politics

Abe warns Africa about debt as China grows presence

28 Comments
By TOSHIFUMI KITAMURA

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Says the leader of a country 250% in debt and climbing.

12 ( +13 / -1 )

Says,

Abe ‘two-plane’ Shinzo!

I’m wondering how to manage my debt as the J government raises taxes and my salary stays the same-Abe help!

5 ( +6 / -1 )

"Don't get indebted to China!"

....

....

"Now, about that loan you wanted..."

8 ( +9 / -1 )

So are we to believe that all Japans overseas loans and assistance is free, a gift from Japan?

7 ( +8 / -1 )

Abe: "I'm warning you about accumulating too much debt. So here's a massive loan. Now excuse me while I go back and tell my people we need to raise taxes to cover it."

6 ( +8 / -2 )

Its not-the recipients are tied to contracts specifying Japan Inc as the suppliers of goods and services...

0 ( +0 / -0 )

Japan may have a huge public debt but they have invested the monies in projects that are feasible , verifiable and in the long run financially viable. The opposite is the case for African countries. Most of the debts have gone into consumption and so there is a huge mismatch between what is on paper as debt and what actually pertains on the ground. Whereas Japan can repay their debts, and by the way, a chunk of the debt is owned domestically, a chunk of Africa's debt is owned externally and there is no hope that they can repay. May countries in Africa just came out of HIPC and many of them have taken loans sometimes exceeding the dreaded 60% levels. In addition, the projects that have been embarked on using these loans have been executed poorly because of corruption.

So what Abe is simply saying is that African governments must watch out otherwise the future looks bleak for the next generation who have the responsibility to repay all these loans but would have no resources to depend on or even enjoy the so-called projects that these loans have been procured for.

0 ( +4 / -4 )

Surely, Abe is warning the Africans against China?

2 ( +2 / -0 )

Man,

Every man,woman and child in Japan is ¥9,000,000 in debt because of the LDP's largesse and here we have it's leader advising another continent about what to do regarding their monetary policy.

TIJ!

6 ( +7 / -1 )

Of course, he is warning them against China. I speak as an African. The Chinese cannot be trusted. They are just taking advantage of the bad leaders on the continent and ripping them off. They know most of the leaders are corrupt and unaccountable to their people, so China promised not to interfere in their internal affairs. This way they got them. Also, China is getting all the advantages on the blindside of these greedy bastards.

1, They pretend they are giving huge loans at competitive rates but the sheer size of those loans make it impossible for them to pay back.

2, Since they know it is practically impossible for them to repay, they insert a clause that says failure to pay by this period, you would forfeit this resource. Many African countries are trapped in this but cannot get out because they badly need the money.

3, The Chinese government is giving these loans but at the same time creating a job market for Chinese citizens on the African continent. The Chinese population is increasing very fast. Any project backed by a Chinese loan must be executed by a Chinese contractor and you would usually find that about 60% of the staff working on a particular project would be Chinese.

4, Most of the projects are executed poorly at exorbitant costs

So all what Abe is telling them is becareful. Think about the next generation and not only themselves and their immediate families,

1 ( +5 / -4 )

but they have invested the monies in projects that are feasible , verifiable and in the long run financially viable. 

This is not true. The reason that Japan accumulated so quickly a huge debt after the bubble is that the Japanese government (=Abe's LDP ) has injected large amount of money primarily for public works in the hope that this would bring back Japan to its economy before the bubble explosion. It never worked and resulted only in making the country to dig its debt at a steady high rate. This translated into ridiculous spending, useless infrastructures is one example, or going into costly experiment like the Monju fast-breeding reactor which was a financial disaster.

In other words, what Abe is telling them not to do is precisely what Japan did.

 Most of the debts have gone into consumption and so there is a huge mismatch between what is on paper as debt and what actually pertains on the ground. 

Makes not sense...

 Whereas Japan can repay their debts

No it can't. Japan is borrowing money to service its debt which is around 240 billion dollar each year.

and by the way, a chunk of the debt is owned domestically

This argument is often used but so what? A debt is a debt and Japan does not operate in a parallel world where debt is somehow just a number. The domestically owned debt only helps to have stable interest rates, but that does not mean that those rates will never increase, which could be catastrophic. In any case, Japan has to service its debt each year, which is currently an enormous burden on the country finance as it needs to create even more debt to do that.

Now the fact Abe tells with a straight face to other countries that they should be careful about accumulating too much debt is a joke from a country which has managed to accumulate the largest one relative to its GDP.

5 ( +6 / -1 )

You may not appreciate my argument about borrowing to consume. At least, I know of a country that borrows even to run its own elections. That is directly borrowing to consume. You may call the investments in infrastructure wasteful investment but the point I am making is that that investment is feasible. Contrast that to a country that is badly in need of infrastructure, yet takes the money but you cannot see the infrastructure. At best you see half-built infrastructure that is left to rot. It may not make sense to you but if you introduce the element of corruption and kickbacks resulting in over bloated contracts, you would begin to appreciate the point I am making.

Japan can repay its debt if it reduces further investments in infrastructure which you think is wasteful. In the case of many African states, this is not option. There is another important point on this but it is not popular so I will hold on to that argument.

The argument about domestic borrowing is simple. When your debts are domestic held debts, you are able to wean yourself from external shocks. You can make economic decisions that favor you . Once majority of your debts are in foreign hands, you are at the mercy of external investors.

