The White House sees a new $150 million loan in Ecuador as way to compete with China
The Biden administration this week announced a $150 million loan to support women-owned businesses in Ecuador, a step the White House sees as a model for the kind of projects the United States plans to support as it kicks off a new initiative to compete with China's Belt and Road global investment and lending program.
The U.S. loan goes to Banco de la Producción, which officials say will ultimately be used to help finance women-owned and women-run businesses in Ecuador.
"We're focused on projects that exemplify our values," said deputy national security adviser Daleep Singh. "So female-owned businesses in the developing world need help, and we're going to provide that help."
Singh spoke with NPR after returning from a trip to Ecuador, Colombia and Panama to discuss potential investment opportunities with their presidents and top ministers.
During the Group of Seven summit in June, President Biden convinced those in the group to join the new initiative, dubbed Build Back Better World, to counter China's growing influence from funding big infrastructure projects around the world.
China has made large loans throughout Latin America
China has long been willing and able to provide fast cash to developing nations in ways that the United States has not.
Leaders in Latin America and in other parts of the developing world have taken big loans from China to build roads, telecommunications equipment and energy systems.
The $150 million loan from the U.S., for example, is quite small compared with the more than $18 billion that China has already provided in loans to Ecuador since 2005, according to data compiled by the Inter-American Dialogue and Boston University's Global Development Policy Center.
In total, the China Development Bank and China Export-Import Bank have provided more than $137 billion in loans to Latin American and Caribbean countries since 2005, according to the data.
But the United States and others argue that the loans often come with questionable financial terms that can leave countries with debilitating debt obligations.
"China tends to extend the duration of its loans, rather than forgive debt repayment, which creates long-term financial dependencies," according to a January report by the Congressional Research Service.
Singh says the U.S.-led alternative will demonstrate how democracies are "still the single best path for delivering results" at home and abroad.
Biden's call to invest "the right way"
U.S. and G7 projects will be focused on the climate, health and health security, and gender equality.
In his speech last week to the United Nations General Assembly in New York, Biden promised to use U.S. resources to invest "the right way."
"For example," he said, "there is an enormous need for infrastructure in developing countries, but infrastructure that is low-quality or that feeds corruption or exacerbates environmental degradation may only end up contributing to greater challenges for countries over time."
The $150 million U.S.-supported loan was made through the International Development Finance Corporation, whose mission is to give loans to overseas projects.
Singh said it's one of a handful of financing mechanisms that the U.S. plans to use to fund new projects when the initiative gets officially underway early next year.
The project was announced in Quito, Ecuador's capital, where Singh and other U.S. leaders met with President Guillermo Lasso and key ministers.
Singh also traveled to Panama and Colombia looking to identify potential projects. In Colombia, for instance, he spoke with President Iván Duque Márquez and members of his cabinet about efforts to expand vaccine production capacity. They went over the regulatory climate and necessary infrastructure support that Colombia would need, Singh said.
"President Duque is keen in his last year or so in office to leave a legacy, such as a vaccine manufacturing presence in Latin America," Singh said. "And I think with our tools and our experience and our desire to diversify medical supply chains globally, there's a very real possibility that a project such as that one could come together."
The first trip was to Latin America, but Singh emphasized that the administration is also looking for projects in Africa, Asia and other parts of the developing world.
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