Bond Purchase By China
Full Of Controversy
The purchase by China of
us$300 million dollars
in Costa Rican bonds has
stirred controversy with
the discovery that the
bonds are being held at
the BCT bank tied to the
country's current
ambassador to China,
Antonio Burgues.
For the more than a
week, Costa Rican
president had refused to
make public details of
the bond purchase by the
Chinese, finally saying
that the reason for
tight lipped position
was to not to disclose a
rate of below 4% being
paid on the bonds.
Controversy began
brewing as questions if
there were any
intermediaries and what
and if any commissions
were paid on the
transaction.
The purchase by the
Chinese is in two parts:
us$150 million are
already purchased and a
promise to purchase
another us$150 million
in 2009.
Following several months
of silence on the
matter, the ministro de
Hacienda (Finance
Minister) Guillermo
Zuñiga told the
legislature Tuesday that
a local bank is holding
half the funds - us$150
million dollars - sent
by China. The other half
is not yet in Costa
Rican hands.
Questions were raised as
to why the bonds are
being held in a private
bank and not a state
bank, like the Banco
Nacional (BN) or the
Banco de Costa Rica (BCR).
As details of the
controversy come to
light, it was learned
that the BCT,receives
between us$6.000 dollars
and us$9.000 dollars a
month for the
safekeeping of the
bonds.
In addition, it Burgues
is listed as a high
executive and a partner
of BCT bank by the Costa
Rican trade registry,
but bank officials have
said he resigned from
the post in July 2007,
shortly before he became
ambassador to China.
The diplomat told Costa
Rican daily La Nación
that he had nothing to
do with the transaction
and only learned of the
bonds being in the BCT
bank by reading it in
the local press.
On Friday, Costa Rican
President Oscar Arias
said the loan is to be
paid off in 12 years
with an interest rate
below 4%.
Costa Rica established
ties with Beijing on
June 1, 2007, following
63 years of relations
with Taiwan, which is
recognized by only about
two dozen nations, half
of which are in Latin
America or the
Caribbean.
Following the formal
establishment of ties,
China offered to buy up
to us$300 million
dollars in Costa Rican
bonds, was preparing to
build a modern us$70
million dollar national
stadium and has offered
important lines of
cooperation with Costa
Rica.
Both countries are also
evaluating a possible
negotiation towards a
free-trade agreement.
Arias visited China in
October 2007. China's
president is due to
visit Costa Rica next
month.
Costa Rica is the only
Central American nation
with ties to Beijing,
while its neighbours
continue to favour
Taiwan, which Beijing
considers to be part of
the People's Republic of
China.
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