Comments on: How Ecuador sold itself to China

By: Michael_Woods

Michael_Woods — Thu, 07 Jul 2011 04:55:59 +0000

Mr. Salmon,

I would urge you to better measure your headline titles. It is because of overstatements like these that conflicts begin, followed by herd behavior.

You have a big responsibility in your hands.

Cheers

By: Laowaiblog

Laowaiblog — Thu, 07 Jul 2011 02:38:15 +0000

It seems that China is the “saviour” of the world: It helps Spain, Greece and other countries in Europe by providing them with loans, and it is investing heavily in Africa and in South America.

This is the result of actions created by the debtors themselves: If countries (and people) had lived within their means, they would not have needed assistance to get out of this whole mess.

http://laowaiblog.com

By: berniebec

berniebec — Wed, 06 Jul 2011 22:46:27 +0000

A question has been raised: why debt with China doesn’t show as external debt in Ecuador?
The thing is that the Ecuadorian government has gotten a little creative and now makes companies (mostly dams) with little capital where the main debtor is this company, not the state. In the case of oil, Petroecuador is the debtor, not the government. Of course, in the end the Government owns those companies. But THE GOVERNMENT DIDN’T TAKE THAT DEBT DIRECTLY.

note: I’m Ecuadorian and know how Chinese do business with the government. Makes the IMF a saint!

By: Danny_Black

Danny_Black — Wed, 06 Jul 2011 20:32:07 +0000

mwebb19, what interest rate is Ecuador paying and what rate is Japan paying on it’s debt? What are the servicing costs?

By: mwebb19

mwebb19 — Wed, 06 Jul 2011 17:41:58 +0000

In fact, the CIA World Factbook says 104 countries have larger public debt to GDP ratios – all the way up to Japan with 225%.
Whatever Ecuador’s economic problems might be, public debt is not one of them, and borrowing a few billion from China will not significantly change that.

By: mwebb19

mwebb19 — Wed, 06 Jul 2011 17:29:50 +0000

What’s your point? Isn’t a public sector debt of 20 or 25% relatively modest these days. Many modern economies have public sector debts approaching 100% of GDP.
Seems a bit of a cheap shot to single out Ecuador these days.

By: Danny_Black

Danny_Black — Wed, 06 Jul 2011 17:29:48 +0000

Nehx, yeah had nothing to do with Argentinians running up huge amounts of foreign currency debt.

By: EdwinaLee

EdwinaLee — Wed, 06 Jul 2011 17:27:52 +0000

“Sold itself to China”? Sounds like a grossly unjustified exaggeration.

By: Nehx

Nehx — Wed, 06 Jul 2011 13:56:08 +0000

“Article subject is so badly biased that it only serve to create negative imagery against china and sensationalism. Trading electric plant for oil is not a big deal for small countries who need the infrastructure but lack cash.” **applause**

Listenning to the IMF was our ruin 20-10 years ago. We were (I’m from Argentina) in one of the worst crisis of our history thanks to the IMF, and the IMF admmited recently that they made HUGES mistakes with us. So F**k the IMF and any neo-liberal economist who tries to speak about what is good for us.

By: Danny_Black

Danny_Black — Wed, 06 Jul 2011 05:16:16 +0000

norge10 and the fastest growing importer of Venezuelan oil is……

By: norge10

norge10 — Wed, 06 Jul 2011 05:08:37 +0000

Felix, um, Argentina has been rather beholden to Hugo Chavez regarding debt finance, contrary to your claim that “Argentina still does whatever it wants to do, and is beholden to nobody”. See e.g., http://venezuelanalysis.com/news/1537.

By: Danny_Black

Danny_Black — Wed, 06 Jul 2011 04:43:34 +0000

prastagus, what rubbish. The Asian economies experienced a sharp drop and then bounced back with the notable exception of Malaysia – who notably did what Foppe thinks was the “right thing” – which took nearly a decade to get back to where it was before the crash. China was only saved from a massive banking and local government crisis by Clinton’s decision to make it a favoured trading partner. Of course, one needs to ask what is going to bail it out of the current local goverment and banking crisis….

China is one great ponzi scheme at the moment and once the insiders have cleaned out all the dumb money then like all ponzi schemes it will collapse.

By: prastagus

prastagus — Wed, 06 Jul 2011 00:47:06 +0000

Thailand went to IMF, got advice, went down and would have took the rest of Asia with it as even Japan, Korea, China was not immune to it. Luckily China ignore the pain it received and put the breaks on the currency and created an anchor which saved the rest of the Asian economies.

Article subject is so badly biased that it only serve to create negative imagery against china and sensationalism. Trading electric plant for oil is not a big deal for small countries who need the infrastructure but lack cash.

Trade and politics should be separated and if western countries couldn’t lower their high-horse attitudes, then China will fill in all the trade blanks with whatever nations.

By: respbeing

respbeing — Tue, 05 Jul 2011 21:28:47 +0000

What about the social and environmental responsibility? China does not follow those rules…

By: Danny_Black

Danny_Black — Tue, 05 Jul 2011 20:44:00 +0000

dWj, presumably it is a loan over a period of time. Ecuador doesn’t deliver they don’t get the rest of the money.