The United States is planning to set up an agency with a $60 billion budget to invest in developing countries, the Financial Times reports. The move is planned to provide an alternative to the Belt and Road Initiative, which some in Washington have described as a weapon of China’s “economic warfare.”
The new agency will incorporate the Overseas Private Investment Corporation (Opic), the previous body in charge of US commercial lending to the developing world. Unlike Opic, which could invest only in debt, the International Development Finance Corporation will also be able to invest in equities.
The new agency is targeted at combating China’s so-called “debt-trap diplomacy,” in which China allegedly gives large amounts of infrastructure funding to smaller countries in order to then take control of the assets once the country defaults on repayment.
According to the head of Opic, Ray Washburne, the agency is designed to counter Chinese “loan-to-own programs,” which are “creating countries that have the shackles of debt around them.”
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