Golding sees possibility of new cold war
G7's move to counter China's influence could land poor countries in midst of Washington-Beijing tussleWednesday, June 16, 2021
Former Jamaica Prime Minister Bruce Golding is arguing that a vow among G7 countries to work together to counter China's increasing presence in developing countries could see the emergence of a new cold war similar to that waged between the United States and the Soviet Union between the 1960s and 70s.
“We may well be looking at a replay of the hemispheric scenario of the 1960s and 1970s except that this time it is a Washington-Beijing rather than a Washington-Moscow combat,” Golding said in a column examining one of the outcomes of the just-concluded G7 summit held in England.
The leaders of the US, Britain, Canada, France, Germany, Italy, and Japan met last week at their first physical summit in nearly two years.
In a direct bid to counter China's 'Belt and Road' infrastructure initiative launched in 2013, the grouping of the world's wealthiest nations announced its own 'Build Back Better World' drive to invest in poorer countries.
Golding, in his examination of the move, noted that concern over China's activities in developing countries was more that of the US, rather than the G7 as a group.
Here is the full text of Golding's article:
The just-concluded G7 summit announced a plan by the powerful club of western countries to counter China's increasing presence in the developing world by mounting an alternative to its Belt and Road initiative. I use the term “alternative” advisedly.
The concern about China's activities in countries like Jamaica is more that of the United States than the G7 as a group. It was clearly displayed during the Trump Administration which saw Secretary of State Mike Pompeo and others like Ambassador Donald Tapia lecturing us on the dangers of doing business with China.
There is an irony here which Mr Pompeo was forced to concede in answer to a question from Allison Peart when he visited Jamaica in January of last year. China currently has investments in the US of around US$60 billion. In addition, its holdings of US securities exceed US$1.5 trillion. It doesn't seem to have had any corrosive effect on America's politics or economy.
For the US, China's engagement in Latin America and the Caribbean is a national security issue. It is not just the friendliness that China is establishing with these countries that causes discomfort. China has invested in and effectively secured control of several ports, particularly in Latin America, and the US is concerned that in a conflict with China these could be weaponised to disrupt America's trade routes and its economy. They could also serve as military assets.
In addition, through major investment projects and long-term supply arrangements, China is gaining increased access to the mineral resources needed to feed its massive industrial capacity which the US argues enables it to compete unfairly in the global market, utilising unfair labour practices, state subsidies, disregard for intellectual property rights and weak environmental standards.
The G7 initiative was spearheaded by the US. Other G7 countries embraced it but wanted it to be focussed on projects related to climate change. President Joe Biden insists on including infrastructure, recognising that climate change projects will not effectively compete with China's Belt and Road programme that is heavily skewed toward infrastructure development.
The extent of that inclusion is not yet clear. How these funds will be disbursed — whether by loans, grants, OPIC-type private investments or a combination of all three — is yet to be determined. Nor is there as yet any indication as to the amount of funds that G7 countries, preoccupied as they are with the post-pandemic recovery of their economies, are prepared to commit and deliver. Added to the uncertainty is the fact that the G7 countries do not have an unblemished record in delivering on their commitments.
As the designated target of this “offensive”, cash-rich China is well positioned to up the ante which could result in two huge baskets of development funds being available to countries like Jamaica. This is where the politics is likely to intervene. The US is almost certain to insist on loan, grant and investment conditions designed to discourage recipient countries from engagement with China's Belt and Road. That is the stated objective of the programme.
The US is unabashed in its foreign policy strategies. According to the Congressional Research Service's review of the 2021 appropriations for foreign assistance to Latin America and the Caribbean, “US policymakers have emphasised different strategic interests in the region at different times, from combating Soviet influence during the Cold War to promoting democracy and open markets as well as countering illicit narcotics since the 1990s”. We may well be looking at a replay of the hemispheric scenario of the 1960s and 1970s except that, this time, it is a Washington-Beijing rather than a Washington-Moscow combat.
The Caribbean community has had a disjointed approach in its attitude toward China. Some countries in their diplomatic relations have danced between China and Taiwan to the rhythm of dollar diplomacy. The bargaining strength of a unified approach has not had much appeal to regional leaders.
The US has far more leverage in the region than China. Negative drug trafficking certification or travel advisories and reduced visa quotas hurt us badly. Negotiations with multilaterals like the World Bank and the Inter-American Development Bank are never allowed to be oblivious of the fact that the US is their major contributor.
Determining the best approach countries like Jamaica should take has no easy answer. Proud as we are, we are a small creature on the ground where elephants are about to go at each other. But we need to start thinking about how we will respond to this new struggle between two economic superpowers with both of which we have comfortably enjoyed such good relations.
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