Doug Henwood wrote:
> Why does China need the WB"s money or advice? They're overflowing
> with reserves,
I don't know, but the cost of funds may be one consideration. Some of the World Bank loans carry interest rate of 0.75% per year with repayment period of 35 years (including 10 years grace period). What would be the discounted value of future outflows on such terms?
>and they're obviously doing something right.
They are collaborating with/receiving favours from the developed world on a scale no other developing country does.
Ulhas
^^^^^
CB: I don't know if I have this just right, but don't the corporations in the developed world saturate their profitable investments within the developed world itself, and have a need to find "new markets" in the "developing" world ? Otherwise they have a bunch of cash that burns a hole in their pocket. Creditors _need_ debtors, like masters need slaves.
Anyway, if the World Bank's funds are part of the "overproduction' fund, then the World Bank _needs_ debtors, and China doesn't look like a bad debt problem. Maybe the World Bank needs China as much as China needs this "help" from the World Bank.