario where it is far much easier to bribe a single minister," he said.

As long as corruption and self-interest are not reined in, Lesotho will continue being taken advantage of not just by the Chinese, but by other investors.

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