2 ( +2 / -0 )

"Says the leader of a country 250% in debt and climbing."

Japan can afford to owe ITSELF.

African countries cannot afford to owe China.

Big difference, in case you've missed it!

-6 ( +1 / -7 )

Abe is dishonest not only in the past but also in the present. What Japan is doing is exactly the same as what China does, loans. That is debt. How come Japan's debt is better than China's ? Which international laws support Abe's claim ?

-4 ( +1 / -5 )

Loan is a loan, offer is offer, trade is trade. Why is Japan's better than China's ? If Japan's is better, why do Africans not take it ? If everything Japan does in business is based on bad mouth and lies, can can Africans trust it ?

-5 ( +0 / -5 )

@Frankus23

What I find surprising about the Chinese government is that it orders the Chinese workers to marry Africans!

I can’t imagine Japan being able to compete against that!

Inevitably, the Chinese will win the race as they are in it so deeply....

-3 ( +0 / -3 )

Peeping Tom

"Says the leader of a country 250% in debt and climbing."

Japan can afford to owe ITSELF.

African countries cannot afford to owe China.

Big difference, in case you've missed it!

What Abe is that African countries cannot afford to owe China but it is okay if the owe Japan and Japan is prepared to increase their mountain of debt through quality ultra expensive loans.

5 ( +5 / -0 )

When people lie to you face to face, they believe you are fools and they are the superior.

-2 ( +1 / -3 )

Is the attraction of accumulating debt with the apparent lack of need to repay just another subtle method of enacting slavery

3 ( +3 / -0 )

What does Abe mean, better terms? Lower interest? And what happens if they don’t pay back their debt to Japan, Japan will just forgive the debt? If not how’s it different from China?

No bank would do that. If they did, they wouldn’t be responsible.

5 ( +5 / -0 )

Says the leader of a country 250% in debt and climbing.

Its less than that. And over 90 percent of Japans debt is held within Japan. So it is not a risk to currency fluctuation, and it can be repaid by the Japanese government any time through Monetary policy.

What PM Abe states is correct. Communist China is loading these poor, third world African nations with debt, and want them to default so they can repossess huge African resources.

-3 ( +3 / -6 )

"If not how’s it different from China?"

"What are Chinese corporations doing in Africa? That's a highly controversial issue."

"The reason Chinese corporations are in Africa is simple; to exploit the people and take their resources. It’s the same thing European colonists did during mercantile times, except worse. The Chinese corporations are trying to turn Africa into another Chinese continent. They are squeezing Africa for everything it is worth."

https://www.forbes.com/sites/panosmourdoukoutas/2018/08/04/china-is-treating-africa-the-same-way-european-colonists-did/#1a2ad174298b

"What I find surprising about the Chinese government is that it orders the Chinese workers to marry Africans!"

It certainly isn't solely for their irresistible eyes!

"But according to Ugandan immigration officials, there’s one major downside: an increasing number of Chinese men are marrying Ugandan women to gain residency and continue their business interests in the country.

Officials told a parliamentary committee in late November that they are seeing more and more Chinese-Ugandan couples, often in sham unions. Couples are normally interviewed before spousal status is granted and Chinese men involved in sham marriages are deported.

https://qz.com/africa/857156/uganda-is-worried-about-the-number-of-chinese-men-marrying-their-women/

Article is from 2016; apparently things have gotten even worse since then.

Not all, but a great majority does it, and for the above mentioned reasons; just speak to any citizen from an African country subject to a Chinese influx. They will be more than happy to put you in the picture.

And from conversations I regularly have with many African friends, they'll switch to Japan at the drop of a hat.

They love the Toyotas, the Panasonic, the Toshiba's, the Nissan's and a myriad more of brands, all of them Japanese; you'll hardly find an African who will prefer a Chinese over a Japanese brand.

I certainly haven't encountered a single one.

-2 ( +1 / -3 )

Peeping_Tom, how many bridges did Japan build for Africans ? how many roads ? hospitals ? schools ? factories ? shopping malls ? reservoirs ? kindergartens ?

How many Africans did Japan save ?

How many hungry people did Japan feed ?

How many ill boys and girls did Japan help ?

If Japan all these, at the time and space they need it, what is Japan afraid of China ?

-8 ( +1 / -9 )

What are Chinese corporations doing in Africa? That’s a highly controversial issue.

The reason Chinese corporations are in Africa is simple; to exploit the people and take their resources. It’s the same thing European colonists did during mercantile times, except worse. The Chinese corporations are trying to turn Africa into another Chinese continent. They are squeezing Africa for everything it is worth.

Japan will invest in Africa but won’t squeeze you as much. We all squeeze just some squeeze harder.

0 ( +1 / -1 )

What legal and moral authority does Abe have to warn Africans about China ?

That's silly, why would you need legal or moral authority to make a threat?

China makes threats all the time without any legal or moral authority.

-1 ( +1 / -2 )

Another 3 arrows of economic death Abe?

3 ( +3 / -0 )

NO African leaders were listening at you, Mr.Abe! For them, "Debts" doesn't matter them! Those African leaders cares who you are! And obviously you: Mr.Abe is a puppet of Donlad Trump just barking for him!

0 ( +0 / -0 )

Philippines better watch out ! China is not a friend but a bully and opportunist.

0 ( +0 / -0 )

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