IDB President: Latin America must avoid switching from Odebrecht to Chinese companies

The president of the Inter-American Development Bank (IDB), Mauricio Claver-Carone, warned against Chinese penetration in Latin America, estimating that the region should not go beyond “the era of Odebrecht to the era of Chinese companies ”.

The problem would be “for the region to move from the Odebrecht era to the era of Chinese companies,” Claver-Carone said, referring to the Brazilian company that left a trail of bribes that caused a political earthquake in the region.

“Chinese companies have misrepresented the markets. Why? Because they are companies subsidized by the State and, frankly, they are companies without integrity standards ”, added the head of the international financial organization.

“It is the concern about how” these companies “affect an ecosystem that already has too many problems, bureaucratic, corruption, transparency etc … It is like a perfect storm,” he deepened.

In the last 20 years, China it strongly gained ground against the United States in the Americas region, becoming the first trading partner of almost all South American countries, granting low-interest loans, and investing in energy projects, ports and highways, among many works.

China accounts for 12% of exports and 18% of imports for all of Latin America and the Caribbean, according to a report by the Paris-based think tank BSI Economics. Between 2004 and 2019, the region’s exports and imports from China increased tenfold and eightfold, respectively, according to the same source.

“An equal field for all”

Although the IDB is based in Washington, Claver-Carone became the first American to head the entity a year ago, the first lender in Latin America and the Caribbean, at the proposal of the Donald Trump government.

Claver-Carone, born in Miami and with Cuban roots, does not say he is against Chinese companies settling in Latin America, but asks “that they do so under a transparent framework and on an equal field for all.”

As the region’s first financial partner, the IDB “seeks investments in the region that can create sustained, inclusive, long-term growth, and the best companies to do so are American, European, Japanese, Korean companies, etc.”

He assures that in the past some of the companies in those countries could ignore these criteria in Latin America, “but today we are in a framework where the business world has made great progress, it has other standards.”

Claver-Carone attributes part of the blame for the supply problem that currently affects world trade to the fact that much of the production was based in China, and believes that decentralization is necessary that could benefit Latin America.

Thus, he explained, if Latin America and the Caribbean were made with 10% of Chinese exports to the United States of those products that they also export to the North American country, an additional “US $ 72,000 million” would arrive in the region, “a transformative amount.” .

The president also demanded that his institution be endowed with greater financing capacity, and when he became president he set the goal of going from US $ 11,000 million to US $ 23,000 million annually.

“We will not be able to accomplish tomorrow’s missions with yesterday’s resources. So we have to strengthen ”the IDB, he explained.