Friday, July 19, 2019

Djibouti: Take the Money and Run?

The Globe and Mail published on 16 July 2019 an article titled "Djibouti's Debt-defying Stunt: Taking China's Money without Accepting China's Control" by Geoffrey York.

As a result of financing most of Djibouti's infrastructure projects, Chinese financial institutions hold the vast majority of Djibouti's external debt. Djibouti insists it is retaining a majority stake in each project. But when China finances the projects and holds a significant chunk of the equity, along with short-term contracts to manage and operate the railway and some of the ports, the Chinese influence can be massive.