Argentina in risk of being trapped in debt

Argentina would potentially become the largest state to have joined the Chinese Belt and Roads Initiative (BRI) in Latin America.

Over the past years China has shown immense interest in the affairs of the Latin American countries. The proposition of the BRI comes at a time when Argentina is already heavily indebted to the USA.

By joining the BRI, Argentina could open Chinese finance for crucial investment in infrastructure and transport, fossil and renewable power, mining, production, agriculture, innovation, and the IT sector.

This would empower the nation to connect and mend the infrastructure gaps and better incorporate with nations, for example, Chile, which appreciates solid business passages that associate it to foreign business sectors, subsequently bringing down coordination costs and upgrading competitiveness.

All the promises that China has made to Argentina have definitely upped the nation’s hopes in restructuring its plummeting economy, but it comes at a price. Argentina is running at a risk of severing its ties with the US while it enters into new trade relations with the Dragon.

Both USA and China are equally vested in making a stronghold over the global economy, however, the latter, more often than not, uses all the unfair means to do so. The BRI is nothing short of a Chinese ploy to access entry into the developing nations and claiming it as an economic colony.

The BRI is a Chinese state strategy and looks for logical collaboration with Argentina. Formally launched in 2013, the activity initially tried to resuscitate the age old Silk Road and maritime trade routes, but it has since extended its extension to improve political and financial participation with nations that officially endorse it.

What the previous sentence translates as is that China, through the means of BRI, is trying to get into the seams and folds of a nation’s economic and political structure and eat it up from within.

Argentina over the past decade has seen a lot of ideological inconsistency when it came to its leaders. Bilateral relations with China intensified during the government of Cristina Fernández de Kirchner (2007-2015), but when Mauricio Macrientered leadership in 2015, he questioned several flagship Chinese projects.

That changed when Alberto Fernández took office in December 2019. Fernández expects to renew the relationship and reactivate the disputable Chinese-moved dams in Santa Cruz province, as well as nuclear power plants.

The only snag they are facing is that China does not want to make dealings with a state that is running in debt. Diego Mazzoccone, executive director of the Latin American Center for Chinese Political and Economic Studies, said that “For China it's important that Argentina is not in default, that it can successfully finish negotiating the foreign debt. No investor wants to invest in a country in default.”

Chinese investment is unlike how other states do it. China has been infamous for a long time because of its skewed and draconian economic policies and its debt trap diplomacy.

China is infamous for providing huge loans to economical weaker nations under the BRI; usually the collateral would be a state resource. In the event of non-repayment within the stipulated time, China has taken over the resources, sometimes even denying rights to the victim nation over those resources.

China's modus operandi was the same in Sri Lanka, when Colombo needed to give up the port of Hambantota to China on a 99-year lease because of non-repayment of Chinese loans.

Fundamentally, BRI was being known as a significant infrastructure initiative, which by creating streets, railroads, and ocean courses would make the movement of goods and services between various nations simpler and less expensive, and subsequently advancing global trade.

China is attempting to make the world grasp the contention that the BRI undertaking will prove to be helpful to developing nations in upgrading bilateral trade, financial relations and network. While clarifying the advantages of BRI, endeavors are being made openly talk to shroud its political, monetary and geopolitical ramifications and dangers.

And now Argentina would fall prey to China’s ploy of overtaking it through the ruse of “helping the nation develop”, and there will be absolutely no way for Argentina to get out of the quicksand once they step into it.

Although China’s intentions and motivations are slowly becoming clear to the world, it is still a known fact that the nations that need help would try to seek it in any way possible. In this light, China enters as the Good Samaritan but is actually a Trojan horse, driven only towards fulfilling its own selfish interests and its dreams of global dominion.