Russia’s Loans as a Means of Geoeconomic Competition in Africa and Latin America

ABSTRACT

Based on the evidence of Russia’s activity in Latin America and Africa, the paper explores the country’s lending policies as part of the country’s economic statecraft. Russia joined the group of countries that provide loans to other governments only quite recently, using the flow of resources from oil sales. As a latecomer, Russia and its companies target states with markets unoccupied by Western competitors. Russia even supports regimes with low credibility and provides them with political and economic support. Because of this high-yield but also high-risk strategy, it faces problems and losses in countries such as Venezuela or Libya.

Disclosure Statement

No potential conflict of interest was reported by the author(s).

Notes

1. See Worldwide Governance Indicators: https://info.worldbank.org/governance/wgi/Home/Reports.

2. For the purposes of this paper, I make no distinction between state corporations, parts of the state machine, state-owned enterprises, relatively independent entities, and enterprises that are 100 percent owned by a state company. Therefore, Rostec as a state corporation, Sberbank as a state-owned company, and Rosneft, held by the state indirectly, are lumped together.

3. Such confusion is not surprising: Alrosa, the main diamond producer, is led by Sergei Ivanov, the son of a long-term collaborator and the head of the defense ministry, first deputy prime minister, and head of the presidential administration, Sergei Ivanov. On top of that, Rostec, Rosneft, and Gazprom are led by Putin’s close collaborators from St Petersburg, Sergei Chemezov, Igor Sechin, and Aleksei Miller. All these people, except for Miller, are regarded as members of Siloviki group within the Kremlin.

4. The resources of the National Welfare Fund could be used for export credits only in 2020. Therefore, their use is not reflected in this paper.

Additional information

Funding

The research was funded by the Czech Grant Agency (GACR) – project No. 21-23328S; Czech Science Foundation.