This is a major chapter right out of America's playbook on South America, a region whose natural resources we have coveted for years. All one needs to do is read Confessions of an Economic Hitman to see how we operated in this region for years and years in the 60s 70s and 80s
69
Yet another example of the economic war China wages across the globe. The author stares “China’s intentions were clear”. Well shame on you, China never made their intentions of robbing poor counties blind as being their intention. I love how the paid poster’s from China on this site try to equate the shoddy infrastructure projects built by the Chinese which fall apart almost overnight to American built infrastructure projects that last decades. It may have taken a while but the world see’s China for the corrupt, malevolent monster it is.
74
It’s interesting that China may be doing the same to our corrupt president. Soon enough the US may have a lot of Chinese megaprojects.
20
Now the world is getting a taste of what a Chinese world order would look like.
66
Makes me ill to think that the poor people of Ecuador will be the ones to pay for this.
37
the Chinese are also building toll roads in Jamaica . Not needed ! Poor Jamaica . America needs to allow it to export to U.S.
The Chinese are also building a large naval port in Jamaica
16
What is China going to do if Ecuador refuses to pay the loans for shoddy work
22
Economic Colonialism
31
The Chinese are duplicating this type of control issue over Indochina. Dams upstream on the Mekong with little to no consideration of downriver consequences. High speed rail system through Thailand, Laos and Cambodia. Beach side resorts in DaNang and more.
Loans and construction across Africa and South America. How much does it take to understand the fabulous wealth they have made by U.S. corporate exportation of jobs to their low cost mainland is being used to undermine the U.S. and strengthen their position world wide?
47
The USA has engineered overthrows and assassinations in Latin America for decades. China is now the villain? Give me a break.
39
Corruption knows no ideology. Populist and other non-democratic countries are much more subject to corruption because they lack checks and balances. It’s not just Ecuador. It’s every country.
Odebrecht has been involved in corruption throughout Latin America. Their top executives are now in jail in Brazil, together with many Brazilian lawmakers, governors and former President Luis Inácio Lula da Silva. Let them all rot.
13
All these projects, from the Dam in Ecuador to the port in Sri Lanka, were initiatives by the government leaders of the host country. China funded the constructions and built them. China got political influence through such activities and may or may not benefit financially in the end -- with the dire economic situation in Venezuela, it's hard to see all the Venezuelan-Chinese dealings are huge financial success for China. Nevertheless, the media and politicians in the West have depicted these commercial transactions as vast, vicious conspiracy by China to trap poor developing countries in debt.
21
Pakistan needs to learn from this story if it wants to learn.
7
If it wasn't China it would have been another wealthy country run by people who are addicted to greed. One of those seven deadly sins. Who knew they are deadly to the planet too!
In our times the poorer peoples of the world are no longer considered human by the despotic leaders of this planet.
They are less equal and more vulnerable to the whims of murderous megalomaniacal psychopaths, and the desires of their wealthy patrons and corporations for ever more lucre.
If they try to run away to their benevolent wealthy neighbors they are debased and humiliated. In some cases their children are ripped away; Drown of the way; make it; and die anyway.
10
Why doesn't Trump say stuff like this..??
2
Anyone still unable to understand the global intentions of China is intellectually deficient.
23
Hmmm, business with China, the United States, Russia, Who to pick? How about None of the Above.
15
China is introducing new rules particularly in the third world. No moral, no respect for human rights, for ecology, for democracy. Western nations should oppose this new form of colonialization with a model based on our ideals . Only there is no credible alternative or political will in the USA or Europe. China puts the achievements for ecology, democracy and good governance worldwide at risk. And they are not open to discussing their colonialization, it might arrive and stay for good.
19
I second those readers who suggest reading "Confessions of an Economic Hit Man". Its author, John Perkins, describes how he was recruited to go to 3rd-world countries and create drastic over-projections for future electricity demand. Based on those lies, other those countries accepted US or IMF loans, the funds of which went to large US contractors to build large infrastructure projects, e.g. dams and oil refineries. The demand was never fully realized, there were bribes paid, there was shoddy construction, yet the country was financially on the hook to pay back the loans. The contractors, e.g. Bechtel, Westinghouse, and others had higher-ups who revolved in and out of government, much like bankers from JP Morgan, Citibank, and other large banks do today.
According to Perkins, countries who refused to pay faced retaliation, first aid freezes, then CIA-sponsored coups that replaced obstreperous 3rd-world leaders with more pliant and corruptible ones.
Having seen supposed US government benevolence perverted into a deliberate debt trap, it's no wonder that 3rd world countries, both the honest and the corrupt, turned to the Chines, who, it seems, have imitated us.
Lessons for 3rd world countries.
1) Rely on your own resources, not the rich world's. Keep control local. Train your own people. Don't sign away rights or resources.
2) Build slowly. Scale up gradually.
3) Don't do large, ecosystem-destroying mega-projects.
4) Work with your neighboring countries, not against them.
64
I would think attorey Mike Moore could easly show liability against China and it's subsidiaries. For substandard equipment, and negligence. Hey Micheal need a new case
This should be clear warning to America that China is not our friend. They are financing our debt, where is the tipping point. The amount of money we pay the service this debt is staggering, and all that money leaving the US.
9
I was a Peace Corps Volunteer in Ecuador in the 1970's.
It's a lovely country with wonderful people. My heart cries over the corruption and the destruction of this beautiful land.
34
The Chinese not only have learned from the US playbook, but they have gone even further by stealing intellectual property and having their citizens study in the US, who then are hired by US Companies. After a year or so of learning the trade, they steal technology, return to China where they blatantly present the stolen technology as their own. And Trump worries about Central American refugees.
35
The problem isn't being dependent on the US, the problem is being dependent.
22
What could China really do if Ecuador just told the to pound sand, They failed to uphold their contract to supply a functioning product. What could China really do if every country that owes them money refuses to? They should all join a coalition and threaten to destroy China's already weakening economy.
11
China has been building and buying:
Dams in Laos
Ports in Sri Lanka
The Prime Minister of Cambodia
The city of Hongcouver
The largest dairy in Australia
A railroad in Kenya
Malaysia
An island in the south Pacific
Apartments in Los Angeles
Grocery stores in Jamaica
etc.
China has a plan to colonize the world. Western greed allows them to sell at slightly above market, then China drives up the market and drives others out. What they can't buy they steal (intellectual property) and the USA is run by an infantile narcissist who has driven a nail into the coffin of alliances, while China makes joint ventures for factories in its own country. Putin has a second world country at best, but China has raised more than a billion people out of poverty, with among other things its one child policy. It is practical, pragmatic and greases the wheels when need be. The world can complain all they want about China, but we sold it to them.
32
And yet progressives want governments to control almost every project, business, and transaction.
5
China is doing this everywhere in the world.
If we had a better President of the United States, we would have warned the poor countries in Africa, Central and South America, and even Asia about this sinister practice of Xi.
China bribes local officials in these countries in the short term with bribes in the millions of dollars, then puts these countries in long term legal and financial binds, demands to get repaid in deep discount terms for interest and principal repayments in natural resources, and then begins the big squeeze on the local populations that no longer have any say at all in their own futures.
The World needs to call out China for this global practice and demand restitution for all of the wrongs that they have been done in this manner. These charges should be made immediately in the United Nations and Congress. It is time that the rest of the world stood up against these sinister practices by China.
This is not a five thousand year old culture of benevolence at work. This is a new culture of greed and evil! The South China Sea is only another example, but done with the exercise of its growing bully mentality and military might.
The World better wake up to this reality before it is far too late.
11
That the United States is playing a smaller role in world affairs because of the "America first" doofus in the White House might be less troublesome if it were not for the vacuum we are leaving being filled by China.
One only had to look at (1) the ruthlessness in which China deals with its own people and (2) the lack of respect China has for international law in dealing with everyone else including its use of industrial espionage and its contempt for the law of the seas to have known how potentially dangerous doing business with China could be. China as a business partner is as beneficent as say The Trump Organization.
China has been actively doing deals throughout the third world. I fear these countries are selling their souls to the devil and the devil will soon be calling to collect on the debt.
14
china is beating us with our own weapons nowadays ...
and if we look at the larger picture, human history is one
of permanent ups and downs: empires' rises AND falls.
we rose, too. now we might want to prepare for our fall.
let others enjoy the rise for a while ... until the next fall.
not a very comforting thought?
if "the global north" hadn't acted so selfishly = destructively
in "the global south" for centuries, maybe china would not be so
welcome there now, in VAIN hopes of less blood shed and loss?
7
It sounds like what America did to these third world countries for the last hundred yrs plus.
Now China as the new world #1 economic power is doing the same thing.
Oh wait, we have a 750 billion dollar a year bloated military budget larger than the next ten countries combined, that we save us.
18
While we continue to be distracted by the continued chaos occurring here in our country , China is spreading it's influence throughout the world and then slowly tightens the noose. Sri Lanka and the Mattalal Rajapasaka airport comes to mind. Called the airport without planes and built with 200million from the chinese governement . China has also been courting the nordic countries .In 2011 a Chinese investor purchased a large area in northeast Iceland with the purported intent of building a huge resort w/ golf course. This project is not going forward although the chinese are still attempting to invest up there. But due to resistance they are now shifting focus to Norway.... any quess which country is looking to control the northern waterways ?
9
While I am glad the Times has taken the time to investigate and write this story ... we need more. This unfortunately is not new and is occurring all over the world .. especially in Africa. China started stealing Zimbabwe's copper 20+ years ago -- propping up Mugabe to keep it flowing.
China is not our friend .. we cannot afford to fill the whole paper with words against Trump ... all the while the problems continue and worsen. No one should be surprised reading this article. look anywhere in the third world .. China is there
Trump is not wrong about China -- a serious problem that has been allowed to grow unchecked for too long .. the pain fixing will be great.
We will all pay the price ..myself included. The USA is the only country that can stop them ... stop buying.
23
Renewable energy. What could go wrong?
