Toll roads: inspiration from China

Toll roads are in the offing. The government has finally realized that it is better to light a candle than curse the darkness. The idea of introducing toll roads has been circulating in relevant government quarters for some time now. This has come after the realization that public coffers alone cannot sustain the soaring demand for more roads. Whereas China has played a significant role in financing and improving the road network in the country, lessons abound on how to effective bridge the budget deficit through public private partnerships.

The government has already announced that Kenyans will soon start paying for use of major roads in major towns and highways through toll charges to finance construction and repair of new roads. Users of the Thika superhighway were supposed to be the first to pay toll fees but the implementation has been postponed. Other projects set to be funded by tolling include a second bridge at Nyali in Mombasa and the building of a dual carriage superhighway between Mombasa through Nairobi and to Nakuru.

The pay for use arrangement involves investors who put their money in infrastructural projects and recoup their money by charging users market price rate fees over time. This arrangement is effective because it allows the government to meet its infrastructural obligations that it would otherwise have not afforded in a short period of time without debt.

A recent Africa infrastructure report indicated the huge infrastructure budget deficit Kenya faces. Kenya requires approximately over Sh320 billion per year over the next decade to address the deficit. This deficit can only be met by an efficient toll authority that will not only construct and maintain the roads, but regulate traffic efficiently in major towns.

Although many people view toll charges as double taxation from government, there are many benefits that come with toll road charges that not many people notice. “We have to embrace tolling. Look how far it has taken China and India,” Transport secretary Michael Kamau averred.

China is a global leader and a great example of a country that has used toll roads to fund its massive national road network in a very short time. It does indeed have about 70 percent of the world’s total length of tolled roads. No other country has built an Expressway network of such scale in such a short period of time in history.

The establishment of China’s National Trunk Highway System in 1991 was the beginning of road infrastructure miracle in China. Investments were made to construct an Expressway network of nearly 85,000 km, a Class-I highway of 68,000 km, and Class-II highway of 320,000 km. Road tolls were used to help contribute to and to recover all financing costs.

The use of toll roads to finance road infrastructure is increasingly being used in countries whose highway capital and operating expenditure requirements outstrip public resources to pay for them. This is true for countries such as Brazil, India, France, Italy, Germany, Japan and many others. In the United States, more than 4,000kms of the Interstate Highway system are tolled.

As a country that has greatly benefited from improved road infrastructure from China, Kenya needs to continuously consider the new standards set and emulate the blueprint that China has laid for us. The Asian giant has made considerable contributions in our roads infrastructure over the recent past, but we cannot expect China to take over the government’s infrastructure obligations.

Many economists and transportation experts see toll roads as the inevitable solution to our road transportation problems and predict a lot of benefits if implemented. They argue that apart from financing the projects, it will improve efficiency in managing both existing and future infrastructure projects. If congestion rises, prices rise and that signals the need for expansion and ensuring that the road facility meets the demand.

Secondly, toll roads increase fuel economy. By increasing the overall capacity of a region’s road network system, toll roads are able to absorb some of the excess traffic that would otherwise have contributed to traffic congestion on non-tolled roads. This enables vehicles to move at more fuel efficient speeds at both toll and non-tolled roads. Moreover, the accident rate on toll roads is lower than other roads, because the flow of traffic is more even.

Toll roads also reduce urban sprawl by balancing the cost of using a road. Traffic congestion is the direct result of under-pricing of roads. The pay to use arrangement depending on market demand would give less incentive to drivers to use busy roads, or live in congested areas and would resort to use either public transportation, or move to areas closer to work or where they travel most.

It is time to embrace toll roads and the government cannot effort to be left behind in this re-emerging strategy of financing road infrastrure. China has proved that this strategy is efficient and workable and the results are there for all and sundry to see.

Third Confucius Institute to propel Chinese Cultural exchange in Kenya

The third Confucius Institute in Kenya was launched as part of the special occasion of the 50^th Anniversary of Kenya’s Independence and the establishment of diplomatic ties between China and Kenya.

The establishment of the third Confucius institute in Kenya signifies Kenya’s importance as a reliable friend and a strategic partner in China’s cultural diplomacy. It also highlights China’s commitment to culture and people to people exchanges in Kenya and the region.

