Are big powers pushing loans onto developing countries?

Yes. They bribe LDC leaders into excessive debt, eventually repaid in public assets (ports, mines) through debt-equity swaps.
16% (4 votes)
Yes, but only to allow certain develoved-country industries to export, followed by debt forgiveness at the expense of taxpayers.
52% (13 votes)
Not really. Developing countries really need foreign capital in order to develop their infrastructure and industry.
32% (8 votes)
Total votes: 25

Comments

Of course, developing countries need foreign capital to develop their infrastructure and industry, but any aid is not a charity, and countries that lend money to poor countries want certain benefits. Different developed countries have different goals and methods of lending to developing countries, but they clearly want to have an impact (economic, political, social) on the debtor's country. Today, China is a rich and important country that is developing rapidly and has a centralized economic system and significant national resources, which can provide loans to poorer countries and influence their infrastructure and economic development. Therefore, China is pursuing a more aggressive open national credit policy. Instead, European countries lend to poorer countries more cunningly and less aggressively. They mainly provide loans in order to allow certain sectors of their countries to export with further debt forgiveness at the expense of Europeans who are taxpayers, ie indirectly the loans are provided by European citizens and not by governments. Coronavirus exacerbates the economic situation in poor countries with debt, as economic growth and production are declining, and unemployment and spending are rising, leading to further debt growth. So I think that big powers pushing developing countries into debt and only countries with more stable economies and less corrupt governments will be able to use international credit effectively and overcome poverty traps.
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Total votes: 13
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The problem of foreign loans for developing countries' governments is very complex and multifaceted. It cannot have one way to communicate. Therefore, the answer to the question cannot be unique and correct at the same time. On the one hand, the economies of developing countries are in dire need of capital inflows (no matter whether from domestic or external sources of investment). Foreign investment is often associated with access to innovative technologies and goods. They are also important for economic growth. In this regard, foreign investment in form of loans is necessary for developing countries' government. On the other hand, it should be keep in mind that economic interests play an important role in today's world. Quite often, such interests are hidden. When it comes to sovereign debt, it is important to keep in mind the interests of both creditors and borrowers. It is hard to believe that the governments of foreign creditors are guided by good intentions to help poor countries. It is also difficult to count on the direct economic effect of sovereign loans. It is not always possible to get significant interest income because borrowers are poor countries. In addition, developing countries' governments often default. Therefore, I consider that among interests of such creditors dominate, first of all: - the possibility of potential access to natural and other resources that developing countries are rich in. The countries of the African continent and China's behavior as a creditor are a clear example in favor of such a thesis; - geopolitical interests. Here we can mention the loans provided by the Russian government to the Government of Ukraine in 1995-2013, as well as current loans from the Russian government to the government of Belarus, financial assistance from the Turkish government to the governments of the Caucasus and Middle East countries. The interests of governments in developing (borrowing) countries are also very diverse. Of course, not all of them can be evaluated equally. I assume that some heads of developing (borrowing) countries in obtaining foreign loans have and implement programs for economic development of their countries. This is evidenced by the experience of individual countries in the Asian region. However, unfortunately, there are many more negative examples related to the use of sovereign loans (respectively, the ability to repay sovereign debt) today in the world. They are the result of: - corruption motives of government officials at the central and local levels; - lack of effective investment mechanisms at the expense of borrowed funds; - weak monitoring and control over the use of borrowed funds. Therefore, I support the view of Daron Acemoglu and James A. Robinson: in order for developing countries to have economic prospects (including in obtaining foreign loans), the proper development of economic and political institutions is needed. Otherwise, no foreign capital will save them from decline.
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Total votes: 12
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Developing countries need funds in order to grow their economy but getting them at the expense of a long-term loan is a risk by itself. As more developed countries give money to less-developed ones, the latest will need to repay the debt one day and as the foreign aid doesn't create long-term growth they will face a serious issue. The developing country consumes the money, invests in infrastructure, and at some point money end and the country is facing the exact same issues but with a nicer infrastructure, they can't maintain. Once the payback day comes, because of the inability to pay, countries give access to their strategic resources such as ports, mines, etc. The lender will profit from this more than they would have profited from the money they would receive back. The videos mention first world countries bulling sub-developed countries in order to take their resources at a lower cost. In my opinion this is wrong and should be addressed by a higher entity.
