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Guyana not worried about Chineses ‘Debt Trap’
…will continue borrowing sustainably—Dr. Singh
The President Irfaan Ali (at centre) led negotiating team in talks with China’s President, Xi Jinping4
Kaieteur News – Guyana’s Minister with responsibility for the Finance Sector Dr. Ashni Singh has dismissed concerns raised by stakeholders that the country could likely fall prey to the China Belt and Road Initiative (BRI)—now described by some western countries as debt trap diplomacy.
Dr. Singh gave his views on Monday during a live broadcast hosted by GlobeSpan24X7 and was asked specifically about the Initiative.
According to the senior Finance Minister, “Whoever we borrow from, whenever and whosever we borrow from, we are firmly committed to maintaining fiscal and debt sustainability.”
This, he said, is in order to meet obligations going forward, irrespective of “who we are borrowing from” and singled out China, the international markets or International Financial Institutions; he said this would be done in a manner that would ensure the country remains in a position to service its debts and debt payments
Defending the notion of borrowing, Dr. Singh was adamant that proceeds from any loans secured would be going towards infrastructural projects aimed at bringing about long-term benefits and reiterated government prudence in its financial obligations.
Economies, he said, are oftentimes grown on the basis of borrowing and that the prudent contracting of debt is normal.
He stated that his administration is cognizant of the difficulty of bringing a country out of bankruptcy to solvency, and juxtaposed the economic landscape prior to the People’s Progressive Party Civic taking office and said, “Going forward, we will continue to guard very carefully our debt sustainability.”
The Finance Minister’s assurances comes on the heels of a virtual meeting between Chinese and Guyanese Pres
idents, Xi Jinping and Dr. Irfaan Ali, on the promotion of a series of initiatives, including BRI—China’s controversial plan to build a trade superhighway across the globe.
The Office of the President subsequently reported that President Ali led a high-level ministerial team in the discussions, one that included Vice President, Dr. Bharrat Jagdeo, Dr. Ashni Singh, Minister of Foreign Affairs and International Cooperation, Hugh Todd, and the Minister of Public Works, Juan Edghill.
The BRI was unveiled in 2013 by President Xi. Its official outline states that the initiative is meant to “promote the connectivity of Asian, European and African continents and their adjacent seas, establish and strengthen partnerships among the countries along the Belt and Road, set up all-dimensional, multi-tiered and composite connectivity networks, and realize diversified, independent, balanced and sustainable development in these countries.”
Guyana signed on to an instrument signaling its intent to participate, in July 2018.
The then David Granger administration’s, Minister of Foreign Affairs, Carl Greenidge, who is now Government Advisor on Borders, had signed on to a Memorandum of Understanding with Chinese Ambassador to Guyana, Cui Jianchun, noting that Guyana would cooperate within the Framework of the Silk Road Economic Belt and the 21st Century Maritime Silk Road Initiative.
Under the initiative, scores of countries appear to benefit from multimillion-dollar soft loans from China for the construction of roads, bridges, airports, deepwater ports and other infrastructure. Because the project has potential to impact the global political and economic reality significantly, it has become controversial, and has been dubbed by the West as a manifestation of China’s debt-trap diplomacy.
Kaieteur News has highlighted how China has been targeting weak and/or corrupt governments to sign onto its initiative, signing away exorbitant loans for mega-infrastructural projects. In 2018 alone, China acquired over 20 deepwater harbours and airports from several countries around the world. The country was able to do so by lending those countries massive amounts of money, which they were unable to repay within the stipulated period.
The country is accused of leveraging these massive loans, which it holds over small states worldwide to snatch assets and increase its military footprint. Developing countries from Pakistan to Djibouti, the Maldives to Fiji, all owe huge amounts to China. Already there are examples of defaulters being pressured into surrendering control of assets or allowing military bases on their land.
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