5 ms·

This is a great project, the only thing that concerns me about it is the very large loan from the IMF denominated in USD they took out in order to build it. Cou

by dools 11y ago

This is a great project, the only thing that concerns me about it is the very large loan from the IMF denominated in USD they took out in order to build it. Could well have been the work of EHMs [1] http://www.amazon.com/Confessions-Economic-Hit-John-Perkins/dp/0452287081 http://www.amazon.com/Confessions-Economic-Hit-John-Perkins/...

IkmoIkmo 11y ago
Could you refer me to the IMF loan, I can't find it? I do know Morocco took our a precautionary loan, iirc with the IMF, in the past few years which was renewed not so long ago. But it was renewed because it was not exercised, it's more of a free loan option they had secured to protect against the very swings in fossil fuel prices that a project like this diminishes due to increased energy independence. Perhaps that's the loan you're referring to? In that case, note that Morocco didn't actually lend the money, it only secured the option to borrow in case shit hits the fan. (oil goes to $100, which is a disaster for Morocco, but no sign of that anytime soon).
- dools 11y ago
  The article I read that in originally references a mixture of private and "IFI funding"[1] which I took to mean International Financial Institutions (which includes IMF/WorldBank etc. who make loans denominated in USD)[2]. The book I referenced above is by John Perkins who worked as a consultant for a company who would justify huge loans denominated in USD for power infrastructure to developing nations, but a significant majority of the work and materials would come from US companies. So the World Bank or the IMF would loan tonnes of money to someone in USD, much of it being transferred directly to companies in the US anyway, and leaving the nation with a large debt to service in a currency they do not issue (leaving them vulnerable to pressure from the US to export goods, for example, even though people require them locally, to liberalised trade agreements, or even to be allies in conflict etc. all sorts of sordid shit; the John Perkins stuff is well worth reading). When governments take on large debts denominated in a currency they do not issue, it's always a cause for concern. That's why MMT academics were against the Euro[3], and why so many developing nations are now locked into crippling debt service that they cannot possibly keep up with. Countries like the US, UK, Australia and Japan who only issue debt (ie. all currency or treasury securities) denominated in their own currency, have no risk of insolvency and no trouble servicing the debt[4] -- they can choose to stop paying interest any time they want and indeed the "debt" people refer to in those economies is really a "buffer stock" rather than a "bond market"[5] When a nation that does not issue USD (ie. any nation other than the US) takes on USD denominated debt, with interest payments denominated in USD, they're up shit creek without a paddle. [1] http://www.worldfinance.com/infrastructure-investment/project-finance/moatize-ipp-noor-1-csp http://www.worldfinance.com/infrastructure-investment/projec... [2] https://en.wikipedia.org/wiki/International_financial_institutions https://en.wikipedia.org/wiki/International_financial_instit... [3] http://www.amazon.com/Eurozone-Dystopia-Groupthink-Denial-Grand/dp/1784716650 http://www.amazon.com/Eurozone-Dystopia-Groupthink-Denial-Gr... [4] https://www.youtube.com/watch?v=i35uBVeNp6c https://www.youtube.com/watch?v=i35uBVeNp6c [5] https://www.youtube.com/watch?v=soVyyyXrcwo&index=6&list=PLoGqI16J4bCtzP8aN3sQcZd8xcGrkXmHA https://www.youtube.com/watch?v=soVyyyXrcwo&index=6&list=PLo...
  - IkmoIkmo 11y ago
    Ah I see, no I wouldn't mean to take it as the IMF although they may have been part of the loan. A big chunk of the money is from climate investment funds (CIFs), which come from IFIs, of which in particular the regional IFI, the African Development Bank, in addition to private loans from Saudi Arabia and Germany. In fact it's co-owned by some of those companies, e.g. the saudi ACWA Power, the Spanish TSK etc. Anyway, it doesn't matter as indeed all of those could be dollar denominated. I don't know if they are. It's extremely common for, particularly in english/international reporting, numbers to be reported in dollar equivalents. Whether that's the actual denomination of the loan I don't know. I do know Morocco struggles deeply with hard currency scarcity, particularly in the realm of necessary energy imports every year, so they're well aware of the issues surrounding obligations in foreign currency denominations. There's a lot of fluff pieces on this project but sadly little deep insight in how it's all structured. Thanks for the book reference. I'd not read it but I've been introduced to the issue in college classes many times, it features heavily in international political economy classes for example of which I took a few. I hope to find some time this semester to look into all the resources you linked me, thanks for that!
- aedron 11y ago
  Not IMF, World Bank: http://www.worldbank.org/projects/P131256?lang=en http://www.worldbank.org/projects/P131256?lang=en
xadhominemx 11y ago
Ya, I don't think "EHM" is a real acronym that people actually use
- dools 11y ago
  It's used in the book I linked to above (and stands for "economic hitman", an industry insider term; or so claims John Perkins who used to be one -- interesting book and worth a read)

