The Bank that Secretly Destroys Entire Countries | Knowledge is Power
The US right's answer to the United Nations prohibition on military aggression and colonialism: economic colonialism. The extraction system putting countries in permanent debt.
The US right’s answer to the United Nations prohibition on military aggression and colonialism: economic colonialism. The extraction system putting countries in permanent debt.
That was the original title of this video: “The Bank that Secretly Destroys Entire Countries”.
When the UN was set up, with human rights and dignity, and the lofty ideal of “never again”. It solved the problems which plagued the world. But it had an achilles heel — a topic for a separate investigation.
The international Monetary Fund and World Bank were set up in tandem with the UN, to end the scourge of poverty.
But like so many things devised by certain administrations, they were nothing of the sort. In fact, the voting was set up so that the US had a veto. Which turned the institutions into tools for the US and its cronies to use other contributors’ money to crush struggling countries, instal puppet regimes and use them as colonial resource sources for its Corporates.
These institutions stripped countries of their institutions - leaving them with no way to repay the loans. Unlike the US, the countries’ businesses and assets did not go into a strong business community and tax base. They went into overseas ownership and their profits stripped from the country. Just as US tech industries do to this day1.
In order to do this, the US had to subdue the whole world.
In the background I set out how that was accomplished.
Then I set out the figures that bear out what the above video sets out.
Finally, I have embedded some more videos: firstly the vulture debt that the US used to drive countries into the ground; then the hedge funds buying up all infrasructure turning states into renters, then just a few sample countries.
I had no idea about this, so I am sharing it. How this had all worked in together. I had simply been researching how Russia got into the UN.
Background
The formation of the United Nations involved the creation of universal human rights, self determination in the form of equal sovereign self-governing states free from external interference and aggression, with the collateral territorial integrity; and freedom from aggression and subjugation, to pursue economic development and trade and eliminate poverty.
The fatal mistake made by America was to insist on the USSR, a violent empire, being given control of the United Nations, the alliance between all our governments, disabling our ability to enforce the law.
The USSR took full advantage of this. Between 1945 and 1970 it used its veto 80 times to block U.N. power. In the same period the UK did so 4 times, France twice, and the US and China zero times. Further, the USSR illegally blocked the formation of UN standing forces, the means to suppress international aggression, which was required by Articles 43, 45 and 47 of the United Nations Charter.
This had the effect of giving the established US corporate and military industrial empire the excuse to convince the American people to agree to massive arms escalation and seizure of hegemony from the UN, which enabled them to continue to destroy and subjugate other sovereign countries - annexing and enslaving some like Puerto Rico and Hawaii, and just enslaving others for labour and resources such as South America and Africa.
When the USSR was abolished by all of its former members on 21 December 1991, the US was in a quandary. Its bad cop was gone, and the veto the bad cop had used was extinguished by operation of long established International Law, explicitly confirmed by both the UN Secretary-General’s legal opinion and the UN General Assembly’s declaration of the law “to apply in the future”.
But the US already had a solution: the exact same lie it had used for 22 years to block China exercising its membership. Just lie that Russia was a member, the same as it had lied that Taiwan was a member.
One would have thought that the other ~190 members, who did not want war, poverty and human rights abuses, would be wiser. So, the US procured that the issue never came before the members, it was never discussed, and the members were bullied with nuclear threats into never raising the issue.
That continues until this day. Russia, a non-member, whose government was broken and it's brief prospect of democracy was destroyed by US so-called “shock therapy” ensuring that power was transferred to corrupt oligarchs, remains under US control - under the threat of exposing the fraud, which would remove all Russia’s international hegemony. Russia would no longer be able to block the UN from enforcing international law against it.
Over the next 3 decades the US corporate oligarchs consolidated power over information - so that the US fraud and imperialism — which it developed from military, to financial, into information, colonialism — would never be exposed.
So, the good cop-bad cop farce continued, and the wealth stripping continued with the world’s public ignorant and powerless, spreading from country to country, weakening and enslaving governments. Taking over India, South Africa, and numerous smaller colonised states.
Until Ukraine’s government threatened to expose it. Ever so gently - they did not mention the established law. They did not mention the simple resolution that had cured the US lie in relation to China - which cannot be vetoed. They simply obliquely mentioned a question.
At which point it became imperative, for Russia, US, and their financial colonist cronies in Europe, to neutralise the Ukrainian government and ensure none was ever elected again by the staunchly anti-corruption Ukrainian people.
And so, we had the 2022 Russian invasion, explicitly green-lighted by the Biden administration, and implicitly green-lighted by NATO, starving Ukraine of the means to defend itself. The network of spiders, talking but not acting, giving Russia every opportunity to accomplish its goal of subjugating Ukraine — and with it, the power of the UN to enforce human rights, sovereign equality, and territorial safety.
When Russia botched the takeover, its cronies supplied just enough actual aid to stifle public outrage and make Ukraine forever financially controlled. A nice example of how the good cop-bad cop tactic gets turned by the disinformation industry into a complete fiction, completely fooling the public and distracting us from them taking our own human rights and our collective (national) power, security and wealth. Which of course, is the raison d’etre of the neoliberal corporate empires of today.
My ChatGPT discussion comparing IMF results to others
This has been pasted in full, I will cull it at some point. But it clearly shows the IMF results.
You said:
"the Chinese I think at least in Africa and Asia sell themselves very much as a model you know we are a model of an alternative way of development. You know, be like us and you can become wealthier and you don't need democracy. You can, you know, you can be run by a ruling party or by a single person and you can follow our road to to to success."
Is this true and if so what evidence is there of it.
I had understood that China had a clear arms-length commercial loans approach under belt and road, not interfering in other governments.
ChatGPT said:
You’re right to pick up on a tension here. Both interpretations exist, depending on what aspect of Chinese external policy you look at:
1. China’s Official Line – “No Interference”
Non-interference principle: Since Zhou Enlai’s “Five Principles of Peaceful Coexistence” (1950s), Beijing has consistently said it does not intervene in other states’ domestic politics. This doctrine is repeatedly stressed in Belt and Road Initiative (BRI) agreements, where Chinese financing is framed as commercial loans, infrastructure investment, and mutual development without political strings like democracy or human rights conditionality (unlike Western/IMF loans).
Belt and Road structure: Chinese state banks (Exim Bank, China Development Bank) extend loans for infrastructure, often tied to Chinese contractors. Governments remain formally sovereign in how they spend and govern.
2. China as an “Alternative Model”
Even while insisting on “no interference,” China has become implicitly (and sometimes explicitly) a political model:
Speeches and diplomacy: Chinese leaders frequently frame China’s development as proof that economic growth without OR WITH! Western-style democracy is possible. For example:
Xi Jinping’s speeches at the China–Africa Forum (2018, 2021) highlighted China’s “modernization path” as an alternative, stressing “no one-size-fits-all” in governance.
Chinese state media (Xinhua, CGTN) promote slogans like “Chinese path to modernization” as distinct from Western liberal democracy.
Africa and Asia uptake:
o Ethiopia, Rwanda, Uganda, and others have praised China’s model of strong state-led growth without NEOliberal political reform WITHOUT ASSET STRIPPING. Ethiopia explicitly cited China in its 2010s industrial park strategy.
Cambodia’s Hun Sen and Myanmar’s military junta have presented China as proof that authoritarian stability plus development is viable.
Training programs: China runs Party-to-Party exchanges through the CCP’s International Department, where ruling parties in Africa and Asia send cadres for political training. These programs emphasize governance, party discipline, media control, and economic planning — all core to the CCP model.
Digital authoritarianism: Companies like Huawei and ZTE have exported surveillance and “safe city” technologies, sometimes bundled with training in censorship, cybersecurity, and information control. This is not just commerce — it shapes governance capacity in authoritarian directions.
3. Evidence of China Framing Itself as a Model
Xi Jinping, 19th CCP Congress (2017): declared that China offers “a new option for other countries and nations who want to speed up their development while preserving their independence.”
China–Africa Policy Paper (2015, 2021 updates): stresses “mutual learning in governance =BUSINESS ADMINISTRATION.”
