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> For Djibouti, the debt is especially daunting, amounting to 60 percent of its gross domestic product. This seems absolutely insane to me.
> For Djibouti, the debt is especially daunting, amounting to 60 percent of its gross domestic product. This seems absolutely insane to me.
It's not necessarily a problem so long as the debt-financed spending accelerates growth. GDP is the amount the economy generates per year. Debt is relatively fixed (unless you borrow more or have a crazy interest rate). As long as the interest on public debt doesn't outpace the tax revenues set aside to service it, they should be fine. Djibouti is a relatively undeveloped country, so infrastructure development can bring them a long way.
> For Djibouti, the debt is especially daunting, amounting to 60 percent of its gross domestic product. This seems absolutely insane to me.
Let's say you make a $100k per year and take out a $60k mortgage, that seems very reasonable. If the railway is going to make their economy more productive and efficient then it seems like a really good idea.
Great news for fans of rail and Africans alike. Also: environment is happier. I'm just amazed at how China is moving forward where other countries (looking at you, USA) simply cannot. What's their secret?
I read another comment on HN about this recently. Their explanation was that it's due (at least in part) to the high savings rate of the Chinese compared to the USA (and other countries, I guess)[1]. The idea is that when people are stashing their money into bank accounts, the banks have a lot more money to work with. For example, Americans will use their money to buy cars. The Chinese would save their money, and the…
Great news for fans of rail and Africans alike. Also: environment is happier. I'm just amazed at how China is moving forward where other countries (looking at you, USA) simply cannot. What's their secret?
Can you explain this comment? China is not building rail networks in Africa for altruistic purposes, their primary interest in Africa's natural resources. How does that relate to the US in any way?
>"Also: environment is happier."
Have you been to a Chinese city recently? Beijing or Shanghai? They are choked with cars despite having good rail infrastructure. In fact China is the largest producer of cars the planet right now. There are times when your lungs hurt at the end of the day. People wearing air pollution masks is normal.
Also you are comparing a centrally planned economy full of SOEs(state owned enterprises) controlled by the Communist Party with a free market economy, they are nothing alike.
>"What's their secret"
There is no secret, the economy is centrally controlled by a single political party that can not be voted out of power.
Source: https://en.wikipedia.org/wiki/List_of_countries_by_motor_veh...
Great news for fans of rail and Africans alike. Also: environment is happier. I'm just amazed at how China is moving forward where other countries (looking at you, USA) simply cannot. What's their secret?
China has very little regard for civil liberties and human rights, whereas the US government has to at least pay lip service to it.
Great news for fans of rail and Africans alike. Also: environment is happier. I'm just amazed at how China is moving forward where other countries (looking at you, USA) simply cannot. What's their secret?
They are not building out of charity but the benefit their own companies. Lot of LatAm countries like Ecuador have taken Chinese credit when Commodity markets are hot, are now regretting their mistake.
[edit]: From Wikipedia -- The new line was built between 2011 and 2016 by the China Railway Group and the China Civil Engineering Construction Corporation. Financing for the new line was provided by the Exim Bank of China, the China Development Bank, and the Industrial and Commercial Bank of China.[5] A total of US$4 billion was invested into the railway.[6]
Great news for fans of rail and Africans alike. Also: environment is happier. I'm just amazed at how China is moving forward where other countries (looking at you, USA) simply cannot. What's their secret?
Second, China was "poor" not too long, it's fresh in their mind, they know how a poor place can just transform, and they see that possibility in Africa. Plenty of those that didn't make it in China figure they can in Africa by leveraging their connection to China. So it's not just rich Chinese in Africa, there are just average Chinese folks who move to Africa and do trade import/export and build small businesses too. They see the possibility and potential. Americans don't see that in Africa, most people alive in America today didn't witness when the majority of America was "materialistic poor" like Africa is today. Which was about 100+yrs ago.
Great news for fans of rail and Africans alike. Also: environment is happier. I'm just amazed at how China is moving forward where other countries (looking at you, USA) simply cannot. What's their secret?
> I'm just amazed at how China is moving forward where other countries (looking at you, USA) simply cannot. China has very little regard for civil liberties and human rights, whereas the US government has to at least pay lip service to it.