The development bank in Latin America has become a battleground for fighting for international freedom between the US and China, their chief has warned the lender to help Beijing expand its presence in the region.
Mauricio Claver-Carone, a recently appointed head of American Development Bank, Washington allowed China to acquire wealth in Latin America by giving money to the lender for years regardless of how Beijing used its members to benefit from the many agreements.
“For decades, the US, across the political arena, has insulted the IDB,” Claver-Carone told the Financial Times. “As a result, China has seized the opportunity without the money to help them. Hopefully, we have learned something now.”
The IDB, founded in 1959, is one of the world’s most advanced and well-known banks in Latin America, with loans of about $ 13bn last year. China is one of 48 members of the Washington-based organization and joined them in 2009, making it eligible to provide loans from the lender.
Claver-Carone, a former Trump administration, last year became a the first American leading the bank following a brutal campaign sponsored by Donald Trump and opposed by Joe Biden. He has since urged the US to support a major increase in China’s ability to overthrow China in Latin America.
In support of his arguments, Claver-Carone cited statistics showing that China had secured a large share of the agreements reached by the IDB over the past 10 years despite being a minority shareholder in the bank, accounting for 0.004%.
Chinese construction and construction companies have won IDB-paid $ 1.7bn agreements between 2010 and 2020, making it the fourth largest contract agreement behind Brazil, Argentina and Peru, according to the bank.
Meanwhile, companies from the US – IDB’s largest shareholder with a 30% stake – won $ 249m, proving how China has used its small share to expand its presence in Latin America.
A closer look at IDB and China, which has also generated billions of dollars from countries in the region to support construction, is coming as Beijing faces off. increased monitoring Its economic base in Latin America, Africa and Asia.
Claver-Carone’s insistence on raising money is backed by other Democrat officials, including Bob Menendez, chairman of the foreign Senate committee, but he has no sympathy with party lawmakers.
Menendez told FT that China “used the IDB” for economic gain and said that by providing less than 1% of the total IDB’s revenue raised “questions about how China managed to become one of the top banking partners”.
The Senate is currently discussing a package of Chinese funds that could boost China’s monetary policy review in Latin America, as well as an opportunity to ask US law enforcement agencies to assess Beijing’s impact on corporate elections including the IDB, World Bank and IMF.
The proposed legislation could also provide an opportunity for Biden’s supervisors to request additional funding from the US to the IDB.
One person quoted in the statement said Biden’s management was interested in a capital increase pending the completion of the IDB training launched earlier this year.
Other lawmakers, including Patrick Leahy, head of the Democratic of the Senate Appecations Committee, are opposed to the increase. But some say the US should do more to counter Beijing’s influence.
“As Beijing continues to crack down on non-negotiating countries, we need to be vigilant and defend our interests in various institutions such as the IDB,” Marco Rubio, a Republican senior member of the Senate legislative committee, told FT.
Mark Lopes, who was a U.S. representative on the IDB board from 2015 to 2018, said Washington should be held accountable for allowing China to become a major player in Latin America.
Lopes added: “The US has been watching for a long time China’s arrival in Latin America, but the countries have not been given a fair chance. The United States has always been critical of the IDB.”
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