The New Development Bank is likely to become a mini-IMF with China as the biggest overall contributor. David Jessop of the London-based Caribbean Council comments the Caribbean should follow this development closely given that China has become a significant regional player and major investor in infrastructure and the funder of Chinese private sector-led ventures across the Caribbean. The new bank seeks to rival the IMF and the World Bank and is created to establish a counterweight to Western-dominated financial institutions in its capacity to fund infrastructure projects and serve as a reserve fund to support economies facing currency and balance of payment crises.
The government of China has made it clear that China will not impose any political conditions or interfere in the internal affairs of the recipient countries.
A China State Council policy paper notes that already China has provided the Caribbean with concessional loans totaling around US$1.5 billion mainly for the construction of infrastructure projects. Works have been carried out primarily in Antigua, Dominica, Grenada and Cuba.
As reported President Xi Jinping of China made it clear in an address to the Brazilian Senate last week that China intends through CELAC to promote a strategic alliance with the Latin America n and Caribbean region. “Our objective is to strengthen and take a leap forward in China’s relations with Latin America and the Caribbean.”
Jessop writes that for the Caribbean this is yet another challenge in relation to future positioning. “Governments will have to consider how and where to insert themselves into not just the expanding and overlapping relationships implied by the various meetings in Brazil, but also decide how to balance this with traditional relationships, the political potential of CELAC, the bilateral economic significance of China, the growing importance of more proximate neighbors in Latin America and the smallness of much of the Anglophone part of the region.”