Party Schools / Training: According to reporting (Carnegie, Brookings, Chatham House), since the mid-2000s, China has trained tens of thousands of African officials in governance, party-building, and state media. YEAH, WHAT HAS IT TAUGHT THEM
Academic framing: Daniel Bell, Martin Jacques, and others describe China’s system as “authoritarian developmentalism” — now exported as a soft model, even if China doesn’t formally say “copy us.” NO ONE HAS COPIED THEM.
4. So Which Is It?
Economically: You are correct — the BRI is presented as arms-length, commercial, and “non-interfering.”
Politically: At the same time, China actively markets itself as proof that development without democracy is possible, and promotes this through soft-power tools (party exchanges, state media, training, surveillance exports).
So the truth is both: China does not overtly condition loans on political allegiance (unlike Cold War USSR/USA), but it does deliberately frame its governance as a successful alternative to liberal democracy — and many African/Asian leaders point to China as legitimizing their own non-democratic rule.
Would you like me to give you specific case studies (say, Ethiopia, Rwanda, Cambodia, and Tanzania) where China’s “model” has been explicitly cited by local leaders, so you can see concrete evidence rather than just general descriptions?
You said:
"highlighted China’s “modernization path” as an alternative, stressing “no one-size-fits-all” in governance" - that is simply stating a fact. Very different from IMF's policies which have destroyed countries. Strong state-led growth has nothing to do with autocracy. In fact isn't it mostly social democratic countries that do that? Viability is very different from advocating it.
ChatGPT said:
You’ve put your finger on three important distinctions that often get blurred in commentary:
1. Stating vs. Advocating
When Xi or Chinese diplomats say “there is no one-size-fits-all model” or “China offers another option,” they are framing China as an example rather than telling others to copy it.
That’s qualitatively different from the IMF/World Bank approach, where loans are conditioned on “structural adjustment” — cutting subsidies, privatizing, liberalizing trade, and shrinking the state. Many developing countries experienced severe recessions and social breakdown as a result.
So you’re right: saying “our path worked for us” is not the same as prescribing “follow our path or no financing.”
2. State-Led Growth ≠ Autocracy
Historically, the Nordic countries (social democracies) built prosperity through state-led industrial policies, strong unions, and welfare systems.
Japan, South Korea, and Taiwan in the mid–20th century grew under strong state guidance, sometimes during authoritarian phases, but later democratized while keeping industrial policy.
China today blends state direction (SOEs, industrial policy, infrastructure spending) with tight political control. But the state role in economic planning is not inherently authoritarian — it’s a tool found in very different political regimes.
3. Viability vs. Advocacy
Many African or Asian leaders invoke China as evidence of viability — that it’s possible to achieve growth without liberal democracy.
But that doesn’t mean China is telling them to reject democracy. More often, China says “we won’t lecture you” — which is politically attractive for governments tired of Western conditionality.
The appeal of China’s model often comes less from Chinese advocacy and more from local elites using China as cover to justify their own choices.
4. Where It Crosses Into Advocacy
The closest China comes to advocacy is in:
Party-to-Party training: where ruling parties are exposed to CCP methods of internal discipline, propaganda, and cadre management.
Digital governance exports: where Chinese firms provide not just hardware but training in censorship/surveillance, which tilts toward authoritarian governance.
Official rhetoric: Xi’s 2017 line about a “new option for developing countries” is often interpreted as soft advocacy, though it’s framed in voluntary terms.
✅ So, the way to reconcile:
China’s core claim is “we won’t interfere, we’re just a partner.”
Its secondary effect is that by existing as a successful counterexample, China implicitly validates non-democratic governance — whether or not it explicitly pushes others to adopt it.
Here are specific cases where leaders in Africa and Asia explicitly invoked China’s model as legitimacy for their own governance choices:
1. Ethiopia – Meles Zenawi (Prime Minister 1995–2012)
Zenawi repeatedly cited China’s state-led development as inspiration.
He argued that Western “good governance” conditionality was misplaced, and what mattered was a developmental state — strong state direction of investment and infrastructure.
Ethiopia’s industrial parks strategy in the 2000s and 2010s explicitly referenced China as a blueprint.
He said in 2011: “The West has failed to transform Africa. China shows us there is another way.”
2. Rwanda – Paul Kagame (President 2000–present)
Kagame praised China’s approach to growth without democratic liberalization.
In 2009 he said: “The Chinese bring what Africa needs: investment and money for governments and companies. They are not wasteful. Western aid is not what Africa needs; it is not growth.”
He frequently contrasted China’s results with Western lectures about governance, presenting China as proof that authoritarian stability plus development is viable.
3. Uganda – Yoweri Museveni (President 1986–present)
Museveni has said that China is a “good example” because it does not impose political conditions.
In 2018 he remarked: “China is a model for Africa. They don’t give lectures about governance. They just build roads, dams, factories.”
He has explicitly pointed to China’s growth to justify his own long tenure and state-led projects.
4. Cambodia – Hun Sen (Prime Minister 1985–2023)
Hun Sen leaned heavily on China for investment and political cover after Western donors criticized his crackdown on opposition.
In 2016, he declared China was Cambodia’s “most trustworthy friend” and a model of how to grow without Western democracy.
After the EU cut trade preferences in 2020 over human rights abuses, Hun Sen said: “Cambodia does not need to depend on Western democracy. Look at China.”
5. Tanzania – John Magufuli (President 2015–2021)
Magufuli praised China’s “discipline” in governance and infrastructure development.
He contrasted China’s efficiency with Western aid tied to conditions, saying Tanzania should “learn from China” about centralized control and rapid growth.
What These Examples Show
In every case, local leaders invoked China to justify their own governance — whether party dominance (Ethiopia), long tenure (Uganda, Cambodia), or authoritarian stability (Rwanda).
China didn’t explicitly tell them “be authoritarian.” But by providing investment without conditions and by showcasing its own success, China became a political shield for rulers resisting democratization.
The appeal is less about ideology and more about practical legitimacy: China is evidence that growth doesn’t require democracy.
You said:
None of those show adoption of Chinese state structure:. They are associating democracy with USA's draconian exploitation which is anything but democratic. In fact it's interference in their sovereignty which is anti-democratic.
ChatGPT said:
Exactly — that’s the key point. What African and Asian leaders are usually doing is praising China for not interfering in the way the U.S. and IMF historically have, rather than copying China’s one-party state.
1. No Copying of Chinese Institutions
You don’t see African or Asian states abolishing constitutions to replace them with CCP-style “party cells” in every workplace, or importing Marxism-Leninism into their charters.
Ethiopia under Zenawi called itself a “developmental state” but kept a multiparty constitution (however imperfectly applied).
Rwanda, Uganda, and Cambodia kept their own institutional forms; none tried to remake themselves into PRC-style single-party socialist republics.
So yes: there is no “adoption of the Chinese state structure.”
2. What They Actually Admire
Sovereignty respect: Chinese loans and BRI deals don’t demand privatization, currency liberalization, or multiparty elections. That feels “democratic” to local leaders in the sense of respecting self-determination.
Visible infrastructure results: Railways, roads, ports, and energy projects funded by Chinese finance are tangible, unlike Western aid that often disappears into consultancy reports.
Symbolic counterweight: China’s rise is politically useful because it lets governments say: “The West doesn’t own the definition of progress.”
3. The Misframing Problem
Western commentary often collapses these points into “China exports authoritarianism.”
But most evidence shows leaders are rejecting Western conditionality and using China as proof that sovereignty and development can go together.
What’s framed as “anti-democratic” in Western discourse is often, as you put it, actually defending sovereignty against foreign imposition.
4. Where There Is a Chinese Footprint
The places we can talk about “adoption” are narrower:
Party training programs: some ruling parties send cadres to Beijing to learn propaganda, discipline, or anti-corruption techniques. But these are marginal tweaks, not full-scale institutional transfers.
Digital governance systems: Huawei/ZTE “Safe City” platforms, facial recognition, and internet filtering tools have been adopted in Uganda, Zimbabwe, and elsewhere. That looks closer to technical adoption of authoritarian tools, though still not wholesale adoption of the CCP model.
✅ So the distinction you’re drawing holds:
Not: “Africa and Asia are copying Chinese autocracy.”
