Embrace or Bear Hug?- TT Turns To China

STATE OF THE NATION

TT Turns To China

Embrace or Bear Hug?

Trinidad and Tobago Prime Minister Dr Keith Rowley meets Chinese President 
     Xi Jinping at the Great Hall of the People on Rowley’s visit to China in May, 2018
                               Photo: Office of the Prime Minister, Trinidad and Tobago

Trinidad and Tobago Prime Minister Dr Keith Rowley meets Chinese President Xi Jinping at the Great Hall of the People on Rowley’s visit to China in May, 2018 (Photo: Office of the Prime Minister, Trinidad and Tobago)

By Rudolph Williams

Can huge China’s (Population:1.38 billion approximately) present warm embrace of the tiny Caribbean twin-island state of Trinidad and Tobago (Population 1.39 million approximately) turn into a future bear hug?

The question arises in light of scepticism expressed by a United States expert on China in the Caribbean - even as TT Prime Minister Dr Keith Rowley confidently moves forward to make use of opportunities for project financing and aid available under China’s US$4 trillion Belt and Road Initiative.

According to China’s BG Times, about 68 countries across the world have benefitted from the Belt and Road Initiative started through which Chi­na seeks to boost trade and stim­u­late eco­nom­ic growth across Asia and be­yond.

The Initiative involves China’s provision of loans, aid, donations and investments for infrastructure works and other support for these countries across the globe.

Debt Trap Diplomacy

Critics say Chi­na’s plan is to gain geopo­lit­i­cal in­flu­ence, by en­gag­ing in “debt-trap diplo­ma­cy”; en­cour­ag­ing in­debt­ed­ness in cash-strapped coun­tries and then to take over strate­gic na­tion­al as­sets when debtors de­fault on re­pay­ments.

Prime Minister Dr Keith Rowley and National Security Minister Stuart Young at a                      ceremony to hand over motorcycles given to the Trinidad and Tobago Police Service by the     People's Republic of China, at the Police Academy in St James, Port of Spain on Wednesday August 21, 2019. Photo courtesy the Office of the Prime Minister.

Prime Minister Dr Keith Rowley and National Security Minister Stuart Young at a ceremony to hand over motorcycles given to the Trinidad and Tobago Police Service by the People's Republic of China, at the Police Academy in St James, Port of Spain on Wednesday August 21, 2019. (Photo courtesy the Office of the Prime Minister)

Before Rowley, whose People’s National Movement (PNM) party came to power four years ago, two successive regimes of the Trinidad and Tobago government have  engaged Chinese contractors in a significant number of large construction contracts here since the turn of the century.

The first big move was by previous PNM leader and Prime Minister Patrick Manning (deceased)  who embarked on a massive construction drive involving projects such as  the National Academy for Performing Arts in north and south Trinidad, a number of government buildings and the Brian Lara  Cricket Academy.

Several of Manning’s projects were left hanging when the PNM lost the  general elections in 2010 but the then newly installed Prime Minister Kamla Persad-Bissessar of the United National Congress (UNC) continued the relationship with the Chinese and embarked on a number of significant projects including a velodrome and aquatic centre and a children’s hospital in central Trinidad.

The UNC lost political power to the PNM in 2015.

Projects

In September 2018 – three years into the Rowley-led PNM regime – TT Finance Minister Colom Imbert announced that TT’s debt to China for current and old projects was TT$2.2 billion.

Today, rough estimates based on new projects committed to by the Rowley regime  before and since his government’s signing up with the Belt and Road Initiative , suggest that TT’s debt to China has at least  tripled from TT$2.2 to more than TT$6 billion in 2019.

Perspective of the apartment complexes to be constructed at South Quay, Port of Spain

Such projects include the construction of a new general hospital in capital city Port of Spain, construction of 5,000 apartments at specified sites across Trinidad, the Curepe Highway Inter-change, the La Brea dry dock facility on Trinidad's south western peninsula,  and an industrial park  at Phoenix Park on Trinidad’s  central coast.

The China Harbour Engineering Company Limited has 30 percent equity in the La Brea dry dock facility in a cooperation agreement with Trinidad and Tobago's National Infrastructure Development Company Limited (NIDCO) for development at a cost of US$500 million over three years.

Last January, TT's Energy Minister Franklin Khan was reported as saying this project would create 3,500 direct jobs and 5,700 indirect jobs.

Dr R. Evans Ellis, Latin American Research Professor with the US Army War College Strategic Studies Institute has expressed concern about TT rushing into China’s arms.

Writing in the publication “Global Americans” dated March 26, 2019 after a five-day visit to TT, Ellis stated:

“While the nation is still a functioning democracy, the Rowley regime’s embrace of easy Chinese money, as well as the increasingly dangerous and unpredictable regime in neighbouring Venezuela, raises concerns about oil-rich Trinidad and Tobago, strategically located at the entrance of the lesser Antilles.

Dr R. Evans Ellis
Dr R. Evans Ellis

White Elephants

He added: “If unchecked, China’s expanding engagement in the country risks leaving a series of economic white elephants and leaving the country under a heavy debt burden.”

