Sixteen senators have expressed concerns about developing countries being weighed down by Chinese debt amid the pandemic.
The debts are in connection with loans Beijing offered to countries under its foreign policy project, the Belt and Road Initiative (BRI, also known as One Belt, One Road). Rolled out in 2013, it aims to build Beijings geopolitical influence along trade routes linking China, Southeast Asia, Africa, and Europe.
“We urge the State Department and the Treasury to consider the impact of the Chinese-financed Belt and Road Initiative (BRI) on the finances of many troubled economies and policy implications of additional International Monetary Fund (IMF) or World Bank support,” the senators wrote in a joint letter, according to an April 24 press release from Sen. Marco Rubio (R-Fla.).
Other signatories included Ted Cruz (R-Texas), Marsha Blackburn (R-Tenn.), Martha McSally (R-Ariz.), and Rick Scott (R-Fla.).
On April 13, IMF (International Monetary Fund) announced that it would provide immediate debt service relief to 25 of its poorest and most vulnerable members—including Sierra Leone, Nepal, Gambia, and Mozambique—so these countries can allocate their financial resources to pandemic relief efforts.
The senators pointed out that “Chinese lending is inconsistent with global standards of governance,” such as loans that require existing assets or sources as collateral.
In 2017, Sri Lanka handed over control of its key port of Hambantota to Beijing via a 99-year lease, after it was unable to pay off over $1 billion in debt for the BRI port project.
Last week, Tanzania President John Magufuli canceled a BRI project signed by his predecessor—a Chinese loan of $10 billion to construct a port at the countrys Mbegani creek in Bagamoyo, according to several media outlets.
Magufuli said the terms of the deal signed in 2013—such as the Tanzanian government would have absolutely no power to voice opinions on future investors for the port throughout the 99 years it will be leased to China following construction—would only be accepted “by a drunken man.”
The senators noted that as China is suffering economic consequences of the virus outbreak, China would be “less willing to roll over debts as they mature, which could exacerbate emerging-market liquidity challenges, and “as projects struggle in areas of strategic interest, China will be tempted to safeguard its investments and political influence.”
The letter called for specific U.S. actions, including pressuring Chinese institutes to renegotiate the underlying debt of developing countries, and requiring any country that asks for IMF assistance to come clean with all outstanding financial obligations, including BRI agreements and Chinese debts.
Without these actions, “U.S. and other Western taxpayers would be in essence bailing out Chinese financial institutions and enabling Chinas debt-trap diplomacy,” the senators concluded. Member nations are assigned quotas to finance the IMF, usually funded by taxpayer dollars.
Heath Silk Road
The senators letter also pointed to the fact that China has been promoting its “Health Silk Road,” the health component of the BRI initiative, amid the pandemic.
In January 2017, the World Health Organization (WHO) and China agreed to become partners in implementing health projects under BRI, naming the partnership the “Health Silk Road,” according to Chinese state-run media China Daily. The agreement was signed by then-WHO director-general Margaret Chan, who was replaced by Tedros Adhanom Ghebreyesus in 2017.
Ghebreyesus visited China in September 2018. According to the WHO, the two sides agreed to reaffirm “their commitment to improving the health” of citizens in countries that were engaged with Chinas BRI.
The current WHO director-general also praised the Chinese regime during his trip, calling China “a model for universal health coverage, a bulwark against health emergencies, and a reminder that transformations can be far-reaching.”
In March, Chinese state-run media Xinhua reported that Chinese leader Xi Jinping told Italian Prime Minister Conte in a phone call that China would be willing to work with Italy on the “construction of a Health Silk Road.”
Italy signed on to Chinas BRI in March 2019, the first among G-7 nations.
Many U.S. lawmakers have criticized ChiRead More – Source