[BrianC]

A dozen poor countries are facing economic instability and even collapse under the weight of hundreds of billions of dollars in foreign loans, much of them from the world's biggest and most unforgiving government lender, China. From a report:
An Associated Press analysis of a dozen countries most indebted to China -- including Pakistan, Kenya, Zambia, Laos and Mongolia -- found paying back that debt is consuming an ever-greater amount of the tax revenue needed to keep schools open, provide electricity and pay for food and fuel. And it's draining foreign currency reserves these countries use to pay interest on those loans, leaving some with just months before that money is gone. Behind the scenes is China's reluctance to forgive debt and its extreme secrecy about how much money it has loaned and on what terms, which has kept other major lenders from stepping in to help. On top of that is the recent discovery that borrowers have been required to put cash in hidden escrow accounts that push China to the front of the line of creditors to be paid.

Countries in AP's analysis had as much as 50% of their foreign loans from China and most were devoting more than a third of government revenue to paying off foreign debt. Two of them, Zambia and Sri Lanka, have already gone into default, unable to make even interest payments on loans financing the construction of ports, mines and power plants. In Pakistan, millions of textile workers have been laid off because the country has too much foreign debt and can't afford to keep the electricity on and machines running. In Kenya, the government has held back paychecks to thousands of civil service workers to save cash to pay foreign loans. The president's chief economic adviser tweeted last month, "Salaries or default? Take your pick."https://fortune.com/2023/05/18/china-belt-road-loans-pakistan-sri-lanka-africa-collapse-economic-instability/

[Plantagenet]

$this->bbcode_second_pass_quote('BrianC', ' ')paying back that debt is consuming an ever-greater amount of the tax revenue needed to keep schools open, provide electricity and pay for food and fuel.

[AdamB]

$this->bbcode_second_pass_quote('Plantagenet', '
')According to Joe Biden the solution is to just increase your debt limit, and then borrow more money in order to pay the interest on the money you already owe. Sure the debt goes up even higher that way, and the interest payments get bigger and bigger every year, but thats OK--- the next time you can just borrow more money again. And again. And again. What could go wrong?

[Plantagenet]

$this->bbcode_second_pass_quote('AdamB', 'D')onald Trump Built a National Debt So Big (Even Before the Pandemic) That It’ll Weigh Down the Economy for Years

[theluckycountry]

$this->bbcode_second_pass_quote('', 'd')ozen countries most indebted to China... paying back that debt is consuming an ever-greater amount of the tax revenue needed to keep schools open, provide electricity and pay for food and fuel... Behind the scenes is China's reluctance to forgive debt and its extreme secrecy about how much money it has loaned and on what terms, which has kept other major lenders from stepping in to

[AdamB]

$this->bbcode_second_pass_quote('Plantagenet', '')$this->bbcode_second_pass_quote('AdamB', 'D')onald Trump Built a National Debt So Big (Even Before the Pandemic) That It’ll Weigh Down the Economy for Years

[Plantagenet]

$this->bbcode_second_pass_quote('theluckycountry', '
')The Media can't say the truth, they have to come out with these BS stories

[ralfy]

https://www.politico.com/news/2023/04/1 ... k-00090588

China operates like any commercial bank: requires collateral, and calls in loans.

But G-7 through the U.S. and the IMF-WB did something else, i.e., structural adjustment: it provided aid and loans with strings attached, i.e., the borrower had to raise taxes, decrease government spending, focus on agricultural subsistence and light industry in order to make money quickly, and pay back the loan plus show off a budget surplus (thanks to raising taxes and decreasing government spending) in order to borrow more money, and rely on import liberalization to make up for any lack in goods and services.

The intent was to make borrows practice fiscal responsibility, but the results were disastrous: lower government spending led to increasing poverty, and a focus on subsistence and light industry led to poor economic growth and de-industrialization.

Worse, that made the borrowers even more dependent on the IMF-WB, which turns out is what G-7 wanted in the first place: make the borrower weak and dependent on them so that they could find ways to take advantage of any cheap labor and natural resources.

That's what happened to countries like the Philippines. In contrast, Asian countries got very good deals with no strings attached, and because of that industrialized. More unusual is China, where the Communist Party became an active partner in foreign-local partnerships. This led to one of the highest and sustained economic growth rates in the world.

It was only decades later that G-7 began to forgive loans, just as the credit that they were providing to the world economy decreased. Now, they want China to do what they could not immediately.

[AdamB]

$this->bbcode_second_pass_quote('ralfy', '
')It was only decades later that G-7 began to forgive loans, just as the credit that they were providing to the world economy decreased. Now, they want China to do what they could not immediately.

[theluckycountry]

$this->bbcode_second_pass_quote('Plantagenet', '')$this->bbcode_second_pass_quote('theluckycountry', '
')The Media can't say the truth, they have to come out with these BS stories

[theluckycountry]

$this->bbcode_second_pass_quote('ralfy', 'h')ttps://www.politico.com/news/2023/04/11/china-lending-imf-world-bank-00090588

China operates like any commercial bank: requires collateral, and calls in loans.

But G-7 through the U.S. and the IMF-WB did something else, i.e., structural adjustment: it provided aid and loans with strings attached, i.e., the borrower had to raise taxes, decrease government spending

[AdamB]

$this->bbcode_second_pass_quote('theluckycountry', ' ')They call Putin an Oligarch, what a joke.

[Plantagenet]

$this->bbcode_second_pass_quote('theluckycountry', '
')
The US should pull a USSR style collapse (if they were smart) and write off all those liabilities and start from a more rational base. But the US isn't smart.

[mousepad]

$this->bbcode_second_pass_quote('Plantagenet', '
')The US is plenty smart.....we just happen to have an elderly and mentally challenged president at the moment

[AdamB]

$this->bbcode_second_pass_quote('mousepad', '')$this->bbcode_second_pass_quote('Plantagenet', '
')The US is plenty smart.....we just happen to have an elderly and mentally challenged president at the moment

[theluckycountry]

$this->bbcode_second_pass_quote('Plantagenet', '
')
You paint with too broad a brush.

The US is plenty smart.....we just happen to have an elderly and mentally challenged president at the moment who doesn't know what is going on.

[theluckycountry]

$this->bbcode_second_pass_quote('mousepad', 'C')an't a nation that builds aircraft carriers and subs and put a man on the moon come up with some good politicians?

[AdamB]

$this->bbcode_second_pass_quote('theluckycountry', '
')And that's why your stupid, or dumbed down. All you can do is think in election cycles. and every-time a new president is elected you blame him for all the woes of the nation and forget all about the last ones.