NOVEL WEB Chapter 951: Deal!
Is it really possible to buy and sell a country's basic industries?
In fact, it is indeed possible!
The economic order established after World War II is essentially a US Dollar economy.
If you want to develop, you need external input of funds and technology, which are ultimately converted into US Dollars and transformed into debt.
There is no real 'aid' or 'assistance in construction' unless it is prefixed with 'non-repayable'; otherwise, it is all low-interest or interest-free loans that need to be repaid!
No country in the world can be completely self-sufficient; they need to purchase goods, which requires using US Dollars or Euros for transactions.
But if you don't have sufficient industrial products or natural resources to export, you can't earn enough foreign exchange to buy goods from other countries.
To meet domestic development needs, borrowing US Dollars becomes necessary.
When debt keeps growing larger without healthy assets to support it, the national finances will eventually become overburdened.
And when a government is insolvent, the result is bankruptcy liquidation, and all government-owned assets and public facilities will become bad assets.
At this point, asset management companies will step in to take over at a low price, ostensibly injecting their own funds to revitalize these assets. In reality, the holders of these assets change from the state to corporations or even individuals.
Of course, this is just on a larger scale; government bankruptcy is relatively rare, so sometimes people find it hard to understand how a company can swallow so many things?
To give a simple example, if a small town wants to develop, it would consider loans or issuing bonds to raise funds and then invest in fundamental projects such as energy, electricity, roads, schools, hospitals, and public transportation, all essential for economic development...
But if the economic development of this town does not meet expectations, debt defaults will occur.
This situation does not exist during good economic times, as banks are willing to provide new loans to repay old debts, and the town can also issue new bonds to pay off previous ones.
However, when the economy is bad, banks will demand early repayment of loans, and bonds will become unpopular.
This is understandable as a commercial action, because bad loans are a significant loss for banks.
When banks find out that this loan cannot be recovered, in order to alleviate their own responsibility, they will dispose of the bad loan to asset management companies.
These companies take over this debt at about 30% of the value and then negotiate with the town government.
The town certainly doesn't want to go bankrupt, so it is willing to negotiate and formulate a so-called repayment method.
The gentlest way is to give you time, allowing you to propose a repayment plan I can accept and gradually repay the loan, avoiding bankruptcy.
For example, I require you to mark out parking spaces on all public roads; if the town residents don't want to see the town bankrupt, they have to pay a high parking fee when driving out.
The harshest approach is bankruptcy liquidation, taking away the town residents' pension fund, public maintenance fund, and even selling off your government buildings and all government-owned assets.
This practice is quite common not only in Africa but also in America; some towns have been devoured by capital in this manner.
Another seemingly fair way is for you to package and hand over your public assets to me, such as water plants, power systems, sewage treatment systems, and other such entities...
I can provide funds to ensure these projects operate, but ownership needs to change, and price increases are inevitable, and the town's future development needs to heed opinions.
Why do Hollywood movies often portray certain super-capitalist corporate giants as villains?
In almost all cyberpunk themed movies or games, governments succumb to corporations.
This is because Europeans and Americans are more familiar with the operation of the mainstream rules of this world; they know that in certain corners of this world, there exist such super giants.
This is not simply a fantasy, but like the Terminator, it is a concern about the future.
Because this possibility absolutely exists, the key to determining whether it happens is the people controlling these corporations rather than the law.
Of course, if a country's main political entity, you can choose to default, and the result is obvious.
The country's credit rating declines, unable to get loans from international banks.
No loans, no externally sourced equipment or technology; even if you have mines, you can't exploit them, and oil can't be extracted.
If you are a country mainly reliant on manufacturing, unable to obtain loans means you can't purchase raw materials, so export becomes out of question.
When those controlling the country are not smart enough and still succumb to such rules, then your country is effectively taken over.
Sometimes these changes are not even noticeable!
Ultimately, when people are pushed to the brink, 'revolution' emerges.
The most successful half-time revolution in modern history occurred in Venezuela when Comrade Chavez severely crippled the oil groups, believing he could rely on oil revenues to lead Venezuelans in controlling their own destiny...
However, he overlooked the multinational agricultural groups controlling most of the arable land within Venezuela, resulting in a situation where Venezuela can only hobble along.
Thus, when Venezuela was blockaded and sanctioned, it led to the bizarre situation where local people couldn't find enough food, yet Venezuela was still a food-exporting nation.