The two countries that always come to mind are Chad and Sudan mostly because they couldn’t be more disparate.
Last year, when Patrick Ho Chi Ping Ophthalmologist by academic profession and former Secretary for Home Affairs of the Hong Kong Special Administrative Region was arrested in New York for offering millions in bribes to African government officials to advance oil and development rights in parts of Africa, including Chad whose President Deby was on the take, we took a look at the culture of bribe receipts and the common denominator in a continent where we expect Africans always seems to be Chinese- with a subplot of Sahara Desert trips with briefcases of cash or brown paper bags of some form of persuasive currency to massage the remains of civic integrity out of leaders who must be configured into China’s geopolitics.
Without going too far back, Chad and Sudan are neighboring countries that still simmer on a civil war that involved tribes, ethnic division, religious prominence and African Leaders imbued with the egotistic, self-centered, ignorance that puts a smile on the face of the Chinese travelling their belt road to Destination Dominance.
That road runs through Chad and Sudan and their bountiful oil reserves- and since neither Chad nor Sudan could pass conventional loan requirements – like creditworthiness and not slaughtering their people for tribal gain, China offered to help both countries giving each multiples of millions to be repaid either in cash, at extortionist rates, or kind at occupational rates. Often, with the right kind of persuasion, like rapid delivery of projects and piggy back loans -that leaders have open access to when sales boom because the project is fast tracked- details like labor laws and workers’ rights are subordinated to Chinese Direct Investment and seldom make the bullet points in contracts, giving China the leeway to meet its country’s deadline for the returns on that investment at the expense of the violation and degradation of local laborers and labor laws.
Now let’s skip across the globe to another hemisphere and look at Ecuador and Peru. They, too, are not very friendly neighbors, if we remember their three year war over border demarcations sometime in 1995 – 1998. What they do have in common, though, is oil and though we don’t profess to know what their financial predispositions were, we do know they had some Human Rights violations, a disqualifier for conventional International Monetary Fund and International Development Bank loans which would have made them prime target for China’s largesse through its no strings, no political concern, noninterference, Foreign Direct Investment ventures and China did step up to lend both Peru and Ecuador multiples of millions of dollars for their oil industry.
Slide a little further up north and slightly east where there’s a small country called Guyana that shares borders with Venezuela. China had found its way to Guyana way back in the 1960’s, when two communist leaders, Cheddi and Janet Jagan, had visions of a dynasty with them languishing in its turrets and were meeting secretly with Mao Tse Tung and Chou en lai in the late 50’s early 60’s, per Janet’s confessions in Thunder (under Chairman Mao).
Moneys were funneled to Guyana through the Jagans that seemed outside and apart from government as is evidenced in the 2003 Protocol on Debt Relief for 464,285 GBP borrowed August 26 1963, 5 million Swiss Francs borrowed Sep 7 1963 during the reign of the PPP and Jagan and quietly discharged with a rollover during a State visit between Jagdeo and a Madam Wu (not a brothel proprietrix) head of the signing Chinese delegation. There is still a question as to whether those moneys received by the Jagans was used for the benefit of the nation, for if it was, it would have been part of the national debt that would have been absorbed by the PNC government which negotiated debt consolidation and reconstruction during its tenure. Why in 2003, is Madam Wu being made whole on the backs of Guyanese taxpayers, without any knowledge of how the nation consumed those loans and whether they were filtered through national pipelines, is a question for which an answer should be demanded.
But we’re talking oil and neighboring countries here.
Move north west now and there is Venezuela, a country with whom Guyana has had a centuries old border disagreement. Attempts at resolution came in the form of PetroCaribe under Hugo Chavez a rice for oil trade agreement which became another spigot for ill-gotten gains by the PPPP and in Jagdeo’s showing of some runaway diplomatic exuberance, in an attempt to settle the border disagreement by exploring the option of granting Venezuela a channel through Guyana’s Atlantic waters as a passageway. Perhaps, he was thinking it was a small trench that ran through his father’s yard, so we’ll just let that stand as Jagdeo’s musings
China was already in Venezuela and was buying its oil by the thousands of barrels per day, was talking launching a satellite for Venezuela and even selling them some aircraft. Maybe, Jagdeo was playing nice, knowing he had no aircraft and only the oil that Janet had started to work on surreptitiously with Exxon, notorious for courting regimes with pliable leaders, understanding that the necessary evil in the oil business is to lean towards the diabolical.
