Govt. doesn’t see it necessary to fully scrutinize deals with China

Jun 08, 2014 News

---

Welcomes more Chinese investments even at a threat of takeover – President  

By Abena Rockcliffe
It is becoming clearer that Guyana rarely knows fully what it is getting itself into when it comes to deals made with China. That was the sentiment expressed by several politicians yesterday after learning that there has been no proper study on the deals Guyana and China has entered into.
For the last few years China has maintained a heavy presence in Guyana and has been sealing some “attractive deals” as more of its nationals take up residence here.
Yesterday at a Presidential Press conference hosted at State House, Donald Ramotar was asked whether his Administration is even the least bit concerned about the amount of stakes China has in Guyana. This question, which was posed by Kaieteur News, was contextualized against the backdrop of a number of international reports which highlighted a trend in Chinese takeover of developing counties.
Appearing extremely anxious to respond, even before the last word of the question could have been spoken, President Ramotar stated “Absolutely not, I welcome Chinese investments in this country as I would welcome any other.”
He told the media that Guyana needs investments and if one follows the trend around the world, one would notice that the Chinese seem to have capital available to drive the world’s economy
The Head of State even made mention of the controversial railroad that China is building in Africa which would run from the coast all the way to landlocked Uganda and beyond.
The President’s contention is that these developments haven’t been done before and the Chinese are now making it possible, so why not.
He urged the media not to fall for the “populace’ view about criticizing the Chinese; their investments are important to us and we welcome it.”
Questioned as to whether there was a think-tank group to determine if the projects being funded by China were good deals and if this group saw the inclusion of financial experts, the President responded in the negative.
He told the media that he was unaware that he had to set up a think-tank group for everything the Chinese proposed. “If the Chinese want to come and build a ship that is working from Berbice to Georgetown, should I set up a think-tank to look at that?”
He added that Guyana has very clear guidelines for investments and that he is not of the opinion that the Chinese are acting outside of these.
The President was also asked if Guyana could have accessed better rates from other banks. He, however, responded that it is quite the opposite, as China offers the best deals. According to Ramotar, “they are far more favourable and the speed at which the Chinese can conclude transactions is especially favoured by the Government.”
Guyana is deeply indebted to China and the country continues to borrow more.
Many nations that fell victim are now beginning to observe China’s strategy. As recent as a few weeks ago, this newspaper published an article that reflected what is happening in other jurisdictions. That piece reflected exactly what is happening in Guyana. The article, which first appeared in the New York Times, highlighted the shady deals and contracts “greased with monetary bribes and other enticements like expense-paid shopping trips to China and scholarships for elite children.”
The article said that natives of Africa have realized the penalties of making certain deals and have begun to doubt that China has their interest in their well being.
The article noted, “The doubts aren’t coming from any soured feelings from African leaders themselves, most of whom still welcome (and profit from) China’s embrace. The new skepticism has even less to do with the hectoring of Western governments, the traditional source of Africa’s foreign aid and investment (and interference).” In a 2012 speech in Senegal, Hillary Rodham Clinton, then Secretary of State, implicitly warned Africa about China. The continent needs “a model of sustainable partnership that adds value, rather than extracts it,” she said, adding that unlike other countries, “America will stand up for democracy and universal human rights even when it might be easier to look the other way and keep the resources flowing.”
The article also reflected that independent media have played an important role in demanding more scrutiny of government deals with Beijing”…A recent op-ed article in one of Kenya’s leading newspapers, The Daily Nation, questioned whether a huge new Chinese investment in a railroad that would run from the coast all the way to landlocked Uganda and beyond was truly a good deal. The project’s first phase will increase Kenya’s external debt by a third.” That railroad is the same one that President Ramotar referred to.
The New York Times article also noted that Kenya could have sought the financing for a project like this through the World Bank, which would have cost as little as a third of the Chinese commercial loan. But that would have required time-consuming processes, from competitive bidding to rigorous environmental and feasibility studies.
The crux of the problem, according to New York Times, is (though not limited to China) the reliance on “shady arrangements made at the very top of the political system, often in the president’s office itself. Contracts are greased with monetary bribes and other enticements like expense-paid shopping trips to China and scholarships there for elite children. Adding to the opacity, China typically favors its state-owned companies for African projects and bypasses open, competitive bidding procedures.

---

---