China Gov’t to Provide $50 Million for Projects

August 17, 2007

President Oscar Arias announced this week that the Chinese government is offering the equivalent of $50 million to Costa Rica for municipal improvement projects such as road repairs, schools and other public works.

The announcement comes just months after Costa Rica shifted diplomatic recognition to China from Taiwan (TT, June 8), whose 63-year relationship with Costa Rica had yielded hundreds of millions of dollars in loans and donations similar to the assistance just offered by China.

“These funds should be used to support, first of all, the efforts of local governments to improve their ability to collect taxes and invest in school infrastructure, improve the roadways, improve security and (increase) attention to socially vulnerable groups,” Arias said at a meeting of the country’s mayors Tuesday.

The money will go toward supporting programs of the Institute for Municipal Development (IFAM), a public entity funded by the central government to give support to the country’s 81 municipalities.

Some uncertainty exists over whether the $50 million from China will be in the form of a donation or a loan.

Statements from the Casa Presidencial have assured reporters that the amount will be donated.

But Finance Minister Guillermo Zúñiga told The Tico Times Tuesday night that “I still can’t confirm even the amount” of the assistance, which will go directly into the central government’s 2008 budget.

Zúñiga said the form of the assistance has not been decided upon either, and that the head of China’s Central Bank will be visiting Costa Rica next month to discuss what form any potential financial aid would take.

Lang Hu, a spokesman with the Chinese Embassy in Costa Rica, said the embassy had no comment on the matter at the moment, although he confirmed that China is in talks with the Costa Rican government over possible financial aid.

The shifting of diplomatic recognition from Taiwan to China, announced in June, was controversial in part because of the generous financial assistance Taiwan had offered to Costa Rica over the years.

The most visible of those financial aid gestures has been the Costa Rica-Taiwan Friendship Bridge over the TempisqueRiver. The bridge makes it easier to get from the Central Valley to certain parts of the northwestern province of Guanacaste.

It was constructed for Costa Rica by Taiwan at a cost of more than $26 million.

The announcement of financial aid from China comes just one week before the arrival of China’s first-ever diplomatic delegation to Costa Rica, to include China’s Assistant Foreign Minister He Yafei, Vice-Minister of Commerce Ma Xiuhong, CCPIT Vice-President Wang Jinzhen, Zhigong Party president Wu Mingxi and Zeng Gang, Latin America Director for the Chinese Foreign Ministry. They’ll be joined by Chinese Ambassador to Costa Rica Wang Xiaoyuan.

The delegation will be visiting the country Tuesday though Sunday, coinciding with  the first China Trade Expo in Costa Rica (seeseparate story).

Next Thursday, the delegation will officially inaugurate the new Chinese Embassy headquarters, located one block south and one block west of President Arias’ house in the western San José neighborhood of Rohrmoser.

 

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