4
There are very few — pretty close to none at all — of Trump's policies I agree with, but, unlike my friends, I'm glad to see the aggressive way he's going after China. It makes me very sad that Democrats had the chance and never took it, instead keeping in place the status quo.
4
As one of the interviewees noted, a bad project here is as bad for China as it is for Ecuador. The article content is interesting (in a train-wreck way) but the headline seems like just transparent anti-China propaganda. The implied or let's say directly stated malign intent is surely wrong. And sure, good intent is never an excuse, but then again there is a lot of unsourced & anecdotal material in the article about actually proven negative effects of the project. The malign Chinese angle plays into stereotypes but is dubious. Would be more interestingly and accurately presented as another case study in how these kinds of mega-projects can go wrong.
11
The combination of corruption, colonialism and venal exploitation continue - just with a new group of people reaping the benefits. Good bye banana republics, say hello to the panda.
It is hard to say whether the Chinese company exploited the Ecuadorians more than their government did, but it does demonstrate the pitfalls of privatizing the investment into utilities - dams, roads, bridges, the electric grid - because profit is god, and citizens are duped.
8
many comparisons with "Confessions of an Economic Hitman" without any real understanding. Ask yourself this after Ecuador and the rest of the developing world take china for as much as they're willing to loan how are they going to collect Will they invade and colonize? Will they bill the now ex elected officials and contractors in their new villas? Without partners Europe and the WHO willing to enforce the loans china will have made an incredible contribution to the developing worlds infrastructure
4
If the U.S. were really concerned about the wellbeing of Latin America, they had decades to show it. But this article is not really about Ecuador at all, is it? It is about who dominates.
11
Any country or company that offers bribe must be punished by denying repayment. This is heart breaking to subject a poor nation to this kind of financial abuse.
At the same time, it is the failure of western wealthy nations, the World Bank and IMF not genuinely helping these nations with funds, advice and standards so that these projects are structurally sound and financially viable.
I hardly agree with Trump’s policies but I am with him on China. China must become a responsible nation proportionate to its wealth and economy.
3
This was a technique honed by our own World Bank. We would put together overly optimistic economic studies based on infrastructure projects throughout Latin America. The forecasts were mostly fraud and when the nation was about to default, the US defense department would sweep in to save the day by getting the loan forgiven in return for a military base.
America's end game was military and political dominance - China's is financial.
What is the difference? China is a monolith with no moral or ethical anchors.
12
Three Gorges Dam is an environmental disaster. The earthquakes caused by the enormous vertical pressure of water, the loss of habitat even to Panda, the beloved Chinese national animal, evacuation of 1.2 million people and 116 towns, and the myriad of other environmental factors did not matter to China. The Chinese Government was unconcerned about the international outcry against it either.
Rarely reported by any international media, the substandard nature of Chinese construction has been evident elsewhere too as new multistory apartment buildings collapses all around the country. And, Chinese misadventures in foreign land galore. China has invested in substandard construction projects not only in its neighbor and client state of Pakistan but also heavily in Africa and South America with no sensitivity to the local citizenry or environment.
You write, “Elected in 2006 under a surge that brought leftists to power across Latin America, Mr. Correa took aim at the United States with fiery, anti-imperialist speeches.”
Yeah, China’s exploitative posture not only ruins the economy of this third-world country but its ecology too. What does the UN do to protect a country like Ecuador that is being destroyed by the Chinese Government? Is there any warranty against shoddy work that the UN can enforce?
China does the same thing in the US too but the Democratic Party is oblivious to such exploitation. Thanks for President Trump for standing firm on this rogue nation.
9
America has been doing this forever. Now China is the best country in the world and US just wants to stop their peaceful rise!
4
The PRC is a loan shark. It uses debt to entrap and control countries. When will everyone wake up to this PRC workplan. Reminds me of the old saw about fraud -- if it sounds too good to be true, it probably is. Third World awake and just say "no". [Sounds corny but it is oh so true.]
these third world countries should not be making these kind of decisions. they are too corrupt and too vulnerable. the UN should step in and mange the public affairs of every such nation. otherwise, they will be in this same economic social condition 30 years from now. and they were in the same position 50 years ago in spite of massive aid programs. the result? More crime, more corruption, more gangs, so their people flee to the US for a better life. The UN needs to take over and run these nations until the local folks are trained properly. if not, China and other greedy countries will continue to fleece them.
What a tragedy.
And this is just the beginning, as the US accelerates its exit from the international arena and loses relevance thanks to the current administration.
Thank you to the New York Times for this in-depth piece of impeccable journalism.
1
Goldman Sachs couldn't have handled it any better. Congratulations China, you can finally sit at the table with the rest of the kleptocrats.
8
Bears similarities to that between Puerto Rico and the Hedge Funds that the US Congress backed.
5
American student loans are still worse than any Chinese loan.
5
Same thing coming soon in Egypt, and they don’t even have oil to pay with. Natural gas?
Seems that China has learned much from Goldman Sachs.
8
Meanwhile back at the ranch, we have a so-called leader who spends his day watching Fox News rather than leading the nation and the world. Why couldn’t the USA offer something similar on better terms with the goal of checkmating China? Because we have childish five year old head of state.
5
In 1955, Ecuador had a population of just under four million. Today, Ecuador has a population of almost seventeen million. By 2050, Ecuador's population is projected to be almost twenty three million. Unsustainable population growth in Ecuador, encouraged by the Roman Catholic Church, has been a major driver of all Ecuador's current woes.
http://www.worldometers.info/world-population/ecuador-population/
Population growth over the last century has destroyed our rainforests, our oceans, our seas, rivers and streams. Human population growth has led to an increase in the gross output of greenhouse gases, which has led to an increase in mean ambient temperature, which has led to an increase in sea temperature, which has led to the melting of the polar ice caps.
Population growth in Central America is one of the causes of the dramatic increase in serious crime, including murders, and thus to the recent migrant caravans from Guatemala, Honduras and El Salvador seeking sanctuary in the USA.
Likewise, population growth in the Near East has led to increased competition between countries and ethno/religious groups over access to scant resources, including between Yemen and Saudi Arabia.
When competition over access to scant resources, caused by population growth, reaches breaking point, war breaks out.
Sustainable energy, including wind farms and solar panels, is not the solution. We need a global reduction in human population.
13
There are a few more countries that could receive China's perceived "help". Mexico, Guatemala, Honduras, El Salvador. All have graft and corruption at the highest levels and severe poverty in the others. Drug lords rule, and villagers send their children on caravans to the United States to save their lives. It sounds suspiciously like a Domino Theory, and the next step could be more US billions given to those countries to compete with China. When will the Chinese Air Force base be built?
1
If Ecuador defaulted on Western loans in 2008, and since default is all too often the historical end game of loans to Latin American countries, why in the world does anyone, especially the Chinese, think Ecuador will pay up this time? At least the US has had the marginal threat of military action in the case of loans defaults, and has used it occasionally, enough to make some nations think twice. But China has no ability to do the same.
What happened here was that the Chinese economy is so fragile that Chinese with vast amounts of money consider foreign loans, even junk loans like those to Latin American nations, as better bets than keeping their money in China. So they make loans like this, and when they go belly up, accept the consequences. It's one of the endless schemes that the Chinese use to circumvent laws that prevent them from sneaking their money out of their own country.
23
So now we are complaining that China is doing what we have so often done? It is all about the extent to which foreign aid is used to help others, especially the poor, or ourselves.
10
@S Baldwin
Please correct me if I'm wrong. The U.S. doesn't LEND money at outrageous interest rates for these types of projects.
BTW: I was in Sierra Leone 3 times last year. You know how American politicians wear the little U.S. flags on their lapels? In Sierra Leone they do the same thing. Except it's two flags. The other is China's. You've been warned.
9
“China took advantage of Ecuador,” said Ecuador’s energy minister, Carlos Pérez. “The strategy of China is clear. They take economic control of countries.”
No, China did not.
China is awash with money and has become the type of bank you go to when on one else will fund your projects.
Especially when all other alternatives include some kind of ideological twist or politics.
Ecuador and its leftist government wanted to run a huge project to show how powerful they are, especially against the US.
They asked around for years and finally found China for funding the project.
Of course, China does not do aid work or hands out gifts as the leftists hoped for, it does business.
And like every bank, China asks for payments and guarantees and not for something others ask for like democracy or ideological adaptation.
So, no, China did not take advantage but acted like any bank run by a controller and an auditor.
It asserted the value of the projects and demanded guarantees which will be drawn if the debtor cannot pay.
And as the debtor had no money to pay in the first place, China took the risk and arranged for a barter trade for payback.
This is not a power play of a political issue, it is pure and simple capitalistic thinking, devoid of any type of ideology.
19
@Thomas is correct. It is pure capitalism down to and including the payment of illegal bribes and delivering shoddy goods to increase the profit margin, all at the expense of the environment. Let's hear it for capitalism.
10
@Thomas
So if the loans are non-political why does China demand Latin American countries break off ties with Taiwan?
15
China’s exploitation of Latin America’s natural resources has raised political and environmental concerns. It showers largesse on populist leaders, who drag their countries into a debt trap.
China got involved in Ecuador through loans, investment in infrastructure and oil purchases. President Moreno was in Beijing earlier this month to re-negotiate Ecuador’s debt – $6.5 bn – to China. His predecessor, the left-wing populist, Rafael Correa is responsible for the mess.
After taking office in 2007, Correa declared a large chunk of Ecuador’s foreign debt “illegitimate,” and the country defaulted, becoming a pariah in credit markets. The state-owned PetroChina, offered a financial lifeline in 2009. In return PetroEcuador sold Amazonian crude to PetroChina. The Yasuni National Park is one of the world’s most biodiverse ecosystems and home to indigenous tribes, holding a third of Ecuador’s oil reserves.
Since 2008 Ecuador has borrowed over $11 bn from China, used for infrastructure, oil, mining and energy projects etc. In 2010, it received a loan for the Coca-Codo Sinclair hydroelectric dam. But it was built by a Chinese consortium, which should now be held responsible for all the cracks and construction flaws.
