Are big powers pushing loans onto developing countries?

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.

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.

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.

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.

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.