It's not easy being indebted to the Chinese: Lessons from Ecuador

Ecuador is planning to auction off three million of the country’s 8.1 million hectares of pristine Amazonian rainforest to Chinese oil companies, Jonathan Kaiman of The Guardian reports.

The report comes as oil pollution forced neighbouring Peru to declare an environmental state of emergency in its northern Amazon rainforest.

Ecuador owed China more than $7 billion — more than a tenth of its GDP — as of last summer.

In 2009 China began loaning Ecuador billions of dollars in exchange for oil shipments. It also helped fund two of the country’s biggest hydroelectric infrastructure projects, and China National Petroleum Corp may soon have a 30 per cent stake in a $10 billion oil refinery in Ecuador.

“My understanding is that this is more of a debt issue – it’s because the Ecuadoreans are so dependent on the Chinese to finance their development that they’re willing to compromise in other areas such as social and environmental regulations,” Adam Zuckerman, environmental and human rights campaigner at California-based NGO Amazon Watch, told the Guardian.

The seven indigenous groups who live on the land are not happy, especially because last year a court ruled that governments must obtain “free, prior, and informed consent” from native groups before approving oil activities on their indigenous land.

“They have not consulted us, and we’re here to tell the big investors that they don’t have our permission to exploit our land,” Narcisa Mashienta, a leader of Ecuador’s Shuar people, said in a report.

Dan Collyns of The Guardian reports that “indigenous people living in the Pastaza river basin near Peru’s border with Ecuador have complained for decades about … pollution,” which has been caused by high levels of petroleum-related compounds in the area. The Argentinian company Pluspetrol has operated oil fields there since 2001.

Wah!!! Aren’t there international courts that would be used by the indeginous people to complain against the government and China.

Now I am starting to understand why OO went to court regarding the SGR through the NNP

kwani the Chinese hawasameagi deni?

It may be an exaggeration but there is also this

Sh16 billion was all that Kenya needed to construct a well-functioning standard gauge railway (SGR), a British magazine has claimed. According to an article published by The Economist, the money would have been enough to upgrade the old railway into an SGR, which would have been as good as the one currently under construction. This would have spared the taxpayer a whopping Sh311 billion, enough to fund all the 47 counties. Kenya negotiated for a Sh327 billion bilateral loan from China for the project. In what is likely to inflame passions, the article seems to conclude that Kenya’s future generations will shoulder the burden of repaying the Sh327 billion debt, which could have been avoided…
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More than half the countries in Sub-Saharan region will go the same route soon enough.

Good luck to all African countries swimming in Chinese debt. If things go south they will have no mercy. In Kenya’s case they’ll just force us to accept mass Chinese immigration.

Built by Mbeberu in the air the way he built highways and dams for 50 years?

God bless chinaman. Chinaman don’t give a fuck. He takes what belongs to himself.

Kenya is doing two things at once:

-Exporting jobs to Chinaman (even for non chinaman funded projects e.g. ADB projects)
-Kenya is borrowing heavy from chinaman for projects whose feasibility is never conducted and also riddled with corruption in form of kickbacks etc.

God bless chinaman!

The SGR is a sideshow here. We’re more interested in the broader concept of Chinese debt

So, what does this say about the amazing Ethiopian infrastructure we were shown here last week?

IMHO, unlike Ecuador, Kenya has an economy that is diverse, and the taxman has been closing loopholes to ensure that earnings are maximized in order to settle Chinese or any other debts. Whenever I pass the new bypasses, I see a beehive of activity as new businesses establish themselves along these economic arteries. Debt is good when it generates income and creates employment. It is bad when, in the case of Ecuador, Venezuela and Nigeria, it is expected to be paid from the sale of a single commodity like oil.

You introduced the SGR sideshow. How exactly was the old railroad supposed to have been upgraded to SGR standards, and who was to carry out the work?

I merely put that there for Le Scumbag because he was the one who brought it up. I know if we go into SGR it will derail the discussion.

I’m more concerned right now by the fact that China’s debt level is also dangerously high (according to the so-called experts). What would it mean to us if their economy was to experience a debt crisis right now?

blame it on the usual western patronizing reportage…

everyone, including the mighty US of A, owes Chinaman money…

Trying telling this to an uninformed public, their first retort, “Raila will never be president”.

Waiting for Waiguru to sue because he slandered her in regards to the stolen NYS money. They steal from “you” and then want to govern. Maajabu. :rolleyes:o_O

Very true but remember every country handles its debt individually. I guess the U.S. right now is like a multinational company with both assets and liabilities. 3rd world countries are more like peasant farmers looking for a loan from equity… but I’m just guessing, I’m no expert in these issues. I just don’t like any sort of debt.

Slowly but surely they start emerging from the woodwork. Can the US repay and service its debts compared to a third world country? Ujinga nayo.

Huu ndio maana wa ukoloni mamboleo kwa wale waloienda shule

The insult is unnecessary and nothing makes it harder for people to listen to you than when you insult them. A word to the wise

Its made to sound bad as if the chinaman is buying the forest to cut trees and export to china. We must be careful of this propagandas meant to poison our mind. If there is oil in amazon forest why shouldn’t they go for it. Oil is underground, it not like farming where you have to clear trees.
They tell us our debt is high yet it is not even comparable to how much they owe the chinaman. Atleast our children will be paying for something they can see