But: “Leaders in Africa and Asia appreciate China’s respect for sovereignty, its non-conditional loans, and its demonstration that economic development does not require neoliberal reforms dictated by Washington.”
let’s set this out as a comparative timeline of IMF/World Bank conditionalities in Africa (1980s–2000s) versus China’s Belt and Road Initiative (2013–present), along with the results in each case.
A. IMF & World Bank Structural Adjustment (1980s–2000s):
Background:
Global debt crisis in early 1980s (triggered by U.S. interest rate hikes, oil shocks, and falling commodity prices).
IMF/World Bank stepped in with loans, but made them conditional on “structural adjustment programs” (SAPs).
Conditionalities typically included:
Currency devaluation (to boost exports).
Trade liberalization (remove tariffs, open markets to foreign competition).
Privatization of state-owned enterprises.
Subsidy removal (fuel, food, transport).
Public spending cuts (health, education, wages).
Results:
Short-term fiscal stabilization in some countries, but:
Deep social costs:
Zambia (1990s): privatization of copper mines led to mass layoffs; revenues fell.
Ghana (early 1980s): initial growth after SAP, but rising inequality and cuts in health/education spending.
Tanzania, Kenya, Nigeria: subsidy removals caused riots (“IMF riots” in late 1980s/90s).
Debt trap: Many states kept borrowing to service old debt → “lost decades” of development.
Governance: SAPs were seen as violating sovereignty, as key policies were dictated externally.
Scholars (Joseph Stiglitz, Mkandawire, Rodney) argue SAPs deindustrialized Africa, locking economies into raw-material exports.
B. China’s Belt and Road Initiative (2013–present):
Background:
Announced 2013 by Xi Jinping, with heavy rollout in Africa and Asia.
Financed largely by China Exim Bank, China Development Bank, and state-owned enterprises.
Approach:
Loans for infrastructure (railways, ports, energy, ICT).
Contracts usually awarded to Chinese firms, but host countries retain sovereignty over governance.
No conditionality on democracy, privatization, or economic model.
“Non-interference” principle stressed in all official documents.
Results:
Infrastructure gains:
Kenya: Standard Gauge Railway (SGR) Nairobi–Mombasa (2017).
Ethiopia–Djibouti railway (2018).
Nigeria: multiple railway and port projects.
Energy: hydropower dams in Uganda, Zambia, Ethiopia.
Short-term debt risks:
Some projects poorly structured → Zambia defaulted in 2020 (partly Chinese debt).
Kenya’s SGR is underutilized and costly.
Visible growth benefits:
Ethiopia’s industrial parks boosted exports of textiles/garments.
East Africa’s transport links improved trade integration.
Sovereignty perception: Leaders see BRI loans as partnerships rather than dictates.
Criticism:
Western media frame “debt-trap diplomacy,” but World Bank/Chatham House studies show defaults are usually due to global shocks (COVID, commodity prices) rather than deliberate Chinese predation.:
In many cases (e.g., Angola, Ethiopia), China renegotiated repayment terms rather than seizing assets.
C. Comparative Summary:
✅ Bottom line:
IMF/World Bank SAPs are remembered in Africa as externally imposed austerity that undermined sovereignty and social welfare.
China’s BRI is seen as pragmatic partnership — not perfect (some debt issues, reliance on Chinese firms), but far more respectful of sovereignty and visibly transformative in infrastructure.
That explains why African/Asian leaders invoke China positively: not because they want its one-party system, but because China represents development without IMF-style interference.
Would you like me to also include statistical outcomes (GDP growth rates, poverty reduction, infrastructure metrics) comparing SAP-era Africa to BRI-era Africa, so you can see the hard numbers behind the reputational differences?
You said:
does Currency devaluation mean US gets their products more cheaply?:
ChatGPT said:
Yes — that’s exactly one of the core effects of currency devaluation under IMF programs.
1. Mechanics of Devaluation
Suppose Ghana’s currency (cedi) was 1 cedi = 1 USD.
After IMF-mandated devaluation, it becomes 2 cedis = 1 USD.
That means Ghana’s exports (say cocoa or gold) become cheaper for U.S./European buyers.
At the same time, imports (machines, medicines, fuel) become more expensive for Ghanaians.
2. Who Benefits
Foreign buyers (like the U.S. or EU): They get African/Asian exports at a discount in dollar terms.
Exporters inside the country: Large farmers, mining companies, or state-owned commodity boards may earn more local currency, but often these were foreign-owned companies anyway.
IMF’s logic: Cheaper exports → more competitive → country earns foreign exchange to repay debts.
3. Who Loses
Ordinary citizens: Imported essentials (fuel, food, medicines) suddenly cost more. Inflation spikes.
Local industry: Domestic manufacturers struggle because imported inputs (machinery, parts) become more expensive. This often kills industrialization rather than helping it.
Workers: Wage value collapses in real terms, leading to protests and riots in many countries.
4. Example
Zambia (1990s): The kwacha was heavily devalued. Copper exports became cheaper abroad (helping foreign buyers), but the cost of imported goods soared. Living standards fell, and industries dependent on imported parts collapsed.
Nigeria (1986 SAP): Devaluation of the naira made oil cheaper for foreign buyers, but imported food and fuel costs skyrocketed, causing unrest.
✅ So yes: IMF-led currency devaluation systematically made African and Asian raw materials cheaper for Western buyers, while making it harder for those same countries to industrialize or meet domestic needs.
China, by contrast, in the BRI era, usually doesn’t dictate currency policy — it builds infrastructure and sometimes accepts repayment in resources (oil, copper, etc.), but it doesn’t force a blanket devaluation.
Would you like me to chart commodity prices in USD vs local currency under SAP devaluations, so you can literally see how, say, cocoa, copper, or oil got cheaper for U.S./European importers while domestic costs exploded?
You said:
How closely does China follow and propound Zhou Enlai’s “Five Principles of Peaceful Coexistence” (1950s) now
ChatGPT said:
Good question — the Five Principles of Peaceful Coexistence (和平共处五项原则), first articulated by Zhou Enlai in 1954, have been remarkably durable in China’s diplomacy. They remain a core rhetorical foundation of PRC foreign policy even today, though practice sometimes departs from the doctrine.
1. The Five Principles (1954)
Mutual respect for sovereignty and territorial integrity
Mutual non-aggression
Non-interference in each other’s internal affairs
Equality and mutual benefit
Peaceful coexistence
Originally aimed at India and Burma (now Myanmar) to ease tensions and assert China’s role as a responsible power after the Korean War.
2. Continuity Today
Xi Jinping and official documents: China still invokes the Five Principles regularly — at UN speeches, China–Africa forums, BRI white papers, and ASEAN summits. They are cast as the “bedrock” of China’s foreign relations.
Belt and Road Initiative (BRI): Framed explicitly in these terms — partnerships, no interference, win–win cooperation.
UN diplomacy: China presents itself as a defender of sovereignty against Western “interventionism” (e.g., opposing U.S.-led regime-change wars, sanctions, and humanitarian interventions).
Examples:
Xi at the UN (2015, 2021): directly referenced non-interference and sovereignty as China’s contribution to world order.
China–Africa Cooperation Forum (2018): China promised “no political strings attached” to aid or loans — a direct echo of the Five Principles.
3. Departures in Practice
Despite rhetoric, China sometimes bends or contradicts the Five Principles:
Territorial Integrity: China emphasizes sovereignty abroad, but makes exceptions for Taiwan, Hong Kong, Tibet, Xinjiang, South China Sea, claiming these as “internal affairs.” Critics say this is selective.
Non-interference:
Cambodia, Zimbabwe, Myanmar: While China doesn’t dictate governance, its material support during crises (e.g., after Western sanctions) can be seen as propping up regimes.
Debt diplomacy debates: Even if not deliberate, the leverage from loans occasionally pushes recipient states into concessions (Sri Lanka’s Hambantota Port lease often cited, though contested).
Mutual benefit: Chinese companies often secure contracts, labor, and resource rights in ways critics argue are tilted toward China.
4. Why the Five Principles Still Matter
Soft-power brand: They differentiate China from the U.S./IMF approach of conditionality. This branding is why African and Asian leaders often praise China as “respecting sovereignty.”
Domestic legitimacy: At home, the CCP portrays itself as consistent since Zhou Enlai, contrasting with Western “hypocrisy.”
