China’s Belt and Road Initiative (BRI) made high-risk, often-unneeded billion-dollar infrastructure loans, with no conditionality, poor risk planning, shrouded in opacity and secrecy. Cash-poor developing countries that lacked the ability to pay were particularly vulnerable, a report says. The seeds of project failure were sown from the outset by a lack of transparency, risk management, and viable controls to check corruption and incompetence.

  • @tardigrada@beehaw.orgOP
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    310 months ago

    The cited report (as pdf here) says:

    The typical rescue loan by Chinese banks requires interest rates of 5 percent. These rates are […] considerably higher than the average IMF [International Monetary Fund] rate, which has been around 2 percent for non-concessional lending operations over the past 10 years. Other multilateral institutions, including the world bank, offer even lower rates for budgetary support.

    We see historical parallels [of Chinese activities] to the era when the US started its rise to a global financial power, especially in the 1930s and after World War 2, when it used the US Ex-Im Bank, the US Exchange Stabilization Fund and the Fed to provide rescue funds to countries with large liabilities to US banks and exporters […]