Correa, wanted in Ecuador for alleged kidnapping of an opponent, requested political asylum in Belgium, where he lives with his Belgian wife and family since 2017. His request is being delt with. Meanwhile Interpol rejected Ecuador’s request for his arrest.
8
Yet another example of massive Chinese project gone wrong. In recent years China has invested more capital in Latin America and Africa than any other country. This capital has the potential to spur unprecedented economic development. But it goes tragically wrong in countries that don’t have strong enough government institutions and rule of law to withstand Beijing’s honeyed persuasion and demands for crippling financial terms. Today’s NYT Ecuador report points out how damaging this is for a poor country. What this and other stories don’t mention is that it’s bad for China, too. First: China and Chinese people are now reaping an atrocious reputation throughout the third world, especially in countries saddled with debt to China or in places (Africa especially) where Chinese laborers and immigrants (2 million in Africa) are perceived as displacing and maltreating local workers. Second: It’s likely that many countries will find themselves economically and/or politically unable to manage the burden of their debts to China. So countries may adopt populist measures like repudiating debt, finding other ways to break/reduce obligations to China, and mistreating or expelling Chinese people from their countries. Some of these things are already happening. In the end China, as well as the Ecuadors of the world, will suffer unintended consequences of Beijing’s miss-thought and poorly executed international economic exploits.
75
@Richard Herold Yes I was in Kenya when the NYT published the story linked here. There was widespread bad publicity and ill feelings generated by this and other incidents of racism on the part of the Chinese. The new railway there is being built by the Chinese, creating a debt trap for the Kenyans.
https://www.nytimes.com/2018/10/15/world/africa/kenya-china-racism.html
3
Why is most of Latin America a mess - socially , financially and politically?
Why will it always be this way?
Why are Costa Rica and Chile doing relatively well while others flounder decade after decade?
42
Neither of those countries are doing great. Neither is the US btw.
2
@Jake It is this way because the Munroe Doctrine stated that Central and South America are and shall always be America's area of influence and no other power shall be allowed to intrude. The United States spent years ensuring that Latin America shall be a mess - socially , financially and politically so that it may be plundered by American Companies. The World Bank and IMF made unsustainable loans to Latin America following Western Imperialist interests.
China is not a 'Western' Power and pursues its own interests.
7
@Jake,
Perhaps because Latin America is not a homogenous political entity? You also left out Uruguay...
3
Simple solution default on the China debt, let them have the dam. It probably needs to be torn down anyhow.
60
@vulcanalex, you haven't been paying attention. Sri Lanka did what you propose, China took a port city in settlement. This is a colonization program.
7
@vulcanalex Uh, they're running out of lenders, having already used the deliberate default tactic on the West.
@vulcanalex
Exactly what I was thinking. The dam failed specs, make no further payments on the loan until it works according to spec.
2
Ecuador needs national electric energy generation and transmission and this dam for all the contingent problems would seem to move in that direction. This article needed to refer to engineers who see solutions to the problems. I have been to the dam referred to in China and know that dam is an excellent success. Problems were encountered and resolved.
The Ecuador dam holds great promise for national development and should be treated as such.
19
@Nancy Anyone who thinks Three Gorges is a success is either uninformed or working for the government. That project devastated huge areas of China, and is far from being fully operational. I have been there too, but with open eyes. The corruption within the entire construction and engineering community in China is devastating. Wait and see.
2
@Nancy
Just a reminder for agents of the Chinese Communist Party posting here that we all just read the article, produced by a free press in a free country, and can tell when you’re gaslighting in the comments.
That Chinese engineering is inferior comes as no surprise. When you steal the work of other nations and cut corners with your own people, disaster is the result.
3
@Nancy
“The Ecuador dam holds great promise for national development and should be treated as such.”
The NYT article provides a detailed refutation of this statement. The comment in contrast makes no attempt to refute the content of the article or support its own statements: Ecuador needs energy, this dam “seems” to move in the right direction, it “holds great promise”, engineers will somehow “see solutions”. All these are just unsupported platitudes.
In our current environment I tend to be deeply suspicious about such posts.
2
China is sowing the seeds of resentment and will reap an unwelcome harvest of ill will in the future.
36
@DBman What also needs saying here is the depth of American exploitation of these people and their resources. We owe these people much in reparations for the damage done to their land and their culture by American corporations. The current administration ignores history because they find it humiliating. Amd, perhaps, humbling if viewed in the right context.
4
China read the IMF playbook enough said
20
An entire article about Ecuador and China - and not one word about Ecuador and Chevron? https://www.bbc.com/news/world-latin-america-45455984
21
@Patricia McIntosh,
That link is gaslighting, pure and simple. How many readers hearing "Chevron" didn't even bother to read the articles and just accepted your rewritten headline as confirmation bias? Did you mention that a US court found that Ecuador had used corrupt means to obtain the favorable judgment? Or that The International Court in the Hague entirely over turned the ruling? Your post is not a reliable source: readers beware of gaslighting.
3
This is a complex issue for the NY Times to examine. It doesn't fit the standard 'victim/oppressor' narrative (ie; white (typically Christian males) taking advantage of people of color).
Kudos to the Times !
66
@Ami Probably too complex for their meager understanding of such things.
16
@Ami
This is happening because for more than two hundred years the people of Central America have used up their bodies working non-arable land to feed themselves, while the best land fed Americans and Europeans.
White, Christian (used very loosely here), males IPSO FACTO enslaved the peoples of Central America and have kept bribing corrupt leaders to keep these countries, that should be able to support themselves, desperately poor.
So, now the Chinese come along and they decide to play our game. They bribe and enslave. Too bad that we no longer have any semblance of respectability or honesty, and no one in the world would believe that we have an ounce of humanity left. So, where is our moral high ground? Maybe it is under our ever deepening swamp?
The next time you eat you morning banana, look at that label.
Where is it from?
Does it have a brand?
When you take that first bite, think about the children of the country who don't get a banana with breakfast because their parents cannot afford bananas.
Why not shut off the TV (personally did 10 years ago, and do not miss 18+ minutes of advertising/propaganda every hour). Go to the library, read history from multiple points of view find the facts don't be lazy and let people who have an agenda tell you what is factual, truthful, indisputable (as if a dispute can't be manufactured when politically expedient).
6
thanks for this illuminating story. Government corruption combined with predatory lending--a toxic mix. The Schadenfreudist in me takes some pleasure in the fact that the US is not the only bad player on the international stage; all imperial powers exhibit the same behaviors...sad but true.
33
With friends like the Chinese who needs enemies.
63
China has already swallowed a port in Sri Lanka, in the pretext of economic empowerment. Hambantota port was signed over to Beijing on a 99-year lease because Sri Lanka cannot repay Chinese loans.
28
I am not sure that the Western loans have a better tracks. Remember Argentine 2000 that followed IMF demands that led it to the crisis. Not even mention Russia or Ukraine that had their share of bad advices (and loans) from the West.
20
Why does Ecuador repay a loan for a dam that is defective and where the loan was signed by officials who were given illegal bribes?
54
@DBman Note that asking a question about the possibility of bribery is not proof that there was bribery.
My thoughts exactly. Moreno should march himself to Beijing and insist that the structural issues be fixed, and withhold payment until such measures are taken. Ecuador has a lot of potential but it also has constant blackouts. Until it can deal with fixing its infrastructure the move forward will be stymied
1
@DBman Great question that I kept asking myself during most of the article.
The question that the reporters need to ask now is whether and how the dam can be made to operate effectively and efficiently. There are problems with dams, as we find in the United States, but the problems are resolved and the supply of clean energy is really important for any country.
I would hope problems with this project can be corrected.
11
What the reporters want to achieve here is not point out the problems to be corrected, but rebuke the relations between Ecuador and China.
17
@Nancy - Hydro-Electric Power doesn't come without a price. The price is usually environmental degradation. Even the Hoover Dam will one day become obsolete and sand and silt will fill Lake Mead, although that is predicted to take 400 years. However other dams in the US are non-functioning because of sand and silt and the dams need to be removed. They can't be fixed.
13
@Nancy
I appreciate the replies and will learn about the problem of sand and silt in coming days. After all, Hoover Dam has been wonderful for the region as have been the TVA dams. The environmental price is important though.
As for the portrayal of China, the New York Times writing on China always seems slanted and I find that disconcerting and dismiss what I take as the unfortunate slant.
6
I am not sure why anyone is surprised - no gives away billions for free. And, let's be honest, this tactic is old and tried where nations acting in their best interest present their largesse as acts of magnificent benevolence - the Brits, Americans, and others have all done it. And given the corruptible nature of many of these poverty-stricken and/or weaker nations, it's like taking candy from a baby . . .
20
Corruption in Sri Lanka under the government
of former president Rajapaksa also led to
the wrong projects by Chinese which were
not commercially viable. Rajapaksa wanted
a big, visible project in his hometown to
impress folks he is doing something. Now
it has been handed over to China in lieu of
non payment of debt. There were reports of
China financing Rajapaksa's reelection. In
Pakistan it is similar story. Government of
Nawaz Sharif, just convicted of corruption,
and his finance minister, Ishaq Dar now hiding
in London and wanted for mega corruption,
signed the agreement and kept it secret. No one
knows what obligation Pakistan has taken on.
Is it bondage for a long time. China is taking
advantage of corruption and the venality of
politicians who sign big projects without
involving competent people to evaluate the
benefits and the terms of agreement. If they
waiver, China offers them money. Many
more countries will fall into the trap unless
they do good cost/benefit analysis and
drive hard bargain with China. Some
countries are being pushed to China's orbit
by US using trade and aid as tools for
influence and control.
16
China didn't take advantage of Ecuador; instead they took advantage of the greedy, corrupt public officials. Big difference. In therapy, they say one needs to first accept that you have a problem, then healing can begin. Unfortunately it seems no one in Ecuador ever heard of therapy never mind being bothered to seek therapy.