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Total votes: 14
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When a developing country starts to get ”financial support” from a developed country it is more than probably that the richer country has a namely interest in that region. Especially when the developing countries have any kind of resouces. In this way the creditors or the powerful states begin to show their superiority over the debitors or the less developed countries whose people become active taxpayers because they are usually trapped in the debt. Step by step, richer countries start to mark the supported territory with their direct involvement, for instance they could invest in transport infrastructure, construction, or even build a military base in the targeted area. As it usually was in the history, superior states wanted to have more important strategic points for any eventuality. As an example is the “capital hunger” of the African continent which is essencial to explaining and understanding how, unlike other centers of world economic power, China has devised an ambitious long-term strategy to conquer African markets and use mineral and energy resources of this continent. China's real investment in Africa is much lower than debt-generating flows and, in particular, project financing. China is not only increasing Africa's economic dependence, but is also trying to strengthen it in the long run by structuring credit agreements for sustainable access to natural resources - loans for exploration and exploitation of mineral and energy resources - allowing control of Chinese companies on the strategic sectors of African countries. However, developing countries really need foreign capital in order to develop their infrastructure and industry and only through accessing external credits they could develop their weak points.
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Total votes: 13
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Many countries in Africa aspire to a better economic future through the model Chinese, that is, infrastructure projects that cannot be afforded. China has been the main beneficiary of that infrastructure boom, but despite the warning signs, both Africa and China itself are burying themselves in debt increasingly difficult to handle. The COVID-19 crisis has accelerated that process and there are several institutions already propose measures to avoid a debt crisis of consequences unpredictable geopolitics. Africa has become the continent with the highest urban growth as it becomes one of the final frontiers of the fourth industrial revolution. Pear By 2050, the current African population may double, with 80% of that growth in the cities. The International Monetary Fund declared in 2019 that the continent would be the second-fastest-growing region, with domestic consumption growing at 3.8% and can reach a combined GDP of $ 2.1 trillion by 2025. This Transition poses huge challenges, but also opportunities for businesses and governments willing to take risks in an unprecedented construction fever. As Chinese investors face increasing restrictions in the United States and Europe, their hunger to invest elsewhere may also increase. This was the case in 2018, for example, when more Chinese companies invested in African tech startups; that is, their interest in the continent increased after increased scrutiny of the US market. In recent years, the notion has spread that infrastructure is what Africa needs more and what China can provide better. So far, it has been a very eventful year for China-Africa relations. While the Chinese have been quick to provide aid and support to African nations during the current COVID-19 pandemic, the outbreak has also highlighted issues that are not working in Beijing's alliances with African countries. About a million Chinese live in Africa, which probably represents the largest non-African migrant population on the continent. And despite revealing weaknesses in the China-Africa relationship, the current pandemic is also showing the positives of Beijing's involvement in the continent. The level of private commitment linked to COVID-19 aid in recent months shows that something may be changing. Countries are certainly responsible for their indebtedness, but one China and one World Bank that have fueled a delusion based on the Chinese model of growth also have their share of responsibility. China's economic objectives in Africa and other places can be criticized as a Trojan horse for espionage and to extend its soft power. Certainly, countries rich in natural resources such as Angola, Zambia, and the Republic of Congo, or with strategically relevant infrastructures such as Kenya or Djibouti, are more vulnerable to loss of control over their assets in trading with their Chinese creditors. But it is no less true that the China exhibition is huge. This situation has 2 parts like any other currency. Of course, the poorly developed countries of Africa, but with a considerable patrimony of natural resources, need investments to develop the territory and grow the country's economy, but, as no investment comes without commission, here is the nasty part. Some investments, or loans, come out to be paid at a much higher price.
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Total votes: 15
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Expert vote