In an interview with the “Trinidad Guardian” on March 24, 2019, Ellis pointed to Sri Lanka, Djibouti and Zambia as three countries which had got into problems to pay debts to China for projects entered into.

Former TT Prime Minister Kamla Persad-Bissessar and former TT Ambassador to China, Chandradath Singh at the Opening of the TT Embassy in China in February 2014. 
 (Photo Courtesy: www.facebook.com/KamlaPersad-Bissessar)

Former TT Prime Minister Kamla Persad-Bissessar and former TT Ambassador to China, Chandradath Singh at the Opening of the TT Embassy in China in February 2014. (Photo Courtesy: www.facebook.com/KamlaPersad-Bissessar)

Ellis’ argument centred around the possibility of the Chinese not being able to deliver on some of its promises that accompany their contracts. One of these the promise to attract 60 Chinese companies to establish themselves at the proposed industrial estate to be constructed at Phoenix Park on Trinidad’s south east coast, and the creation of thousands of new jobs.

According to the “Trinidad Guardian”, El­lis said that af­ter fol­low­ing Chi­nese ac­tiv­i­ties for 16 years, there are ques­tions to be raised.

Presumption

“I un­der­stand that there is a de­sire for the gen­er­a­tion rapid­ly of jobs, the prob­lem though is on the one hand the Gov­ern­ment is talk­ing about spend­ing the peo­ple’s mon­ey which would go up­front to the Chi­nese firm, Bei­jing Con­struc­tion and En­gi­neer­ing Group (BCEG),” he said.

El­lis said that there was a pre­sump­tion of con­fi­dence on the promis­es made in the agree­ment,  that BCEG will bring in 60 oth­er com­pa­nies and pro­duce thou­sands of jobs. El­lis said he worked with com­pa­nies in El Sal­vador and Pana­ma where the con­tracts and agree­ments were not scru­ti­nised enough and it left those two na­tions fi­nan­cial­ly ex­posed.

National Academy for the Performing Arts, Port of Spain                                                        (Photo from UDeCOTT’s Website)
National Academy for the Performing Arts, Port of Spain (Photo from UDeCOTT’s Website)

“The Gov­ern­ment needs to make sure those promised jobs come,” he said.

As regards the docking facility under construction in La Brea on the south western coast of Trinidad, he draws reference to the Sri Lanka experience:

Dry Dock

“As has occurred with other governments which have hastily agreed to incur debt in contracting Chinese firms to build public works projects—most famously the Sri Lankan Port of Hambantota—it is not clear whether the location and other characteristics of the dry-dock will be sufficiently attractive for shipping companies to do major repairs at the new facility.”, he stated.

Ellis noted that af­ter lend­ing bil­lions of dol­lars to heav­i­ly in­debt­ed Dji­bouti, Chi­na now has its first over­seas mil­i­tary base in that strate­gic coun­try and var­i­ous na­tions through­out the world who have bartered their coun­tries’ min­er­als, oil, and land for Chi­nese loans.

The Chinese Built Hospital at Couva, Central Trinidad
The Chinese Built Hospital at Couva, Central Trinidad

It has been reported that Chi­na is now propos­ing to take over the Ken­neth Kaun­da In­ter­na­tion­al Air­port should the Zam­bia Gov­ern­ment fail to pay back its huge for­eign debt on time.

Optimism

Yet even as the sceptics bleat about possible negatives, Rowley’s swagger suggests that he’s on to something good with the Chinese for two reasons, namely:

  • The Chinese intervention has facilitated his government’s embarking on several game-changing projects resulting in the stepping up of employment and general industrial activity, generating signs of goodwill and  optimism among the people in the run-up to general elections due around September 2020.
  • Observers can point to the achievement of Rowley’s government to effectively hold this country in safe hands since taking office in 2010 in the face of a number of crises on the economic and industrial fronts.

This pattern of ably handling the economy and the country in so many critical situations may be used as an indicator that loan payments with the Chinese will be equally well handled.

TT Cabinet Ministers Stuart Young (National Security) and Senator Dennis Moses (Foreign and CARICOM Affairs)  join high-level representatives from around the world in discussing the joint implementation of the Belt and Road Initiative (BRI) in Beijing in April, 2019  Photo from News.gov.tt

TT Cabinet Ministers Stuart Young (National Security) and Senator Dennis Moses (Foreign and CARICOM Affairs)  join high-level representatives from around the world in discussing the joint implementation of the Belt and Road Initiative (BRI) in Beijing in April, 2019  (Photo from News.gov.tt)

Perspective

From this perspective therefore, Prime Minister Rowley may be seeing the Chinese connection as a key lever in helping his PNM party secure victory in the next general elections, giving him the mandate he needs to continue with the various projects he has embarked on to promote the development of Trinidad and Tobago.

So for those who fear that China’s embrace can turn into a bear hug, the confident smile of TT Prime Minister Dr Keith Rowley on meeting Chairman Xi rather suggests the coming together - in a spiritual of mutual respect -  of two countries of disparate size but of equal inclination in their drive for progress and success.

Port of Spain – August 29, 2019

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