14
We have certainly seen this scenario before. A fiery leftist leader vehemently denounces the US and instead partners with a communist country. Rampant corruption and criminally disastrous decisions lead to loss of oil revenue and crippling debt. Recession follows. Hyperinflation and societal collapse cannot be far behind. Ecuador is very likely on its way to becoming the next Venezuela.
47
China also has a stake in many countries in Africa. 'They take economic control of countries' It's their business model. Wake up people!
36
Through the comments, there is a trend that seems to suggest we should do nothing about nefarious activity of others because we engaged in such in the past. This logic is foolhardy. We're not hypocrites here, we're reformed persons whom have learned, atoned, and now feel compelled to act. We're guilty of genocide in this country; does that mean we should stand aside and let it happen? No. So how is economic oppression different?
13
@James Allen What might the US actually do? It is their country, their mistakes, and we are broke. Nothing for us to do. And nobody in the US is guilty of genocide, NOBODY!!!
13
@vulcanalex
I am from New England. The settlers of New England committed genocide against the native tribes of this area.
We are morally broke. We worship money and the greediest of the greedy and aspire to be just like them.
If a Thomas Payne were to appear on the political scene today the electorate would laugh at such an unsophisticated politic.
2
Andrew Jackson was guilty of genocide. For that matter, our 1930s immigration policies were complicit in such, "turn the boats around." When you get to numbers and body counts, The Vietnamese may have a case against Johnson.
What we can do is coalition building for a united economic front like TPP did. Further, we can stand by The Monroe Doctrine.
We're not even close to "broke."
3
Remember the Opium War. China did exactly the same thing as what European countries did against China some 200 years ago just by using a junk dam instead of opium. Mr. Trump would not read NYT, but this is a good one for him who is all alone.
9
@KI
The 2d Opium war started with the public torture of an old French priest Augustine Chapdelaigne for the delight of Chinese commoners. Then the Chinese tortured the staff of the British Embassy until they were unrecognizable when found by Lord Elgin. 1 of the war’s treaty terms was that CHinese government documents will cease the ubiquitous use of ‘savage’ ye3man2 to refer to any white person. Chinese kept that promise the same as they abide by the WTO accords. The word is everywhere in the Chinese kids’ books even today. Xenophobia and racism in China are nothing new even if Chinese Imperialism is.
20
"Then there is the price tag: around $19 billion in Chinese loans . . . "
The Chinese must have read "Confessions of an Economic Hitman."
14
@Drew
John Perkins's book is an eye-opener. Suggest anyone interested in learning more on this topic pick up a copy.
1
@Drew Absolutely agree with you. The exact same model
1
The French received payments from Haiti for a century, for reclaiming their own land. Cubans in Miami are still litigating their haciendas in Havana. Perhaps the descendants of African slaves and Native Americans might need to renegotiate their international equities.
18
@john - My ancestors were serfs in Russia for centuries. Serfdom ended in Russia in 1860s, same as slavery in U.S. Does that mean I can go to a U.S. court and have Russian oil and natural gas payments from Europe attached to pay for my reparations?
Nothing in this article is the least bit surprising. Corrupt Ecuadoran officials? Check. Corrupt Chinese officials? Check. Chinese imperial ambitions? Check. Shoddy Chinese construction? Check. The list goes on.
79
I hope the other sucker countries signing up for Xi's 'belt and road' scam read this as a cautionary tale. What is truly amazing is the incompetence and/or malfeasance of the Chinese administrators and engineers. But the populist fools around the world have no respect for competence and honest analysis.
18
@Paul I think the message is that the leaders apparently did get their bribes (success from their point of view) but the leaders then got caught (potential failure from their point of view). Still, I expect there are plenty of leaders who expect they are clever enough to take bribes and not get caught and they might be correct if they are not too greedy. As others have pointed out, it is not so much the country that is a sucker, it probably is more the leaders that are greedy.
8
@Doug Karo - What troubles me is that these thieves come here to live. When I say here, I mean, the United States included along with all the Western Nations, the United Kingdom, France, etc. Tax evaders and bribe takers need to be returned to their respect countries for punishment and not given asylum.
2
Kinda like the British in India.
7
@Bar1
OK then, never mind. Is that what you are saying?
3
@Bar1
Not exactly. The British left India with a very functional rail network and cricket.
8
China cannot make shoes or pants -- how could they build a dam? Let's all wake up.
7
@stormy China made one of the largest dams in the world, they are capable, but when you don't want a good product you don't make one.
8
Workers of the world unite? China's "communist" take on capitalism sounds like a confirmation of Marx's iron laws related to the creation of surplus value.
1
China will come running to the IMF when the debtors refuse to pay them back.
6
Just default. Latin American countries do it all the time. What's China going to do about it? Nada.
30
The NYTimes pays little attention to the more than 9 Billion that Chevron (texaco if you want to confuse people) owns Ecuador for stealing its oil and polluting a large chunk of the country. This money, originally set at 18 Billion, should be payed and will reduce the financial headache of Ecuador; the Chinese should be held accountable too
27
@Cholito Sutil - Sorry, an international court overturned that judgment against Chevron.
"The tribunal unanimously held that a $9.5 billion pollution judgment by Ecuador’s Supreme Court against Chevron 'was procured through fraud, bribery and corruption and was based on claims that had been already settled and released by the Republic of Ecuador years earlier.'”
https://www.reuters.com/article/us-chevron-ecuador/international-tribunal-rules-in-favor-of-chevron-in-ecuador-case-idUSKCN1LN1WS
It was probably the same corrupt officials who took the Chinese bribes.
Bribery, engineering errors, fraud, etc. Surely, there are legal mechanisms for refusing to repay the debt.
5
Sounds like a Chinese twist on the IMF loans....
16
Is “The Art of the Deal” available in Spanish?
9
Wow, China sounds almost as predatory as AIG, Goldman and Wells Fargo combined. No small feat.
32
Is this a confirmation of the predatory nature of AIG, Goldman and Wells Fargo?
3
Mr. Doe, I'm starting to get the idea that pretty much all big business does the same thing.
1
Seemingly no article about corruption and bribes is complete without a reference to HSBC.
10
@Xoxarle This one time, at least, HSBC is blameless. It was merely the bank in which money was deposited and had no other involvement. If I stole money from someone and deposited in a bank, that bank would not be involved in the robbery, would it?
The belt in Belt and Road is cinched around the victim country's neck in the form of staggering debt burden. Perhaps there could be a solution in collective action.
Since this financial strangulation scenario is playing out not only in Latin America but South Asia and Africa as well, the victim nations as a group could unite to insist on massive debt renegotiation. Tell the Chinese that if they do not renegotiate, we will all default together. While the Chinese could manipulate around a single small country's default, a large-scale collective default would get their attention because it would threaten the overall stability of their financial system.
28
As long as the politicians get paid off, deals like this will continue.
24
This is exactly the kind of "foreign aid" the US has practiced for decades: Build unnecessary infrastructure in poor countries using American companies so virtually all the "aid" enriches Americans. We're surprised that another rich power would follow our model? Read "Confessions of an Economic Hit Man" for more details.
39
@Upstate Guy Well said.
4
@Upstate Guy
You are mistaken. The United States used to fund such infrastructure projects (bridges, highways, etc.) through foreign aid in the past, but for the last 30 or 40 years the focus of USAID projects in the Third World has been, for lack of a better term, developing human capital -- empowering women economically and socially; fighting AIDS and other endemic, diseases; improving transparency, civil society, and the rule of law, etc. Our bridge building days are far behind us.
I was a Foreign Service officer in two African nations in the late 1970s, and in neither was USAID involved in the type of infrastructure projects mentioned in this article.
30
@Upstate Guy- John Perkins has also been described as a professional liar. He went on from his role as an 'economist' for the now defunct firm Chas. T. Main to being a shill for the nuclear power industry. And even if his claims are true, the huge difference is he was talking about the actions of a private corporation, not- like China- as a nation using this type of predatory activity as standard operating policy.
1
The same strategy, in yet another country. Underwritten by corruption, designed to get China to gain access to resources, and probably a naval base.
15
Has everyone forgotten the bestseller Confessions of an Economic Hit Man? This is EXACTLY the way the United States exerted control over the economies of almost every country on Earth: infrastructure loans financed by unpayable debt. The playbook is exactly the same - tempt the leader with unnecessary "infrastructure", and in return, you get leverage to extract natural resources and veto power over the country's budget.
An American newspaper cannot cover this dynamic without pointing out the fact that this country pioneered it. Good article as far as it goes, but the job of this newspaper is to inform and contextualize.
28
@Andrew Nimmo- John Perkins has also been described as a professional liar. He went on from his role as an 'economist' for the now defunct firm Chas. T. Main to being a shill for the nuclear power industry. And even if his claims are true, the huge difference is he was talking about the actions of a private corporation, not- like China- as a nation using this type of predatory activity as standard operating policy.
2
China has repeated that model in many countries
"To settle the bill, China gets to keep 80 percent of Ecuador’s most valuable export — oil — because many of the contracts are repaid in petroleum, not dollars. In fact, China gets the oil at a discount, then sells it for an additional profit."
In Pakistan , governments assets , like airports, electricity from dams etc are mortgaged to China for loans that were used to build infrastructure projects by Chinese contractors. The money invested comes right back to China while the country is left with the loan and in many cases with a dam or a power plant or an highway which the country could not afford.
12
China is following USA's playbook.
5
And this is why Trump needs the wall. Instead of keeping our adversaries far away from our borders, he let's them get as close as they want. China is now starting to take over Greenland. It doesn't matter how close they get. It doesn't matter if Russia and China control the entire planet outside our borders. The wall will protect us.
4
Like the walls in Walking Dead?
3
How is that any different than how the World Bank works? Or foreign "aid" from the US and Europe that shackles countries in debt for "buying' our stuff?
7
@AG
How many strategic ports have the WB/IMF extorted from poor countries?
11
All over the world it’s the same story. I’ve see roads built by China in Kenya, hydropower projects built by China in Malaysia, bridges, harbors, etc etc.
