Joyous Africans Take to the Rails, with China’s Help

Re:Joyous Africans Take to the Rails, with China’s Help by sremani on Wednesday February 08, 2017 @06:25PM (#13603190)

Because China is an export-oriented country. Now we can go into who provided credit for whom to build this railway track, I would assume (I can be wrong) it all involved a dizzying array of Chinese creditors and companies, from the steel, construction to the trains themselves.

They are not building out of charity but the benefit their own companies. Lot of LatAm countries like Ecuador have taken Chinese credit when Commodity markets are hot, are now regretting their mistake.

[edit]: From Wikipedia -- The new line was built between 2011 and 2016 by the China Railway Group and the China Civil Engineering Construction Corporation. Financing for the new line was provided by the Exim Bank of China, the China Development Bank, and the Industrial and Commercial Bank of China.[5] A total of US$4 billion was invested into the railway.[6]

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Re:Joyous Africans Take to the Rails, with China’s Help by vkou on Wednesday February 08, 2017 @06:49PM (#13603345)

> Lot of LatAm countries like Ecuador have taken Chinese credit when Commodity markets are hot, are now regretting their mistake.

Ten years ago, the same was said about those same countries, except it was WMF loans, not Chinese loans.

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Re:Joyous Africans Take to the Rails, with China’s Help by lazaroclapp on Wednesday February 08, 2017 @08:11PM (#13603763)

Sure. Two things were true then, are true now and will be true ten years later (when India is making the loans?): First, the loans are not charity. Second, Argentina will end up defaulting on them.

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Re:Joyous Africans Take to the Rails, with China’s Help by fspeech on Wednesday February 08, 2017 @11:35PM (#13604685)

GDP per capita Ethiopia: $505 (2013)

GDP per capita Argentina: $14715 (2013)

The impact of a railroad (and therefore ROI whether measured financially or just socially) is bound to be higher for Ethiopia, esp since it is the first and only to connect the landlocked country to a major sea port.

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Re:Joyous Africans Take to the Rails, with China’s Help by lazaroclapp on Thursday February 09, 2017 @12:43AM (#13604948)

I mean, you are not wrong. But I don't see how that's a reply to my post. Also, to make it clear, I am (roughly) from the region, and the joke about Argentinian defaults was meant to be gently poking fun at their history with it, since LatAm and loans came up.

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Re:Joyous Africans Take to the Rails, with China’s Help by fspeech on Thursday February 09, 2017 @01:17PM (#13609337)

For a country with such low GDP the debt to GDP ratio is not a good indicator of its future. If the country's economy performs at all its GDP could go up multiple times. The situation is different for a middle income country such as Argentina. One can't reasonably expect Argentinian GDP to go up multiple times so the debt is a lot more onerous relative to the GDP. There is a well know "middle income trap" that is hard to escape. The economic upgrade required to move to the developed status from the middle income rung is much harder than what is required to move up from a very low base (really just "normalize") such as Ethiopia.

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