Template-type: ReDIF-Paper 1.0
Author-Name: Nour, Samia Satti Osman Mohamed
Author-Email: samiasatti@yahoo.com
Author-Workplace-Name: Faculty of Economic and Social Studies, 
	 Khartoum University, and UNU-MERIT
Title: Assessment of effectiveness of Chinese aid in financing development in Sudan
Abstract: This paper fills the gap in the Sudanese literature and discusses the 
	 effectiveness of Chinese aid for financing development in Sudan using 
	 new primary data at the micro level. We find that the Chinese share in 
	 total loans and grants offered to Sudan greatly increased from 17% in 
	 1999 to 73% in 2007 out of total loans and grants offered to Sudan. We 
	 find that Chinese aid and loans to Sudan caused mixed positive-negative 
	 impacts. The positive impact is providing alternative complementary 
	 sources of finance to complement domestic capital and financing 
	 development projects. The negative impact is increasing Sudan's debts to 
	 China from 0.9% in 1999 to 13.45% in 2007 out of Sudan's total debts. We 
	 find that the effectiveness of Chinese aid to Sudan is undermined by 
	 offering aid tied to trade, FDI and importance of oil to the Chinese 
	 economy. We explain that despite the recent global economic crisis China 
	 has maintained offering tied aid to maintain its access to oil in Sudan. 
	 We find that despite a long period of economic sanctions, Sudan was able 
	 to grow thanks to the robust and increasing intensification of special 
	 economic relations with China which relaxed the development finance 
	 constraint. From the perspective of the new approaches to financing 
	 development our findings imply that even when a country is facing 
	 binding political and economic sanctions, it can still be able to 
	 finance a high growth strategy if it is endowed with natural resources 
	 and a partner that is in need for such resources.
Classification-JEL: F30, F34, F35, O10
Keywords: finance, financial aid, eceonomic development, aid effectiveness,
	 China, Sudan  
Series: UNU-MERIT Working Papers
Creation-Date: 2011
Number: 2011-005
File-URL: https://unu-merit.nl/publications/wppdf/2011/wp2011-005.pdf
File-Format: application/pdf
File-Size: 275 Kb
Handle: RePEc:unm:unumer:2011005