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It is a hard problem. Poor countries need a lot of investment (0). Historically many investments failed and creditors ruined the country and made live of the i

It is a hard problem. Poor countries need a lot of investment (0). Historically many investments failed and creditors ruined the country and made live of the involved people even more miserable. My gut feeling is that chinese investors are a little bit smarter but there are obviously problems as well. (another gut feeling: china has too much money, they can't invest in US treasuries anymore) (1) This US/China conflict is just stupid. Nearly everybody looses. (0) Adam Tooze "The west has failed to keep its promises on aid" https://www.ft.com/content/75d35382-32e4-4548-82e6-0d20d99847cf https://www.ft.com/content/75d35382-32e4-4548-82e6-0d20d9984... (1) https://markets.businessinsider.com/news/bonds/dedollarization-china-economy-treasury-bond-market-outlook-selling-american-debt-2023-8?op=1 https://markets.businessinsider.com/news/bonds/dedollarizati...

hakfoo 3y ago
Part of the reason that developing-world investment has traditionally been hard is because it likely requires a longer perspective than most investors have. Build a decent rail network in Laos and it might take 75 years for them to leverage it to a level of development that pays it back, which gives you 75 years of risk it might all come crashing down. You can't float that meaningfully on the public markets, but a state can justify it, both because they can wait on the payback, and swallow the loss if they have to, and because they can value the economic cooperation and dependency it generates. I wonder if an alternate route would be to use aid money as subsidy to attract private investment. Juice the yield on bonds to too-compelling-to-ignore, or offer backfill on short-term revenues if the project is speculative, and you could attract the world's financiers. On the other hand, perhaps there's a hostility to existing finance to begin with. A lot of the developing world has had bad experiences with the mainstream Western financial system-- their banks and associated institutions are the ones coming in and demanding austerity, privatizations, and currency manipulations to settle their debts. Perhaps China just represents a fresh face: all they need to do is squeeze a little less to look good by comparison.
- AtlasBarfed 3y ago
  It also requires something that western capitalism doesn't really structure itself around: an actual moral compass that isn't just shadow imperialism which is what "confessions of an economic hitman" involves. You'd want to genuinely want improvement for the people. Not for enriching a new set of brutal and corrupt elites that will do the bidding of the CIA/IMF/whatever, but actually want the people's lives improved in living standards, education, economic independence, etc. Kind of like how China fast-forwarded themselves. In rose tinted glasses, I can see the Belt and Road kinda being like that, but of course it left out the development of manufacturing / stealing of technology that really underpinned China's rise.

hakfoo 3y ago

Part of the reason that developing-world investment has traditionally been hard is because it likely requires a longer perspective than most investors have. Build a decent rail network in Laos and it might take 75 years for them to leverage it to a level of development that pays it back, which gives you 75 years of risk it might all come crashing down. You can't float that meaningfully on the public markets, but a state can justify it, both because they can wait on the payback, and swallow the loss if they have to, and because they can value the economic cooperation and dependency it generates. I wonder if an alternate route would be to use aid money as subsidy to attract private investment. Juice the yield on bonds to too-compelling-to-ignore, or offer backfill on short-term revenues if the project is speculative, and you could attract the world's financiers. On the other hand, perhaps there's a hostility to existing finance to begin with. A lot of the developing world has had bad experiences with the mainstream Western financial system-- their banks and associated institutions are the ones coming in and demanding austerity, privatizations, and currency manipulations to settle their debts. Perhaps China just represents a fresh face: all they need to do is squeeze a little less to look good by comparison.

AtlasBarfed 3y ago
It also requires something that western capitalism doesn't really structure itself around: an actual moral compass that isn't just shadow imperialism which is what "confessions of an economic hitman" involves. You'd want to genuinely want improvement for the people. Not for enriching a new set of brutal and corrupt elites that will do the bidding of the CIA/IMF/whatever, but actually want the people's lives improved in living standards, education, economic independence, etc. Kind of like how China fast-forwarded themselves. In rose tinted glasses, I can see the Belt and Road kinda being like that, but of course it left out the development of manufacturing / stealing of technology that really underpinned China's rise.