Barbados ‘a major beneficiary’ of China

by SHAWN CUMBERBATCH

shawncumberbatch@nationnews.com

BARBADOS HAS BEEN FLAGGED as one of the main beneficiaries as China refocuses and increases its lending to Latin America and the Caribbean.

This is detailed in the new database produced in a collaboration between United States-based Western Hemisphere think tanks the Inter-American Dialogue, and the Boston University Global Development Policy Centre.

The database detailed that between 2015 and now, Government has secured US$291 million from China’s major development finance institutions (DFIs), China Development Bank (CDB) and China Export-Import Bank (Ex-Im Bank).

Barbados borrowed US$170 million from the Ex-Im Bank in 2015 for the Sam Lord’s Castle Hotel rehabilitation, which is ongoing, and Government recently borrowed US$121 million from the Ex-Im Bank to execute the Scotland District Road Rehabilitation Project, the database stated.

This information was also shared in the new report, At A CrossRoads: Chinese Development Finance To Latin America And The Caribbean 2022, which is authored by Rebecca Ray, a senior academic researcher with the Boston University Global Development Policy Centre, and Margaret Myers, a fellow at the Woodrow Wilson Center, who also directs the Asia and Latin America Programme at the Inter-American Dialogue.

Ray and Myers reported that “in 2022, the CDB and Ex-Im Bank extended new commitments of US$813 million”.

They explained that while this was “a far cry from the early years of the relationship, when CDB and Ex-Im bank rivalled the World Bank in the amount of financial support to the region,. . . it represents a return to activity after new financing fell to zero in 2000”.

The two researchers noted that as China’s major DFIs, the CDB and Ex-Im Bank “have historically accounted for the bulk of China’s overall lending to the Latin American and Caribbean region”.

“Based on data from the Chinese Loans to Latin America and the Caribbean Database, which. . . tracks Chinese DFI finance to Latin America and the Caribbean governments and stateowned enterprises, these two banks issued US$136 billion to the region between 2005 and 2022, with most of that directed toward Argentina, Brazil, Ecuador, and Venezuela,” they said.

The pair added that the region “saw a precipitous decline in loans from CDB and Ex-Im Bank between 2015 and 2020, when lending ceased altogether, amid pandemic-related challenges, and as China reconsidered development bank functions and areas of focus”.

They elaborated: “Between 2019 and 2022, the Latin America and the Caribbean region received a total of just over US$2.9 billion in loans from both CDB and Ex-Im Bank, as compared to peak DFI lending in 2010, when CDB alone issued over US$35 billion to the region.

“Though still lending at low rates to LAC governments, China’s DFIs would appear to be engaging the region with renewed interest.”

Ray and Myers added: “In Brazil, CDB issued a US$500 million term loan to the Banco do Brasil, which the latter will reportedly use to finance social projects.

“In the Caribbean, Ex-Im Bank issued a US$121 million concessional loan to Barbados for the Scotland District Road Rehabilitation Project and another US$192 million concessional loan to Guyana for Phase II of the East Coast Road Project.

“In addition to these new loans, CDB and Ex-Im Bank also expressed interest in supporting several more, sometimes sizeable infrastructure projects in other parts of the region.” (Taken from this week’s BARBADOS BUSINESS AUTHORITY.)