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Joyous Africans Take to the Rails, with China’s Help

nytimes.com

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Re: Joyous Africans Take to the Rails, with China’s Help

#71

Post by Symbiote »

earthtolazlo wrote: post #3
r00fus wrote: post #2

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?

What about the coal-fired plants cheerfully mentioned in the article strikes you as good for the environment?

"it will be mechanised and rely on locally-produced hydropower to run." according to an older article. Maybe that didn't happen?

http://www.businessinsider.com/chinas-global-influence-is-gr...

Re: Joyous Africans Take to the Rails, with China’s Help

#72

Post by [deleted] »

ezzaf wrote: post #65
ww520 wrote: post #32

Earlier quoted context omitted.

GDP is per year while debt is spread over time, like 30 years. Assuming 5%/yr for the amount of interest and principle repayment, 5% x 60% = 3% of GDP for debt service per year. Not too bad. Assuming the project adds 1% to GDP growth, it would boost the GDP by 35% at the end. Adding 2% would boost by 81%. And the effect will continue after the debt has been paid off. That's a good investment.

I don't think you're accounting for interest in that calculation. If they have borrowed 60% of GDP at an interest rate of 3%, it would take a 1.8% annual increase in GDP just to match the interest on the loan. That is also ignoring the fact that you can't just take the entire GDP growth and use it to pay the loan, you have to collect fares and taxes which can only be a proportion of that growth. If you collect more i…

[deleted]

Re: Joyous Africans Take to the Rails, with China’s Help

#73

Post by kalleboo »

ww520 wrote: post #32
kevindong wrote: post #5

> For Djibouti, the debt is especially daunting, amounting to 60 percent of its gross domestic product. This seems absolutely insane to me.

GDP is per year while debt is spread over time, like 30 years. Assuming 5%/yr for the amount of interest and principle repayment, 5% x 60% = 3% of GDP for debt service per year. Not too bad. Assuming the project adds 1% to GDP growth, it would boost the GDP by 35% at the end. Adding 2% would boost by 81%. And the effect will continue after the debt has been paid off. That's a good investment.

Dunno the accuracy of this source, but http://china.aiddata.org/projects/1471

> The loan is worth 475 million USD at the rate of Libor 6 months (0.507%) plus 2.6% with a 3 year grace period and 23 year maturity

Re: Joyous Africans Take to the Rails, with China’s Help

#74

Post by luckystartup »

Does this open up any investment or business opportunities?

I feel like the shipping and railroad industry is enormous and impenetrable, but there must be some smaller opportunities in here. Even if it's something sort of intangible, like "increasing transparency and fighting corruption". Because you know some percentage of this money went into the wrong pockets.

If you were just a programmer from a western country, how would you even begin to get started in developing markets? Not just this railway project, but Africa and Asia in general. I'm reading things like this [1]:

> China, India and the rest of the developing world will eclipse the west in a dramatic shift in the balance of economic power over the next 50 years.

So I want to be where the growth is happening. How do I do that? Do I need millions of dollars before I can achieve anything? Should I learn Mandarin, Hindi, or Swahili? In the past, I would have had to visit some of these countries and talk to some local entrepreneurs. Now I can just do my own research, meet people online, and have Skype calls. There's really no need to travel in order to find opportunities.

EDIT: I just watched the "Empire of Dust" documentary... That's really eye-opening. I hate to think about how much all of those workers are being paid. Even the Chinese managers. I guess business is business, and they just pay as little as possible. It also seems like it is very difficult to get anything done.

[1] https://www.theguardian.com/global-development/datablog/2012...

[2] https://www.youtube.com/watch?v=A0C4_88ub_M

Re: Joyous Africans Take to the Rails, with China’s Help

#75

Post by kalleboo »

thisrod wrote: post #40

TL;DR: The railway from Ethiopia to Djibouti failed because no one could afford to maintain it. A few years later, the Djibouti government took out a loan for the value of 9 months production from the entire country, and paid some Chinese firms to build them a brand new one.

Skimming some of the sources in Wikipedia, it looks like the maintenance and rebuilding of the previous railway stalled not so much due to cost reasons but rather political reasons in the cooperation between Djibouti and Ethiopia. I guess it's easier politically to rally around a new shiny railroad than play "who pays who" for maintenance of a 100-year-old one.

Re: Joyous Africans Take to the Rails, with China’s Help

#76

Post by averagewall »

tomcam wrote: post #66
matt4077 wrote: post #41

Earlier quoted context omitted.

– They can finance stuff like this on credit unchecked by ny public opposition to growing national debt – Having started later than western countries, their public debt (41% GDP) is much lower – High GDP growth rates further lower the effective burden of their debt – They can act largely unencumbered by the historic debt of colonialism, while western countries face opposition both internally as well as locally in the…

- They give zero fucks about environmental impact

Environment? It's a desert, you can hardly break it worse than it already is. Also, it's Africa. Concern for the environment is a luxury for rich countries where the people already have a good quality of life and can put more effort into secondary effects like pollution/etc. Ultimately, humans are more important than the environment so where you can give a big boost to the former at a moderate cost to the latter, it can be a worthwhile trade-off.

Re: Joyous Africans Take to the Rails, with China’s Help

#77

Post by tomohawk »

dwaltrip wrote: post #62
tomohawk wrote: post #34

Earlier quoted context omitted.

Good solid World Bank math

Do you have any concrete criticisms? I'd be curious to learn about them.

This is an unstable area - to say the least. What happens if/when there is an extended disruption? Perhaps the Chinese government will feel justified to send in troops?

What if (as seems likely) the monotonic growth doesn't materialize? What if there's a recession for a few years and there is a decline?

Taking on debt means taking on risk.

Re: Joyous Africans Take to the Rails, with China’s Help

#78

Post by markdown »

matt4077 wrote: post #41
r00fus wrote: post #2

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 can finance stuff like this on credit unchecked by ny public opposition to growing national debt – Having started later than western countries, their public debt (41% GDP) is much lower – High GDP growth rates further lower the effective burden of their debt – They can act largely unencumbered by the historic debt of colonialism, while western countries face opposition both internally as well as locally in the…

> They have less qualms of working with some regimes with less-than-stellar records on human rights

Citation needed.

US corporations not only readily work with dodgy regimes, they also work with drug cartels. China has horrible human rights records, but US corporations readily deal with the Chinese govt when there is money or market-share to be gained.

Re: Joyous Africans Take to the Rails, with China’s Help

#79

Post by Synaesthesia »

jimmywanger wrote: post #17
r00fus wrote: post #2

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.

Inside the US that's true but outside of the US, America has a terrible human rights record. They've supported and armed many of the worst dictators as well as directly attacking many countries too.

Re: Joyous Africans Take to the Rails, with China’s Help

#80

Post by [deleted] »

luckystartup wrote: post #74

Does this open up any investment or business opportunities? I feel like the shipping and railroad industry is enormous and impenetrable, but there must be some smaller opportunities in here. Even if it's something sort of intangible, like "increasing transparency and fighting corruption". Because you know some percentage of this money went into the wrong pockets. If you were just a programmer from a western country,…

[deleted]
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