World Bank Money To Suspected Huawei Firms Exposes US Disconnect
© Bloomberg Huawei Technologies Co. Opening day of Mobile World Congress at Fira de Barcelona, Barcelona, Spain, Monday, February 27, 2023. The annual art and technology event runs from February 27 to March 2.(Bloomberg) -- The release of a $10 million World Bank loan to contractors linked to Huawei Technologies Co. exposed a gap between Washington's national security priorities and the policies of international development lenders, a U.S. watchdog found. The United States is a major shareholder.
The contracts were revealed in a Government Accountability Office report that Republican senators asked last week to find out how many contracts were awarded to US companies and companies on the US sanctions list.
Read More China wins most World Bank contracts, US agency says
The United States has targeted Chinese telecom leader Huawei over allegations that its devices could be used to spy on President Xi Jinping's government; But the company refused. Washington and many allies have banned Huawei's networking equipment on national security grounds, and the U.S. Commerce Department has severely restricted U.S. companies from selling the technology starting in 2019.
© Bloomberg Huawei Technologies Co. Opening day of Mobile World Congress at Fira de Barcelona, Barcelona, Spain, Monday, February 27, 2023. The annual art and technology event runs from February 27 to March 2.Meanwhile, the World Bank only prevents companies from competing for loan contracts if they are blocked by UN sanctions or anti-corruption measures.
The tension reflects "what is a stronger and more expansive sanctions regime in the United States and how it conflicts with the performance of these international institutions," said Scott Morris, a former US Treasury official who now works at the Center for International Development. .
Huawei representatives did not immediately respond to a request for comment.
The report raises questions about President Joe Biden's choice of Ajay Bang to lead the bank. He is expected to replace David Malpass, who was nominated by former President Donald Trump and is stepping down next month. The United States is the World Bank's largest source of funding, and every president since World War II has been American.
The Biden administration continues Trump's tough stance on Chinese technology and national security issues, among the many factors straining relations between the two powers.
"Why would we agree to allow US money to go to Huawei under the World Bank agreement when we and many other countries restrict trade with Huawei because of serious security concerns?" Republican Sens. Chuck Grassley of Iowa, along with Bill Hagerty of Tennessee and Tom Cotton of Arkansas, said they requested the report. "The administration must have a strategy to protect US influence in the World Bank to protect US interests."
According to the GAO report, 28 contracts worth $76 million, including 12 Chinese companies, were awarded to entities that may be on the US sanctions list.
The US Treasury Department, which represents the US in the World Bank, told the GAO that it is not responsible for overseeing the granting of contracts to individual borrowers. The department declined to comment.
To be sure, the funds allegedly transferred to Huawei entities represent a fraction of the 150,000 contracts the GAO analyzed between 2013 and 2021 worth $80 billion.
Additionally, the GAO said the analysis could not confirm whether contractors were on the US sanctions list. "Our analysis indicates that the contract was awarded to an entity on the US list, but we have not been able to confirm this."
The larger of the two contracts awarded to the Huawei Consortium at $9.9 million is a regional government project in East and Southern Africa in May 2020. Another, Huawei International Co., about $61,000 for software maintenance and support. The services in Rwanda were awarded in October, the GAO said.
In particular, since Beijing launched the Belt and Road Initiative in 2013, China and the World Bank have been fighting to build infrastructure projects in developing countries. China's two largest development banks graduated more than 1,000 earlier this year, according to Boston University's Center for International Development Policy. Foreign projects. In the year Commitments made between 2008 and 2021 amount to about $500 billion, or 83 percent of the World Bank's sovereign debt over the same period.
-- In support of Nick Wadhams.
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