The first Confucius Institute in Kenya was established at the University of Nairobi on 19^th December 2005. It was the first Confucius institute of its kind to be established in Africa and was highly significant for China’s cultural offensive that the then Chinese president Mr. Hu Jintao paid it a visit during his visit to Kenya in the year 2006. It has been instrumental in promoting the understanding of Chinese language and culture since its launch. 

The Confucius Institute at University of Nairobi has been voted top 20 Confucius Institutes globally with the excellent reward six times in succession from 2007 to the end of 2012. It is an official HSK test center in Kenya for the HSK Department.  HSK is “Hànyǔ Shuǐpíng Kǎoshì” meaning Chinese Proficiency Test, the only standardized test of Standard Chinese language proficiency for non-native speakers of mandarin such as foreign students, overseas Chinese, and members of China’s ethnic minority groups. The test is administered by Hanban, a non-government organization affiliated with the Ministry of Education of the People's Republic of China.

Because of the high demand and interest in Chinese language and culture in Kenya, the second Confucius Institute was established at Kenyatta University in December 2008. It offers free lessons for one academic year to any student who is interested in learning the basics of Chinese language, an effort for which they receive a certificate. This gesture has been received well and students, teachers, businessmen and tour operators have grabbed the opportunity and registered in droves.

The launch of the third Confucius institute at Egerton University will give Kenya the highest number of such institutes in Africa with South Africa, further cementing Kenya’s place as a key center of cultural diplomacy in the region. Moreover, the Confucius institute at Kenyatta University is conducting a pioneer programme in which a select group of secondary school teachers from schools within Nairobi can learn Chinese. The group of about 20 teachers is then expected to teach Chinese to students in their respective institutions. It is worth noting that the Chinese language has also permeated various primary schools in the country as a foreign language of study.

Since the establishment of the first Confucius institute in Kenya, over 200 students from the Confucius institutes have gone on to study in China on scholarships. For instance, in the last four years, there were 45 students in 2009, 40 in 2010, 97 in 2011 and 17 in 2012 that got long-or-short-term scholarships and studied in China. Currently, some of them are still studying on scholarship in China; 7 are studying for master’s degrees, 2 for bachelor’s degrees and 13 for one-year certificates in Tianjin Normal University.

Confucius Institutes in Kenya have made a significant contribution to the development of strong cultural and economic links between China and Kenya. The Institutes are mandated to teach Chinese Language and Culture, Chinese Fine Arts, Sports and Games, Traditional Chinese Medicine, Confucius Philosophy and other related Chinese programmes. They facilitate Sino-Kenya educational and cultural exchanges through specific programmes and consolidating and carrying on the friendship among the two countries. They are meant to be bridges that unite the Chinese people and the Kenya people and unlock business and trade cooperation.

Confucius Institutes are named after Chinese philosopher Confucius. His philosophy emphasized personal and governmental morality, correctness of social relationships, justice and sincerity. He espoused the well-known principle "Do not do to others what you do not want done to yourself", an early version of the Golden Rule.

Confucius institutes have become a platform for cultural exchanges as well as bridges for reinforcing friendship and cooperation between China and the rest of the world. There are more than 350 Confucius institutes in 180 countries which are promoting the philosophy of the ancient Chinese scholar while facilitating cultural and educational exchanges. They are modelled on France’s Alliance Francaise, Germany’s Goethe Institute, and the British Council, but enjoy the added advantage of being attached to universities as independent departments awarding certificates, diplomas and degrees in Chinese language studies.

The interaction and understanding between the Chinese people and Kenyan people has increased tremendously necessitating the establishment of the third Confucius Institute in Kenya. This opens a good opportunity for Kenya’s future if many can speak Chinese because China’s economy is growing very fast and this will translate into more opportunities for Kenyans as the two countries work closely to achieve mutual development goals.

China’s growing role in the UN is promoting International peace and security.

On September 17^th 2013, United Nations member States convened for the sixty-eighth session of the United Nations General Assembly. Among them was China; a Charter member and one of the permanent members of the UN Security Council. Following its rise and influence in international political and economic affairs, China’s role has risen sharply in the United Nations and it is having a positive influence in promoting international peace and security.

