The diplomatic debt-trap

Dec 25, 2017 Features / Columnists, Peeping Tom

Today, Christmas Day, will find Guyanese homes soaked with various aromas – black cake, sponge cake, ginger beer, pepperpot, picnic hams, baked chicken and turkeys, you name it – and the smell of food is all around.
The aromas of Christmas should drown out the nasty smell of betrayal which has become a feature of Guyanese politics. They will not, because of one singular act of rankness whose stench is so strong that it is likely to stay around way into 2020.
The deal which the government signed with Exxon Mobil is stinking up the whole country. It is a rotten deal, made more foul by non-disclosure, at least to Guyanese – who were in the dark until they were forced to do so or face embarrassment.
Instead of firing those involved in deceiving the Guyanese people, the President took responsibility for the signing bonus being deposited in what he believed to be an escrow account, but which has turned out to be a foreign exchange account.
The mouthpieces of the government, masquerading on social media, were daring enough to suggest that because government officials were signatories to the account, monies could not be illegal withdrawn. It is precisely because the signatories of the foreign currency account are government officials that the nation should be worried, because that means that they can be instructed at any time by political officials, as to how the funds should be deployed.
If the contract with Exxon had been made public, there would have been no need for any account. The placement of the monies is illegal, since the monies are supposed to be placed into the Consolidated Fund, an extra-budgetary fund or a deposit fund.
We have not heard of any objections, from the signatories, insisting that the monies pass through the Consolidated Fund. What comfort? The fact that there are signatories to the account is of comfort only to the foolish.
If the contract had been made public, all this controversy would have been avoided.
It is now being made public that the International Monetary Fund was given access to the contract and has made some comments on its contents. The IMF is often viewed as an extension of the American government, and therefore would most likely be predisposed towards supporting an American viewpoint. Yet the IMF is reported to have found loopholes in the agreement, which can reduce the benefits which are to be paid.
This past week, the government went with its begging bowl to Brazil. Two major agreements were signed. The first had to do with water control in the south of Guyana and the second, which is the more substantive agreement, was concerned with the road from Linden to Lethem.
The Brazilians are not providing the financing for the actual construction of the road. They along with the Guyana Government are hoping that China will foot the US$500M plus to build the road which will link Georgetown to Lethem.
Guyana will no doubt have to borrow that money from China. That borrowing will come with interest which has to be repaid. This loan will be the biggest investment made by Guyana ever. It will be bigger than the Skeldon Sugar Factory. China is a smart nation. They will insist that the road be linked to a port, as they have done controversially in Sri Lanka.
China will offer to build the road and to build a sea port linked to the road. And like in Sri Lanka, the road and the port will run into repayment problems, and then China will come and seize the road and the port, thereby controlling more than one-third of Guyana. Sri Lanka recently handed over a port which was constructed with Chinese loans to China, and for which it could not repay. China has gobbled up the port. It is all part of what is being described as the debt-trap diplomacy pursued by China.
The leaked comments of the IMF, concerning the Exxon deal, suggest that Guyana may have some problems with interest, with Exxon. Guyana may end up in a situation where it finds itself over-indebted to both China and to Exxon. Guyana could end up becoming colonised by the Americans and the Chinese.
So as to enjoy the aromas of Christmas today, consider the possibility that this could be the last time Guyana can have a Guyanese Christmas. If Guyana falls into the debt-trap, it could end up being taken over by the Chinese and Americans.

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The diplomatic debt-trap

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