Central America without a clear vision to take advantage of the growing alliance with China

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  • Tue, 08/21/2018 - 21:49
  • EFE

Central America lacks a vision and plans to take advantage of the growing alliance with China, which four countries of the Central American Integration System (SICA) has already joined, including El Salvador, analysts told Efe.

China "is clear" of what it wants in Central America: it sees Panama as a platform to distribute its products, thanks to its ports and the facilities of a bullet train that the Asian giant plans to build in the country and could transport goods produced in neighboring Costa Rica or in El Salvador, where labor is cheap.

"By 2030 it is estimated that China will be the first commercial power and nobody will stop it (...) China knows what it wants, the problem is that we are not clear on what we want," added the rector of the Faculty of Economics of the State University of Panama (UP), Rolando Gordón.

El Salvador announced on Monday the break of relations with Taiwan, considered a rebel province by Beijing, and sealed the diplomatic ties with China, a decision that Salvadoran President Salvador Sánchez called a "step in the right direction."

The new status with China will bring El Salvador, affected by high levels of poverty and violence and very dependent on the remittances of its emigrants, the great majority living in the US, "great benefits," said Sánchez, who announced a bilateral dialogue to identify specific actions in trade, investment and infrastructure development, among others.

A little more than a year ago Panama did the same and has already signed about thirty agreements with China, which for years has a preponderant role in the local economy, being the second most important user of the Canal, only surpassed by the US, and the first supplier of the Colon Free Zone (ZLC), the largest in the continent.

Costa Rica was the first country in the region to establish ties with China in 2007, and both signed a joint 2016-2020 action framework last year that identifies infrastructure, technology and financial cooperation as priority areas.

The Dominican Republic, which belongs to the Sica although geographically is in the Caribbean, also established, last May, relations with China, amid great enthusiasm of business and public opinion, as also happened in Panama and Costa Rica at the time.

"I imagine that the Chinese will be interested in developing projects in El Salvador that would mean significant income for the Central American country, and I imagine that the decision was made in coordination with the businesspeople" of that country, a sociologist and Panamanian university professor, Marco Gandánsegui, told Efe.

Gandásegui, associate researcher at the Center for Latin American Studies (CELA), agreed that unlike China, which has geopolitical and commercial plans at 40-50-100 years, "the Central American countries do not have a project" on relations with the Asian giant.

That is why he expressed his hope that the Salvadoran business community, "which I think pushed because it wants to do business with China," will do so within the framework of a plan that generates benefits for his country.

Central Americans should aspire to have value-added business with China, generate taxes, specialize in national labor and open the Chinese market to the regional export, said economist Gordón.

In the opinion of Panamanian ambassador Nils Castro, one of the investments that China could make in El Salvador is the rehabilitation of La Unión port, affected by "dredging problems" that, "if solved" can make it "quite profitable and can serve to Honduras, which has poor access to the Pacific".

The decision made by El Salvador and China, which signed the diplomatic agreement in Beijing, raised "concern" in the US, as expressed by the ambassador in San Salvador, Jean Manes, who said that this will "impact" the bilateral relationship.

"The US is obviously very worried" about China’s moves of China, since after "conquering South America, now there are Chinese businesspeople in Central America.  The problem commercial rather than political," said Gandásegui.

In the opinion of Castro, the US reacts this way because El Salvador, Honduras and Guatemala, the so-called Northern Triangle, have been "subject to US control", in recent years with the Alliance for Prosperity plan, which seeks to stop illegal mass emigration and has US funding.

Guatemala, Honduras and Nicaragua remain in the region as allies of Taiwan and analysts interviewed by Efe are skeptical about changes in the short term, although they agreed that in the end "it's a matter of time." 

Giovanna Ferullo


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