Economy in foreign hands - response

| Thursday January 28, 2010 00:00

Our disappointment stems from certain factual inaccuracies and insinuation, which we only imagine are intended to paint Chinese construction companies specifically, and Chinese people generally, in an unfavourable light.

First and foremost, the title of the article is misleading. This is so because even though the title seems to suggest that the Botswana Economy is in foreign hands, the only foreign entities mentioned are Chinese. This is particularly disappointing because the overall impression then created is that the Botswana Economy is in Chinese hands, which is factually incorrect. There are various other inaccuracies contained in the article as well and these are as addressed below:

It is a well-known fact in Botswana that to enable any company bid for any government construction projects, such companies must tender for such jobs through the PPADB, who as you are well aware, is an independent body set up by legislation to evaluate and award construction projects. The criteria utilised by the PPADB for its selection process is widely known and transparent for all those who care to know. Whereas it is correct that many construction projects are awarded to Chinese companies, it is inaccurate to state that Chinese construction company controls the Botswana economy. This is so because had the author invested a little bit of time to research the topic, he would have been able to discover that government construction projects, in the greater scheme of things, actually only constitutes 4.8 percent in GDP terms. Even assuming, without admitting, that the author is accurate in his bold assertion (which we still maintain to be wrong), that all government construction contracts are awarded to Chinese companies, control of 4.8 percent of GDP cannot by the stretch of any imagination constitute control of the Botswana economy.

The author accuses the Chinese construction companies in the following terms that all these Chinese companies have the same ancestor and the identical pricing is an indication that the entities hunt in packs. Again this allegation is factually incorrect and actually constitutes irresponsible speculation. There are clear tender rules which all companies intending to tender for construction projects in Botswana must follow. It is not alleged that any of those rules have been breached by any Chinese construction company. It is wrong for the author to make such factually baseless allegations when there is no evidence to substantiate it. It is equally wrong for you to have published it when you had no evidence to support the baseless and unsubstantiated allegations made.

It is further alleged that the BDP receiving a donation from Chinese Communist Party last year, is mentioned as part of the answer to why the Chinese win most of the major tenders. This is yet another factually inaccurate allegation, which has no basis whatsoever. We believe that the primary reason for many construction projects being a warded to Chinese contractors are due to the expertise, experience, good management, high efficiency and low profit expectation that Chinese construction companies utilise for managing construction projects. The participation of Chinese companies in this market produces a competitive market oriented tendering process, which ultimately leads to massive cost savings for the government fiscus. Perhaps the author should have also noted for public edification that Chinese construction companies never abandon construction projects and on the contrary they manage to deliver products of quality, punctually which in the long run also saves money for the client.

The author further accuses Chinese construction companies of paying low wages. This is simply not true.  On the contrary, Chinese construction companies are able to attract good workers and artisans because they pay competitive wages. In any event, it is a well known fact in the construction industry that there are certain prescribed (by legislation) minimum wages payable to construction workers and Chinese companies usually pay above these minimum requirements. The participation of Chinese construction companies in the Botswana economy is rather a commendable one as it has created over 20,000 jobs and has also liberated the construction industry from prohibitive and undue high prices due to competition which, is a well-known practice too in free trade.
Chinese construction companies have also in the past year immensely contributed to over half a million Pula as part of their corporate responsibility campaign, to various charities and for various public causes throughout the country.

The participation of Chinese construction companies in the Botswana economy has had a positive rather a negative impact on the economy and the picture the author in his article has depicted is obviously incorrect, factually unsupported and seeks to maliciously misinform the public and must as a result be corrected. We hope that the right thinking public would examine the facts and distil from the irresponsible reporting the author appears to have depicted.

For your further information we enclose to this letter an article produced by Standard Chartered Bank which is an independent analysis of the various sectors of the Botswana economy. We hope that in the future your author would base his allegations and conclusions on facts rather than baseless conjecture.

Zhang Guangcan
China Enterprises Association