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Your premise here seems to be "countries paying back their loans is bad for the companies that built the infrastructure", and I think I'm really going to need s

Your premise here seems to be "countries paying back their loans is bad for the companies that built the infrastructure", and I think I'm really going to need some more explanation for that one.

coliveira 8y ago
Companies are paid anyway: if the country cannot make payments, it will have to agree to an IMF loan that is used to pay the American companies first, and then left holding the debt along with draconian austerity measures. So for these companies the more outlandish the promises, the better! The payment is "guaranteed" by the IMF deals. During a period from the 60s on this has been the biggest cash cow for American companies operating on developing countries.
- DuskStar 8y ago
  Right, but that seems to suggest that it's getting countries to agree to take huge loans that's good for the companies, which is kind of independent of their eventual ability to pay the loans back. GGP was saying that countries paying back the loans was bad for the companies in question, when their relationship will have been over for years at that point.
  - coliveira 8y ago
    Yes, in a normal world it is not bad for these companies if the country can pay their loans back. However, if you follow the logic, if a country is paying back the loans on time it just means that the first loan was not big enough! The advantage for a company to sell more than the buyer can pay is that for the foreseeable future (a decade more or less) it will make A LOT of money. This is all that CEOs really want. And under the logic of IMF, these loans will be paid in one way or another, so the company will not suffer any problem by selling more than the country really can pay.
icebraining 8y ago
"When some of those countries were unable to service their debt we often said, "Ok, you may not pay now, but your country will vote to support the US at the next vote in the UN. Or you will allow the US to build a military base on your territory." Or something else of the kind." https://sputniknews.com/analysis/201711161059158765-economic-hitman-interview-us/ https://sputniknews.com/analysis/201711161059158765-economic...
- DuskStar 8y ago
  That seems like it would be bad for the US not bad for the companies in question, who got paid either way.
  - icebraining 8y ago
    The gist I got from the article is that those companies would also get benefits, like cheaper access to resources or monopolies in their areas of operation.
- Eire_Banshee 8y ago
  I wish more people understood that this is how international debts are ACTUALLY paid.
pthreads 8y ago
I am going to recommend this book -- Confessions of an Economic Hitman (John Perkins). I think there might be a new version since the time that I read.
KorematsuFred 8y ago
Countries forced to take loans they don't need and then being forced to pay back is actually a bad thing. Us government is using American taxpayer money to funnel it back into American private companies, in the process increasing corruption world over, making USA less safer and hurting global economy is a bad thing. (again this is pretty much like student loan bubble. )

Your premise here seems to be "countries paying back their loans is bad for the companies that built the infrastructure", and I think I'm really going to need some more explanation for that one.

coliveira 8y ago

Companies are paid anyway: if the country cannot make payments, it will have to agree to an IMF loan that is used to pay the American companies first, and then left holding the debt along with draconian austerity measures. So for these companies the more outlandish the promises, the better! The payment is "guaranteed" by the IMF deals. During a period from the 60s on this has been the biggest cash cow for American companies operating on developing countries.

DuskStar 8y ago
Right, but that seems to suggest that it's getting countries to agree to take huge loans that's good for the companies, which is kind of independent of their eventual ability to pay the loans back. GGP was saying that countries paying back the loans was bad for the companies in question, when their relationship will have been over for years at that point.
- coliveira 8y ago
  Yes, in a normal world it is not bad for these companies if the country can pay their loans back. However, if you follow the logic, if a country is paying back the loans on time it just means that the first loan was not big enough! The advantage for a company to sell more than the buyer can pay is that for the foreseeable future (a decade more or less) it will make A LOT of money. This is all that CEOs really want. And under the logic of IMF, these loans will be paid in one way or another, so the company will not suffer any problem by selling more than the country really can pay.

icebraining 8y ago

"When some of those countries were unable to service their debt we often said, "Ok, you may not pay now, but your country will vote to support the US at the next vote in the UN. Or you will allow the US to build a military base on your territory." Or something else of the kind." https://sputniknews.com/analysis/201711161059158765-economic-hitman-interview-us/ https://sputniknews.com/analysis/201711161059158765-economic...

DuskStar 8y ago
That seems like it would be bad for the US not bad for the companies in question, who got paid either way.
- icebraining 8y ago
  The gist I got from the article is that those companies would also get benefits, like cheaper access to resources or monopolies in their areas of operation.
Eire_Banshee 8y ago
I wish more people understood that this is how international debts are ACTUALLY paid.

pthreads 8y ago

I am going to recommend this book -- Confessions of an Economic Hitman (John Perkins). I think there might be a new version since the time that I read.

KorematsuFred 8y ago

Countries forced to take loans they don't need and then being forced to pay back is actually a bad thing. Us government is using American taxpayer money to funnel it back into American private companies, in the process increasing corruption world over, making USA less safer and hurting global economy is a bad thing. (again this is pretty much like student loan bubble. )