China promises housing program for new ally Nicaragua

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The first project China says it is developing after relations are restored

Laureano Ortega Murillo signs the restoration of relations with China in December 2021. Photo: La Prensa

What are the experiences of Chinese investments in the region?

By La Prensa

HAVANA TIMES — A month and a half after restoring diplomatic relations with Nicaragua, Xi Jinping’s government promises to carry out its first “cooperation” project in Nicaragua consisting of a “big real estate project.” The project will last three years and will include 84 municipalities, as announced by the First Lady / VP of the country, Rosario Murillo.

But what are the experiences of other Central American countries that have relations with the Asian giant?

“We are working, we are finishing, and we can reveal that the government of the People’s Republic of China has approved an important cooperation project with Nicaragua and the Nicaraguan people, a large housing program for families throughout the country (.. .) the plan is for three years and will benefit tens of thousands of Nicaraguan families in 84 municipalities across the country,” Murillo said Jan. 28 during his midday speech, without providing the exact number of homes they plan to build. to construct.

During the Taiwan-Nicaragua relationship, Taiwanese cooperation was known for building these types of projects. The last was the “solidarity housing for vulnerable families” program that the regime extended to 49 municipalities, and which, according to the Taiwanese authorities, meant the construction of 400 housing units in 2021.

What is China investing in?

The international relations experts consulted by LA PRENSA agree that Beijing is seeking to increase and strengthen its commercial position in the world and among its main investment objectives for the coming years is Latin America and especially the Central America.

Andres Serbin, international analyst and president of the Regional Coordinator of Economic and Social Research (CRIES), founded in Managua in 1982, explains that what China is offering instead of Taiwan surely has to do with some type of investment and the rare possibility of loans.

Andres Serbin, international analyst and president of the Regional Coordinator for Economic and Social Research (CRIES).

“China has been quite reluctant to offer loans in Latin America. It has reduced the amount of loans but has increased its investments aimed at extracting the minerals that are important for them to have for their own development,” he told La Prensa.

Carlos Malamud, senior researcher for America at the Royal Elcano Institute, says China is definitely in Latin America “from a long-term perspective, looking for a supply of raw materials, food and minerals”. From this point of view, what Nicaragua can offer “is relatively little. Nicaragua is a very small country, very poor and with a very limited market. However, from a political point of view, it is good for China because Nicaragua has now recognized the Beijing government.

At the same time, he notes that the Chinese economy “is not going through great instability. It obviously does not have the other setbacks of the other powers. However, the situation is still quite delicate”.

Carlos Malamud, Principal Investigator of America at the Royal ELCANO Institute

Andres Serbín stresses that if it is true that China’s interests are in natural resources and in the development of infrastructures, these must “take advantage of its export potential from the various Latin American countries to its market; in China. He also has an interest in energy. These are the three keys to how China manages its interests outside of increased trade.

Chinese projects in Central America

China has made many promises to Central American countries, but in reality many have not materialized.

In Costa Rica, for example, which in 2007 was the first Central American country to establish diplomatic relations with China. That year, then Costa Rican President Oscar Arias visited Beijing and was received by his Chinese counterpart, Hu Jintao. From this visit came the Chinese promise to build a new national football stadium, an oil refinery and a highway to Puerto Limón, in addition to promises of investment in hydroelectricity and tourism. To date, only the construction of the stadium has materialized. The rest of the pledges are pending.

The stadium, dubbed “The Jewel of La Sabana”, has a total construction of 34,122 square meters, 34,762 seats and cost 111 million dollars. The work has sparked controversy, as China has brought in its own workforce, taking away job opportunities for Costa Ricans.

The other projects are in progress, but the planned completion dates have already passed.

Chinese President Xi Jinping greets his arrival at the Presidential Palace in Panama City, for a meeting with Panamanian President Juan Carlos Varela on December 3, 2018. – (Photo by Luis Acosta/AFP/Getty Images

In the case of Panama, investment by Chinese companies in at least three maritime and transport infrastructure projects exceeds $2.58 billion. On June 29, 2018, the Chinese consortium (Panama Cuarto Puente) made a $1.42 billion bid for the design and construction of a fourth bridge over the Interoceanic Canal, and on November 9 of the same year, the Panamanian government signed a contract to carry out the project. Another project that has been awarded to a Chinese company is the new cruise port that will be built in Amador, on the island of Perico. The estimated cost of the work is $165.7 billion.

The new port terminal, located on Margarita Island, was expected to be ready by the end of 2019. However, in June 2021, the Maritime Authority of Panama initiated the process of canceling the concession to container ports of Panama Colon for breach of contract. There was also a promise to build a high-speed rail line from Panama City to Chiriquí on the border with Costa Rica at a cost of $4.1 billion to be completed in six years. However, the deal fell through.

In El Salvador, projects for the National Library, the National Stadium, the wastewater treatment plant on the Ilopango side and the La Libertad pier are under development. As Salvadoran President Nayib Bukele explained on his Twitter account, the new National Library of El Salvador is a donation from China and will cost $54 million, including equipment and books.

Read more about Nicaragua here on Havana Times.

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