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US Saves Ecuador From China’s Debt Trap

Americas china debt debt trap Development Finance Corporation Ecuador Latin America US US News World

US Saves Ecuador From China’s Debt Trap

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WASHINGTON—The United States struck a deal with Ecuador to refinance its China debt, as part of an effort to counter Beijing’s growing influence in Latin America. The U.S. International Development Finance Corporation (DFC) signed a framework agreement with the government of Ecuador on Jan. 14 to refinance its preexisting debt to China and support the country’s development projects in the future. DFC is a federal government agency formed in Dec. 2019 to advance U.S. foreign policy interests and finance infrastructure projects in developing countries to compete with China. “The agreement is for the delivery of up to $3.5 billion to prepay expensive debt and reactivate the productive sector,” President Lenín Moreno of Ecuador said during a virtual press conference after the signing of the agreement. As part of the deal, Ecuador agreed to join the “Clean Network” to remove Chinese companies from its telecommunications infrastructure. Last year, the State Department …

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