10 years of China's Belt and Road project, Egypt battles economic misery and investing in cleantech solutions
October 2023
Hello and welcome!👋
The international community is responding to the unfolding human tragedy in the Middle East. The escalating conflict is getting wall-to-wall coverage and, in the process, raising concerns about media bias and fair reporting.
Given how rapidly events are moving on the ground, this edition of Deep Dive will take a step back and instead delve into other important stories away from the front pages.
XI’S SIGNATURE FOREIGN POLICY
China’s Xi Jinping rolled out the red carpet on 17 October to commemorate the 10th anniversary of the Belt and Road Initiative (BRI). Representatives from numerous countries, including Vladimir Putin, Viktor Orban and Joko Widodo, travelled to Beijing for the celebration.
Over the past decade, the BRI has become synonymous with China’s trillion dollars’ worth of infrastructure projects across emerging markets. An airport in Nepal, railway line in Kenya and hydropower dams in Laos are just a handful of the ventures that Beijing has backed.
When the initiative was conceived, President Xi’s aim was to improve regional connectivity along the ancient Silk Road while competing with the US for influence. So far, this experiment has created tremendous opportunities for China’s state-owned enterprises as well as strengthened diplomatic ties with the so-called Global South.
Singapore’s CNA offers a useful snapshot of the wide-reaching policy:
But the BRI is not without criticism. There have been accusations of broken promises, shoddy construction and predatory lending. “Debt-trap diplomacy” is a common refrain, particularly in Western media.
Given the uptick in geopolitical tensions amid China’s cooling growth, Xi appears to be adjusting his ambitions for the next chapter of the BRI. He’s signalled a pivot towards greener and smaller-scale projects. Think more solar farms and hospitals, and fewer highways and ports.
EGYPT’S CASH SQUEEZE
The crisis along its Israel border will compound Egypt’s dire economic situation. On 5 October, Moody’s cut the country’s credit rating deeper into junk territory, pointing to forex reserve shortages and dwindling policy options. Put simply, Egypt is broke and President Abdel Fattah al-Sisi has few levers to pull.
The Russia-Ukraine war continues to take a toll on Egypt, exacerbating underlying weaknesses. The most populous nation in MENA suffers from soaring commodity prices, costly food subsidies, poor industrial development, pervasive military control, high youth unemployment and budget deficits.
Repeated IMF bailouts mean Egypt is the fund’s second largest debtor after Argentina. In the past, Saudi Arabia and the UAE provided financial support to President Sisi, but even his Gulf allies are demanding reforms.
The consensus among analysts is that Cairo must introduce painful economic measures to unlock further aid packages. So instead of holding presidential elections next spring, Sisi has brought the vote forward to December to cement his position first.
Once the ballots are counted - there’s no viable opposition - Sisi will secure a third term. However, confidence in his abilities seems to be waning. “Mr Sisi, who led a coup in 2013, is on wobbly ground,” says The Economist. “Victory would allow him to rule until 2030. The question that many Egyptians have begun to whisper is whether he will last that long.”
CLEANTECH EXPLAINED
Government ministers, policymakers, business leaders and activists will gather in Dubai from 30 November until 12 December for the annual UN climate summit known as COP (Conference of the Parties).
With 2023 on track to be the hottest year on record, there’s renewed urgency around finding solutions to keep rising temperatures in check while also reducing pollution. One of those answers is clean technology – or cleantech.
Cleantech refers to companies or innovations designed to promote environmental sustainability. The term encompasses everything from renewable energy sources to water purification. According to entrepreneurs and investors, the beauty of cleantech is that it has the potential to be implemented sooner rather than later.
In the race against “global boiling”, state authorities and venture capitalists are now channelling billions of dollars to help the cleantech sector scale up. Besides the obvious products, such as solar panels, wind turbines and EV batteries, here are some cleantech breakthroughs grabbing attention:
Carbon capture and storage (CCS): The process of removing CO2 emissions generated through industrial activities, and then compressing, transporting and storing the treated gas.
Hydrogen: Whether it’s green, blue or yellow, hydrogen is being hailed as an alternative to oil and gas. However, extracting hydrogen remains expensive and, ironically, energy intensive.
Smart waste collection: Sensors and AI tools are being deployed to better sort waste and enhance disposal techniques. The goal is to boost recycling rates and limit what ends up in landfills.
Fun fact: Prince William is a big fan of cleantech. The UK royal recognises start-ups in his Earthshot Prize. The next award ceremony will take place in Singapore on 7 November.
Thanks for reading! Take care and stay curious, Sara x