President Granger’s commitment to avoid the China debt trap

Sep 02, 2018 Features / Columnists, My Column, News

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One of the most talked about issues is the move by China to take possession of the assets of poor countries. This is a common behaviour of people who have tons of money and who want even more. They eye other people’s property and scheme to get that property.
In Guyana, many people are battling in the courts to recover their property pilfered by some greedy, moneyed person. In many cases they would arrange with some corrupt officer inside the Deeds Registry to forge transports. The result is that often there are two titles to the property, each duly registered, but inspection often reveals the fraud.
There are others who lend money to a borrower who later fails to repay the loan. And this is not the fate of only poor people. I know many people who borrowed so much that when they failed to repay they watched their assets become the possession of others. I will not name any defaulting person, but I am certain that there are many, too numerous to mention.
Countries have been known to loan money to poor countries, then move in to claim their assets when these countries fail to repay. At one time the major powers that controlled some poor countries simply capitalized on the resources of the countries and in return, gave them some pittances.
When Guyana became independent it got what the then leader, Forbes Burnham, described as a wooden handshake. Suriname, on the other hand, got a golden handshake—a sum of money from its colonial masters, the Dutch.
Today, China is seeking to expand its reach by lending money to many countries. In any cases the loan is so expansive that these countries are now heavily indebted. In Sri Lanka, China took possession of the Hambantota port because Sri Lanka simply could not repay the loan.
Such loans have been made to some 80 countries. Pakistan cut back on the loan programme as did some other countries when they awoke to the reality. One such country is Malaysia. The new leader, Mahathir Mohamad, slashed some of the projects that his predecessor entered into with China loans. The contention was that the leader enjoyed kickbacks even as he signed the loan agreements.
And that has been the case with many of the other countries whose leaders are undoubtedly corrupt. They borrowed and ensured that whatever the outcome they, the leaders, would be financially stable for the rest of their lives and beyond.
China had no worry about the countries’ inability to repay. Rather it is more interested in the assets. Djibouti is one such country. Its position on the Horn of Africa is crucial for military and economic reasons. China knows that and wants that piece of land, much to the chagrin of the United States.
And as the rest of the world looked on, Guyana signed a Memorandum of Understanding with China under the same Belt and Road project that has indebted so many countries. Immediately many became afraid that the coalition government was heading in the same direction of those other poor countries.
“Not so,” says President David Granger. He was hosting a rare press conference on Friday at State House. He was clear that he was going into any arrangement with China with his eyes wide open. What was most pleasing was his conviction that what happened to the other countries would not befall Guyana.
He could not speak for the other countries, but he knew that any arrangement that Guyana enters into would not indebt Guyana. He said that Guyana needs infrastructure and that it matters not who provides the funding. Suffice it to say that there would be no graft and any loan would not end up in the pockets of corrupt leaders.
That was so clear that one must ask about the initial fears. Indeed, Guyana borrowed money for two major projects, the Skeldon Modernisation Project and the expansion of the Cheddi Jagan International Airport. The money came from China and the loan was humongous.
Guyana borrowed US$200 million to improve its sugar production. That project is a white elephant like Sri Lanka’s Hambantota port. China took possession of the port in Sri Lanka that like the Skeldon project, is a white elephant.
The airport project was another questionable loan. At US$138 million the project sounded alright until other details emerged. There have been allegations of people getting kickbacks from the Chinese. To compound the situation, Guyana could not walk away from that project simply because the previous government had actually paid money for work not yet completed.
The new government had no choice but to continue with this project that is touted to be the hub for flights from Africa. Djibouti’s China-financed project is also touted as a hub.
I had cause to examine the way China is moving to expand its global image. I see the groundswell of Chinese businesses in my corner of the world. I am aware of cheap Chinese products that attract my people and I am also aware of the preponderance of counterfeit goods.
That apart, China has long been an ally of Guyana which in fact, was the first English-speaking country in the Caribbean region to establish diplomatic relationship with China. That being the case, one would expect a more than friendly relationship. That is why the plight of other countries should escape Guyana, provided the leadership has the interest of the country at heart.
And President Granger has given that assurance.

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