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Comment by paganel | Hacker News Reader

You’re saying that building roads and bridges is not beneficial to countries which deeply lack roads and bridges?

The book "the undercover economist" talks about this alot, but how the USA and the world bank did it. Essentially US contractors go to a developing country and say: you need to build infrastructure for your economy to grow and so take out a huge loan to do that, and paying back will be easy because of all the resulting growth. But there are two catches, the first is that it will be US companies doing the work (or at least controlling the money), and they will vastly over-estimate the growth and hence the required infra-structure (to maximize profits of course). Country agrees, sometimes knowing full well about how its corrupt but they get a slice so who cares, and boom. You get profits for private USA companies and unpayable debts for the country. Bonus is when the debts default the loan-provider can take ownership of whatever was very valuable in the country be it nationalized industries or natural resources.

The fact that China could or would do the exact same thing in Africa is a no-brainer because of course they are.

This is also the topic of the book Confessions of an Economic Hitman.

Yes, that's the one I actually meant, thank you. I can't edit my original now but this is book I was referring to.

Not when they are built by Chinese companies, using Chinese sourced labour and supplies, and then the locals are taxed / billed to use them which many can't afford to begin with. Not to mention the governments now owing that loan money plus interest, none of which really went into the local economy.

Not arguing against China, nor infrastructure projects, but B&R initiative is very China-centric, with a lot caveats that are often overlooked by short-sighted politicians.

So what do you suggest as a better alternative?

The West has tried and failed with countless “solutions” for more than six decades now, in many places making the situation worse compared to the start of the decolonization process.

Also, road taxes is a measure that it is also heavily promoted by the European Commission in the Eastern European countries where “its” money is now helping build bridges and highways (I live on such an Eastern European country).

Yeah, that's a thing - west just exploited the hell out of many parts of Africa, while not improving most places by any meaningful means, just filling pockets of corrupt local dictators. In fact most places are much worse off than they were 60 years ago.

So don't complain that they are fed up and seek help elsewhere, what west has to offer has been tried many times and results are down there. If they end up indebted to Chinese or US or some EU country like France means little difference to them, all else being equal.

The local dictators hide and bring their money to the west only so it is a lie that the money stays in those countries. Most of it is comes to the west and then these politically exposed people are used by the 3 letter agencies of the west to control the poor countries. For those countries the loans from the West or China don't matter only maybe they can better options if they can play the west and China against each other.

It seems unlikely that omnipotent 3 letter agencies have been the cause of African strife for the last 30 years.

Economics does.

Nigeria, Egypt, and South Africa have decent economies, and they've followed the same path as many other developed countries.

Moving away from agriculture and raw resource extraction, building industry, and then identifying, incubating, scaling, and exporting services.

The fact that other countries in the region haven't done the same, specifically the largest Ethiopia and DRC, has more to do with internal civil wars.

Hopefully recent stability in Ethiopia and engaging additional generation capacity at the Grand Ethiopian Renaissance Dam will kickstart the Ethiopian economy.

(And no, civil wars aren't all started by 3 letter agencies)

I think the major issue in this situation is that the loaned money effectively circulates back into Chinese hands, and all that the local economy gets in return is infrastructure that they will in a few years not be able to maintain or develop due to a lack of skill or resources.

So not only are none of the locals profiting from these projects, but more importantly no one is learning and developing the skills to construct and maintain the new infrastructure and services in the region.

This play by China (even if unintentional) is extremely predatory as it only makes the country more dependant on China.

In an ideal circumstance China would manage these projects while training and developing local talent to help develop the local industries. Only then do I believe would these deals be beneficial for Africa in the long run.

So you might believe these project are improving the local regions at the present, but I would be really interested to hear if you still believe so in 10 years.

This is the 101 debt trap propaganda narrative. Few years ago McKinsey field reports of 1000+ PRC firms across africa and 90% of employees were locals. There's studies back in mid 10s that show 70-80% localization figures across PRC infra export projects. Reality is PRC/BRI localization depends on project timelines - quick ones use more experienced PRC labour, long ones integrate more locals, because at the end of the day there's deadlines to meet and govs/people of underdeveloped countries want better infra fast. PRC supply, local demand, and even corruption mostly align in these deals. And what is even "extremely predatory", of course if they use PRC tech they would become more dependant to PRC supply chains just like they would be dependant on west when using western vendors. The western cope is thinking there's something wrong being dependent on PRC who has established industrial base to deliver and sustain these capital projects cheaper than west. Underdeveloped countries with limited indigenous capabilities have to choose who to be dependant on regardless, and without conflicting geopolitics like in ASEAN, PRC is the easy partner of choice.

lmao if the west really wanted to help Africa or Asia in the name of lifting everyone on the globe out of poverty it would be something like Marshall plan & how EU is integrating the balkans (Marshall plan in todays dollars is like 130 billion :))

I love this condescending and infantilising tone of yours, regarding African governments as some gullible, uneducated bunches of toddlers that anyone can just walk in and take advantage of - as if they weren’t perfectly capable of signing their own deals.

Fitting such casual “Africa dumb” and “China evil” sentiments in one nonchalant comment seems like such a weird specialty of this brainwashing and propaganda that we have going on in the West.

You are the only one saying "Africa Dumb" and "China Evil". How is Africa supposed to maintain and extend roads without the expertise in their local population? Or are you saying they do have this expertise?

Nah.

This is just usury and loan sharking on a global scale.

Substitute Southeast Asia for Africa.

China is pretty much providing payday loans and debt trap diplomacy to poorer countries (149+) in order to consolidate power.

This has nothing to do with sophistication but everything to do with greed.

> regarding African governments as some gullible, uneducated bunches of toddlers

They’re not stupid, they’re corrupt. The elites get a slice of the pie. It’s how development finance has been done for centuries. “Stakeholders” are bought off. The country is left with the bill.

Exactly. And if a ruler’s elite supporters find out he turned down Chinese loans that he could’ve used to give his elite supporters lots of free money, they’ll remove him from power and put someone else in that will take the loan money and pay it out to the elites.

CGPGrey has a great video called ‘Rules for Rulers’ that explains this in depth: https://youtu.be/rStL7niR7gs

> corrupt

To quantify the statement,

https://en.m.wikipedia.org/wiki/Corruption_Perceptions_Index

https://en.m.wikipedia.org/wiki/Global_Corruption_Barometer

I love this condescending and infantilising tone of yours

Fitting such casual “Africa dumb” and “China evil”

None of this happened, you are hallucinating what other people said.

Correct.

Building roads to nowhere, airports that are almost not used, ports and trains that aren't used aren't beneficial. It could be usefull if a minimal of due diligence was done though, but there hasn't as far as I'm aware.

Additionally, when the local people are not hired as workers, but Chinese people are. The value of infrastructure projects and funneling back money to the local workers is greatly deminished.

Instead, infrastructure money goes straight back to the Chinese ( instead of the locals), while the country itselve has to pay the money back to the Chinese.

So China passes by the cash register 2 times.

not in the way china builds for export

i can comment on the road projects in Nigeria and Zambia which i have personally seen

over 3-5 years after completion many fell into disrepair and now arent much better than unpaved tracks that they replace ,while the nations gained no road building expertise and are stuck with large loans

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