The New International Financial Institution for U.S. ExpansionIn the framework of the institutional transformations that the United States is advancing to regain global hegemony, in January 2020 it launched the so-called International Development Finance Corporation (DFC), as the new agency that will control the necessary financing for its repositioning in the world. The intention to modernize the international development financing scheme is contained in the new National Security Strategy (NSS), promulgated at the end of 2017, and where it states that the United States must arm itself with new tools to face the growing influence of China and other powers on the international scene. The NSS recognizes that the United States has been losing the battle for that global pre-eminence, and provides orientation to the formation of the new financing scheme, understanding that this action will be essential to update its geopolitical position. The questioning that the document makes of the situation of U.S. hegemony is linked to its inability to offer fair and attractive trade relations, in contrast to what China has been achieving, especially in Latin America and the Caribbean. "Today, the United States must compete for positive relationships around the world. China and Russia direct their investments in the world to expand their influence and gain competitive advantages against the United States," reiterates the NSS. China and its promotion of a multi-polar world is defined in the NSS as the greatest threat to the objectives of the United States. And from this criterion, the NSS states that this country must use a new methodology for international financing, prioritizing the promotion of private capital over areas that contribute to the great objectives of imperial foreign policy. The new U.S. national security doctrine proposes that the new DFC should openly confront the China Belt and Road initiative,[1] and at the same time, favour the expansion of U.S. private capital, to foster new alliances and strengthen existing ones: "The United States can play a catalytic role in promoting economic growth, led by the private sector," the document clarifies. The legal initiative that creates the DFC, approved by consensus by Republicans and Democrats, merges the former Overseas Private Investment Corporation (OPIC), and the Development Credit Authority (DCA), belonging to USAID, in a supra development aid agency, the largest and most important created in that country. To materialize this geopolitical operation, the DFC will manage some U.S.$60 billion, doubling the financial capacity of its predecessor OPIC. The new corporation will also assume the management of the credit portfolios of OPIC and DCA; that is, it starts its work, managing just under U.S.$30 billion, distributed in a variety of projects around the world. The legislation provided the DFC with innovative financial tools, which guarantee it greater flexibility in its new role, and prioritizing its line of action, in the investment in energy and infrastructure projects, contained in the following regional initiatives arranged by the United States for its geopolitical repositioning: Connect Africa, 2X Women's Initiative, Feed the Future, América Crece [America Grows], Indo-Pacific Strategy, U.S.-India Development Foundation and, European Energy Security and Diversification. From this perspective, in December 2019 the United States government launched the "America Grows" initiative as the response of Donald Trump's government to the significant progress made by China and Russia on the continent. In recent years, Latin American and Caribbean countries have deepened their economic relations with China, establishing more and more agreements and trade flows with the Asian nation. According to a 2018 World Economic Forum report, China displaced the United States as the main trading partner of Argentina, Brazil, Chile, Peru and Uruguay, and has invested more than $110 billion in government projects across the region. The report highlights the peculiarity that Chinese banks refrain from imposing political conditions on the governments receiving loans. In this scenario, which envisions a transition of the political, economic, and cultural order in Latin America and the Caribbean, the United States raises the America Grows initiative, as an updated implementation of the old Monroe Doctrine.
