Crime Against Humanity: Pensée Unique in Economics, 43

Borrowing foreign currency? “If funds are necessary to mobilize domestic resources, then these can be created ‘out of nothing’ through the costless process of credit creation. Why borrow from abroad and pay back interest and the principal in foreign currency, when one can create the money for free at home? After all, the foreign banks are also merely creating the money ‘out of nothing’ through the process of credit creation. Of course, certain foreign purchases may be necessary. But these can be kept to a minimum and in line with export earnings. … foreign debt, usually in foreign currency, needs to be serviced, and the principal ultimately paid back. This imposes additional costs and currency risk. With many development countries suffering from structural trade deficits (since they mainly export low value−added goods, whose long−term relative prices tend to fall, while importing high−value−added goods, whose relative prices tend to rise), their currencies tend to depreciate, thus raising their real debt. Together with the compound interest, an escalating debt trap quickly develops.”
Inviting foreign investments? “Apart from usually being unnecessary, foreign investment has a number of disadvantages: firstly, foreign investors are primarily oriented towards their own interests, and these are unlikely to coincide with the national interest of the developing country. Secondly, foreign ownership of real assets, such as land and factories, implies foreign control – including over the allocation and disposal of profits, as well as the decision when to close local factories and pull out. Thirdly, foreign investment may be encouraged by a developing country in order to enhance technology transfer and the level of know−how at home. However, few studies of technology transfer have shown that much technology is actually transferred to developing countries. In the real world of imperfect information, technology is protected know−how that firms are reluctant to share. Thus there may be cheaper and more efficient methods to transfer technology, not related to foreign investment.