It’s Debt Trap Diplomacy – It’s Confessions Of An Economic Hitman – The Balbina Dam
There is much documented on the colossal waste, filth and corruption of the billion-dollar infrastructure of developing nations across the world. Corrupt officials dealing with amoral financial institutions. The promise of acutely syphoned riches to those involved is justified under the cover of ‘infrastructural’ development. The Balbina Dam is the archetypal example.
The story of the Balbina Dam is one of a winning business model – a fancy, western banker man of authority flys into your jungle town and meets with the local authority. He brings with him reports put together by Harvard economists and Yale engineers. He meets with this government authority and presents him (it’s never her) with a proposal so eye watering and amazing, only a fool would refuse it.
The fancy western banker man promises development to this region that only his institutional finance can make possible. And don’t worry about the risk, look at these reports we put together. These are the smartest minds in the world, and they agree that you can really turn things around with this development.
Did I mention how many jobs we are going to provide? How much money you are going to generate for your people?
It’s tried and tested.
Impossibly Stupid | Unforgivablly Corrupt Debt Trap Diplomacy | Pissing Billions Into An Open Wound
The Balbina Dam, a 250-megawatt hydroelectric infrastructure project was promised to deliver green, reliable and local energy to the people of Brazil at what would also be a competitive price.
Originally priced at $383,000,000 – Balbina’s final cost was 3x the original cost at $800,000,000. Even if Balbina delivered on its lowest promise, the lowest promise being it would work, it would have still been a colossal waste.
But Balbina was so woefully designed that when it started to fill, the water was not adequately contained and leaked over the edges flooding more than 2,000 square miles, dislodging two ancient Amazonian tribes for good, the Wamiri and Atroari.
To compound on the already laden incompetency, the artificial lake was not logged beforehand, making the waters impossible to navigate because of submerged trees. At least a dozen exotic animal and wildlife species were wiped out and because of the acid gas produced by the rotting trees, those animals are not going to be able to return for thousands of years.
It Gets Worse…
That same rotting gas from trees artificially submerged, not only decimates the local wildlife but in fact produces 3,000,000 tonnes of methane each year, the equivalent of 28x the greenhouse gases and equal measure coal fire plant would have created.
These environmental factors compounded to the point where the lake would actually never reach its intended capacity, therefore, restricting the hydroelectrical potential the dam originally promised. Delivering on half the promised output.
The Balbina Dam Scorecard
Coming in at three times the price, late, and at half of its operational potential. The dam only cost 2,000 square miles of desolation, the eradication of dozens of indigenous wildlife, the displacement of ancient tribes, 28x the methane gas of an equivalent coal-fired plant and 20 years later… functionally 0 use.
The initial promise flown in on the wings of the fancy Yale educated Western banker fell flat on it’s face… again.
Was it ever supposed to work? That is the real question. You could make the case that yes, it would have been good if it worked, but in reality, I think the end-use case of the infrastructure project is inconsequential.
It’s all about the financial flows created by the project. Once those stakeholders are taken care of
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