Economy: The United States will help Ecuador with its Chinese debt to put pressure on the Asian country
Madrid, 14 (Europe Press)
The US International Development Finance Corporation (DFC) has reached an agreement with Ecuador to help it pay off the billions of dollars in debt it has with China in exchange for that country. Latin America excludes Chinese companies from its communications networks.
DFC Chairman Adam Buehler signed the agreement at an event with Ecuadorian President, Lenin Moreno, on Thursday, describing the agreement as a new model for expelling China from the Latin American continent.
Buehler explained that the agreement will have a positive impact on the development of Ecuador, while preventing an “authoritarian” country from exercising its influence in other countries.
The outgoing Donald Trump administration hopes the initiative will set a model that encourages other Latin American countries to stop relying on debt bought by China and Asian companies to avoid access to their communications networks.
The agency, in turn, indicated that this was not a deal made by the Trump administration. “This is not a priority for the Democrats or a priority for the Republicans. This is an American priority,” Buehler said in statements to the Financial Times.
One of the key conditions for the deal with Ecuador is that its capital, Quito, sign what Trump’s CEO considers a “clean net.” This is an initiative of the State Department that aims to ensure that countries exclude China from telecommunications services and equipment while developing high-speed 5G networks.
Under the agreement, DFC will coordinate with private financial institutions to help create a bidding tool that purchases oil and infrastructure assets in Ecuador. Sales of these assets will provide Quito with liquidity to repay debts with China at an early date and inject investments into various development projects.
Ecuador’s debt with China goes back to the era of former President Rafael Correa, whose sovereign debt turned into “default” or non-payment in 2008, after which he decided to turn his back on Washington and agree on a series of loans with China, which are still in place. They continue to pay .
The current Ecuadorian president, Lenin Moreno, criticized the Chinese agreements as vague and harmful to the country. The executive renegotiated some of the debt terms and last year secured $ 2 billion (1645.3 million euros) in fresh money from a Chinese bank.
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