Members of the United States’ Congress want to investigate how China is managing to secure large contracts from the Inter-American Development Bank (IDB) despite being one of the smallest shareholders in the organization.
According to an article in The Financial Times, China won contracts worth almost US$1.8 billion from the IDB between 2010 and 2020, a large figure compared with the $249 million won by the United States during the same period. The US Senate is currently considering a package of bills related to China, and chief among them are provisions to create a formalized effort to examine how China appears to have gained an outsized influence in organizations like the IDB and similar instutitions.
Founded in 1959, the IDB is the main lender to the regional governments. Last year alone, it disbursed almost $13 billion of loans. The US holds a 30% stake in the organization, while China controls less than 1%. Moreover, China joined the institution only in 2009.
The rising influence of China in the region is causing worry in Washington. Besides IDB’s, China has secured numerous deals from Latin American governments, mostly to carry out infrastructure projects. In addition, many of its multinationals, such as Huawei and Aliexpress, have invested millions of dollars in the region.
Analysts often argue that China is not concerned by Latin America’s economic plight and that the Asian giant is solely aimed at achieving its business goals in the region.
In an interview with the British daily, the IDB’s chief Mauricio Claver-Carone criticized the US, saying “Washington allowed China to gain an economic foothold in Latin America by underfunding the lender for years.”
The US, according to the report, is open to increasing funding but is awaiting the results of a study commissioned by the IDB last year.