Gallagher in Dialogo Chino on China’s Latin American Loans
Kevin Gallagher, Professor of Global Development Policy at the Frederick S. Pardee of Global Studies at Boston University, was recently interviewed on concerns over how Latin American countries are spending Chinese loans as well as how those loans will eventually be repaid.
Gallagher was quoted in an April 12, 2017 article in Dialogo Chino entitled “Latin American Petro-States Struggle With China Debts, Need New Solutions.“
From the text of the article:
For Latin American countries, including Venezuela, the crucial question is how to use the loans. Kevin Gallagher, a professor at Boston University who studies Latin America, said: “China can’t be the one to trigger [more] sustainability, but if Latin America got its act together the Chinese could provide some real funding.”
Latin America is rich in natural resources, which are exported as raw materials, rather than as processed products. Loans from Chinese banks are focused on energy, mining and infrastructure.
According to Gallagher, Latin American governments mainly use Chinese loans to build infrastructure between mines and oil fields to refineries and ports – a far cry from real economic integration or sustainable development.
In Gallagher’s new book, The China Triangle, he says that the situation in many Latin American nations has led to a trade imbalance where countries rely heavily on exports. Profits made from the export of natural resources are reinvested into the extractive sectors rather than in sustainable economic and social development.
Gallagher also told chinadialogue that if China’s transition towards a greener economy goes smoothly, it may no longer need the commodities Latin America currently supplies to the same degree.
Kevin P. Gallagher is a professor of global development policy at Boston University, where he co-directs the Global Economic Governance Initiative (GEGI). GEGI’s mission is to advance policy relevant research on governance for financial stability, human development, and the environment on a global scale. You can follow him on Twitter @KevinPGallagher.