What I’ve also seen is the breathtaking stupidity of foreign governments thinking/believing that they can get something for nothing from China. Only China comes out ahead in these arrangements. China is playing the long game with its Belt and Road grand plan, and in the end only China stands to gain, economically and politically.
Message to the few remaining countries that haven’t fallen under the spell of Chinese money and “expertise”: save yourselves while you still can.
23
Same with mining, specifically copper mining, as with petroleum, and it's happening all over Latin America, as it happened in Africa last decade. Except with mining, the impacts last millennia, compared to the decades that petroleum can generate (one mining project can deforest 5,000 to 20,000 hectares). To paraphrase Mark Twain : The trick is get commodities as cheap as possible, dishonestly if we can; honestly if we must. And it is pointing out that in its desperate need to to pay back loans, the country has, in the past 5 years, opened pristine forests in upper Andean watersheds to large-scale mining, with millions of new hectares of mining concessions being given away to transnationals from the north, under ridiculously deregulated scheme, violating the Constitutional right to prior consultation, and with oversight by corrupt officials much like the petroleum and Hydro gangs who were paid millions to look the other way (see: https://bit.ly/2rPQzYk)
12
It appears that other countries engage in folly, building grand things that don't work, kinda like a wall. Perhaps China will loan $5B to Trump in exchange for, well, who knows...
16
Yes, Ecuadorians are going to miss the good old days of yankee imperialism.
6
The idea to build a dam and pay for it by exporting oil sounds good until it is not. With lots of silts, sands & debris in the reservoir, it suggests that the maintenance could be a big problem, resulting it partial functioning. I doubt the Chinese provided adequate training to the local employees. Or maybe the locals are too indifferent to their own jobs.
3
So China is doing what the US has been doing for decades, as s documented in John Perkins's book, "Confessions of an Economic Hit-Man." But we use the World Banj, the IMF, and USAid to do our dirty work of impoverishing nations with huge debt on large, mostly unneeded projects. Why our media is not more honest about what our nation is all about shows the sorry state of journalism, it not being independent. The hypocrisy is dripping.
10
What China is doing seems a modified version of what John Perkins described in the book Confessions of an Economic Hitman.
ISBN 0-452-28708-1
From Wikipedia comes this:
"According to Perkins, his role at (Chas. T.) Main was to convince leaders of underdeveloped countries to accept substantial development loans for large construction and engineering projects that would primarily help the richest families and local elites, rather than the poor, while making sure that these projects were contracted to U.S. companies. Later these loans would give the U.S. political influence and access to natural resources for U.S. companies."
https://en.wikipedia.org/wiki/Confessions_of_an_Economic_Hit_Man
6
"The strategy of China is clear. They take economic control of countries." Ecuador knew this tactic but signed up anyway. Now China has added a new wrinkle : shoddy construction by their appointed Chinese companies rendering the project worthless.. If this were a domestic matter, we'd demand a refund.
I hope UNASUR can stop this exploitation. Despite the threat to our world standing, the U.S. Is no help right now, even if we were wanted.
10
Yes, only the US is allowed to impoverish other nations with impunity. The arrogance of those meddling Chinese!
6
I wish these types of articles provided some comparisons to other types of borrowing before concluding that China is putting other developing countries in the poorhouse. For example, the article says that Ecuador is paying China 7% interest on a 15-year loan, and claims this is extortionary. However, Ecuador is paying 10.5% on its 15-year bonds to international investors: https://markets.businessinsider.com/bonds/ecuador-_republikdl-bonds_201515-20_regs-bond-2020-xs1199929826. And these bonds have to be paid back in dollars, leaving Ecuador at the mercy of the Federal Reserve. So China in fact gave Ecuador a significantly better deal than it could have gotten on the international bond market.
10
@Aoy You are certainly firm in your belief. So let's respond with a typical South American financial disaster. The first thing that happens is the the people discover that their money doesn't go far any more, and that they have too little. The government also buys votes with grants and gifts. As Brazil, Venezuela, and Argentina illustrate, the result is massive inflation. What's good about massive inflation? You pay off 10% bonds with much cheaper inflated money. It's how any government self finances, including the US. In the case of the three above mentioned countries, even the inflated currency is worthless, as the inflation rate is so very high. ( into the 1000-10,000 % yearly area in some instances). And that's why the oil deal was a great deal. I'd rather be paid in 7% oil than fatally inflated local currency.
1
@Aoy
Maybe if they had a better economic policy and hadn't told the West off before they get a better rare.
1
@Aoy
how is the weather the most polluted city in the world today, Mr. Beijiengly ?
2
Why can’t these corrupt officials who made the deal sit in prison until the entire loan, plus interest, is paid off?
12
It seems that the Chinese, now that they are major global players in the economy, are doing just what the USSR and the USA did during the Cold War, and what Germany did to Greece before 2008: using investment to "capture" friendly nations and exploit them for the benefit of their geopolitics and home economy. Capitalist, soviet-communist, or sino-state-capitalist, the big guys all bleed the little guys in the same way.
16
@Lichanos
Thank you for not mentioning the Buckley Petroleum under William F. Buckley moved to Venezuela in 1917. You never know when someone might put 1+1 together and come up with 2.
5
I take it the Monroe Doctrine only applies to European colonial powers?
8
@Mike McGuire In other words, the Monroe Doctrine also applies to foreign powers that send technicians and technical aid, loan money to, or in any way are involved in the economic life of a Western Hemispheric nation?
I don't think so!
Read the excellent book: "Confessions a Economic Hit Man" by John Perkins to see the "Original Screenplay" by the US Foreign Aid program, the World Bank and others who first got to Ecuador and many others to "secure" dependence on the U.S.I worked for the U.S.A.I.D. in the 1960s and could recognize the scenario. But the Chinese (having read the book) did not make the loans repayable in dollars , but what they needed more, oil
Sad to see the replay and harm to such a country.
13
Economic colonialism has the same effects as the ethnic and racial kind. It's enslavement, incarceration and impoverishment both ways. The Chinese believe they are part of a superior people and they are not going to forgive debts that are intended to pay for their massive population.
15
How they say it? better stay with the devil you know than the devil you don't. And how all these ex-leaders can afford to exiled in Belgium I wonder.
11
@Bobb Correa's wife is from Belgium, which is why he fled there. With the controversies of his presidency, I'm sure he's had that as an exit strategy for a long time.
1
Amazing comments. Poster after poster agree that China is plundering the world, but the only person fighting back against China is Trump. Yet they slam Trump.
Problem is, he does so many stupid and hurtful things that no one will give him any credit for any little positive thing he does.
21
@john palmer
Have you thought that Trump is waiting for the payoff from China to call off his "fighting back"?
8
How is he fighting China's exploitation of other countries? "America First "
6
@john palmer Trump is raging not fighting. It he was fighting he would seek allies and assistance from NGO's If you call tweeting fighting them Trump is your man. You forget Trump is Trump's worse enemy. His antics make people forget his few positive policies. I have read positive stories about Trump but the are lost in the pages of his bombast and din. That is of his own making,
15
only receive gifts from the USA....or else
5
He that lieth down with dogs shall rise up with fleas.
7
Ecuador, hobbled by debt from incompetence and corruption, always in the throes of neocolonialism, have fallen from U.S. control into China's. It reminds me of Bolivia, in a similar tight spot, as Evo and Alvarito seek their re-re-re-reelection next year. Could this be the international era of strongmen 'a la Trump'? Depressing!
11
`“The Chinese put the hook in,” said Steve Hanke, a Johns Hopkins economist. “At the end of the day, what do these countries have? A pig in a poke.”
Steve Hanke doesn't know what a pig in a poke is. The metaphor "at the end of the day" means the time when things have become clear.
2
@David Lloyd-Jones
Reinterpretation: At the end of the day you realize you have nothing but worthless garbage instead of a pig.
6
I wonder what would happen if Ecuador and other recipients of Chinese loans and non-viable infrastructure projects simply refuse to pay the loans and forbid the Chinese from taking ownership under local law. If the Chinese were to follow the historic examples of the British and Americans, they would either use military force or leverage their control over corrupt officials. The state of the modern world would, however, probably make those courses of action too fraught to pursue. Maybe the Chinese will learn from their mistakes, reform themselves, and ensure future infrastructure projects are actually rational and worth the cost. Then, the Chinese will be *VERY* dangerous.
19
much like the dams built in this country a few generations ago
1
The fact that the Chinese are plundering third world countries with sketchy infrastructure deals, bribes to officials and payments extracted from the respective country's natural resources is occurring on multiple continents. This will end when these countries have legitimate governments who can declare the contracts null and void and tell China to go home. That may take decades....but it will happen.
23
So that's the recipe for One Belt on Road? Shoddy work and imperialism by debt. I'm sure this will work out well.
16
Leaders, activists and academics from the Global South rail against the West and white people but many will soon find out that China is little different and in many ways worse.
Instead of blaming others for their misfortune maybe leaders and the people of the Global South could think a bit more strategically and in the long-term.
14
This worldwide campaign involving exorbitant loans that create a slavelike dependence of many south-american, african and asian countries, but Europe not excluded ( greece), is the modern colonialization that will strangle many countries for decades ( contracts often last 99 years). No respect for populations, ecology, human rights, this is exploitation at the most basic level, employing greed and corruption of politicians as a bait. Unless occidental nations unite and create a authentic alternative and moral consensus, this chinese plague might destroy our worldwide community for good. This is why we need capable and integer politicians with vision.
6
This article is totally bias, partial and its analysis has a lot of ignorance and lack of history: local, hemispheric and worldwide.
Unfortunately, small countries like Ecuador do not only need the money of the so-called "investors", but also the experience and science of other countries, because small countries have not been able to educate their population.
You write:
“Instead, it has become part of a national scandal engulfing the country in corruption, perilous amounts of debt — and a future tethered to China.”
