Stop the fearmongering over Chinese investment in Jamaica

Tuesday, November 06, 2018

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Dear Editor,

I was listening to a discussion on radio in which some people were raising the alarm over Jamaica's reliance on Chinese loans to finance many of the country's development initiatives. The main concern seems to be that if Jamaica defaults on any of its loans to the Chinese we will have to give up our assets.

A couple of things to note:

1. Jamaica has never defaulted on its debts and never will. Why? The first charge on the nation's constitution is the repaying of debt, as far as I know. I think it's a dumb thing as the first charge on the Constitution should have been making sure the country can function. But, nonetheless, it's there. That means before one teacher gets paid, the debt has to be repaid somehow.

2. Jamaica has a grip on its debt, though it is steadily declining. For the first time in a very long time our debt is less than all the goods and services the country produces. And it is set to fall even further over the coming years. What that means is that Jamaica will be well able to continue servicing existing debts over the coming years.

3. Jamaica does not have any asset that is strategic to the Chinese Government to project power overseas or to defend itself. What many of these analysts and economists seem to not understand is that countries in which China has taken over assets are countries which conserve China's strategic interest. Take Sri Lanka, for instance, where they have just taken over a port. It is in China's strategic military interest to own a port on its Belt and Road Initiative. What that will enable China to do in the future is to have a port where they can send supplies to keep their army well equipped if they needs do so overseas. It's about projecting power overseas.

Remember now, they have a new military base in Africa. In the tiny nation of Djibouti. America also has one there. It's all about military power. The Belt and Road Initiative, if you look at it, is a real nice route to ferret the Chinese military from the East to the West if needs be. There is no militarily significant asset in Jamaica to the Chinese. That's all China is interested in right now. Projecting power overseas militarily to counter the US. Venezuela is a much better country militarily to the Chinese, and much lower risk of antagonising the USA than if they should set up in Jamaica, which have friendly relations with the USA. Remember the Chinese doctrine of biding their time.

4. If locals won't invest the Government has no choice but to take the loans offered by the Chinese in order to develop this country. The Government has been begging for the private sector to invest in infrastructural projects. We can't continue to wish for development. We have to find people or countries who are willing to invest in this nation. When last have we heard of a Jamaican consortium of businesses that has come up with a proposal?

5. Jamaica is growing. Let's not forget that. The economy is humming along, albeit not at a vast speed. However, any amount of economic expansion helps to enrich a country and must not be underestimated. With economic growth, debt to GDP coming down, Jamaica is well placed to service its Chinese loans.

This fearmongering about Chinese investment is just that. Many local contractors who were used to living like leeches off the Jamaican Government, doing shoddy work, and living high off cost overruns are now finding it hard to survive now that they have to compete with the Chinese. The Chinese have no such belief. They are about doing real work, under budget and on time. When last has anybody heard of cost overruns on a Chinese work? Actually, it's a blessing. The Jamaican taxpayers are benefiting because we don't have to be paying for the corrupt overruns.

Fabian Lewis

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