Chart of the Week: Asian Infrastructure Investment Bank and Belt and Road Initiative Memberships in Latin American and the Caribbean
In September 2022, Argentina applied for membership in the BRICS group of nations (named for its original five members of Brazil, Russia, India, China, and South Africa). It will become the third Latin American member, after Brazil and Uruguay, which joined in 2021.
This news comes as Latin American and Caribbean countries increasingly seek out membership in South-South development cooperation and finance initiatives, including the New Development Bank (the multilateral development bank of the BRICS group) as well as the Asian Infrastructure Investment Bank and the Belt and Road Initiative. Notably, all three of these initiatives are headquartered in China, although both the BRI and AIIB have multilateral governance.
In the 2022 China-Latin America and the Caribbean Economic Bulletin, 2022 Edition, Zara C. Albright, Rebecca Ray and Yudong (Nathan) Liu provide insights into the ever-changing landscape of China-LAC economic relations and posit a continued strengthening and growth of China-LAC economic relations, including these expanded forums for cooperation.
In this Chart of the Week, Figure 10 from the report demonstrates the evolution of China-LAC economic relations over time, tracking the countries that joined the China-led Asian Infrastructure Investment Bank (AIIB) and the Belt and Road Initiative (BRI).
Figure 1: Asian Infrastructure Investment Bank and Belt and Road Initiative Memberships in Latin American and the Caribbean
An increase in saturation and color shows the growth of China-LAC economic relations through increasingly active multilateral diplomacy, especially in the past year. In 2021, Argentina and Chile joined the AIIB, while Peru joined in January 2022. The BRI also continues to grow in LAC, as both Argentina and Nicaragua have joined in 2022. Nicaragua joins neighbors Costa Rica, El Salvador and Panama, as well as ten Caribbean countries in joining the BRI without AIIB membership. Illustrated by the dark blue color, five countries––Chile, Ecuador, Peru, Uruguay and Argentina––are now full AIIB members and BRI countries. Currently, Venezuela and Bolivia remain prospective AIIB members, while Brazil is the only LAC country with full AIIB membership that hasn’t also joined the BRI.
The growing trend of LAC countries joining the AIIB and BRI not only demonstrates the strength of China-LAC economic relations, but also their commitment to future investment and trade. Following several diplomatic announcements, the coming year could see significant financial commitments among China-LAC countries. In February, Argentina President Alberto Fernández announced a recent visit to China included signing over $20 billion in financing agreements. The same month, Ecuadorian President Guillermo Lasso traveled to China, after which the two countries announced they would initiate formal debt re-negotiations later that year.
Given these diplomatic efforts alongside earlier trends in commodities trade and electricity sector mergers and acquisitions, which totaled nearly ten times new investments at $5.9 billion, the researchers forecast China-LAC relations to strengthen and grow into 2022.
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