Yes, lack of vision and weakness of the politicians are counterbalanced with criticisms and accusations to blame others for their ineptitude. The dam is quite new; I am sure that this infrastructure has problems, they should be maintained instead of complaining.
As we all know leadership is very important, unfortunately, President Lenin Moreno does not have that leadership, for example, his government has already had 3 vice-presidents in 2 years.
In the balance of power of the planet, Latin America since its existence has been under the control -shadow- of the United States, see how the countries of Latin America have been, they have not yet developed... Let others do what the United States did not do. If China has its own interests, this is part of the balance of power, let the small develop with other science and capital and let’s see.
4
@Ineffable-That's a solid thirty cent's worth, right there.
2
@Ineffable You wrote, "In the balance of power of the planet, Latin America since its existence has been under the control -shadow- of the United States." So, of course, English is the national language of Latin America. Thank you for proving your ignorance. You should find out the former name of the country of Belize, which country made the first attempt to build a canal across the isthmus of Panama, and what event is celebrated on Cinco de Mayo.
2
@Enabler
I do not know what you are talking about…English is not the “national” language of Latin America. Latin America is formed by many countries, many nationalities.
That we all have to start learning Mandarin, that's another topic.
1
What will US goverment do? Drag another country into war by the name of democracy like syria afghanistan or iraq? Come on.
5
Show me a project of this magnitude built anywhere that was completely free of corruption, shoddy workmanship, wholesale theft and graft.
Start with the Suez canal, continue with the Panama canal. Add roads, bridges, stadiums, office buildings.
Ecuador isn't any better, or worse than any other country, yours and mine included (like the Montreal Olympic stadium, or the Toronto Skydome with a retractable roof, or more recently the abhorrent single streetcar line reconstruction at a cost of around $800 million in Toronto).
But of course the piece is not about Ecuador; it is about China. The big, bad China.
I get it, fair and square.
9
"Pressure Group from Washington, D.C." could be a well crafted quip, rather than a translation mistake.
6
When one State works in another's economy, they do so as if a private investor not a State. Ecuador could prosecute China for corruption and take back claims to their tangible goods as a result. Unlike Sri Lanka, were the private investor whom is a State try to muscle forward, Monroe Doctrine will back them up.
4
@James Allen Excelent point. With all the evidence of massive bribes by the representatives of China, why doesn't the present Ecuadorian government prosecute the entity these people were representing. An open, fair trial and conviction would result in nonpayment without being frozen out of credit markets in the City and Wall Street.
1
I am Shocked! Shocked! that there is corruption and bribes. I am sure Ecuador's "public servants" had only the interests of the Ecuadorian people in mind.
I am sure the Chinese only wanted to lend a helping hand.
33
A lot of Ecuadorians are going to claim asylum in the US. One thought might be to negotiate a deal whereby they can bring their poverty and kids to China. But realistically they'll be in LA within a year. With all that oil they should be prosperous. I think we should make it a state. Then at least the US taxpayers would get the resources. Our legal system would make sure the Chinese are stiffed.
10
This “development/loan “ plan is being played by China throughout the world, focuing on Africa, Smaller Asian and South and Central America. ( even in Eastern Europe.)
Lock em up, scam em, build somerging.
One reason the TransPacific Partnership should have been worked on as a plan. Far from perfect and based on the big guys winning it openned options to stay involved in places like Ecuador and Sri Lanka.
Sorry donnie my boy you have to entangle and hug the world. The good old USA is not the 1960s giant that donnie envisions. We need to be creative, partner with Australia, South Korea and Japan in the Pacific. Etc etc for the rest of the world.
Africa is in far worse shape in the Chinese stranglehold. 20 years from now China will have strangled a lot of these markets.
Wake up it is not 1963.
16
Trigger Warning: this comment trades in what can be pernicious stereotypes but I believe the anecdote is worth sharing in the context of this article—especially given its source.
At least some Chinese pride themselves on their ruthless business acumen. A native Chinese missionary lady I once knew said they had a saying in China: “The Chinese are the only people who could buy something from a Jew and sell it to a Scot at a profit.” Like I said, stereotypes, but I think it’s instructive in terms of how some (some! not trying to overgeneralize here) Chinese see themselves when it comes to business.
11
@Michael Evans-Layng, PhD
Your story is interesting, but I think, not in the context of the article. That context is greed, corruption, pure and simple. On both sides.
@Michael Evans-Layng, PhD In other words, in this they're like everyone else.
read "Confessions of an Economic Hitman" and you'll see that China is simply replicating what the US has successfully done for decades
39
@Linda Ponzini
Linda,
My thought exactly. Not to excuse China, but I always wondered why, e.g., third world countries would have to go into hock to build roads for pure-export mining projects owned by corporations of the advanced countries.
The poor of the world were going into debt to help extract their resources for us to use. It didn't make sense then, and we have little authority to mock others doing the same thing now.
9
@Linda Ponzini Yes, under capitalism man exploits man; under communism it's the other way around.
17
@Linda Ponzini
And this is why they should be allowed to do it?
2
Mao helped the Chinese become well fed,well schooled,i.e. The Little Red Book,and well Health,like Acupuncture,in The Great Leap Forward. Still,The Cultural Revolution continues in the Draconian repression of Muslims in Sinkiang,and Kim Il Jun's Nuclear Regime in North Korea. The West's investment in China is simply Gravy!
1
Don’t Use Capital Letters in a Sentence for Emphasis.
Unless it’s you, Donald.
7
Interesting article but I'm not clear on one important point of the contract between Ecuador and China.
Why is Ecuador contractually obligated to pay for a defective product?
111
China helped Ecuador build numerous dams, schools, roads and clinics. Apparently one of the dams has a lot of cracks in it and us near a volcano.
Infrastructure for oil deal with China.
Drugs for guns with US.
What is with the China bashing in the NYT?
2
Your thought mirror some others here. As such, the reply is the same. Your conclusion is false:
Ecuador and Venezuela can choose to nationalize these things and restore their oil to their own hands. Look at Iran versus Britain and Arabia versus the European conglomerate. It can be done. As to China trying to "own" the US, it won't work as it will actually have a reverse effect due to the volume in question. "If you owe the bank $100 that's your problem. If you owe the bank $100 million, that's the bank's problem." - J Paul Getty. Furthermore, as the United States controls dollars from a macro perspective, we can never succumb to their "owning us" as we can print more cash whenever we feel a need. Additionally, as dollars are the global reserve, we control the economic system at large. Beyond this, China owning US Debt is a stabilizing force helping to create peace. Were war to come between the US and China, first thing we'd do is wipe out any debt we owe in their direction. As they want their cash, they are disincentivized towards an actual shooting war.
4
None of these developing countries can afford deals with China -- It doesn’t matter. Closer to Beijing, China is involved in half the dams in Laos. China will collect payment as the hydropower itself.
10
Just having returned from Vietnam and Cambodia, this is exactly what is being done there. China is building all over the place, and will own they whole area because the countries that China is "investing in" will not be able to repay the loans. Not only that, the populations of these countries are not benefiting because China brings in their own workers. This is exactly what they are doing in Africa too. In the meantime, this president is so busy looking for adulation, he can't see what is right in front of him.
143
The funny thing about the Fire Phone" photo was that out of the 2 languages used on the phone, none was the official language of Ecuador.
I can imagine what Trump would say this news was broadcasting on FoxNews -- What did the Chinese do? That should have been us!
4
This is one more story about China the loan shark on prowl looking for easy victims. Country after country it is the same story. Sri Lanka, Malaysia, Ecuador and Pakistan where China looks for vulnerable country, sweet talks and bribes them into taking loans they do not need or cannot afford. Many African countries have succumbed to the same trick. China knows that they cannot afford the loans, but it gets it money out fast since many of the equipment and labor comes from China so that it gets its own money out at inflated prices. What is left is the gravy of valuable assets –oil, ports, timber and minerals to be repossessed. On top of that, just like China has asked of Pakistan, these countries cannot show the terms of loan to the IMF or the World Bank. The US should convene a meeting of Asian, African and South American countries to share China’s loan shark practices and tell them that the US can help these countries if they default on Chinese loans. China has limited options to collect on everyone that defaults. These countries should learn some lessons from the US homeowners who were given subpar loans that they could not afford.
40
Meanwhile, Panama is one of the wealthiest countries in Latin America and a source of stability in a turbulent region, mostly thanks to the Panama Canal.
4
Not a good analogy as for the first 100 years, The United States controlled the canal and its profits. In other words, this matched China's current actions. Worse on us, we influenced a revolt in Columbia to create Panama in order to dig the canal. Hence, Panama did not benefit from said canal. Instead, Panama was subjugated to American will for a century.
7
@James Allen
Panama has been in complete control of the canal for 19 years.
China tried the methods outlined in this article to "help" Panama build the 21st C new locks (post Panamax) for the canal.
Panama was smart enough to turn the Chinese down.
1
By this logic, Sri Lanka will be set after 99 years with their new port facilities. Until then they're militarily occupied so as China can place a strategic check on India and lack any power for recourse. - See Panama analogy.
4
Isn’t this similar to what China did to Venezuela, piling on massive debt and then taking control of the petroleum sector? Ecuador will now become the next Venezuela, an impoverished socialist debacle in free fall. The most frightening thing is that they seem to be trying to do the same to America, by slightly different means.
7
Ecuador and Venezuela can choose to nationalize these things and restore their oil to their own hands. Look at Iran versus Britain and Arabia versus the European conglomerate. It can be done. As to China trying to "own" the US, it won't work as it will actually have a reverse effect due to the volume in question. "If you owe the bank $100 that's your problem. If you owe the bank $100 million, that's the bank's problem." - J Paul Getty. Furthermore, as the United States controls dollars from a macro perspective, we can never succumb to their "owning us" as we can print more cash whenever we feel a need. Additionally, as dollars are the global reserve, we control the economic system at large. Beyond this, China owning US Debt is a stabilizing force helping to create peace. Were war to come between the US and China, first thing we'd do is wipe out any debt we owe in their direction. As they want their cash, they are disincentivized towards an actual shooting war.