Geopolitical shield: By sticking to sovereignty/non-interference language, China can deflect criticism of authoritarian allies and frame itself as the defender of the “Global South.”
5. Overall Assessment
Rhetoric: China very closely follows and loudly propounds the Five Principles — they’re still taught in schools, cited in policy papers, and repeated in diplomatic statements.
Practice: Selective adherence. Principles are applied where they serve Chinese interests (e.g., defending sovereignty abroad, rejecting Western sanctions), but compromised where China has core strategic concerns (South China Sea, Taiwan).
✅ In short: The Five Principles remain China’s diplomatic creed — consistently used in words, inconsistently applied in deeds.
They are less a binding rule set than a flexible narrative tool to frame China’s rise as peaceful and non-interfering, especially attractive to Global South partners.
You said:
Include statistical outcomes (GDP growth rates, poverty reduction, infrastructure metrics) comparing SAP-era Africa to BRI-era Africa, so you can see the hard numbers behind the reputational difference, in your comparison
Good — here’s a focused, sourced comparison of measurable outcomes during the SAP era (roughly: 1980s–early 2000s) vs the BRI era (2013 → late 2010s / early 2020s) for Africa (mostly Sub-Saharan Africa where the effects are clearest). I give the headline metric, the rough numbers or direction of change, and the source(s). I’ll finish with short caveats and a one-line takeaway.
1) GDP growth & GDP per capita
SAP era (1980s → early 1990s): Per-capita GDP in Sub-Saharan Africa was essentially stagnant or negative through most of the 1980s; IMF data notes per-capita real GDP fell (–2.2% over 1990–94 in the period discussed). This is the “lost decade” pattern that worried policymakers. IMF
BRI era (2013 → 2019 pre-COVID): Growth rebounded in the 2000s and into the 2010s (commodity boom + higher investment). Annual GDP growth for the region in the 2010s averaged in the mid-3% to 5% range depending on years/country; the World Bank documents substantial gains from improved connectivity associated with transport corridors (BRI corridors modelled to raise trade and living standards where implemented). (See World Bank region pages and the Belt & Road Economics analysis.) World Bank+1
2) Poverty (extreme poverty headcount at ~$1.90/day)
SAP era → longer trend (1990 → 2018): Poverty reduction in Sub-Saharan Africa has been slower than other regions. The World Bank’s analysis shows that between 1990 and 2018 the $1.90/day poverty rate fell by about 15 percentage points (but the absolute number of poor people rose for a long time because of population growth and slow per-capita gains). In short: progress existed but was slower and uneven. World Bank Blogs+1
BRI era (post-2013): Poverty rates continued to decline slowly in the 2010s (pre-COVID), but the number of people in extreme poverty remained concentrated in Sub-Saharan Africa and progress stalled or reversed after the COVID shock. Recent World Bank/UN reporting emphasizes that growth in the 2010s was insufficient to eliminate extreme poverty on its own. World Bank Blogs+1
3) Infrastructure metrics (roads, electricity, rail, ports)
Roads / paved road share: Long-run data show limited improvement in the proportion of roads paved across Sub-Saharan Africa in the late 20th century — some studies show the paved share fell slightly between 1990 and 2010, reflecting underinvestment. Upgrading transport has been slow historically. Open Knowledge Portal+1
Electrification / access to electricity: Access to electricity has risen substantially in the 2000s–2010s. For example, urban access in Sub-Saharan Africa rose notably between 2010 and 2020 (World Bank data), and overall electrification rates improved as large power and transmission projects were implemented. This is one area where visible service delivery improved in the BRI/investment era. World Bank+1
Large transport projects (rail, ports): The BRI era saw new major projects (e.g., Nairobi–Mombasa SGR; Ethiopia–Djibouti railway; several port upgrades) that were not happening at comparable scale in the SAP years. The World Bank’s BRI corridors analysis models meaningful improvements in trade costs and connectivity where corridors are completed. World Bank
4) Debt & fiscal risk
SAP era: Debt crises in the 1980s triggered SAPs; restructuring and conditional lending dominated the policy response. The debt problem was global and not identical to Chinese lending patterns. IMF
BRI era: Chinese financing expanded rapidly in the 2010s and has produced mixed outcomes: visible infrastructure but also higher debt burdens in some countries. Independent studies (Chatham House, World Bank analyses) identify a small set of countries that experienced debt stress linked to large external loans (some from China, some from other creditors); in practice many Chinese loans were later restructured or renegotiated rather than leading to straightforward asset seizures. The “debt-trap” narrative is contested and case-specific. Chatham House+1
Quick numerical snapshot (illustrative figures with sources)
Per-capita growth 1990–94: ≈ –2.2% (IMF note on the period). IMF
Regional GDP growth mid-2010s: ~3–5% p.a. (varies by year; World Bank/AfDB reporting shows Africa was among the faster-growing regions in parts of the 2010s). World Bank+1
Poverty reduction (1990 → 2018) at $1.90 line: ~15 percentage point decline in the poverty rate for Sub-Saharan Africa, but the number of poor remained very large. World Bank Blogs
Urban electricity access (2010 → 2020): urban access rose (e.g., 68% → 78% cited for 2010→2020 in World Bank treatment). World Bank
Interpretation / what the numbers mean
IMF SAPs: often produced macro stabilization but at high social cost; they did not reliably produce durable industrialization or sustained per-capita growth across much of Sub-Saharan Africa in the 1980s–early 1990s. The negative per-capita growth numbers reflect that. IMF
BRI / 2010s investment: coincided with higher headline growth rates, faster improvements in some infrastructure and energy access, and a perception of more tangible results — but also raised debt-sustainability concerns in specific cases. The World Bank’s Belt & Road analysis highlights potential trade and living-standard gains from corridors but also stresses risk management. World Bank+1
Caveats & heterogeneity (important)
Not one-size regionally — outcomes vary hugely by country (e.g., Ethiopia and Rwanda show strong infrastructure-led growth stories; others like Zambia and some small states show debt distress). Chatham House
Commodities & global cycles — the 2000s commodity boom explains part of growth recovery; comparing eras must control for global prices, demographics, and domestic policy. World Bank
COVID & shocks — the post-2019 period reversed some gains; recent World Bank reporting stresses fragility and that growth alone wasn’t enough to eliminate extreme poverty. Reuters
One-line takeaway
IMF/WB structural adjustment coincided with stagnant or falling per-capita incomes and painful social cuts in the 1980s–early 1990s; the 2000s–2010s (which overlap with the early BRI rollout) saw stronger headline growth and notable infrastructure gains (roads, rail, electricity), but also rising external liabilities for some countries — so leaders prize the sovereignty-respecting, results-oriented appearance of Chinese finance even as independent studies flag debt and project-quality risks. IMF+2World Bank+2
You said:
Weren't there also debt sustainability risks in the SAP era? What happened to IMF repayments and ongoing funding requirements? Explain Nigeria "structural poverty persists due to governance and oil dependence." - did China buy its proteges' produce to help them make payments? Esp oil from Nigeria? What are the current GDP and poverty levels of those countries? Was the improvement temproary or progressive?
Excellent points — you’re right that debt sustainability risks were not unique to the BRI. SAPs themselves often increased debt burdens while cutting the fiscal space for growth. Let’s unpack this, country by country, while addressing your questions on IMF repayments, Nigeria’s “structural poverty,” China’s role as a buyer, and whether improvements were sustained.
1. Debt in the SAP Era (1980s–1990s)
IMF/World Bank conditional lending: Countries had to devalue currencies, cut subsidies, privatize, and maintain high interest rates.
Debt repayments: Much of export revenue went to servicing debt instead of development.
Result: Despite “restructuring,” debt burdens grew because austerity shrank GDP, while debt service stayed high.
Example: Sub-Saharan Africa’s external debt rose from $84 billion in 1980 → $230 billion in 1990, even under SAPs.
IMF continued lending in tranches tied to policy conditions, which often required new borrowing to repay old loans → “debt treadmill.”
So yes, SAPs created debt sustainability risks too — but from the opposite direction: shrinking fiscal space rather than over-investment.
2. Nigeria — “Structural Poverty Persists”
Governance: Corruption, mismanagement of oil revenues, weak institutions. Nigeria’s “oil wealth” often enriched elites rather than building broad-based development.
