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The absence of fear

Sep 06, 2018 Features / Columnists, Peeping Tom

Guyanese should be worried. Their government is doing a poor job at defending its interest in the Belt and Road Initiative.
The most compelling reason why Guyana is looking to China for assistance in developing its infrastructure is because of the availability of funds from that source. This is the most disingenuous argument which is being proffered as a justification for Guyana’s interest in the Belt and Road Initiative (BRI).
Other related propositions made by government in relation to China’s willingness to finance infrastructural projects, include the fact that infrastructure is both costly and visible, so it has certain attractions for developing countries. As such, developing countries approach China to assist in the funding of infrastructure because of, among other things, frustration experienced in trying to secure finance from the Inter-American Development Bank, the Caribbean Development Bank and the World Bank.
China is not the only country or institution which is willing to finance large-scale infrastructural projects. China is an easy source. It is the ease with which China is willing to lend that makes it such an attraction, and not necessarily the absence of alternative sources of financing.
The attraction of Chinese lending is that it can be quicker and easier for developing countries. But as mentioned before, there are dangers to China’s quick approvals and its willingness to finance major infrastructural projects. There is the danger of overpricing, lack of transparency, and there is the danger of the borrowing state being unable to repay what it has borrowed and therefore becomes indebted to China.
This newspaper has outlined clearly what it sees as the modus operandi as to how China operates. In one of its articles outlining how China operates, this newspaper explained how Sri Lanka found itself in a debt trap because of this easy borrowing from China.
China built, among other things, a city and an airport in Sri Lanka, both of which turned out to be white elephants, and because the Sri Lankan government could not repay its loans to China, it was forced to lease one of these facilities to China, meaning that China exercises de facto control over a major port in Sri Lanka.
Three days ago, the BBC reported that Uganda has borrowed more than US$3 billion dollars from China. One of the projects for which the money was used is the Entebbe-Kampala Expressway which costs US$476M, and which now has been reduced to a tourist attraction.
China has been on a propaganda counter-offensive. It has pointed to what it says are increases in exports to China by those countries which are part of the Belt and Road Initiative in Africa. China is a making the point that the benefits of the BRI are not one-way.
It is surprising, therefore, that the government of Guyana has not used similar arguments. It has not sought to show how Guyana will benefit from increased trade as a result of the Belt and Road Initiative. It is, therefore, one thing to state that Guyana is going into the BRI with its eyes wide open. But if Guyana cannot, as yet, determine the benefits in trade and revenues, of the projects it wishes China to finance, how can it be entering into any negotiations with eyes wide open.
The Chinese leader has said that the BRI comes with no political strings attached. Well, that is far from the truth, because a key objective of China’s foreign policy has always been de-recognition of Taiwan. So there have always been political strings attached.
The Guyana government is not addressing why China would have such a great interest in extending the BRI to Guyana, other than to expand its own markets. There is very little manufacturing taking place in Guyana and therefore apart from raw materials, there is not much for Guyana to competitively export to China.
The government has been far from convincing in trying to assure Guyanese that there is nothing to fear from the BRI. The greatest fear should be that very absence of fear.

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