by dools 11y ago

IkmoIkmo 11y ago

Could you refer me to the IMF loan, I can't find it? I do know Morocco took our a precautionary loan, iirc with the IMF, in the past few years which was renewed not so long ago. But it was renewed because it was not exercised, it's more of a free loan option they had secured to protect against the very swings in fossil fuel prices that a project like this diminishes due to increased energy independence. Perhaps that's the loan you're referring to? In that case, note that Morocco didn't actually lend the money, it only secured the option to borrow in case shit hits the fan. (oil goes to $100, which is a disaster for Morocco, but no sign of that anytime soon).

dools 11y ago
The article I read that in originally references a mixture of private and "IFI funding"[1] which I took to mean International Financial Institutions (which includes IMF/WorldBank etc. who make loans denominated in USD)[2]. The book I referenced above is by John Perkins who worked as a consultant for a company who would justify huge loans denominated in USD for power infrastructure to developing nations, but a significant majority of the work and materials would come from US companies. So the World Bank or the IMF would loan tonnes of money to someone in USD, much of it being transferred directly to companies in the US anyway, and leaving the nation with a large debt to service in a currency they do not issue (leaving them vulnerable to pressure from the US to export goods, for example, even though people require them locally, to liberalised trade agreements, or even to be allies in conflict etc. all sorts of sordid shit; the John Perkins stuff is well worth reading). When governments take on large debts denominated in a currency they do not issue, it's always a cause for concern. That's why MMT academics were against the Euro[3], and why so many developing nations are now locked into crippling debt service that they cannot possibly keep up with. Countries like the US, UK, Australia and Japan who only issue debt (ie. all currency or treasury securities) denominated in their own currency, have no risk of insolvency and no trouble servicing the debt[4] -- they can choose to stop paying interest any time they want and indeed the "debt" people refer to in those economies is really a "buffer stock" rather than a "bond market"[5] When a nation that does not issue USD (ie. any nation other than the US) takes on USD denominated debt, with interest payments denominated in USD, they're up shit creek without a paddle. [1] http://www.worldfinance.com/infrastructure-investment/project-finance/moatize-ipp-noor-1-csp http://www.worldfinance.com/infrastructure-investment/projec... [2] https://en.wikipedia.org/wiki/International_financial_institutions https://en.wikipedia.org/wiki/International_financial_instit... [3] http://www.amazon.com/Eurozone-Dystopia-Groupthink-Denial-Grand/dp/1784716650 http://www.amazon.com/Eurozone-Dystopia-Groupthink-Denial-Gr... [4] https://www.youtube.com/watch?v=i35uBVeNp6c https://www.youtube.com/watch?v=i35uBVeNp6c [5] https://www.youtube.com/watch?v=soVyyyXrcwo&index=6&list=PLoGqI16J4bCtzP8aN3sQcZd8xcGrkXmHA https://www.youtube.com/watch?v=soVyyyXrcwo&index=6&list=PLo...
- IkmoIkmo 11y ago
  Ah I see, no I wouldn't mean to take it as the IMF although they may have been part of the loan. A big chunk of the money is from climate investment funds (CIFs), which come from IFIs, of which in particular the regional IFI, the African Development Bank, in addition to private loans from Saudi Arabia and Germany. In fact it's co-owned by some of those companies, e.g. the saudi ACWA Power, the Spanish TSK etc. Anyway, it doesn't matter as indeed all of those could be dollar denominated. I don't know if they are. It's extremely common for, particularly in english/international reporting, numbers to be reported in dollar equivalents. Whether that's the actual denomination of the loan I don't know. I do know Morocco struggles deeply with hard currency scarcity, particularly in the realm of necessary energy imports every year, so they're well aware of the issues surrounding obligations in foreign currency denominations. There's a lot of fluff pieces on this project but sadly little deep insight in how it's all structured. Thanks for the book reference. I'd not read it but I've been introduced to the issue in college classes many times, it features heavily in international political economy classes for example of which I took a few. I hope to find some time this semester to look into all the resources you linked me, thanks for that!
aedron 11y ago
Not IMF, World Bank: http://www.worldbank.org/projects/P131256?lang=en http://www.worldbank.org/projects/P131256?lang=en

xadhominemx 11y ago

Ya, I don't think "EHM" is a real acronym that people actually use

dools 11y ago
It's used in the book I linked to above (and stands for "economic hitman", an industry insider term; or so claims John Perkins who used to be one -- interesting book and worth a read)