John Perkins recounts times spent hoodwinking developing economies out of their resources for the US and warns how his Chinese counterparts are raising the bar.

I was an economic hit man (EHM) for the US through the 1970s. My job was to dupe other countries into believing that what the US did would be a benefit to all the people in those countries. Nothing could have been further from the truth.

This same hit-man strategy continues today. And now, China has taken it to new levels.

The strategy US employs involves identifying low-income nations that possess oil or other resources but lack sufficient means and/or the political will to develop them. It then sends EHMs to convince the resource-rich nations to accept large loans from what’s known as the Washington Consensus (the World Bank, International Monetary Fund, US Treasury Department, and related institutions). The target countries must use their undeveloped resources as collateral.

An important condition in our strategy is that the loans are earmarked to hire US companies to build power grids, ports, industrial parks, and other infrastructure projects that drive economic growth. These companies reap huge profits, a few local elite business owners benefit from the improved infrastructure, and everyone else suffers because funds are diverted from health services, education, and other public sectors to pay interest on the loans. The debts are so large they can’t be repaid and the countries default on their loans. This process is often referred to as debt-trap diplomacy.

As a first step toward addressing the default problem, the EHMs demand that the low-income nations sell their oil, minerals, or other collateralised resources at rock-bottom prices to US transnational corporations (which often don’t pay US taxes but are supported by US policies), with few (if any) environmental and social regulations.

When a country’s collateralised resources turn out to be insufficient to pay off the debt, the second step is to implement what are known as neoliberal policies. These include imposing austerity programmes that reduce taxes for the rich and cut wages and social services for everyone else, reduce government regulations, privatise public-sector businesses and sell them to North American investors, and discourage collective bargaining — all of which support “free” markets that favour transnational corporations.