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In response to
"how does the world wide economy not just implode?"
by
Epiphany
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it actually seems sort of like maybe china is going that route in ecuador...
Posted by
x (aka dmuck)
Jul 5 '11, 15:00
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"When Ecuador defaulted on more than $3bn in foreign debt two years ago, soaring borrowing costs were a given. But the Opec nation�s latest $2bn loan from the China Development Bank has some wondering whether the price could end up being Ecuador�s sovereignty.
According to Quito-based Analytica Securities, the latest loan brings Ecuador�s debt to China and its corporations $6.7bn � about 11 per cent of its forecast $62bn GDP for 2011.
The debt to China so far includes $1.7bn for a hydropower plant that will supply three quarters of Ecuador�s energy needs and a $1bn �advance payment� for 69m barrels of crude over two years.
PetroEcuador has denied reports that the latest loan is tied to a 72,000 barrels per day jump in delivery to China, which, if true, would see three quarters of Ecuador�s oil exports bound for China, Analytica says in a research note.
The country�s debt is �still quite low� at $15.26bn, it notes.
But the banking grape vine is ripe with rumours that the government wants a further credit line of as much as $10bn: �If that were to happen, Ecuador would owe the Asian giant an extraordinary 24% of GDP.�
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