Editorial

Grenada-Taiwan debt saga: Let's 'tek sleep mark death'

Friday, October 28, 2011

IT pains us to watch the loutish strategy being utilised by Taiwan to collect a US$28-million judgement against Grenada for non-payment of loans received from Taiwan's Export-Import Bank in the 1990s.

We are told by an Associated Press report that lawyers representing Taiwan have filed papers compelling cruise lines and airlines to hand over any money they owe Grenada in fees or other payments.

Taiwan, the report tells us, resorted to this action after Grenada said it could no longer pay the loans as the country was having difficulty recovering from the economic shocks of Hurricane Ivan in 2004 and a drop in tourism after the September 11, 2001 terrorist attacks in the United States.

Apparently, the Grenadian Government had approached the Taiwanese to renegotiate the loans, but that effort was flatly refused because Grenada had severed diplomatic relations with Taiwan in favour of China.

And therein lies the rub, because Grenada now finds itself in the midst of a decades-old maelstrom of hostility between Taiwan and China.

Essentially, after losing the 1949 civil war, the Kuomintang leaders who fled to Taiwan branded the communist Government in China as illegitimate, and successive administrations on the island since then have sought independence from the mainland.

But Beijing has always insisted that Taiwan belongs to China, and has included the island, as well as Hong Kong and Macau, in its "One China" principle.

Taiwan, in order to win support for its push to be recognised as an independent state, has been doling out foreign aid, particularly to developing countries, among them some Caricom states.

China, for its part, has been very active in spreading its influence in this and other regions across the world. Earlier this year a white paper on foreign aid issued by China's State Council by the end of 2009 showed that 161 countries and more than 30 international and regional organisations had benefited.

Of the total, 30 are in Asia, 51 in Africa, 18 in Latin America and the Caribbean, 12 in Oceania and 12 are in Eastern Europe.

The white paper also informed us that 80 per cent of China's foreign aid went to Asia and Africa, areas with the world's poorest people.

We remember well that in 2004, Dominica broke long-held diplomatic ties with Taiwan in favour of China, no doubt influenced by China's promise of four infrastructural development projects valuing more than US$100 million, all of which was in grants. The Chinese have so far delivered on three of those four projects, we are told.

We don't expect that anyone in this region, or elsewhere for that matter, believes that these offers of assistance are made without conditions. That is the nature of relations between states, and they gather more strength when funds, especially in the form of grants, are involved.

When it comes to loans, we hold firmly that repayment is obligatory, and we have no doubt that the Grenadians share that view. We can, however, empathise with their position, given the shocks to their economy.

And while we can understand Taiwan's anger at Grenada's decision to cut ties in favour of China, we believe that this effort to seize port fees is, at best, iniquitous, especially because of the fact that Grenada has tried to renegotiate the loan.

There is, of course, a very poignant lesson in this issue for the Caribbean. It is simply that we need to get our economies in order to avoid borrowing.

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COMMENTS (10)

Norman Lee
11/11/2011

Grenada prostituted itself with China, knowing well the likely consequences of a breakup of the romantic relations with Taiwain. So, a lover's quarrel develops and Taiwan, like shylock, is demanding it's pound of flesh. In a man-woman world, the moral thing to expect is for the new lover, China, to provide funds to allow a clean break with the ex-lover. But China is bent on rubbing salt into the wounds and will not bailout its new lover. So, like a Judge Judy episode we see Taiwan's response!

james allen
11/6/2011

shame on taiwan,for trying to blackball a little island in the carribean,who are simply trying to feed its people...

ghost rider
10/30/2011

@Dyl Brown, this will happen much sooner than 10 years. In fact the Chinese will insist on it.

thor bergers
10/29/2011

avoidance of borrowing may arrive sooner than desired. the fifty percent haircut on greek debt may be a flashing sign to the bondholders to stay away from coubtries at an elevated risk. greece, just like jamaica, is a tourist destination, with an otherwise uncompetitive economy and endemic corruption. the relationship with the IMF was even iniatated cause normal banks didn t trust jamaicans any more. And be honest would you trust your money with the JLP or PNP.

Halvard Howe
10/28/2011

Grenada had severed diplomatic relations with Taiwan in favour of China. Really? A dem owe di people dem millions? LoL. I know it's not funny but as the article says, "There is a very poignant lesson in this issue for the Caribbean". It is simply what to expect if we continue to "bad mouth" Hugo Chavez and Venezuela. JLP, be warned . . .

Mark Forbes
10/28/2011

If there was any donmanship, not to mention war, famine and disease in that alternate reality that Clovis is living in, it is his own fault. Doesn't he know that imagination doesn't have to bound by reality? Come on man, you can imagine anything you want!

PL BOGLE
10/28/2011

Apart from essential imports, Jamaica must take strong measures to cut its huge import bill. The island must also focus on alternative sources of energy, including solar and wind energy. Jamaica is an oil-dependent nation which uses approximately 27.4 million barrels per year, has to take on a huge annual oil-import bill that exceeded US$2 billion, and equates to a huge chunk of the island's approximate GDP of J$700 billion. Jamaican consumers need to decrease their dependence on food imports. Approximately 61 per cent of the country's basic food items are imported, data from the Statistical Institute of Jamaica showed that the nation's food import bill had increased from US$479 million to over US$662 million. Jamaicans must eat what we grow and grow what we eat. The general deterioration of the Jamaican economy is burdened by international debt and a huge import bill.

Dyl Brown
10/28/2011

the next 10 years we will be teaching the Chinese language in prep schools instead of Spanish.

Ras Benji
10/28/2011

Very true Mr. Editor. Do you think Costa Rica would ever be in that situation?I think not.
One Love!

0o k
10/28/2011

Last year I was listening to an interview with the Jamaica Observer Business Editor and Cliff Hughes on the occasion of the Jamaica Observer Business Leaders Awards.
When asked about the outlook for Jamaica's Economy, I was shocked when he says he does not see the end borrowings to fund our budget. He basically said we will be borrowing forever. Get that tape and analyze it for yourself. It is only a year old.

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