Another One Bites the Dust: Entebbe Int. Airport falls to China's Debt Trap

[Silberman]

What would be a motive behind wanting to control airports in africa or abroad? If you owned and controlled an international airport in africa, what would you do with it? With the cost of oil on a steep incline, it seems air travel will be significantly more limited or expensive in the future. And so I wonder what their motive is for wanting such a thing. Could airports in africa be the next bitcoin?

Yeah lol, sell all your coins and invest in African airports, current trading symbol is O o.

As for the other part is pretty simple, you need to think out of the box a bit, and the first thing is that you need to see if this was indeed a good idea for them or, like everyone does they have made a mistake, lending money for something that was not worth it, like bad collateral.
The Chinese investors and their government are non-omnipotent beings knowing everything and anticipating the future, they have made a lot of errors in investments, they've lost billions also, look at what happened in Venezuela when they've met corruption on a different level.

It's a numbers game, you need to spend $100 and make sure you make $101, so you can lose 10 if you gain 11 from another source.

This could also be a case of the Chinese government dumping their dollars in a more discreet fashion, after all they are in a difficult position, they are exporting products and receiving fiat for those products, but fiat is suffering high inflation, so what do they prefer? To keep their fiat which losses value every day or do they loan those dollars to another government they know cannot pay and get an airport in return? Under that view the airport seems preferable to the fiat to me.

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[teosanru]

Very strange. This looks like economic colonization something of this sort was also done by Britishers in their time, they just used their military along with that, China is practicing the same tactic, just adding the crisp of hostile takeover to this transaction. The strangest thing is that rest of the countries are absolutely quiet towards such practices of China. Many ports of Asia have already fallen prey to this strategy now it's Africa's turn I suppose.

[Coyster]

To be honest, I actually believe this is going to be the case for quite a lot of countries and organizations that are indebted to China, China are doing what they need to do to be the number one economy in the world, and if you look at it from all angles you can't really blame them, they are willing to grant you loans and add clauses that will favor them in the end, should in case you do not pay, but the country also has the right to reject such clauses and by extension, reject the loan outrightly.

But many of these countries and very corrupt, they are mostly underdeveloped and developing countries, and when they take this loans, they hardly put it into good use, making it impossible for them to pay back. I'm of the impression that if some of this money borrowed from China is actually used for the development of the country taking the loans, then they could actually have a way to pay back, but majority of the money is embezzled, and then in the end it all favors China. The Chinese government may actually be giving this loans knowing fully well this countries would not be able to pay back which is wrong in a way, but the fact remains that the erring country broke the terms of an agreement and rightfully have to lose something.

[dothebeats]

I don't understand why sign the agreement hastily and think of renegotiation later. Those who signed on Uganda's behalf should take the hit, as they are the ones who are directly responsible for the forfeiture of the airport to the Chinese. Most probably they already received handsome sums on underground meetings, and them trying to renegotiate is just a way to make it seem like they still care.

China will surely employ this strategy on poor African countries with lots of corrupt officials. It's the easiest way to get what they want without being questioned by other governments since there is an agreement that is set upon by both parties.

[doomloop]

The Entebbe International Airport is now reportedly directly taken over by China due to loan default. The only International airport of Uganda, which serves at least 1.9 passengers every year, is the latest victim of China's loan trap.

China has been using this tactics to penetrate into third world countries. They issue them loan and when they are not able to pay up for the loan that they have been issued, China will come in. I have been seeing news like this about China’s plans to take over these countries which is very cruel. I really don’t know why China would be this wicked, and just like the OP has said, they really needs to be stopped.

Funny enough, most of these African leaders are like this and are only good at stealing from the country’s treasury. I wouldn’t be surprised that the money that was loaned to this country (Uganda) was not used for the purpose of which it was borrowed. It can as well be possible that their leaders has mismanaged the money, and it has now led to this problem.

[ultrloa]

The Entebbe International Airport is now reportedly directly taken over by China due to loan default. The only International airport of Uganda, which serves at least 1.9 passengers every year, is the latest victim of China's loan trap.

China has been using this tactics to penetrate into third world countries. They issue them loan and when they are not able to pay up for the loan that they have been issued, China will come in. I have been seeing news like this about China’s plans to take over these countries which is very cruel. I really don’t know why China would be this wicked, and just like the OP has said, they really needs to be stopped.

Funny enough, most of these African leaders are like this and are only good at stealing from the country’s treasury. I wouldn’t be surprised that the money that was loaned to this country (Uganda) was not used for the purpose of which it was borrowed. It can as well be possible that their leaders has mismanaged the money, and it has now led to this problem.

They are exploiting those small countries who have corrupt leaders so that they can own something good which can help them on I think spying the nation and that take over of their airport is kinda a national threat for them since china can monitor their movements and that is not good to them. I do hope no other country will fell in this debt trap and those country needs money doesn't think about taking those loans to china since we already know what they do next if a country cannot pay their obligation to them.

[kryptqnick]

Another one has fallen.

The Entebbe International Airport is now reportedly directly taken over by China due to loan default. The only International airport of Uganda, which serves at least 1.9 passengers every year, is the latest victim of China's loan trap.

