Evaluation of Foreign Aid from China on Sudan’s Economic Development Process

Abstract

Literature of economics and politics has recently realized the controversial role of China in Africa, however, in case of Sudan; the nature and charactertics of development assistance and aid from China is appreciated for being least interruptive in the domestic affairs of the country. Thus, China is regarded as a donor interested in commercial and economic mutual benefits rather than in political once, consequently; this paper determines the positive and negative effects of Foreign Aid from China to Sudan. Apart, a vast range of literature in discipline of politics, a comparison of effectiveness of Foreign Aid from China to Sudan in context of economic is lacking. Hence, current study assessed the positive and negative effect of Foreign Aid from China to Sudan qualitatively. Data is gathered from interviews of development projects managers and from reports and publications of Central Bank of Sudan, Ministry of Finance & National Economy and The World Bank. The projects incorporated are under the development assistance and Aid from China. In the analysis of effects of aid from China to Sudan, positive as well as negative effects were revealed; Significance of both types cannot be neglected given, their influences on the economy of Sudan. Where positive effects are related to economic development, their negative impacts are associated with sustainability of growth given, its influence on debt burden as most of the Chinese Aid in form of loan rather than debt. Thereafter, assessing the influence of aid is subject to comparison its positive effects on economic indicators and its negative impact on debt burden. Moreover, debt burden doesn't only deteriorate sustainability but also; it has influence on economic growth given the expenditure of debt servicing. Thus, Sudan is recommended to compare the increase in income due to aid with increase in indebtedness, for policy making in aid relationship with China.

Keywords: China, Foreign Aid, Development, investment, Oil, Sudan, debt burden