Saturday, March 21, 2015

More on China Infrastructure Bank (AIIT) from Michael Hudson

interview posted in Naked Capitalism:
"The World Bank, under U.S. congressional pressure, has said, look, we’re not going to finance countries becoming independent of the United States; our function is to make them export more to the United States and to buy from the United States. So the funding of the World Bank has mainly been to fund infrastructure developments, vastly overpriced, to Third World countries to create money for American engineering firms; also to lend out dollars and to indebt countries to it; and worst of all, to promote privatization. And that’s really the big difference between the Chinese Development Bank’s philosophy and the World Bank."
"PERIES: Now, I have actually seen and witnessed what China’s impact has been in some of the Latin American countries where they have huge investments in infrastructure development projects, which often isn’t in the best interests of those countries. For example, China brings in a number of their labor, thousands of Chinese workers, to those sites to work, and they’re basically importing labor, not hiring the local labor for these projects. Now, that’s what I witnessed. How do we know that China is really going to be different, apart from the discussions they’re having with you? Is that reflected in any policy? Or are they trying to have these conversations in a more collaborative way with the southern countries?
HUDSON: Well, for almost any countries for the last few hundred years that has been putting it in infrastructure, it’s pretty much used its own labor and management. Certainly the World Bank has always promoted very expensive American management and American workers for this. Britain did in its countries. I think China wants to make sure that it has control. And, after all, it’s trying to do–it’s already trained its labor specifically for these projects. And the World Bank has been and the IMF have been very careful to prevent other countries from developing the kind of labor and developing the skills that would lead them to create this infrastructure, precisely in order to make them dependent on World Bank and U.S. leadership. And of course China is going to be using its own labor, but in principle, obviously, these countries need to develop the skills so that they can say, look, we have to have our own labor work here too."

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