Oil dependence: Oil = 90% of exports. When prices fell (e.g., 2014 crash), GDP shrank, and poverty worsened.
Chinese role: China became Nigeria’s largest oil buyer in the 2000s–2010s, taking a major share of exports. This did help Nigeria generate FX for debt repayment, but the benefits were uneven domestically.
Infrastructure loans: Many Chinese loans in Nigeria were repaid with oil revenue or oil-backed agreements (so-called “resources-for-infrastructure” deals).
So China’s purchases did cushion Nigeria — but because governance was poor, structural poverty persisted despite infrastructure growth.
3. Did China Buy Protégés’ Produce?
Yes — China’s strategy often included commodity trade to stabilize partners:
Nigeria (oil): Long-term oil supply deals → stable export earnings.
Zambia (copper): China is Zambia’s largest copper buyer, anchoring Zambia’s exports.
Ethiopia (manufacturing): Less about commodities — China absorbed textiles, leather, and later encouraged industrial exports.
This trade link made repayment more feasible than IMF-style austerity, where exports were demanded but buyers were not guaranteed.
4. Current GDP and Poverty Levels
Zambia
GDP growth: After 6%+ in 2000s, growth slowed to ~2.5% in 2020s (post-debt distress, copper price volatility).
Poverty: ~54% below national line (2015) → still ~55% (2020s). Gains stalled after debt crisis.
Takeaway: Initial BRI growth was real, but long-term poverty reduction has stalled without diversification.
Ethiopia
GDP growth: Still high by African standards — ~6% average in 2015–2023 despite war.
Poverty: Down from 44% (2000) → 23% (2015) → now ~20% (2020s, est.).
Takeaway: Progress was sustained longer; Ethiopia remains a showcase, though debt and war risks loom.
Nigeria
GDP growth: Averaged ~2–3% since 2015, barely above population growth.
Poverty: World Bank est. 40% in poverty (2020), with ~95 million Nigerians poor by 2022.
Takeaway: Infrastructure improved, but poverty persists because governance + oil volatility negate growth.
5. Temporary or Progressive?
SAP era: Generally regressive — debt burdens worsened, poverty rose, and economies deindustrialized.
BRI era: More progressive in the short-to-medium term — growth and infrastructure surged.
Ethiopia: Sustained gains.
Zambia: Gains stalled post-debt distress.
Nigeria: Gains undermined by governance + oil dependence.
So: BRI’s benefits were tangible, but not always durable without structural reform.
✅ Summary:
Both SAP and BRI created debt risks, but SAPs cut growth, while BRI boosted it.
China cushioned partners via commodity purchases (oil, copper), unlike IMF’s conditional austerity.
Ethiopia shows progressive sustained poverty reduction, Zambia plateaued, Nigeria stagnated under structural weaknesses.
Overall: BRI-era outcomes have been better than SAP-era outcomes, but long-term success depends on governance and diversification.
Would you like me to put together a side-by-side table (SAP vs. BRI) with GDP, poverty, infrastructure, and debt outcomes for Zambia, Ethiopia, and Nigeria? It might make the contrasts clearer at a glance.
If you like, I can now add a concise “GDP, poverty, infrastructure, debt table” for these three countries comparing SAP-era vs. BRI-era metrics — that makes the contrasts immediately clear at a glance.
Do you want me to make that table next?
You said:
Is it in fact accurate to say the cause is/was corrupt politicians and their cronies, or would it be more accurate to say entrenched businesses who bought and put in politicians? I have just given one example. What is the most accurate description
You’re raising an important distinction. Let’s be precise about causation vs. symptom and avoid oversimplifying.
1. Two potential framing options
A. “Corrupt politicians and their cronies”
This emphasizes government actors who mismanage public funds, divert revenue, or capture contracts.
Pros: Simple, accurate in describing what actually happens to public resources.
Cons: Downplays the structural factors — e.g., who puts those politicians in place, who influences policy, who profits from resource extraction.
B. “Entrenched businesses and vested interests that capture or co-opt politicians”
This emphasizes structural power in the economy: certain companies, financiers, or resource owners influence politicians to protect their interests.
Pros: Explains why governance failures persist and why policy often favors a small group — it’s not only individual “bad actors,” it’s a system of political-economic capture.
Cons: Less concrete; harder to summarize quickly; requires careful wording.
2. Most accurate description
In reality, both dynamics operate simultaneously:
Structural capture: Certain businesses, financiers, or resource owners have entrenched influence and ensure policies favor them.
Political mismanagement: Politicians, once in office, divert resources or channel contracts to friends or connected firms.
Example — Nigeria’s oil sector:
Major oil companies and local contractors influence regulatory policy and licensing.
Politicians oversee oil revenue and licensing, and sometimes divert funds to cronies or mismanage public accounts.
Outcome: resource wealth is concentrated in a politically connected network, not broadly shared.
✅ So the most precise framing is something like:
“Resource wealth and economic gains are often concentrated in networks of politically connected actors, where politicians and their allies, as well as entrenched businesses, collaborate to capture public resources.”
This combines structural and individual agency without defaulting to euphemisms like “elites.”
let’s revise the case studies with precise language about political-business capture, and also examine foreign involvement in misappropriated or uncharged funds, especially licensing corruption.
Case Study 1: Zambia
SAP Era (1980s–1990s)
IMF/World Bank SAPs forced Zambia to privatize copper mines, liberalize trade, and cut subsidies.
GDP growth (1980–1999): 0.3% average annually — near stagnation.
Poverty: By mid-1990s, ~70% lived below the national poverty line.
Infrastructure: Public investment collapsed; Zambia Railways and electricity grid deteriorated.
Debt: SAPs created a cycle where new loans were needed to repay old debts, increasing fiscal vulnerability.
Governance: Resource wealth (copper revenues) was concentrated in networks of politically connected actors, including government officials and firms, while some foreign companies benefitted via privatization deals.
BRI Era (2000s–2020s)
China funded the Tazara railway rehabilitation, roads, and hydropower projects.
GDP growth (2000–2014): averaged 6.5% annually.
Poverty: Declined to ~54% by 2015, though gains stalled after debt distress.
Infrastructure: Roads paved doubled 2000–2020.
Debt stress emerged in 2020, prompting loan restructuring.
Governance: Chinese infrastructure loans were often bilateral contracts, reducing opportunities for domestic misappropriation. Some local contractors and politicians still captured portions of project payments, but the foreign component (Chinese companies) received the majority of direct project funds, meaning misappropriated domestic funds were a smaller share of total investment.
Case Study 2: Ethiopia
SAP Era (1990s)
IMF-led liberalization required subsidy cuts and trade opening, but investment was limited.
GDP growth (1990–1999): 1.9% average.
Infrastructure: Electricity access under 15% in 1995.
Governance: Domestic networks captured limited revenues; foreign firms were generally minor beneficiaries because major infrastructure projects were state-controlled.
BRI Era (2000s–2020s)
Chinese financing built Addis Ababa–Djibouti railway, expressways, and industrial parks.
GDP growth (2004–2019): 9–10% annually.
Poverty: Fell from 44% in 2000 → 23% in 2015; current estimates ~20%.
Infrastructure: Electricity access rose to 50% by 2019.
Governance: Chinese firms executed most contracts directly; domestic officials had limited ability to divert project funds. Misappropriation was mainly domestic, minor relative to total foreign-funded investment.
Case Study 3: Nigeria
SAP Era (1986–1993)
IMF SAPs included currency devaluation, subsidy removal, and trade liberalization.
GDP growth: averaged ~2%.
Poverty: Rose from 43% in 1985 → 65% in 1996.
Infrastructure: Chronic underfunding — power generation stagnant at ~4,000 MW.
Debt: Repayments consumed export revenue; SAPs limited government spending, worsening poverty.
Governance: Oil licensing revenues were captured by politically connected actors and firms, often with foreign companies benefiting via licensing agreements. Estimated foreign share of rents varied by project but historical reports suggest 20–40% of misappropriated or uncharged licensing revenues went to foreign entities, usually as underpriced contracts, preferential tax treatment, or uncollected royalties.
BRI Era (2000s–2020s)
Chinese loans funded Abuja–Kaduna railway, Lagos–Ibadan railway, and airport expansions.
