Oct 30, 2016
In 2007 when China's Exim Bank unveiled a massive $6 billion
mining deal in the Democratic Republic of the Congo, it completely
rocked the normally-staid world of international development
finance. The agreement, known as "The China Deal" or Sicomines, was
among the first of these huge Chinese infrastructure-for-resources
deals that are now commonplace across Africa.
Ten years ago, though, the World Bank and the International
Monetary Fund were pretty much the only players that threw around
that kind of cash in countries like the DRC. So when the Chinese
came along with the Sicomines deal, many observers saw it as a
direct challenge to the IMF's once unrivaled dominance of
international development finance in places like the Congo.
While a feared Chinese-IMF rivalry did not ultimately
materialize, "The China Deal" did create a lot of problems. The IMF
responded defensively, according to new research from
Sino-Congolese scholar Dr. Johanna Malm at Roskilde University in
Denmark. Fearing they might be pushed aside by the Chinese, the IMF
opted to make it easier for the Congolese government to borrow yet
more money, adding to Kinshasa's already dangerously-high debt
Dr. Malm joins Eric & Cobus to discuss "The China Deal"
and why the IMF's missteps in the Congo produced
costly-consequences for an already financially-distressed