4
One bad project is used here to characterize all Chinese efforts in foreign countries to spread its influence and guarantee its markets. No mention of the fact that the US has done exactly the same thing--finance and build projects in states it wants as clients, usually with more or less bribery and corruption as a built-in factor.
You can also add in CIA training, arming and financing of "death squads" to destroy or suppress political opposition or actually overthrow unfriendly government in those countries. At least the Chinese haven't done much along these lines yet.
How else to explain all the corrupt dictators worldwide on the US payroll over the past half-century ?
Articles like this one make it clear why the Western democracies don't control their major press outlets. They don't need to; the Western press has long volunteered, en masse, to act as a propaganda front and spreader of the word.
45
@Nick Wright
That is a remarkable statement coming from a purported Canadian, whose countrymen are even now being held hostage by China. Is that possibly an old location, “Nick”?
13
@NorthernVirginia
But he's right.
9
@NorthernVirginia: You imply that I'm not Canadian, but Chinese, just because I criticized what to me is a very political and therefore biased article. Is that's the only possibility in your mind, or is it just the usual resort to the ad hominem fallacy?
In response to your jibe about hostages, I can only point out that your own president made it perfectly clear that, in his mind at least, the US extradition request to Canada in the Meng Wanzhou case is in fact a case of political hostage-taking (to extract trade concessions from China). So no difference there either, between the US and China.
FYI, we know why China has detained Canadians: their own intensely proud and patriotic public demanded it. Now that the US has confirmed their fears, Canada finds itself the victim of an outrageous act of bad faith by the US. How dare you upbraid me with it.
15
These loans should be forgiven
11
Look at what the IMF is doing to Argentina, and what's it's done for years there, and ask, is the looting demanded by neo-liberal principles any better for ordinary people than the actual looting which took place here?
Between China and the international lending agencies, not much to choose.
8
Dont't pay. Stop the oil that China doesn't need so is re-selling at even greater profit. Petition the World Bank and UN for relief.
11
Under the Chinese Communist Party, corruption is China's biggest export.
Ecuador and others were tired of being asked to meet transparent, high standards for western financing. They were troublesome and expensive.
Beijing came and said, take our money, we're a better partner.
Who's more troublesome and expense expensive now.
39
Haven't Goldman Sachs prescriptions for ailing countries, such as Greece, done as much harm to those countries as China has done to Nicaragua?
In fact, reading this article I was thinking, "Gee. Usually, to get results this awful for the client nation, you'd have to hire Goldman Sachs."
Move over, Goldman. There's a new, more powerful player on the block.
27
This is case of “power hungry imperialist lender beware”.
Clearly the Chinese entrapped Ecuador by corrupt means.
For that foul conduct China should pay the price.
Ecuador should just rescind all contracts with China.
14
The article talked about all the corrupt officials in jail for bribery by a Brazilian construction company, yet implying Chinese did the same without any evidence. Now the 7% interest may seem high for aid, but not high by standard of commercial lending. The question of full output of the dam was blamed on the transmission infrastructure and not necessarily on the dam itself. I am sure there is the question of whether it's wise to build the dam near a volcano, the decision was made by Ecuador government, but please don't try to blame everything on China.
4
"Another complaint is the bill. Maria Esther Tello paid $60 last month to keep the lights on in her home, a shock given the government’s promises electricity prices would go down." My monthly electricity bill is in the range of 8 (that is right, eight) dollars monthly in a 2 bedroom home with a washing machine, refrigerator, microwave, television set, an at least two outside lights that stay on throughout the night. It has been about the same since 2014, when I bought my house in this welcoming and beautiful country. My bill is higher that my close neighbors who, in this rural setting, rarely have electrical appliances. So, based on personal knowledge, I cannot help but wonder where the NY Times getting this information? Did Maria Tello actually provide it? Did she show her bills? Does she own a hotel perhaps and the Times got the information mixed up?
8
@PatriciaSadly in many of these countries many times people need to choose between utility bills or food. Electricity cost a fortune in countries like Uruguay for example and I am sure that in Ecuador it is probably worse
@Paul It looks to me like she's writing from San Miguel de Ibarra, Ecuador, and so, probably knows whereof she speaks.
5
@Patricia I was also surprised at Ms. Tello's $60 electric bill. My bill in Quito is usually around $10-$15, never tops $25 (and that's when the dryer is working overtime).
2
Who on Earth pays for services/infrastructure not yet finished/performing as promised?
Pay them when it's Finished -- and, most importantly: WORKING PROPERLY. And, not one moment before.
18
China’s Communist Party members are legendary for corrupt self enrichment. The party’s present leader including many family members have grown beyond wealthy by this systemic corruption. Recall the astounding expose of this issue in this very newspaper that infuriated President Xi.
Of course the Ecuador bribes and the green light to offer them came from the very top.
14
What happened for more than a century between the "developing" countries of Latin America and the United States is, simply, continuing with China. The Chinese do not need to learn anything from the US about using the mechanisms that Capitalism provides for rich nations to exploit poor nations, or for the rich to exploit the poor within nations. At this point in history what has become clear is that the world is being parceled out between the East (mainly China) and the West, the US and Western Europe. Will the West be able to devise a system to protect itself and its regions of influence? Clearly, the Chinese see themselves filling the spaces that the retreating West is leaving behind. When will the economic competition of capitalism become the catastrophic war that increasingly seems inevitable?
20
Empire building using loans and fiat currency instead of armies and navies. The results are the same - one nation of humans under the thumb of another under the false pretenses of progress and wealth.
53
@Ted Garcia The way of the world, apparently: If people can be parasitized, other people will find a way to do it.
6
@Ted Garcia
Electrical power is a nice thing to have. To me the issue seems less about loans and more about corruption and idiocy.
12
Since the dam was built entirely by the Chinese and never actually functioned as it was supposed to, why hasn’t Ecuador sued the Chinese construction company to recoup some of their losses?
137
I’d bet a goodly sum that China insisted on indemnity clauses in whatever contracts they offered.
18
@Peter
My thought too. China's dam building experts certainly understood the problematic geography. It's clear the corrupt Ecuador officials knew too, likely absolved China of the site issues in its constriction contracts, and it all proceeded.
But a contract predicated upon criminality, graft and deceit is not one that will stand up well in a court.
But what court? And will rule-of-law adverse China honor the court's ruling?
32
@Peter
My bet is on the Ecuadorian side being willfully complicit in this entire ordeal. I'd venture to say that the contracts were written in the way that the Chinese can't be held responsible.
3
Yup.
I heard a joke some decades ago: The Minister of Energy of (can be any Latin country) visits his counterpart in (some other Latin country. The host takes his guest to see a huge dam the guest admires it, and the host pats his wallet and says, "Ten percent, right here." The same happens at an oil refinery. A year of so later, the host returns the visit, and is taken out to a place in the jungle where there is no sign of any structure. "See that beautiful hydro plant?" The visiting Minister can't see anything but jungle, and says so. The host pats his wallet and says "100%, right here."
The sometimes maligned World Bank, and America's aid program USAID, for all their imperfections, worked hard and often successfully to rein in corruption. The Chinese actively engage in it. The real crooks are the host country's officials who pocket the money. No wonder the host country officials prefer to do business with the Chinese! The people pay.
Critics of the World Bank and other "western" institutions should get the facts (mixed as they often are) before issuing blanket and often ungrounded criticisms.
264
@joel bergsman So it's the western world's responsibility to protect corrupt countries from themselves? Why can't the equadorian people demand that from their own leaders? That's the thing I never get.
All the western countries go to where they are being holding people accountable. But apparently we have to offload that responsibility to powerful international banks in order for non-western (and non-asian) countries to do the same?
5
@Dan For all our faults ... there really is no one else. The USA has given 3-4 Marshall plans to Africa with little to show for it .. yes, it's true. Billions wasted .... The WB and IMF lend and forgive (mostly the USA's money).
Don't have the answer -- I know China is not. They are not going to forgive these loans.
The western countries (especially the USA) are attacked internally for being neo-colonial -- when that's far from the truth.
We don't respect our political system -- understand that most of our fights are around the edges .. while the rest of the world is in turmoil. We have much to be grateful for .. and don't see it.
11
@joel bergsman
What you are saying is mostly Western propaganda and brainwashing masquerading as facts. There are many, many infamous examples of corruption under Western institutions. Anybody who follows these things would know that. The dam may have been a bad idea and the Chinese may be even worse, but trying to use this to whitewash Western institutions and countries and their record in Latin America won't work. Try a lot harder next time. Can you produce ANY evidence that there wasn't a lot of corruption in the implementation of aid projects in developing countries sponsored by the World Bank and Western countries? I think the evidence suggests that such corruption was not only present, it was enormous.
9
What we are witnessing here, and in other places where China has lent its money with little or no hope of being repaid, is a prelude to and justification for a grab of local interests akin to annexation, or outright military adventure and/or occupation. Or perhaps that was the grand scheme in the first place.
151
@Rocky
A world power nation is all over the world. America has a footprint surrounding China with Taiwan, Japan, S Korea, etc in Asia. Now China will do the same to the US.
Difference is one is a representative democracy and the other is an authoritarian dictatorship.
14
@Rocky
Yes. That was the grand scheme in the first place.
8
@AG
Being occupied or strangled or whatever by representative democracy is not that different from when it's an authoritarian dictatorship.
5
This reminds me of John Perkins "Confessions of an Economic Hitman" published in 2004. It looks like Chinese finance people who were educated at US business schools took the lessons to heart.
I should note that the city of Stockton, California was also a victim of Goldman Sachs financial fraud.
"Former economic hit man John Perkins shares new details about the ways he and others cheated countries around the globe out of trillions of dollars Then he reveals how the deadly EHM [economic hitman] cancer he helped create has spread far more widely and deeply than ever in the US and everywhere else to become the dominant system of business government and society today Finally he gives an insider view of what we each can do to change it."