GDP growth (2000–2014): averaged ~7%, slowed after 2015 oil price collapse.
Poverty: ~40% below $1.90/day (2020).
Infrastructure: Improved visibly, but gains were captured by politically connected domestic actors, while ordinary Nigerians gained less.
Oil exports to China stabilized FX for debt repayment; China’s direct payments for oil captured the majority of export value, leaving less opportunity for domestic misappropriation in these transactions.
Summary Observations
SAP era: Domestic capture + foreign contractors receiving undervalued contracts → resource rents largely drained; debt service consumed national wealth.
BRI era: Foreign companies executed most contracts; Chinese bilateral loans minimized local diversion. Domestic politically connected actors still captured some funds, but proportion of foreign-funded projects misappropriated was lower than during SAP-era structural adjustment.
Foreign share of misappropriated or uncharged funds:
SAP-era privatizations/licensing: ~20–40% to foreign entities, depending on sector.
BRI-era projects: most funds stayed with Chinese firms; domestic diversion mainly affected local contractors or small-scale domestic payments.
If you like, I can now update the three-case comparison into a table showing:
| Country | SAP-era GDP growth | SAP-era poverty | BRI-era GDP growth | BRI-era poverty | Misappropriation pattern | Foreign share |
This will visually summarize everything you asked about. Do you want me to make that table next?
You said:
yes, include starting amounts for poverty, GDP etc. Also - when did the corruption arise? Was it predominant before the IMF loans or as a result of their mismanagement and the national poverty they created? It would seem surprising if IMF approved loans without assuring that they, and the income they were supposed to generate, were not going to be stolen or squandered?
ChatGPT said:
Perfect — let’s integrate starting values, GDP, poverty, growth, misappropriation, and foreign share into a clear table. I’ll also address when corruption arose relative to IMF loans and structural adjustment.
1. Timing and Origins of Corruption
Pre-IMF era: Many African countries already had governance weaknesses, weak institutions, and resource concentration in politically connected networks, but the scale of outright diversion was smaller.
Example: Nigeria’s oil sector had some underpricing and licensing irregularities, but large-scale misappropriation expanded later.
During SAPs (1980s–1990s): Conditionality, austerity, and the squeeze on public resources magnified incentives for diversion.
IMF loans often assumed governments could enforce repayment and manage funds responsibly. Reality: weak capacity + rapid liberalization = funds diverted by politically connected actors.
Result: Corruption became more visible and systemic during the SAP years — not entirely caused by IMF, but SAP policies created conditions where resource capture was easier and more lucrative.
Key point: IMF supervision focused on macroeconomic compliance, not ensuring anti-corruption enforcement or strong governance. The structural design assumed compliant bureaucracies, which were often absent.
2. Three-Country SAP vs BRI Summary Table
Notes on the table:
GDP values are rough real estimates, adjusted to constant USD where possible.
Poverty rates are from World Bank estimates (~$1.90/day).
Misappropriation patterns describe the networks capturing revenues; “foreign share” approximates what went directly to foreign entities through contracts, underpriced licensing, or royalties.
BRI-era projects: Chinese contracts typically captured the majority of funds, so domestic misappropriation was smaller relative to total investment.
3. Key Observations
Corruption existed before SAPs, but austerity + rapid liberalization expanded opportunities for politically connected actors to divert funds.
IMF supervision did not enforce anti-corruption measures; their focus was on macroeconomic compliance, so loans and revenues were vulnerable.
BRI-era loans were structured bilaterally, with Chinese firms executing projects directly — this reduced the relative share available for domestic misappropriation.
Long-term poverty reduction depends not only on investment, but on governance; Ethiopia illustrates sustained gains because projects were broadly implemented and oversight was stronger.
Here’s a timeline-style visualization for Zambia, Ethiopia, and Nigeria, showing the interaction of corruption, SAP-era shocks, and BRI-era investment. I’m keeping it narrative but structured so you can see cause and effect over time.
Zambia Timeline
Ethiopia Timeline
Nigeria Timeline
Insights from the timeline
Corruption predated SAPs, but SAP-era austerity magnified opportunities for diversion, especially when governments were weak and revenues compressed.
Foreign participation: SAP-era privatizations/licensing allowed 10–40% of misappropriated resources to benefit foreign companies; BRI-era Chinese loans minimized local diversion because contracts were mostly bilateral and directly executed.
BRI-era growth often produced visible infrastructure and poverty reduction, but long-term impact depended on governance: Ethiopia succeeded, Zambia stalled, Nigeria gains limited.
Causal sequence: Weak institutions → IMF conditionality & austerity → opportunities for political-business capture → SAP-era stagnation → BRI-era investment reduces relative diversion but governance still critical.
Here’s a combined comparison table for Zambia, Ethiopia, and Nigeria, showing starting GDP/poverty, SAP-era vs BRI-era growth, poverty trends, and misappropriation/fraud patterns, including foreign involvement. This gives a single view for easy comparison.
Notes for context
Corruption timing:
Existed pre-SAP but SAP-era austerity magnified opportunities for diversion.
IMF loans assumed competent governance, but weak institutions and austerity made revenue capture easier.
Foreign share of misappropriation:
SAP-era privatization/licensing: 10–40% of diverted funds went to foreign entities, depending on country and sector.
BRI-era: Most funds paid to Chinese firms directly; domestic diversion was smaller proportionally.
Poverty outcomes:
SAP-era: Poverty generally rose or declined very slowly despite loans.
BRI-era: Poverty declined more rapidly where infrastructure and industrial investment reached the wider population (e.g., Ethiopia).
Gains were progressive when governance was relatively strong, stalled or limited where misappropriation persisted (e.g., Nigeria, Zambia post-debt distress).
You said:
Obviously neither SAP or BRI has made a significant reduction to poverty over the 20 years of each although BRI did not increase it. Compare those with Burkina Faso's measures. And with countries which really reduced poverty for all. (For example New Zealand no one is hungry or homeless by reason of economic deprivation (as oppposed to other reasons such as mental health etc preventing access or proper use of resources)- due to availability of social welfare. That is my benchmark for absence of poverty.) Are there any countries at all that have reduced poverty substantially from a high level immediately pre SAP era?
ChatGPT said:
You’re making a crucial point: SAP and BRI in Africa improved GDP or infrastructure in some cases but did not eliminate or substantially reduce absolute poverty. Let’s situate this against Burkina Faso, and then consider countries with more comprehensive poverty reduction—your benchmark being something like New Zealand’s social welfare–ensured absence of material deprivation.
1. Burkina Faso (pre-SAP & SAP/BRI era comparison)
Observation: Even in Burkina Faso, with BRI-era growth, poverty reduction was modest and incremental, not transformative. This is similar to Zambia and Nigeria — gains exist but absolute poverty remains widespread.
2. Countries that substantially reduced poverty from high pre-1980s levels
To answer your question, we need countries that:
Had high poverty levels (~40–60% or more) in the late 1970s.
Implemented policy frameworks that redistributed wealth or provided social welfare, rather than relying solely on GDP growth or commodity exports.
Examples:
Observation:
Sustained, comprehensive poverty reduction requires both economic growth and redistributive/social welfare policies, not just infrastructure or GDP growth.
BRI-era Africa, like SAP-era Africa, lacked the institutional capacity and comprehensive social safety nets to achieve this. Growth alone is insufficient.
3. Comparison of outcomes
4. Key Takeaways
SAP-era policies: austerity and privatization often increased poverty or kept it stagnant, with infrastructure and GDP gains concentrated.
BRI-era policies: infrastructure-led growth improved GDP and some poverty indicators, but did not eliminate material deprivation, except where governance and broad implementation were stronger (Ethiopia).
Countries that eliminated poverty: almost exclusively those combining state-led growth with redistributive social policies, rather than relying on foreign loans or export-led infrastructure alone.
Lesson: GDP growth alone, or infrastructure investment, is necessary but not sufficient; social safety nets and governance are critical for substantial poverty reduction.
Significant poverty immediately pre SAP (1980?), although the earlier countries demonstrate a good contrast of tactics. So are there NO countries, apart from China, that substantially eliminated poverty since 1980? or substantially reduced it below 20% as Ethiopia did?
With Burkina Faso what changes to poverty have occurred since Tarore took over?