On July 21, 2020, the United States and Honduras signed a memorandum of understanding, in which the Central American country formalizes its incorporation into the America Grows initiative, with the promise of investment of U.S.$1 billion, in private projects, during the next three years, prioritizing the energy issue: "Our focus will be on projects to strengthen the country's infrastructure, advance digital connectivity, strengthen the health sector, expand financial services, and help lay the foundations for a more prosperous future," declared the Executive Director of the DFC Adam Boehler during the signing of the document, which was attended virtually by the Honduran President Juan Orlando Hernández. The document, negotiated between the United States and Honduras, adopts reference points from the agreements already signed with Panama, Chile, Argentina, Jamaica, Colombia, Brazil, Peru, and El Salvador, and establishes the legal framework of reference for future financial actions of the DFC in Latin America and the Caribbean. Unlike the type of financing that China provides to Latin American and Caribbean countries, where national projects are prioritized, and the capacities of governments are strengthened to generate higher levels of well-being for the population, the action of the DFC would reinforce economic dependence and the expansion of U.S. private capital, commodifying the phenomenon of development assistance. The configuration of the DFC as the new financial body of U.S. foreign policy has generated enthusiasm in anti-Chinese conservative groups. On August 14, 2020, Senators Marco Rubio (Republican) and Bob Menéndez (Democrat), characterized by their extremist positions against sovereign governments in Latin America and the Caribbean, presented the bill entitled Advancing Competitiveness, Transparency and Security in the Americas Act (ACTSA). According to the initiative presented, the bipartisan proposal would seek, on the one hand, to strengthen the economic competitiveness of the United States, and on the other, to criminalize China's political and commercial presence in the region. "China's goal is to use economic power to displace the U.S. I am proud to join Senator Menéndez in presenting this project, which seeks to strengthen our economic capacity, to counter the growing evil influence of Beijing in Latin America and the Caribbean," Senator Rubio pointed out on his social networks. The ACTSA project involves the new DFC, and will propose, for the approval of Congress, that 35 per cent of the financial budget of said agency be dedicated to the region during the next 10 years. The DFC's agenda, since the formal start of its operations on January 2 of this year, has been affected by the institutional rearrangement, the capture of human capital that will make the work of this body effective, and, of course, the consequences of the COVID-19 pandemic. However, its Executive Director Adam Boehler, a young businessman linked to the provision of health services who graduated in 2000 in economics from the University of Pennsylvania, has wasted no time and has established work meetings with different characters and officials of Latin America and the Caribbean, carrying the promise of the Trump administration to generate large investments for the projects that may be presented to this institution. Before the end of 2019, he visited the Colombian President, Iván Duque, in Cartagena, where he confirmed that his agency will promote efforts that guarantee the financing of the largest number of projects, especially in energy and infrastructure. He also held meetings with the same discursive criteria, with President Nayib Bukele from El Salvador, Juan Orlando Hernández from Honduras, Alejandro Giammattei from Guatemala, and Mexican Foreign Minister Marcelo Ebrard with whom he signed a letter of intent to finance a gas pipeline, which will be built by the company Rassini SAB de CV in the southern states of the country, for U.S.$632 million. As the new agenda of the DFC is proposed, based on the guidelines set forth in the U.S. National Security Strategy, it could contribute to the deepening of political instability in the region, and even more explosive scenarios, with the intensification of economic inequality, inequity in the distribution of resources, and political dependence. Ansonith Albano is a professor in the Faculty of Political Sciences, National Autonomous University of Nicaragua. TML Note1. The Belt and Road Initiative is a global infrastructure development strategy adopted by the Chinese government in 2013 to invest in nearly 70 countries and international organizations. Its stated aim is to strengthen China's connectivity with the world. It combines new and old projects, covers an expansive geographic scope, and includes efforts to strengthen hard infrastructure, soft infrastructure, and cultural ties. Originally called One Belt, One Road it is a Chinese economic and strategic agenda by which the two ends of Eurasia, as well as Africa and Oceania, are being more closely tied along two routes -- one overland and one maritime. (ALAI, September 9, 2020. Translated from original Spanish by TML.)
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Among other things,
with the implementation of the America Grows
initiative, the United States seeks to change the
energy matrix of the Caribbean region, in order to
redirect its growing surpluses of liquefied
natural gas (LNG) there. The International Energy
Agency (IEA) noted in a report dated November
2017, that in 2025, the United States will become
the world's largest exporter of LNG, from the
extraction of shale gas on its territory. A
substantial core of the projects, contained in the America Grows initiative, reflects the intention
of the United States to move its gas surpluses to
the Caribbean region.