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As a member of the Security Council, China has a very important role in shaping resolutions at the United Nations using its veto powers. It has only used its veto eight times in the interest of international peace and security: in 1972 to veto the admission of Bangladesh which it considered a rebellious province of Pakistan, in 1973 to veto a resolution on the ceasefire in the Yom Kippur War, in 1997 to veto ceasefire observers to Guatemala, in 1999 to veto an extension of observers to the Republic of Macedonia, in 2007 to veto criticizing Myanmar on its human rights record, in 2008 to veto sanctions against Zimbabwe, in 2011 to veto sanctions against Syria, and in February 2012 to veto for the second time a draft resolution calling for foreign military intervention in Syria.

In the recently concluded United Nations general assembly, the Syrian crisis was among the agenda of the Security Council. The Veto-wielding powers in the Security Council with the exception of China and Russia wanted a resolution that authorizes the use of military force should Syria fail to meet its obligations. However, China and Russia made it clear that they would use their veto power to prevent the adoption of such a resolution.

Just a week before the opening of the UN General Assembly, Chinese foreign Minister, Mr. Wang Yi, met with U.S secretary of State John Kerry and discussed nuclear weapons in North Korea, chemical weapons in Syria and maritime security in the South China Sea. Mr. Wang emphasized that China is committed to non-conflict confrontation, mutual respect and win-win cooperation for everyone’s benefit.

China’s actions over time have shown that it is a country committed to international peace and security. It has consistently rejected the use of force or any military interventions and occupations of other countries. These actions are guided by principles it holds dear that espouse peaceful development and peaceful resolution of disputes.

First, in its principle of respect and equality amongst nations, China insists that nations should accommodate each other’s core interest and major concerns in a diversified manner. It proposes acknowledging that countries, big or small, strong or weak, rich or poor, are equal members of the international community and on matters of international concern, dialogue and negotiation must be prioritized to ensure lasting peace, harmony and stability.

In the principle of mutual understanding and trust, China calls for understanding of every nation’s strategic intentions. It avers that greater roles played by emerging countries in regional and international affairs represent opportunities rather than threats to international security. China calls for a new way of thinking and says thatZero-sum assumption and cold war mentality in the security arena contrasts to the trend of today. China says if we ignore the facts, make assumptions or distortions on others’ strategic intentions purely based on differences in ideology and social system, we risk creating adversaries.

China has made it clear that it will unwaveringly follow the path of peaceful development. China’s fast rise in strength and influence goes hand in hand with a desire for a peaceful international environment in which China can develop itself and reciprocally help maintain and promote world peace with its own development. This path is fundamentally different from the historical path of colonial expansion that many developed countries used to develop themselves.

Maintaining world peace and advancing common development is an important mission for the Chinese military in this new era. China’s explains that participation in world security cooperation is by no means an enlargement in sphere of influence or even territorial expansion. Rather, it is for an enabling regional security environment, for interests to be shared with other nations, and for fulfillment of its due international responsibilities and humanitarian obligations.With its increased political, economic and military strength, China understands that it bears a great responsibility as an emerging power. It has shown that it is committed to its international obligations through security cooperation.

China is the largest force provider for UN peacekeeping operations among the permanent members of the Security Council, with more than 20, 0000 servicemen deployed in 20 UN peacekeeping operations. It has sent 8 task forces of 20 ships to the Gulf of Aden and waters off Somalia for escort missions. Among the 4,000 vessels they have escorted, more than 40% are foreign vessels. It is currently ranked 7^th among member states for contributing 3.93% of United Nations Peacekeeping operations budget for 2013-2015.

That China adheres to the path of peaceful development is in no doubt. China has become a player and builder of international peace and security. The times and tides of the 21^st century point to China’s new reading that seeks bonds of cooperation, peace and prosperity.

China Inspires Kenya’s to adopt Special Economic Zones development model.

The Kenyan government through the immediate former director general of the Vision 2030 Delivery Secretariat, Mugo Kibati, recently announced that Kenya is adopting the model used by China and Singapore in developing their special economic zones. Kibati said the two countries used the zones to solve the twin issues of unemployment and industrialization.