In 2015, the Ugandan government took a $207 million-loan from the Export-Import Bank of China for the international airport's expansion. As expected, the loan agreement signed by both parties included sneaky and questionable clauses. Uganda's president, Yoweri Museveni, attempted to renegotiate the deal with the Chinese government but to no avail. And now that the country has failed to repay this commercial loan, a clause which basically means the airport will have to be surrendered to China is feared to have taken effect.

The Ugandan Entebbe International Airport is just one among many countries' national assets that had to be directly forfeited in favor of China due to loan default.

This post-modern way of conquest by China will have to stop! But how?

Sources:

1. https://economictimes.indiatimes.com/news/international/business/china-reportedly-takes-over-ugandas-airport-on-account-of-loan-default/articleshow/87957646.cms
2. https://www.ndtv.com/world-news/china-to-seize-entebbe-airport-over-loan-uganda-denies-debt-trap-reports-2628059

Wow, this is a big loss... My country's actually considering loans from China, but I really hope we won't take them because being risk-averse about loans is a part of our culture. There are many companies in my country which basically offer micro loans (up to $1.8k), no questions but an ID proof asked, and then they have crazy percentage you're supposed to pay up, and it quickly gets even crazier if you miss any payments. What China's doing looks to me like the same thing buy on a scale of a whole country: it's easy to take this loan, compared to other loans, but it's also very easy to lose something solid because of the conditions.

[Oceat]

The Entebbe International Airport is now reportedly directly taken over by China due to loan default. The only International airport of Uganda, which serves at least 1.9 passengers every year, is the latest victim of China's loan trap.

China has been using this tactics to penetrate into third world countries. They issue them loan and when they are not able to pay up for the loan that they have been issued, China will come in. I have been seeing news like this about China’s plans to take over these countries which is very cruel. I really don’t know why China would be this wicked, and just like the OP has said, they really needs to be stopped.

Funny enough, most of these African leaders are like this and are only good at stealing from the country’s treasury. I wouldn’t be surprised that the money that was loaned to this country (Uganda) was not used for the purpose of which it was borrowed. It can as well be possible that their leaders has mismanaged the money, and it has now led to this problem.

They are exploiting those small countries who have corrupt leaders so that they can own something good which can help them on I think spying the nation and that take over of their airport is kinda a national threat for them since china can monitor their movements and that is not good to them. I do hope no other country will fell in this debt trap and those country needs money doesn't think about taking those loans to china since we already know what they do next if a country cannot pay their obligation to them.

I think it's not their fault why other countries fallen into this kind of trap since, first of all it's the politicians who agreed to sign the contract with/without reading the terms and conditions thoroughly. It's the government who are handling the funds that the China lend to them and I think China knew it all along if a country is full of corrupt officials, they will soon owned something from that country.

It surprise me to see such loan sharks alike in the streets are now lurking in some other countries to watch their prey fall from their traps. I don't know how the people/politicians/government would stop this but they seemed to know how this works but they just continue even though they knew the risk.

[Darker45]

I think it's not their fault why other countries fallen into this kind of trap...

Who's to be blamed, the one who set the trap or the one who fell victim to it? I'm not saying Uganda is 100% clean and innocent in this case but surely I wouldn't put the entire blame on them for not scrutinizing and signing a contract full of unfair clauses.

So what? We are in the 21st century. Trying to demonize nationalities, ethnicities, religious beliefs is so 20th century 

Trying to keep silent against injustices committed by a powerful institution, country, ethnicity, religion, and so on is so 18th century. Nothing is demonized here except the demon.

[Oceat]

I think it's not their fault why other countries fallen into this kind of trap...

Who's to be blamed, the one who set the trap or the one who fell victim to it? I'm not saying Uganda is 100% clean and innocent in this case but surely I wouldn't put the entire blame on them for not scrutinizing and signing a contract full of unfair clauses.

If they knew that it was unfair then why they still agreed on that? That's why I said it's not their fault although they are still to be blame though since they were taking advantage of the country's situation. Both country has faults and I think we can blame each one of them.

But the question is, who would stop China from doing something like this? Do you believe a UN can stop them from doing that when in fact they don't listen to the other nations advice.

[LogitechMouse]

Correct me but the agreement of both Uganda and China is the loan will be paid for 20 years with a grace period of 7 years but this happened.
Well, the China has the right to do it so this is the main problem of the countries they indebted with. Uganda is one of the 160+ countries that has debt to China and this put China as the largest creditor in the world.

What I'm afraid is they will do this to other countries as well and slowly they will try to conquer the world. Kinda like a conspiracy for me but I think that they are on their way to do it. :X

[kaya11]

Another one has fallen.

The Entebbe International Airport is now reportedly directly taken over by China due to loan default. The only International airport of Uganda, which serves at least 1.9 passengers every year, is the latest victim of China's loan trap.

In 2015, the Ugandan government took a $207 million-loan from the Export-Import Bank of China for the international airport's expansion. As expected, the loan agreement signed by both parties included sneaky and questionable clauses. Uganda's president, Yoweri Museveni, attempted to renegotiate the deal with the Chinese government but to no avail. And now that the country has failed to repay this commercial loan, a clause which basically means the airport will have to be surrendered to China is feared to have taken effect.

