New York
CNN
—
According to a copy of her prepared remarks seen by CNN, US Treasury Secretary Janet Yellen will ask Congress to lend more money to developing countries to counter China’s growing influence.
In addition to increasing lending to other International Monetary Fund programs, Yellen wants to tell lawmakers that the Biden administration plans to increase participation in the Inter-American Development Bank Group private-sector investment fund and the African Development Fund.
“These investments will strengthen our commitment to these regions at a time of geopolitical competition,” Yellen said in testimony before the House Financial Services Committee on Tuesday. Lending to organizations like the IMF “serves as an important counterbalance to opaque, unsustainable lending by others like China.”
According to a recent study, China has spent $240 billion between 2008 and 2021 to bail out 22 countries that are “almost exclusively” debtors of Xi Jinping’s landmark Belt and Road infrastructure project, including Argentina, Pakistan, and Kenya Turkey.
But many of the countries to which the country has extended loans are struggling to repay the loans, which could plunge their citizens into even greater poverty. China has called on the World Bank and IMF to help bail out some countries, but has failed to provide transparency on the terms of the loans and other key details.
Yellen testified earlier this year that she is “very, very concerned about some of the activities that China is doing around the world – engaging with countries in a way that leaves them in debt traps and fails to foster economic development.”
“We are working very hard to counteract this influence in all international institutions in which we participate,” she said at the time.
Yellen also wants to tell lawmakers that she is “relieved” that lawmakers have “taken timely action to address the debt ceiling.”
“But while we managed to avoid a default, the United States came dangerously close to the border again. “This cannot be normalized as the way we do business in Washington,” her prepared remarks said.
Debt ceiling negotiations dragged on for months before lawmakers finally reached an agreement to suspend the debt ceiling for two years. Such last-minute action “damages our global leadership and credibility on the world stage,” Yellen will tell lawmakers Tuesday.
Fitch Ratings warned that it was still considering a US debt downgrade despite the last-minute deal passed by Congress.
— CNN’s Jessie Yeung contributed to this report.
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2023-06-12 23:06:41
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