Perhaps good to see this technology shipment in light of the recent chaos in food product shipments to Egypt. No details on the financing; we have to suppose they have worked out a way for Egypt to pay the EUR balances for these turbines (we of course should have our doubts).
And for all of you "free trade!"-ers out there, I hate to break it to you but no way in hell a product this sophisticated or complex EVER would be going the other way... no way never. This is another "one-way product".
Bon voyage! First two @Siemens‘ H-class gas turbines get shipped from #Berlin to #Egypt. https://t.co/srwPwimChG /ya pic.twitter.com/zq5Q4BX36d— Siemens Press Office (@siemens_press) February 16, 2016
7 comments:
Egyptians are not like those irresponsible Greeks - of course they can finance it.
Bob,
Tom's oil "rent" removal might help with the Greece operating within the EUR system situation too.. might see an automatic shift in leading EUR flow in Greece towards domestic productive contribution vice oil rents... could help... could go to other imports too (we've seen that in the US) but I'd have to think SOME would swing over to domestic services and products...
"we have to suppose they have worked out a way for Egypt to pay the EUR balances for these turbines (we of course should have our doubts)."
Why?
In any of these deals, end to end people always get the money they want and use the money they want. Otherwise there will be no deal. It's totally irrelevant what the invoice is priced in. That's just a record of account.
Ultimately the finance system will discount Egyptian pounds for Euros by matching up trades in the other directions - possibly augmented by savings in one or the other currencies. All while scraping off fees along the way.
What, Egypt has no use for gas turbines? Why would they have no use for a gas turbine? Every country needs gas turbines.
As Neil says, Siemens will have been paid. Siemens are not in the habit of giving away their goods. Egypt has the money to buy the turbines. So where's the problem?
The real problem is the one you could have shown with a picture of US military hardware going to Egypt. The massive military "aid" to Egypt is geopolitical and a further subsidy to the giant corporations who funnel money out of the enormous Pentagon budget.
I'm saying you will never see something like a gas turbine going from Egypt to Germany....
Think of one-way heart valve in human anatomy... only works one way....
"Egypt has the money to buy the turbines. So where's the problem? "
That is not indicated...
Siemens probably got paid and DB is holding a note.... which will probably go bad ....
Matt: "Siemens probably got paid and DB is holding a note.... which will probably go bad ...."
Just as probable is Egypt simply had enough money to buy the thing. Given the perceived riskiness in trading with Egypt, why does all this international trade with Egypt (or many much less developed countries) continue, and over many decades? Or maybe if the risk is as real as you say, companies just demand hard cash up front, and Deutsche Bank or whoever don't enter into the equation. Foreign currency please, and Egypt gets plenty of euros from tourism. In any case, why "probably got paid"? Why would Siemens not get paid? Are Siemens not interested in getting paid? And why would the supposed note Deutsche are holding go bad? Surely the decades of Deutsche holding supposed notes from Egypt tells us something. It has yet to renege on its promises to pay.
Matt: "I'm saying you will never see something like a gas turbine going from Egypt to Germany...."
Why not? The Near East was economically far superior to the West until relatively recently. India, for example, was economically superior to Britain. The British did, however, have a inspired plan: deliberately smash the place to bits and then drone on about free trade and other imperialist gibberish. What was true of India was also true of other parts of its empire. The French, Dutch, Portuguese and Spanish were no different.
And it wasn't that long ago that what you're saying about Egypt was being said of the Far East and India (even Ireland), but look at them now. Japan became a powerhouse within a few decades. Russia went from a subsistence peasant farming economy to outer space and hydrogen bomb in the space of a few decades. China is even more impressive than Russia. Economic development isn't a simple matter. It's tied to a country's internal politics and external politics. Egypt's internal politics is tied to a military economy. The military owns something like half the country's wealth. That fact is tied to the geopolitical ties the US has with Egypt's ruling elite. Egypt won't be making turbines for Germany while this relationship continues, just as China and Russia weren't able to change from agrarian peasant farming to powerhouses while the internal and external order was what it was.
There are no economic, cultural or social reasons to stop Egypt from undertaking the kind of development we have seen in China and Japan. Like China before it, Egypt's underdevelopment is purely political. Ireland was as backward as it is possible to imagine under the British, with something approaching a nineteenth century economy. It entered the twentieth century only after the British were kicked out. Egypt may do the same when the military is forced from economic and political power.
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