The Ugandan Entebbe International Airport is just one among many countries' national assets that had to be directly forfeited in favor of China due to loan default.

This post-modern way of conquest by China will have to stop! But how?

Sources:

1. https://economictimes.indiatimes.com/news/international/business/china-reportedly-takes-over-ugandas-airport-on-account-of-loan-default/articleshow/87957646.cms
2. https://www.ndtv.com/world-news/china-to-seize-entebbe-airport-over-loan-uganda-denies-debt-trap-reports-2628059

I am afraid that my country (Philippines) is next if the next president is dumb as hell. Hopefully things go smoothly this election and no cheating will be occurred. China is slowly dominating the SEA countries and in terms of military might there no country in the region that could match it up. This money trap is some that have been planned ages ago and well executed, if these goes steady, maybe all the SEA countries would be Chinese citizens whether they like it or not.

[Sithara007]

Yeah sure.... A binding contract signed between 2 willing entities and enforced when 1 party doesn't meet its contractual obligations is one of the greatest injustice the world has ever known...

Agreed with this. I don't know why the western press is unfairly targeting China. If Uganda paid the loan as per the obligation, then there would have been no issues. China gave out loans to countries which have zero chance of getting any money from the western nations. Given this, I would expect Uganda to hold on to their part of the bargain. Western nations have no right to blame China, when they have colonized poor countries in Asia and Africa for many centuries. First they should pay repatriations, and after that they can complain about China.

[sana54210]

The Entebbe International Airport is now reportedly directly taken over by China due to loan default. The only International airport of Uganda, which serves at least 1.9 passengers every year, is the latest victim of China's loan trap.

China has been using this tactics to penetrate into third world countries. They issue them loan and when they are not able to pay up for the loan that they have been issued, China will come in. I have been seeing news like this about China’s plans to take over these countries which is very cruel. I really don’t know why China would be this wicked, and just like the OP has said, they really needs to be stopped.

Funny enough, most of these African leaders are like this and are only good at stealing from the country’s treasury. I wouldn’t be surprised that the money that was loaned to this country (Uganda) was not used for the purpose of which it was borrowed. It can as well be possible that their leaders has mismanaged the money, and it has now led to this problem.

There are two methods that Uganda could have used here, either they just let China take over and realize the fact that another nation is now controlling their airport but they could get more loans in the future and grow even bigger or they have the possibility to nationalize it if they want to. I mean what is the worst that could happen?

You just do not allow china to control and legally disband any foreign ownership if you want to. Sure there could be consequences like no foreign investor would want to come again, and that could result with more poverty but at the same time we are talking about having the national freedom not withheld by another nation. So it is a weird dilemma, china has all the rights here and if Uganda didn't pay then consequences are normal but I am not entirely sure if I would want something like this to ever happen to our nation neither.

[eaLiTy]

The Entebbe International Airport is now reportedly directly taken over by China due to loan default. The only International airport of Uganda, which serves at least 1.9 passengers every year, is the latest victim of China's loan trap.

I did not understand what you mean by the airport servers 1.9 passengers every year, what kind of metric is that  . When it comes to loan trap, China was offering these loans to many countries and the risk of surrendering them was inevitable if they are not able to follow the terms.

The Ugandan Entebbe International Airport is just one among many countries' national assets that had to be directly forfeited in favor of China due to loan default.

This post-modern way of conquest by China will have to stop! But how?

It is simple, if you took a loan, you must not default the terms, these developing countries was not able to get loans from any central banks globally and China was willing to give them at a premium cost and they know the risk of defaulting and China took the chance knowing they would have a control over a property wherever they invest and they have made billions of investment all over the world especially in Africa and Europe.

[Silberman]

Yeah sure.... A binding contract signed between 2 willing entities and enforced when 1 party doesn't meet its contractual obligations is one of the greatest injustice the world has ever known...

I see your point, however context needs to be taken into account in order to better understand what is happening, I have always thought to be wrong that a government can indebt itself beyond what they can actually pay, because now you need future generations of people and other governments to pay for your mistakes, and when we add the huge level of corruption that we see in some of those countries it is fair to consider if that loan was actually used to help people or it is in the bank accounts of corrupt politicians, which makes this a great injustice for the people that have to pay for this while those politicians suffer no repercussions for their actions.

[dezoel]

This is my first time of hearing or seeing a story like this. I never really used to imagine that such things can still happen at this time. Anyways there's no other way that China will be getting their money back if not by during this. But that gets me wondering whether they are going to be in charge of that airport for good now, it is something that isn't just going to be for a while until they are able to recover the money that they loaned to the country?

Then another thing is, getting that all these countries should stop taking loans from China? Is really bad for them, cuz they're not even being productive with the loss that they're taking. Rather than just keep taking loans all the time and at the end of the day they are not even achieving anything apart from more and more debt to pay. So, it is of no use for them to be taking loans out all. And come to think of it ,most of these third world countries has leaders who don't take their responsibilities serious, they are just good at money laundering and that's all.