Kenya will build Special Economic Zones in the cities of Kisumu, Mombasa and the historical town of Lamu in the coast region. The two cities and Lamu Town are expected to be converted into special manufacturing and services hubs that supply the foreign markets.

According to Kenya Vision 2030 blueprint, the special economic zones will include the establishment of agricultural parks, industrial parks, science and technology parks for the development and production of information technology software and hardware products.

Special Economic Zones are areas where market-driven capitalist policies are implemented to entice foreign businesses to invest in. The policies include investment in new infrastructure like office buildings and banks and preferential tax exemptions for foreign firms who want to invest in the country.

China is a global shining example of how effective Special Economic Zones can transform regions and spur economic development. Since 1979, after Deng Xiaoping’s economic reforms were implemented in China, Special Economic Zones were created to beckon foreign investors to do business in China.

Shenzhen became the model for China’s Special Economic Zones (SEZ) when it was transformed from 126-square-miles of a shanty fishing villages to a bustling business metropolis. Located a short bus ride from Hong Kong in southern China, Shenzhen is now one of China’s richest cities and the most successful Special Economic Zone in China. 

During his recent trip to China, President Uhuru Kenyatta visited the bustling Shenzhen province and was taken aback by its history and transformation. He encouraged Chinese investors to come to Kenya and promised to promote investment friendly policies in Kenya. He said the legislation and licensing regime governing the SMEs was being reviewed to make it a one-stop-shop to attract more investment.

Kenya can learn and emulate a lot from the Shenzhen experience which has inspired many other countries to success. Following the shenzhen example, Special Economic Zones have been established in several countries, including Brazil, India, Iran, Jordan, Kazakhstan, Pakistan, the Philippines, Poland, South Korea, Russia, Ukraine, United Arab Emirates, Cambodia and North Korea. Special economic zones (SEZs) are now touted as one of the most successful policies for economic development. The number of zones worldwide has grown into the thousands over the last few decades.

Special economic Zones (SEZs) fuelled China’s economic growth and they were governed by laws that were more market-oriented than national laws. For example, the Chinese government charged lower taxes in these zones in an effort to boost business and attract foreign investors. 

These zones were often set up in close proximity to national centers of research excellence to encourage technology transfer. Foreign investment created badly needed infrastructure in the form of facilities like factories and other production centers. Foreign investment also created opportunities for transfers of technology as well as increased exports. From 1981 to 1994, for example, exports rose 19 percent per year. 

The establishment of Special economic Zones in Kenya opens up a world of opportunities and possibilities for Kenya and the East African region. China’s experience has shown the world that with proper management of Special economic Zones, countries and regions can be transformed economically. 

Looking into the new era of China-Kenya relationship where China is committed to facilitate investment, technology and skills transfer to Kenya, the special Economic zones in Kenya are assured of a partner in China that is experienced, has learnt the lessons from its success and failures, and is ready to offer support and investment for the mutual benefit of both countries. 

Several Chinese manufacturers are already setting up local production plants in Kenya, shifting from the previous strategy in which they supplied the domestic consumer market with goods imported from China. This presents an opportunity for skills transfer and possibility of upgrading Kenya’s enterprises. Moreover, many Chinese entrepreneurs expressed their desire to invest in the country.

Therefore, attracting and utilizing the foreign investment through Special Economic Zones has become an urgent and timely strategy to take to the next level of development. China has been investing in Africa positively. With its 2nd largest GDP and the biggest Foreign Reserve, as well as abundant capitals, management experiences and advanced technologies accumulated over the past 30 years, China is capable of investing more in Africa and in Kenya. 

Up till the end of April, 2012, Chinese direct investment in Africa reached USD 15.3 billion, with more than 2,000 Chinese enterprises in 50 African countries. China’s Foreign Direct Investment (FDI) to Africa has assisted Africa to accelerate economic growth. Private enterprises has taken the place of Chinese state-run enterprises, and become the key player and source of Chinese investment in Africa.

Kenya stands to gain a lot from this new venture and the fact that there already exists willing investors from China is a bonus. We have a model to guide us, partners ready to share their experiences and walk with us and the urge to emulate the success of Shenzhen in Kenya.