"Confessions of an Economic Hit Man" (NY TIMES bestseller for 70 weeks, published in over 30 languages).
84
It is an excellent book, and yes, when I read the first couple of paragraphs of this article I immediately had the same thought that the Chinese are duplicating methods that had already been perfected by American corporations and government in previous decades, as explained in great detail (including specific examples involving hydroelectric power projects in South America, if I remember correctly) in Perkins’s book.
21
Please note: Confessions of an Economic Hitman was almost complete fantasy, written by an unstable man who has been shown to have used completely incorrect basic facts (is Indonesia’s infant mortality rate) across his entertaining but false book. The absurd Hollywood antics portrayed in the book are only believable if you don’t understand how boring/banal economic “oppression” actually is.
The Chinese understand it. So do the Russians.
They also understand that books like Confessions of an Economic Hitman weaken the US and are probably behind its high ratings online.
1
Well, let's all take a good look in the mirror. This is exactly the way the US has treated Latin American and other third-world countries for more than a century. Actually, the Chinese aren't as bad--yet. The US loans money to corrupt officials who deposit their cut in off-shore banks, like the Chinese do, and the US manipulates terms of trade so that repaying the loans costs more than they're worth, like the Chinese do. But the US also imposes dictatorships on its client states (Honduras and Haiti are recent examples) that squeeze the poorest of the poor until they cough up the blood money our banks think they deserve. No doubt the Chinese will learn from our example.
176
@Dan
What you're overlooking, Dan, is the fact that the US has learned, somewhat at least, from those past mistakes and instituted controls over these activities, such as the Foreign Corrupt Practices Act that seeks to prevent US companies from paying bribes to obtain work overseas. Unfortunately bad actors like China, who could have learned from our learning process, didn't and now are going down the same path. They too will eventually figure out why it's not in their long term national interest, but until they do ordinary people in these places have to tax themselves to make up for the huge cost of the petty bribery that lined the pockets of their corrupt leaders. Of course Trump wants to go backwards and get rid of FCPA to help the US "compete" better.
77
I imagine there’s lots of American business school grads in China.
19
John,
The FCPA etc only apply to powerless individuals effectively. Not the armies of lawyers our corporations have to negate the charges of corruption.
And never mind the work of our intelligence agencies and the CIA with their covert actions and installing despots, controlling elections and sowing misinformation (actually it is kinda rich of us to complain about Russia and 2016).
So, sorry to say this, you are quite wrong in your thinking!
10
United Fruit was responsible for the term "Banana Republic" now China is just following a very old game plan. Ecuador should have seen it coming, but because of past exploitation they were unable to help themselves.
27
@Brendan Varley
"Past exploitation"you refer to is a misnomer for much of the limited 'post colonial' thinking in a country like Ecuador. I have lived in Ecuador for 8 years and I observe that there is no real substance or intellectual framework for "thinking smart" , "innovating" or most importantly, " EDUCATING " the masses of people, maybe the biggest issue in the undeveloped world.'s being taken advantage of...,
9
@Brendan Varley
Sorry to disagree. What do you mean by "Ecuador?" The bribed government officials, I guess, understood that the Chinese lenders and contractors were expecting a return on their bribes. Maybe the officials didn't realize just how big a return? The taxpayers, as always in most countries, had no opportunity to "see it coming" or to do anything about it if they did suspect anything. And this has been going on, worldwide, for quite a few generations. It ain't ignorance, it ain't stupidity, it's simply crooked greed by crooks on both sides.
9
This is China's strategy, based on Leninist ideology for winning a revolutionary victory at home, but fueled by what I perceive as a contempt for foreign nations, whom PRC leaders view as "exploiters" (Westerrners who enslaved and exploited China with the likes of opium addiction and the Opium wars) or else "those to be exploited" (starting with their colonies Tibet, Xinjiang, and someday Taiwan, they seek to dominate and exploit the Third World in building up energy and trade corridors with new naval and air ports for military power projection) in order to secure their "rightful place" as the next Superpower. Meanwhile, Rome fiddles. One can argue that the main difference with America is that China has united around a common vision ("China Dream" was a brilliant propaganda campaign designed to instill nationalist aspirations to all citizens), though their means of achieving this dream is bound to be even more wicked. Yet the covert Chinese campaign to flood America with Fentanyl is not worse than British greed that flooded China with Indian opium.
34
@Hacked Regarding China flooding the US with fentanyl: that’s a good point, but why do some people feel the need to put that stuff into their brains in the first place?
2
@Hacked
Nonsense! Leninism has nothing do with this. It's simple economic imperialism.
5
Actually. it isn't Leninist; it's capitalist in the best tradition of what we have done for many, many decades to other nations in the world. Don't point out the splinter in another's eye until you remove the plank from your own.
5
Puts me in mind of the 80's and all the heartbreaking stories of farmers going broke and losing their farms. Why? Because banks made credit easy and farmers couldn't resist that new tractor or an additional piece of land. The friendly banker turned into a rapacious enemy when commodity prices went down, interest rates went up and the bill was still due. Sad stories, but as with Ecuador, no one put a gun to anyone's head. People borrowed without considering that the bank was going to get its money no matter what happened to the price of farm products.
13
@Jim Poor analogy. The bankers didn't build the tractors and the reason that the farmers couldn't pay the loans wasn't because the tractors didn't work.
20
@Jim
Hey Jim --
Why not visit Ecuador? Read through some of the other more educated comments above. You have made a lot of overly simplified arguments -- Here we are aware that China has been buying off the poor across Africa and its developing countries for maybe 20 years now. China will one day sooner than later be the country that sets all of the economic rules in the the world.. THe U.S. is collapsing, many smarter people than me believe. Chinese immigrants this past year are flooding into this small country the size of Colorado. There are indeed many serious problems in the world, vacuums of economic power, for sure. This NYT piece details our struggles here in Ecuador with corruption, malfeasance and bad decision-making. You do have one thing right, our small country is struggling .However I am waging a bet you didn't realize that the U.S. is no longer offering any country, large or small in the world an example of prosperity or even of stability. ! Read the ECONOMIC HIT MAN Book. It will open your eyes.
11
@SWilliams Show me a perfect analogy, Maryland.
Easy credit leading to unwise investment is the parallel.
So what would happen if Ecuador refused to ship any more oil to China pending a renegotiation of the loans?
134
The government of China would find an Ecuadorian or two in China and throw them in prison.
13
@Bob Garcia Who cares! The Ecuadorian politicians got their cut!
2
Trump would invade Ecuador on the behalf of Xi.
6
This is a very sad and disturbing article.
I don't have the answer but ask anyone who has such knowledge, is there no way that developing countries especially can be protected from China's aggressive economic efforts? Some Chinese business people are ruthless and have become a fixture in an area that I visit. They are buying all of the "old folk's homes" and refurbishing them. They take out the lobbies where patients gather and turn them into more rooms. They don't have any interest at all in being part of the communities where they now have an impact on the personal lives of the people there; it's all about the "bottom line".
64
@Neela C. Loans are not inherently good or bad; it is up to the borrowers to make good use of the money. Many countries that have received extensive Chinese loans and investment like Cambodia and Ethiopia are now posting impressive economic growth in part thanks to those loans.
Also, many developing countries are turning to Chinese debt because China offers better terms than other international lenders. For example, Ecuador pays 10.5% on the international bond market for 15-year loans but this article says that China only charged it 7%. Chinese companies also usually charge lower prices than Western ones because of economies of scale and lower labor costs, making projects more affordable for developing countries.
4
For every buyer there is a seller. The blame lays with both.
1
Was there no requirement to deliver a functioning dam, capable of operating for a defined period for a fixed price modifiable by joint agreement?
172
@Frank Ecuador should have only paid if the dam worked to 100% of its design capacity. Half a year at half capacity only gets China 25% of the full payment.
18
@Frank good point. there may be a solution to salvage the derelict situation but it will require an in-depth analysis to come up with what ails and how to fix them over a long period of time. The question therefore is, " who is going to pay for it?".. :)
6
It's always fun to see the u.s. demonized as: racist, exploitive, predatory etc in these pages. The left won't admit it, but this kind of behavior is part and parcel to an economic system that spans all political, ethnic and geographic boundaries. When your system ( and I use the word loosely) depends on an ever expanding economy, population and exploitation of resources you will go anywhere and do anything to keep the insanity going. This is why the natural world, including people will be consumed and little to no progress will ever be achieved on GH gas reduction. We have made a deal with the devil and no one will call it out.
104
@Al: Ecuador has a very significant environmental constituency, which has pushed hard against careless exploitation of its resources in the past (Shell, Texaco) and has won some battles. It appears that many of the transgressors on the Ecuadorean side in the present debacle have earned time in the slammer. Do not despair of their or our ability to resist. That said, the culture of official corruption is old and deeply rooted in Latin America. The battle lies ahead.
14
@Al
This "I know you are but what am I?" thinking will get us nowhere.
It's not a left-right issue in my opinion, rather about ethical behaviour and this article does a fine job of calling China out.
11
@Al What ever do you mean that "the left won't admit it"? Are you saying the "left" (such as it is) is in favor of exploitative capitalism, or environmental destruction?
14
Toward the end of the article, the author says this: "Beyond China, the new government is going back to the institutions Mr. Correa demonized: the World Bank and the I.M.F. Some worry that Ecuador is simply seeking another set of financial masters." In other words, Ecuador turned to China because it saw US-back institutions as exploitative--and they are. We aren't the good guys here, and it remains to be seen whether China turns out to be worse. Like China, we expect to get paid, too, whether things work out on the ground or not.
50
@Kurt Spellmeyer As well we should. That's why loans shouldn't be made over the objections of people who can reasonably predict how things on the ground are likely to work out.
31
@Kurt Spellmeyer -- This article perfectly encapsulates the confluence of corrupt politics, populism (the anti-U.S. Latin variant), bad planning, bad construction, bad equipment, with full orchestration by China, the Snidely Whiplash of international finance.
Think they'd have been better off working with western institutions. Best of luck to Ecuador.
14