{"id":50025289,"date":"2019-03-25T13:17:14","date_gmt":"2019-03-25T10:17:14","guid":{"rendered":"https:\/\/stage.dialogochino.net\/?p=25289"},"modified":"2023-06-16T23:16:54","modified_gmt":"2023-06-16T20:16:54","slug":"25282-venezuela-crisis-touches-down-in-china","status":"publish","type":"post","link":"https:\/\/dialogue.earth\/en\/business\/25282-venezuela-crisis-touches-down-in-china\/","title":{"rendered":"Venezuela crisis touches down in China"},"content":{"rendered":"

On the occasion of its 60th<\/sup> anniversary and for the first time ever, the Inter-American Development Bank (IDB) planned to hold its annual general meeting in China \u2013 until it was dramatically cancelled<\/a> on Friday night.<\/p>\n

The summit, which was set to begin Tuesday in the city of Chengdu, Sichuan province, was called off as the question of who should represent Venezuela, a country in the grip of a political crisis, came to the fore, challenging China\u2019s diplomacy.<\/p>\n

Last week the IDB voted to replace the representative of disputed President Nicol\u00e1s Maduro with the Harvard economist Ricardo Hausmann, who was put forward by national assembly leader Juan Guaid\u00f3, who declared himself president in January.<\/p>\n

By designating Hausamnn, the IDB became the first multilateral financial institution to officially recognise one of Guiad\u00f3\u2019s team.<\/p>\n

The decision created a sudden diplomatic dilemma for China, which has been a non-lending member of the bank since 2009 and has tried to maintain a neutral position on the political crisis on events in Venezuela, one of the IDB\u2019s 48 member countries.<\/p>\n

Hausmann: Maduro, China critic<\/h2>\n

The main event at the summit would\u2019ve been the IDB governors meeting at the end of the week, which usually includes finance ministers or central bank members of member-countries.<\/p>\n

Hausmann is a staunch critic of Maduro. He was planning minister under President Carlos Andr\u00e9s P\u00e9rez in the 90\u2019s and was the IDB\u2019s chief economist for six years.<\/p>\n

Hausmann has also been critical of China\u2019s international operations and its oil-backed loan packages. In an article published by Project Syndicate<\/a> in January, he wrote:<\/p>\n

\u201cIn principle, China\u2019s massive savings, infrastructure know-how, and willingness to lend could be great for developing countries. Alas, Pakistan, Sri Lanka, South Africa, Ecuador, and Venezuela have learned the hard way, Chinese development finance often delivers a corruption-filled sugar high to the economy, followed by a nasty financial (and sometimes political) hangover.\u201d<\/p>\n

Though there was some tension over Hausmann\u2019s attendance behind the scenes, it quickly escalated. According to Reuters<\/a><\/em>, China proposed to not invite any representatives from Venezuela so as to \u201cdepoliticise\u201d the meeting. The news agency also reported<\/a> that the US had threatened to pull out of the meeting after China refused to grant Hausmann a visa for the trip.<\/p>\n

It\u2019s a tremendous shame to see world leaders step back from multilateralism at a moment of political crisis<\/p><\/blockquote>\n

The Beijing Youth Daily<\/a> quoted Chinese Foreign Ministry spokesperson Yan Shuang as saying that China deeply regretted the IDB\u2019s decision to cancel and move its annual meeting, adding; \u201cChina will, as always, strengthen cooperation with Latin American and Caribbean countries and the Pan-American Bank to achieve mutual benefit and common development.\u201d<\/p>\n

\u201cMissed opportunity\u201d<\/h2>\n

According to Rebecca Ray, a researcher from Boston University who specialises in Chinese development finance to Latin America, there are no winners from this week\u2019s meeting cancellation. \u201cIt\u2019s a tremendous shame to see world leaders step back from multilateralism at a moment of political crisis,\u201d she said.<\/p>\n

Ray said that Latin America’s borrower-run alternative banks to the IDB and the International Monetary Fund, such as Latin America Development Bank (CAF) have not had to cancel their meetings because of differences over Venezuela.<\/p>\n

\u201cIt is only when Beijing and Washington allow multilateral organisations to become venues for competition rather than cooperation that the business of development has to grind to a halt,\u201d she said.<\/p>\n

Calling off the meeting meant a \u201cmissed opportunity\u201d for other countries looking to receive loans and to advance Chinese collaboration with the bank on sustainable development projects, according to Ray.<\/p>\n

In a tweet posted Sunday, \u00c1lvaro Mendez, co-director of the London School of Economics\u2019 Global South Unit, called the IDB\u2019s decision \u201cdeeply embarrassing\u201d and suggested that the bank had caved in to US pressure.<\/p>\n

\n

Deeply embarrassing the decision by @the_IDB<\/a> to cancel its Annual Meeting in #China<\/a> – @MorenoBID<\/a> finally cave in under pressure from @realDonaldTrump<\/a> via David Malpass @USTreasury<\/a> \u2013 I just received my ID batch via the App which is still working pic.twitter.com\/58rcPFCLNy<\/a><\/p>\n

\u2014 Alvaro Mendez (@alvaroimendez) March 24, 2019<\/a><\/p>\n<\/blockquote>\n