The economic debts of the developing world will not be fully repaid, quite simply because the people who live in the developing world cannot afford to repay them. The harsh reality of poverty in poorer countries was an initial stimulus for the loans. As we shall see below, economic conditions suggested that borrowing money was a reasonable course of action in the 1970s, particularly for poor countries, which perceived few, if any, alternative ways to address the economic plight of their citizens. Those who live in the rich countries of the developed world can readily observe profound poverty: all who live in the wealthy, industrialized nations do not have equal access to education, health care, good nutrition, and housing. The fact that these deprivations exist alongside great wealth is shocking, but they pale when compared to the scale of global poverty. The hunger, homelessness, illness, and suffering of the poor in the developed countries must be multiplied a thousand times, in some respects a million times, to begin to reflect the scope of poverty in the world's poorest nations. Despite the overwhelming number of statistics and indicators, global poverty is as hard to measure as it is to conceptualize. Although it is simple to characterize abstractly the living conditions of the world's impoverished population, there is no widely accepted, standard method of identifying the poor, and, therefore, of measuring the exact extent of global poverty. Economists, social scientists, politicians, and agencies for international aid each advocate their own particular definition of poverty depending upon the interests, whether noble or self-serving, which they are protecting or pursuing. Nonetheless, whatever the bias of the analyst or the method used to estimate the number of global poor, the statistics are appallingly high, almost beyond comprehension. Regardless of the method of calculation, it is clear that many people in the world are suffering needlessly and living lives of wretched deprivation. This is especially true for women and children in the developing world.
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Total votes: 9
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Expert vote

I voted for option 3, but I think there is some truth in each of the statements. Depending on the political system and the stage of development of each country, it may be in one or another of the situations. Therefore, I believe that this question cannot be answered in general, but referring to particular situations. It is even possible that in a certain country there is a combination of situations, for example, 1 + 3, in different proportions. Developed countries may have certain geostrategic interests that motivate them to make one decision or another to support developing countries. An ideal global society would not allow strong inequalities between states and between the living standards of peoples. But that does not exist, although we are in the best period of humanity. From my point of view, the best situation is now in the European Union which has policies to reduce inequalities. Strong states seem to have understood that there is a strong regional benefit in the development of all societies. It is understandable that powerful states want to protect their supremacy, but some have understood that global development is the desirable long-term goal.
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Total votes: 11
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Big powers are always pushing loans, because they need money for their own business or interests. They usually tell people that they need money for some reasons, investment plans, developing country, etc. And in this is the explanations for how many countries are indebt. Poor countries works hard for money, people work equally with people from a rich country, but it doesn t matter, because big powers wants the product, they value the product, not the people and they don t invest in poor countries.
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Total votes: 11
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Foreign direct investment and other private financial flows have declined in developing countries following the 2008 financial crisis, which is why foreign investment is resuming in 2012, but at a much lower level than before the financial crisis. So I think developing countries need foreign capital to be eligible and to be able to attract investment. Balancing the trade balance by increasing exports and attracting investment in the country is an absolute priority for a government. The increase in investment volume will be accompanied by action aimed at improving the business environment and investment climate in the partner countries, as well as significant technical assistance. In this way, everyone will benefit: on the one hand, the local private sector will become more active, on the other hand, companies that want to expand their activity in developing and neighboring countries. Achieving sustainable and inclusive growth and job creation continue to be some of the main challenges for developing countries. The investment climate and the general context of policies in the EU's neighborhood and in Africa do not always support private sector investment. This is especially evident in fragile countries and in countries affected by conflict and violence, some of which are important countries from which migrants in an illegal situation come. Let's not forget one aspect, however, any attraction of foreign capital has its negative parts that a state must have the capacity to manage. Never a great financial power whether we are talking about a country or we are talking about a bank that offers a loan can not give you confidence if there is no long-term strategy with a profit and the possibility of development for that country or bank. A complex example is that of China, which has become one of the largest economic powers, helping poor countries build their roads, airports and other infrastructure because that country is a strategic point for their own development, and this strategy is an extremely beneficial one for a poor country, if we were to define it, we could simply call it the poverty trap.
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Total votes: 10
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I think that it depends on the country too. For example, Romania is getting a lot of money from other European countries. From my point of view, those money are wasted away. Taking into consideration the Corona period, our president risked to borrow a lot of money from different parts of our continent, in order to help the health field. However, things are not quite good, the money were spent, the country's economy is down and the whole country is now in debt. The country is gonna suffer a while, but this is not the first time that the leader of the country is getting us into debt. Money are easily spent, hardly justified and the economy of the country needs time to recover. So, yeah. I think that the big powers of a country push loans onto developing countries.
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Total votes: 10
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