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Development Banks in Latin America have become the newest battlefield in Latin America Strive for global influence After warnings between Chinese and American leaders, the bank has helped Beijing increase its influence in the region.
Mauricio Claver-Carone, recently installed Inter-American Development BankWashington said Washington has allowed China to gain an economic foothold in Latin America through years of underfunding lenders and turning a blind eye to how Beijing used its membership in the agency to win excessive shares of contracts.
“For decades, in the entire political arena, the United States has underestimated the value of the Inter-American Development Bank,” Claver-Carone said in an interview with the Financial Times. “As a result, China has filled their advantages in the financial vacuum. Hopefully, they have now learned this lesson.”
The Inter-American Development Bank (IDB) was established in 1959. It is one of the oldest development banks in the world and an important authority in Latin America. It issued nearly $13 billion in loans last year. China is one of the 48 members of this Washington-based institution and joined in 2009 to make it eligible to bid for projects funded by the lender.
Former Trump administration official Claver-Carone (Claver-Carone) became First American Leading the bank after a radical movement supported by Donald Trump and opposed by Joe Biden. Since then, he has been urging the United States to support the institution’s capital increase to offset China’s influence in Latin America.
In support of his argument, Claver-Carone pointed out that data shows that although China is the smallest shareholder of the bank, it still holds 0.004% of the shares, but in the past ten years, the bank has won funding from the Inter-American Development Bank. A large number of contracts.
According to the bank’s data, Chinese engineering and construction companies won IDB-funded contracts worth US$1.7 billion between 2010 and 2020, making it the fourth largest deal recipient after Brazil, Argentina and Peru.
During the same period, a company from the United States (the largest shareholder of the Inter-American Development Bank, holding 30% of the shares) won a contract worth US$249 million, emphasizing how China Has used its small share to expand its business in Latin America.
When facing Beijing, IDB and China’s attention also provided billions of dollars in direct loans to countries in the region to fund infrastructure projects. Strengthen review Its global economic influence in Latin America, Africa and Asia.
Claver-Carone’s push to seek capital increases has been supported by some senior Democrats, including the chairman of the Senate Foreign Relations Committee, Bob Menendez, but has not received the party’s members. Generally supported.
Menendez told the British “Financial Times” that China “uses the International Development Bank” for its own economic interests, and said that China contributes less than half of the 1% of the International Development Bank’s core funds. It has itself become a serious problem in the world’s largest country. The bank’s top procurement partner”.
The Senate is currently debating a package of Chinese bills to strengthen the review of China’s economic practices in Latin America, including a provision requiring US intelligence agencies to study how Beijing affects institutions including the Inter-American Development Bank, the World Bank, and the International Monetary Fund. decision.
The legislation under consideration will also authorize the Biden administration to apply to the U.S. International Development Bank for an increase in U.S. funding.
A person who listened to the debate said that the Biden administration is open to capital increase until the completion of an Inter-American Development Bank study earlier this year.
Some lawmakers, including Patrick Leahy, the head of the Democrats of the Senate Appropriations Committee, opposed the raise. But others say that the United States must take more measures to counter Beijing’s influence.
Marco Rubio, the top Republican of the Senate Intelligence Committee, told the Financial Times: “As Beijing continues to exploit fragile countries through debt trap diplomacy, we must remain vigilant and protect the interests of multilateral institutions such as the International Development Bank. .”
Mark Lopes, who served as the US representative on IDB’s board of directors from 2015 to 2018, said that Washington had to take on some responsibilities to make China an increasingly large investment entity in Latin America.
Lopez added: “The United States has long been concerned about China’s invasion in Latin America, but these countries have not had a better offer. The United States has historically underestimated the value of the Inter-American Development Bank.”
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