China lends and then owns

Aug 06, 2018 Features / Columnists, Peeping Tom

China’s Road and Bridge Initiative (BRI) can present serious problems for Guyana. It can bury Guyana in debt and lead to the eventual ownership of Guyana by China.
Under the BRI, China is building highways, railways, ports, and establishing maritime links with more than 76 countries. The attraction of the BRI is that it funds projects which otherwise the governments could not have been financed.
This is one of the reasons why Guyana is jumping about excitedly about the BRI. It sees China as the only source of financing for the Linden to Lethem Road and for other infrastructure projects for which the government does not have a clue how to finance. China is seen as a savior, coming to the rescue of the government, by financing these projects.
But at what price? Most of the money to finance the projects will have to be repaid. They are not grants. They are loans. China is not waving a wad of gifts in front of governments. It is burying them in debt because the massive investment which will be required to finance the infrastructure projects will have to be repaid.
Guyana has already had a bad experience with one major Chinese investment. The failure of the Skeldon Sugar Factor has sounded the death knell for the sugar industry. Therefore, Guyana has to be cautious in committing to major Chinese investments because of the impact on debt.
This newspaper has pointed to what has happened in Sri Lanka which now finds itself holding a massive debt because of the white elephant projects built by China. The country was forced to hand over a seaport project to China because it cannot service the debt on its borrowing from China.
In other words, one of the dangers of the BRI is that China is quite willing to commit funds even for projects which are suspect because the monies for these projects have to be repaid and if they cannot be repaid China will gain possession of the assets. China’s BRI is therefore a form of financial imperialism which leaves beneficiary countries highly indebted.
The Times of Indian reported this past week that the same failed strategy in Sri Lanka is being reproduced in Pakistan.
According to the Times of India, China is pouring money into Pakistan. Beijing is building highways, roads, a railway, an energy generation plant, an airport, a special economic zone and a deep water harbour.
This is the strategy which China is using around the world. It is financing infrastructural development and in the process is indebting the beneficiary countries. This then allows China to take control of the assets which its money has built and which cannot be repaid.
The BRI is part of China’s imperialist plan. China is not using its military might to invade countries. It is using its financial muscle to wrest control of markets around the world. China is strategically positioning itself to penetrate into these markets by burying the BRI countries in debt and then forcing the governments to hand over control of the infrastructure projects to China.
Guyana must not delude itself into thinking that when the road to Lethem is completed that Guyanese will benefit from the trade with Brazil.
Guyana will end up being so indebted to China that it will have to give up control of that road to China who will also ask for the land alongside the road as collateral for the lending. China will therefore end up with the land. China will end up with the road and with the ports.
The BRI is part of a global plan by China to increase its reach into the economies. China through the BRI can end up owning much of the developed world. Guyana, if it is not careful, can become a victim.

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