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US will grant loans to developing countries to reduce reliance on Chinese telecom tech: Report

The United States will offer loans to developing countries as an incentive to get them to steer clear of telecom hardware made by Chinese companies such as Huawei and ZTE, the Wall Street Journal reported. Bonnie Glick, deputy administrator of the United States Agency for International Aid (USAID), told the Journal that the agency will try to convince countries it is working in to “buy hardware from suppliers in democratic countries rather than from China”. We have reached out to a USAID spokesperson to find out if the agency will also be offering this aid to India.

US Federal Communications Commission chair Ajit Pai had recently hinted at assistance for countries to rid themselves of Chinese telecom operators at CyFy 2020, an online event held by the Observer Research Foundation. The US has been pushing countries around the world to stop using Chinese telecom equipment, and switch to “trusted” vendors instead. At CyFy, Tobias Feakin, Australia’s Ambassador for Cyber Affairs and Critical Technology, said that for 5G networks, “high risk” vendors like Huawei need to be blocked.

Financial incentives may provide developing economies a good reason to consider vendors like Nokia and Ericsson instead of Chinese ones like Huawei, which tend to be less expensive. The UN Secretary General noted in a report last month that the initial build-out of telecom equipment is an extremely costly prospect, due to which access fees remain high. The cost of Chinese equipment has long been one of the more inconvenient challenges of the US’s efforts to persuade countries to disallow telecom vendors from that country. Throwing the financial might of the US behind the issue — at least for countries that aren’t in a position to shun Chinese hardware — seems to be the next chapter as demand for 5G networks starts cropping up around the world.

Deputy Administrator Glick of USAID is in Finland for talks where this initiative will be pushed. “[Glick and officials] will discuss cooperation on fifth-generation (5G) broadband Internet technology in emerging markets and support for the adoption in emerging economies of open, interoperable, reliable, inclusive, and secure digital ecosystems,” USAID said in a press release. Loans would be provided through agencies like the US International Development Finance Corporation, Glick told the Journal.

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