Kaieteur News is being taken to task for reporting critically on the China and Belt Initiative. But what Kaieteur News is doing is sounding a warning to Guyana to be careful about committing to this initiative.
Guyana has to be wary of walking blindly into an initiative which has encountered serious problems in other parts of the world. Guyana cannot ignore what is happening in other parts of the world. That would be like venturing into a dark alley.
The Minister of Foreign Affairs Carl Greenidge has tried to allay fears over Guyana’s signature of China Belt and Road Initiative. In a response which was published in the media, the Minister made a number of arguments which implicitly sought to defend Guyana’s interest in the Belt and Road Initiative.
This column has already dealt with one of those arguments: the view that a Memorandum of Understanding is not an agreement. This week, the other arguments made by the Minister of Foreign Affairs will be examined.
The first is these that we live in a world of ideological rivals. This is another way of saying that China has its political rivals and therefore much of the criticism of China’s global outreach is part of an ideological campaign to attack China.
While it cannot be denied that indeed the West is concerned about China’s global outreach, it is also a fact that much of the concerns about China and, especially about its ‘debt diplomacy’ is based on problems with projects under the initiative. Research has shown that the debt ratios of many Asia and South Asian countries is approaching dangerous levels. Tongo is reported to have made a request for debt waivers from China. The Belt and Road Initiative is not accelerating into Africa. One leader has already described it as a new form of colonialism. Myanmar is now experiencing its own debt problems because of its dealings with China.
The suspicions over China’s Belt and Road Initiative are not confined to countries in South Asia and Africa. Montenegro has been forced to raise taxes and freeze wages because it ran into problems after it took a huge Chinese loan to build a highway connecting to one of its ports.
Guyana should be forewarned also by the fact that major Asian countries such as Japan and India are keeping at arms- length from the Belt and Road Initiative. And this goes beyond the security implications of the initiative.
The problems which these countries are forewarning of which face Guyana, a minute economy compared to those countries and one which therefore cannot grow out in any future debt crisis.
Guyana has already been shafted because of its deal with ExxonMobil. Pre contract costs have to be paid and by the time that is finished Guyana will not get much from first oil because of this and the 75% cap on cost recovery.
Therefore, Guyana has to be mindful of falling into a debt trap with China. China can emerge as Guyana’s largest creditor. Already, Guyana has racked up a massive debt in respect to just two projects – the Cheddi Jagan International Airport and the Skeldon Factory. There is also a claim for sums owed for work done to the Marriot Hotel. Guyana has to be careful then down the road when it cannot service its Chinese debts. What will happen then when China comes knocking?
So therefore while it is understandable that the western countries are likely on geo-political grounds to oppose the Belt and Road Initiative, other countries in China’s backyard are equally wary. And they will become more wary because of the track record of the initiative and the fact that the benefits of the Belt and Road Initiative seem to be flowing one way.
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