The West continues to terrify us about debt and especially debt from China even though many of them do borrow from China.
When the IMF comes, the conversation is always centered around DSA (debt sustainability analysis) and debt to GDP. We talked about “speed bump” and threshold.
They try to convince us that we can build our infrastructure from domestic resource mobilisation even though they can not point to any place on earth where that has happened.
Without the needed infrastructure, there is no way you can expand and grow your economy and by extention your tax base. All that DRM cliché is crap: it doesn’t work. It hasn’t worked anywhere.
In private sector, we use Other People Money (OPM) to create and deliver value and then we keep the profits. Even the richest people on earth still borrow money.
I decided to post a link so we can see the Debt to GDP ratio of some of the richest countries in the world and decide for ourselves.
Let’s borrow, build our infrastructure and improve the living conditions of our people and then worry about repayment later. That is what all the smart countries and people are doing.
Debt and who we borrow from are not the problems. What we do with the borrowed money is the problem.
You see! They are all borrowing to keep moving on…
4 thoughts on “Debt and Development: the scary story.”
You are quite right but identifying a sustainability plan would be better… We could however manage what we generate from our little corner than solely depending on the continuous borrowing….
The drip drip that comes from our little corner cannot fix our problems. Unless we remove the constraints (huge infrastructure deficit), we won’t be able to move forward. The problems require massive resources and domestic resource mobilisation won’t cut it.
The usual keeping -the-can-along-the-road argument
That is correct! We can never solve all the problems at once and so you kick some down the road