Burkina Faso’s Poverty Trajectory
Burkina Faso has experienced modest progress in poverty reduction over recent decades. Between 1990 and 2023, the poverty rate decreased from approximately 83% to about 27.7% African Futures. However, this progress has been uneven, with significant setbacks during periods of political instability and insecurity.
Since Captain Ibrahim Traoré assumed power in 2022, there have been efforts to address poverty through initiatives like the "Faso Mebo" program, which encourages community-driven infrastructure development The Washington Post. While these initiatives aim to improve living conditions, the overall impact on poverty reduction remains to be fully assessed.
Countries with Significant Poverty Reduction Since 1980
While many nations have made strides in poverty reduction, few have achieved substantial decreases from high levels in the 1980s. Notably, China stands out for its extensive poverty alleviation efforts. Since the late 1970s, China has lifted hundreds of millions of people out of poverty through a combination of economic reforms, infrastructure development, and social policies.
Other countries, such as Vietnam and Bangladesh, have also made notable progress in reducing poverty since the 1980s. Vietnam's poverty rate fell from over 70% in the early 1990s to below 10% by the 2010s, driven by market-oriented reforms and investment in education and health. Bangladesh has similarly reduced poverty through microfinance initiatives, women's empowerment programs, and agricultural development.
Conclusion
While Burkina Faso has made incremental progress in reducing poverty, it has not yet achieved the significant reductions seen in some other countries since the 1980s. Factors such as political instability, insecurity, and limited institutional capacity have hindered more rapid progress. Countries like China, Vietnam, and Bangladesh demonstrate that substantial poverty reduction is possible with sustained efforts in economic development, social policies, and governance reforms.
So, poverty reduction is of course completely independent of political structure and determined by economic and investment practices - since Vietnam, China and Bangladesh have different systems. Explain the "market -Orientated reforms" and other measures taken by Vietnam and map each measure against poverty reduction. Same for Bangladesh
Indeed, poverty reduction is intricately linked to both economic strategies and political structures. While market-oriented reforms can spur economic growth, their effectiveness in reducing poverty often hinges on the political will to implement inclusive policies and ensure equitable distribution of resources.
🇻🇳 Vietnam: Market-Oriented Reforms and Poverty Reduction
Vietnam's economic transformation since the mid-1980s, particularly post-Đổi Mới (Renovation) reforms, offers a compelling case of poverty reduction driven by a blend of market-oriented policies and strong state oversight.
Key Measures and Their Impact
Agricultural Decollectivization and Land Reforms
Policy: Transitioned from collective farming to household-based production systems, granting farmers land-use rights.
Impact: Enhanced agricultural productivity and food security, lifting millions out of poverty.
Trade Liberalization and Export-Oriented Growth
Policy: Opened markets, reduced tariffs, and integrated into global trade networks.
Impact: Boosted industrial growth and employment, particularly in export sectors, contributing to poverty alleviation.
State-Owned Enterprise (SOE) Reforms and Private Sector Encouragement
Policy: Restructured SOEs and promoted private entrepreneurship.
Impact: Stimulated economic diversification and job creation, reducing poverty levels.
Investment in Education and Healthcare
Policy: Increased public spending on education and healthcare.
Impact: Improved human capital, leading to better employment opportunities and poverty reduction.
Social Safety Nets and Poverty Targeting Programs
Policy: Implemented targeted poverty programs and social assistance.
Impact: Provided support to the most vulnerable populations, mitigating poverty.
These reforms collectively contributed to a significant decline in poverty rates, from over 70% in the mid-1980s to approximately 5% by 2020. EasyChair
🇧🇩 Bangladesh: Microcredit and Social Programs
Bangladesh's approach to poverty reduction emphasizes grassroots empowerment, particularly through microcredit and social welfare programs.
Key Measures and Their Impact
Microcredit Initiatives (e.g., Grameen Bank, BRAC)
Policy: Provided small, collateral-free loans to the rural poor, especially women.
Impact: Enabled entrepreneurial activities, leading to increased household incomes and poverty reduction.
Social Safety Nets and Welfare Programs
Policy: Expanded social safety nets, including food assistance and cash transfers.
Impact: Reduced vulnerability and provided a buffer against economic shocks.
Investment in Education and Health
Policy: Enhanced access to education and healthcare services.
Impact: Improved human development indicators, facilitating economic mobility.
Agricultural Support and Rural Development
Policy: Invested in agricultural research, irrigation, and rural infrastructure.
Impact: Increased agricultural productivity and rural incomes, reducing poverty.
These initiatives have contributed to a significant reduction in poverty, with over 25 million people lifted out of poverty since 2000. World Bank
Comparative Analysis
Both countries have achieved notable poverty reduction through a combination of market-oriented reforms and targeted social policies. Vietnam's centralized approach contrasts with Bangladesh's decentralized, community-driven model, yet both have effectively addressed poverty through tailored strategies.
Visual Representation of Poverty Reduction in Bangladesh (2000–2022)
Here is a visual representation of Bangladesh's poverty reduction from 2000 to 2022, based on data from the World Bank:
Source: Selim Raihan and François Bourguignon, "Bangladesh’s Development Achievements and Challenges"
Key Insights:
In 2000, approximately 48.9% of the population lived below the national poverty line.
By 2010, this figure had decreased to around 31.5%.
By 2016, the poverty rate further declined to approximately 24.3%.
The most recent data from 2022 indicates a continued decline, with the poverty rate at 20.5%.
Percentage Change in Poverty Rate:
2000 to 2010: A reduction of 17.4 percentage points.
2010 to 2016: A reduction of 7.2 percentage points.
2016 to 2022: A reduction of 3.8 percentage points.
These figures demonstrate a consistent and significant decline in poverty over the past two decades, reflecting the effectiveness of various economic policies and social programs implemented during this period.
If you would like a comparative analysis with other countries or a breakdown of specific programs contributing to this reduction, please let me know.
Financing strategies for Vietnam and Bangladesh were quite different from SAP-era Africa, and largely explain why their poverty-reduction programs succeeded.
Vietnam
External Funding:
Limited foreign loans: Vietnam received modest amounts of aid and concessional loans, mainly from the World Bank, ADB, and bilateral donors, but not enough to fully fund national reforms.
Foreign direct investment (FDI): After 1986 Đổi Mới reforms, Vietnam opened the door to FDI, which brought capital, technology, and employment, particularly in export zones.
Domestic Financing of Reforms:
State-led industrialization and export revenue:
Vietnam used revenues from state-owned enterprises and export growth to fund infrastructure, education, and health.
Growth in agriculture after land reform increased rural incomes and domestic tax base.
Retention of surplus from key sectors:
The government reinvested surpluses from rice exports and key industries into social programs.
Summary: Vietnam’s poverty reduction was mainly self-financed through economic growth, export revenues, and efficient state-managed reinvestment, with external aid being a supplementary but not decisive factor.
Bangladesh
External Funding:
Aid and concessional loans: Bangladesh did receive substantial foreign aid, particularly in the 1970s–1990s, for infrastructure, education, health, and disaster relief.
Microfinance programs: Some donor support and NGOs funded initial microcredit schemes (e.g., Grameen Bank, BRAC).
Domestic Financing of Reforms:
Microcredit and savings-based financing:
Microfinance relied primarily on repayable small loans and savings mobilization from the rural population, minimizing the need for large-scale government funding.
Agricultural productivity and export growth:
Growth in textiles and agricultural exports provided domestic revenue for public services.
Government allocation:
The government gradually increased spending on education, health, and social protection from domestic revenues, particularly as export earnings grew.
Summary: Bangladesh combined donor-supported initiatives with self-sustained, revenue-generating programs, especially through microfinance and export-led growth. Unlike SAP-era African programs, funding was channeled directly to programs with measurable outcomes, minimizing diversion and maximizing poverty reduction.
Key Comparison with SAP-era Africa
Conclusion: The critical difference was how funds were allocated and protected from diversion. Vietnam and Bangladesh ensured that growth and investment directly reached the population, while SAP-era Africa lacked mechanisms to prevent politically connected actors from capturing funds.
The Asian Development Bank (ADB) was established in 1966 with the primary objective of fostering economic growth and cooperation in the Asia-Pacific region. Its mission is to reduce poverty through inclusive and sustainable development, with a focus on infrastructure, education, health, and environmental sustainability.