Why the Chinese Economic development won’t slow down

China’s economy has seen an average annual growth rate of about 10 % for the last three decades, ushering China into the ranks of middle-income countries, which in itself is considered a miracle in the history of world economic development. Its GDP now ranks second in the world and the Chinese people don’t seem to be about to relent on their quest for further economic prosperity.

China’s influence in the world economy was minimal before it initiated economic reforms in 1978 and shifted from a centrally planned to a market based economy. It began to experience rapid economic and social development never seen before. Its great leap forward reflected a shift in economic power as it transformed itself from poverty-hit communist state to global heavyweight.
 

 In a report published by the Paris based Organization for economic cooperation and development, it is expected that China will overtake the United States by 2016 to become the world’s largest economy.  The International Monetary Fund (IMF) also predicted that than China’s economy will be bigger than that of the United States in terms of purchasing power parity.
 

Tom Miller,  a Beijing based economic consultant said “It's realistic to say that within 10 years China will be roughly the same size as the US economy," and according to estimates by the world bank, Goldman Sachs and others, it should happen by 2025. Whereas predictions as to when this may happen vary, many analysts aver that if China remains consistent over time, then this is going to be a reality in the near future. 
 

China’s rise is unavoidable given its resilience and commitment to its economic goals. The country’s potential is immense and its market reforms are not yet complete.  There is still a lot of room for growth which is increasingly being driven by private sector companies. Its future growth driver lies in its consumers who continue to lead the world in consumption.
 

Last year, inbound foreign direct investment into China surpassed $100bn for the first time, and investment overseas by Chinese companies in non-financial sectors totaled $59 billion. To secure sound economic growth, the country is gradually shifting from the traditional growth pattern based on GDP only, to a more sustainable development model. The leaders are emphasizing more investment to increase China's capacity for scientific and technological innovation and an innovation-driven economic growth mode.
 

Over the past 30 years of reform and opening up, under the motivation and inspiration of pursuing dreams, a conducive environment for success has been created and the nation is highly optimistic and ready to do whatever it takes to achieve the “Chinese dream” which emphasizes economic prosperity.
 

The Chinese dream aims at making China a “moderately well-off society” by about 2021and making China a fully developed nation by about 2049. This is a good incentive that is already planted deeply within the Chinese people’s hearts considering their history of meeting set out goals and China’s reforms over the past three decades.

 

The new leaders of China have promised to deliver the arduous task of pursuing these economic goals with the necessary policies already in place and ready to be implemented. In their report to the 18^th National congress, the country set the goal of doubling China’s GDP of 2010 and the per-capita income of urban and rural residents by 2020. 
 

This is the first time that the Communist Party of China (CPC) has included per capita income in its 2020 development blueprint of a moderately prosperous society. Previous targets only focused on GDP growth. This is an ambitious goal but considering China’s economic miracle in the last decade, it is possible that the Chinese leadership will deliver. 
 

The per-capita disposable income of urban residents in China rose 8.4 percent in 2011 from a year earlier while the per-capita net income of rural residents grew 11.4 percent over the same period. With that, China will definitely continue to serve as a global economic powerhouse. 
 

Despite the global economic slowdown, the CPC has promised to make this goal a reality by 2020. When the goal is realized, the 1.3 billion Chinese people will join the group of fewer than 2 billion people worldwide who currently enjoy the standard of living as envisioned in a moderately prosperous society.

CPC leaders have acknowledged that rapid economic rise comes with a lot of challenges as well, including high inequality; rapid urbanization; challenges to environmental sustainability; and external imbalances that require policy adjustments for China’s growth to be sustainable.
 

In its 12th Five-Year Plan (2011-2015), the government forcefully addresses these issues. It highlights the development of services and measures to address environmental and social imbalances, setting targets to reduce pollution, to increase energy efficiency, to improve access to education and healthcare, and to expand social protection. 
 

China’s new leaders are devoted to this economic goal and have vowed to build on the achievements of their predecessors to scale the new heights. This reflects the Chinese nation’s everlasting spirit of unity of purpose among the Chinese people and its leaders; a laid down solid, material foundation for realizing economic prosperity. For now, the China economic dream is no longer a grand slogan. It is rooted in reality, as a result of real struggles, hard work and preparation for future success.