Comment by KorematsuFred | Hacker News Reader

Comment by KorematsuFred | Hacker News Reader

While Afganistan is called the graveyard of empires, India is where emperors face their first miserable defeat.

There is a book titled "Confessions of an economic Hitman". The book is written by an ex-CIA agent to was an economist and would write a lot of fake reports claiming developing nations can grow much faster only if they invest heavily in infrastructure. Then US would generously offer loans in return of assurance that the contracts will be awarded only to American companies. Fe decades down the line those countries would be left holding the can and debt. This model failed miserably for USA in India because India' growth story after 1990s turned out of be true, India's hunger for infra actually grew. Enron who had a weird misadventure in India eventually had to file for bankruptcy.

While I am happy that India is tripling the nuclear energy capability I am unhappy that American companies are involved. It might end up badly for Indian but more than likely to Americans.

Your premise here seems to be "countries paying back their loans is bad for the companies that built the infrastructure", and I think I'm really going to need some more explanation for that one.

Companies are paid anyway: if the country cannot make payments, it will have to agree to an IMF loan that is used to pay the American companies first, and then left holding the debt along with draconian austerity measures. So for these companies the more outlandish the promises, the better! The payment is "guaranteed" by the IMF deals. During a period from the 60s on this has been the biggest cash cow for American companies operating on developing countries.

Right, but that seems to suggest that it's getting countries to agree to take huge loans that's good for the companies, which is kind of independent of their eventual ability to pay the loans back. GGP was saying that countries paying back the loans was bad for the companies in question, when their relationship will have been over for years at that point.

Yes, in a normal world it is not bad for these companies if the country can pay their loans back. However, if you follow the logic, if a country is paying back the loans on time it just means that the first loan was not big enough! The advantage for a company to sell more than the buyer can pay is that for the foreseeable future (a decade more or less) it will make A LOT of money. This is all that CEOs really want. And under the logic of IMF, these loans will be paid in one way or another, so the company will not suffer any problem by selling more than the country really can pay.

"When some of those countries were unable to service their debt we often said, "Ok, you may not pay now, but your country will vote to support the US at the next vote in the UN. Or you will allow the US to build a military base on your territory." Or something else of the kind."

https://sputniknews.com/analysis/201711161059158765-economic...

That seems like it would be bad for the US not bad for the companies in question, who got paid either way.

The gist I got from the article is that those companies would also get benefits, like cheaper access to resources or monopolies in their areas of operation.

I wish more people understood that this is how international debts are ACTUALLY paid.

I am going to recommend this book -- Confessions of an Economic Hitman (John Perkins). I think there might be a new version since the time that I read.

Countries forced to take loans they don't need and then being forced to pay back is actually a bad thing. Us government is using American taxpayer money to funnel it back into American private companies, in the process increasing corruption world over, making USA less safer and hurting global economy is a bad thing. (again this is pretty much like student loan bubble. )

I don't understand your point, how did America lose when India grew quickly after investing in infrastructure with the help of American capital? Furthermore, I'm unaware of any real adversarial relationship between the US/India. Is it portrayed in India as being so?

American politicians made a bet on India actually failing to grow. They thought that once the country is deeper debt they can bully India around for support in UN, military bases and so on. American government most certainly lost that bet.

Do not mistake government with people. American citizens are not same as government nor American government solely works in American citizen's interest. This is a powerplay in corridors you don't even know to exist. Let me give you an real world example.

Indian government might be oppressive and incompetent at governance but they are supremely good at understanding other governments. A certain Indian company wanted to import a highly sophisticated technology from European country. The laws prevented the export without the European nation approving the sale. The technology itself was very benign. It was not defense tech or anything dangerous. But those restrictions on sale were put in place at the request of American government officials few years ago.

How did the Indian company managed to get it eventually ? Indian government through a secret untraceable channel donated $5M to a charity run by the wife of an ex-American official. That official then made phone call directly to the head of European state who signed the papers in 24 hours and the sale went through. Also all this probably perfectly legal and happens all the time. I recommend you read "Clinton Cash" to know more about one such family.

India is already firmly in the Western sphere of influence, and I still don't see how America "lost" any bet. A strong India is absolutely in our favor given it's a democracy with fundamental rights and rule of law.

The example you cite is not surprising to me in the least. It's realpolitik, and every regional power does this and always has. That book was self important wish-fulfillment on the part of the author, IMHO.

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