Scubidu wrote:Consecutive large current account deficits lead to currency devaluation and it was a private sector led boom that led to the Asian Financial Crisis. They were largely financed the deficit with debt and not equity (except Malaysia), coupled with the fact that the deficit was being financed externally. Goes back to the fact that when you can no longer finance your deficit, your credibility with lenders diminishes.
If indeed infrastructure projects yield high returns then let's see if we attract FDI flows. The solution, your long term infrastructure prospects would be greatly aided by foreign private inflows because you could create growth and finance your imports.
my 2 cents.
@Scubidu my plan is very short term in the bigger scope of things.. You cannot honestly expect the private sector and foreigners to come running to fund building of roads, bridges, power, health care etc..
First of all we all know what prices kenyans will pay if these are in the hands of the private sector & foreigners (kplc gives a small taste everyday)
Secondly as long as infrastrucrure borrowing to finance the deficit remains domestic there aint much of a problem.. ,(site japan)
When the infrastructure is up and the importation cools we will be begging the currency to depreciate to boost exports... (site asia)
Mark 12:29
Deuteronomy 4:16