Skyscrapers, trains and roads: How Addis Ababa came to look like a Chinese city
The US has a lot of experience - both successful and unsuccessful - at nation building, actively and passively via trade and investment, over the last ~70 years or so. When you get it right, the results are spectacular.<p>If China can invest half a trillion dollars plus into Africa over two decades and it turns out really well, and they can help lift hundreds of millions of people out of poverty, then that will be a tremendous outcome. They&#x27;ll be contributing back to the virtuous cycle that their own development over the last few decades has been part of. More and more countries become net contributors and the pace of eradicating extreme poverty quickens.<p>The debt trap concerns are legitimate, ignoring the propaganda side of that for a moment. That&#x27;s a pretty obvious potential problem for very poor countries when taking on massive development loans etc.<p>Ghana for example has a $40-$50 billion GDP, and China recently agreed to lend them $15 billion to try to develop their natural resources (bauxite mining for one) for China&#x27;s use. When you&#x27;re borrowing that large of an amount of capital vs the size of the economy that has to repay the debt, it&#x27;s obviously risky. Ghana&#x27;s vice president optimistically referred to it as a Marshal plan for Ghana. The pessimistic retort by a member of their parliament:<p>&gt; &quot;How much of our natural resource are they leveraging in that agreement for the $15 billion facility? If you’ll remember, former President Kufuor did the same thing when we were constructing the Bui dam. He went to China and mortgaged our cocoa for a loan agreement. Today we ship the country’s cocoa to China to service the debt,” he said.<p>All of these examples come with that double sided risk&#x2F;reward concern, with debt and what you put up in exchange for the development capital.<p>The other giant issue I rarely see these articles discuss, is practical sustainability. That&#x27;s every bit as important as the debt concern. The US could hand Albania an advanced, $11 billion nuclear aircraft carrier, that doesn&#x27;t mean it&#x27;s a good idea matched to their level of development and what they can afford to maintain. Skyscrapers are very expensive to maintain across decades. Ethiopia has a GDP per capita of $700.<p>To be clear, I&#x27;m not saying what does or doesn&#x27;t make sense for Ethiopia. Rather, it&#x27;d be interesting to see an analysis of what a country like Ethiopia can support economically. There&#x27;s a sustainable process to economic development. You can accelerate it a bit, if you try to leap too far you run the risk of causing dramatically worse problems than the nation otherwise would have experienced had it developed more organically or at a more measured pace. If it goes south, you not only have the debt to deal with, you have expensive infrastructure you can&#x27;t afford to maintain, a double blackhole. China can dump immense sums of capital into trying to leap a country like Ethiopia forward. If they get that wrong, Ethiopia is stuck with trying to upkeep that infrastructure. It makes me wonder if there are elaborate studies done by Ethiopian authorities before allowing major projects funded by China to go forward, when it comes to estimated 30-50 year type maintenance costs.