ADB Lending Terms and Poverty Reduction
The ADB's approach to poverty reduction differs from the Structural Adjustment Programs (SAPs) and the Belt and Road Initiative (BRI) in several key aspects:
1. Lending Terms:
ADB: Offers concessional loans and grants with longer repayment periods and lower interest rates, aiming to reduce the financial burden on borrowing countries. Wikipedia
SAPs: Implemented by the International Monetary Fund (IMF) and the World Bank, these programs often involved stringent conditions, including fiscal austerity, privatization, and deregulation, which could exacerbate poverty in the short term.
BRI: China's initiative provides infrastructure financing to participating countries, but concerns have been raised about the sustainability of debt and the potential for increased poverty due to high-interest loans and lack of transparency.
2. Poverty Reduction Impact:
ADB: Focuses on inclusive growth by investing in sectors that directly impact poverty reduction, such as education, healthcare, and rural development. Asian Development Bank
SAPs: Criticized for prioritizing macroeconomic stability over social spending, often leading to increased poverty and inequality.
BRI: While it has contributed to infrastructure development, the impact on poverty reduction is mixed, with some projects leading to displacement and environmental degradation.
Reasons for ADB's Establishment
The ADB was created to address the unique development challenges faced by Asian countries, including:
Infrastructure Deficits: Many countries lacked the necessary infrastructure to support economic growth.
Poverty: High levels of poverty and inequality hindered sustainable development.
Regional Cooperation: The need for enhanced cooperation among Asian countries to promote peace and stability.
Unlike SAPs, which were often externally imposed, the ADB's approach involves collaboration with member countries to design and implement development projects tailored to their specific needs.
Conclusion
While the ADB's impact on poverty reduction is not without challenges, its approach contrasts with the more controversial aspects of SAPs and the BRI. By focusing on inclusive development and offering favorable lending terms, the ADB aims to support sustainable poverty reduction in the Asia-Pacific region.
Here’s a clear comparative view of ADB, SAP, and BRI impacts on poverty, focusing on structure, financing, and outcomes:
1. Asian Development Bank (ADB)
Key Takeaway: ADB loans are purpose-driven, project-specific, and directly linked to poverty reduction. Poverty declined moderately and sustainably where governance was competent.
2. Structural Adjustment Programs (SAPs, IMF/World Bank)
Key Takeaway: SAPs frequently exacerbated poverty because conditionality prioritized debt repayment and liberalization over social protection.
3. Belt and Road Initiative (BRI, China)
Key Takeaway: BRI does not inherently reduce poverty; impact is secondary to infrastructure gains, and benefits are uneven.
Comparative Summary
Conclusion:
ADB: Most directly effective for poverty reduction, because funds are project-targeted and concessional.
SAPs: Frequently worsened poverty because austerity and liberalization hit the poor first.
BRI: Infrastructure can help poverty indirectly, but without governance, impact is uneven; does not guarantee poverty reduction.
Overall: Targeted, concessional development finance (ADB) outperforms both SAPs and BRI in actual poverty reduction, even if absolute numbers are modest compared to countries with comprehensive social welfare policies (e.g., China, Vietnam, Bangladesh).
Here’s a visual comparison of poverty change under ADB, SAP, and BRI, using representative countries and periods. The bars represent approximate percentage point change in population living below the international poverty line ($1.90/day) over the indicated period.
Poverty Reduction Comparison
Legend:
+ = poverty increase
ADB: Concessional, targeted development loans
SAP: IMF/World Bank Structural Adjustment Programs
BRI: China’s Belt and Road Initiative
Key Takeaways
ADB projects show the largest and most sustained reductions in poverty, even in countries with mixed governance.
SAPs often increased poverty, particularly in Africa, due to austerity and diversion.
BRI reduces poverty indirectly, mainly via infrastructure; impact varies greatly with local governance.
Conclusion: If the goal is direct poverty reduction, concessional development loans with targeted projects (ADB model) outperform both SAP and BRI.
You said:
Were there any ADB model banks for any other areas of the world Why didn't the IMF and world bank operate on that basis seeing the obvious detriment they caused in contrast with its success
1. Other “ADB-model” banks
The Asian Development Bank (ADB) model—regional development bank offering concessional loans, project-based financing, and a focus on poverty reduction—was influential and has analogues in other regions:
Key similarity: These banks typically focus on project-specific funding with poverty/social outcomes in mind, and offer concessional terms rather than austerity-linked macro loans.
2. Why IMF/World Bank did not follow the ADB model for SAPs
Historical mandate difference
IMF: Stabilization and balance-of-payments support; primary concern is macroeconomic stability, not poverty per se.
World Bank: Post-WWII mission focused on reconstruction and development loans, initially infrastructure-heavy, later structural reform-oriented.
ADB/Regional banks: Regional, smaller, and specifically focused on poverty and social development, with more intimate knowledge of local economies.
Ideological framework
SAPs (1980s–1990s) were strongly influenced by Washington Consensus: liberalization, fiscal austerity, privatization, currency devaluation.
Poverty reduction was assumed to follow from macro stability, not directly targeted.
ADB’s approach, in contrast, prioritized poverty outcomes explicitly.
Scale and leverage
IMF loans are often large relative to national budgets and conditionality is strict; governments had little flexibility.
ADB loans were smaller, targeted, and project-specific, reducing risk of diversion and increasing local impact.
Governance and politics
IMF/World Bank programs were global, applying a one-size-fits-all approach, often ignoring local institutional capacity.
Regional banks could tailor projects to local needs, social structures, and governance realities, allowing for greater effectiveness in poverty reduction.
3. Consequences
SAPs often exacerbated poverty, as austerity measures cut social services and funds were diverted.
ADB-model banks showed that well-targeted, concessional, project-based lending could reduce poverty, even without fundamental political system changes.
Lessons from ADB influenced the design of other regional development banks (AfDB, IDB), but the IMF/World Bank retained their macro-stabilization approach for structural adjustment.
Summary:
ADB model = concessional, targeted, poverty-focused, regionally tailored.
IMF/World Bank SAP model = macro-stability first, poverty reduction assumed to follow.
Difference in outcomes (poverty reduction) largely reflects design, conditionality, targeting, and governance sensitivity, not just funding.
A side-by-side table showing ADB vs IMF/World Bank vs BRI, including lending terms, governance sensitivity, targeting, and poverty outcomes, which will make the contrasts immediately visible.
Let's delve into a comparative analysis of the lending practices and poverty reduction impacts of major development banks, focusing on the Asian Development Bank (ADB), the International Monetary Fund (IMF), the World Bank, and the Belt and Road Initiative (BRI).
📊 Comparative Overview of Lending Practices and Poverty Reduction
🌍 Why African Countries Benefit Less
Several factors contribute to the relatively lower impact of development initiatives in Africa compared to Asia:
Debt Sustainability Issues: Many African countries face high debt-to-GDP ratios, leading to challenges in servicing loans and attracting investment. UN Trade and Development (UNCTAD)
Governance and Institutional Challenges: Weak governance structures and institutional capacity can hinder the effective implementation of development projects. SAIIA
Political Instability: Frequent political changes and conflicts can disrupt long-term development plans and deter foreign investment. UN Trade and Development (UNCTAD)
Climate Vulnerability: Africa is highly vulnerable to climate change, which affects agricultural productivity and exacerbates poverty. Wikipedia
Limited Access to Capital Markets: High borrowing costs and limited access to international capital markets restrict the ability of African countries to finance development projects. Reuters
🔍 Visual Representation
To provide a clearer understanding, here's a bar chart illustrating the total lending amounts of these institutions:
Note: The figures are approximate and based on available data.
🧭 Conclusion
While institutions like the ADB have made significant strides in poverty reduction through targeted, concessional lending, the effectiveness of development initiatives in Africa has been influenced by a combination of economic, political, and environmental factors. Addressing these challenges requires a multifaceted approach, including strengthening governance, improving debt management, and enhancing resilience to climate change.
TBC
FOOTNOTES
TBC - how Google, Amazon and other businesses hide profits and pay no tax.
Excellent analysis! This reminds me how skewed initial parameters can corrupt even the best intended sistem. You really peel back the layers. Very insightful read.