We’re not saying that Janet is any of those things but Exxon’s radar for those traits zeroed in on her for a reason and she laid the foundation for the mucked up contract Guyanese are stuck with today, in large part because the current Government says that it has gotten the best deal that it could- under the circumstances.
It may be important to note that part of Exxon’s predatory portfolio is courting gifts, like signing bonuses to ‘pipsqueak’ countries, repairing roads, cleaning towns, helping with drainage, depositing money into accounts that are not strictly government owned or discussed on a published budget and a plethora of well placed kickbacks sitting on the horizon of gushing oil. Worthy of note too, is Exxon’s willingness to decline to reveal payments to foreign governments, saying it would violate confidentiality clauses in their contracts. Global Witness and the International Monetary Fund have said these circumstances make it very difficult to say how much money is entering the revenues of the government.
We’re not saying these are the circumstances that have Guyana’s re- negotiation of a better oil contract in apparent paralysis……but we’re just saying.
Now let’s get back to China and Venezuela and Guyana and aircraft stuff.
There’s an indisputable calculus in China’s loaning apparatus that goes beyond the traditional repayment construct. What they have done is to create a kind of bartering system so that in the absence of cash they are granted resource concessions….which could range along a creative spectrum of trade extortion- ownership in the project, leases that are longer than the average human life and often repayment in natural resources that they help to harvest. It’s the kind of deal that a cash poor resource rich nation with leadership that has more ambition than guile tends to take. Often, after paying China, most of these borrowers find not enough is left over for them to generate enough revenue to pass on to its citizens.
There’s a famous series of studies done by Global Financial Integrity which lays bare the scheme that is China’s accounting system- a reverse flow of aid with net outflows from the developing countries in forms of extortionist interest rates, unrecorded capital, same invoicing – shifting profits between subsidiaries, trade ‘misinvoicing’ – the prevalent practice of reporting false prices on trade invoices to sprit money out of developing countries. There’s also a study done by the Brookings Institute which looked at China’s Overseas Direct Investment apparatus. It is referred to as the Ministry of Commerce with which all companies investing abroad must register so that the State would have a database of which companies are investing abroad, their line of business, the countries in which they invest. It is this state controlled machine through which their accounting tactics run and how China ‘oversees’ its companies engagement worldwide in order to exact what it considers to be due taxes.
We may recall the Guyana Skeldon Sugar Factory, a loan signed with China’s Exim Bank to create a production of 110,000 tonnes of sugar per year replacing 35,000 tonnes per year and representing a quarter of the total industry output, a capacity that was never met because of ‘construction flaws’ and China’s engineering repairs done by China National Imports and Export Corporation whose forte was moving cars. But who cared? It was a Chinese Company under its Ministry of Commerce and the ‘loan’ to Guyana dictated that they find the repairman. Either way they would be paid….it’s a barter system with commodity accumulation as a large part of its focus. They provide disputable expertise and attach it to the multiplicity of loans/aids packages and the whole thing is inextricably trapped in a Chinese puzzle of commingling.
So, when we saw the headline ‘China to loan Venezuela 5 Billion’ we cringed. They were doing it again. They were inserting themselves as missionaries of good will between two feuding countries because these countries have oil. And China, arguably the largest consumer of oil, needs this fuel to produce its substandard consumer products to flood consumer markets with cheap goods to own those markets, as it hurtles down the Belt Road to Dominance.
China’s economic largesse is neither benign nor altruistic, never was. Every economic overture China has made through its Asian Infrastructure Investment Bank and its China Development Bank – alternatives to the to traditional economic lenders World Bank and International Monetary Fund- has been made with cunning calculation to get China closer to its goal of Super Power. The loans are doled out under the pretext of no strings and no interference in a country’s domestic affairs.
But we’ve seen Chinese boots on the ground in South Sudan during its civil war under the pretext of removing Chinese Nationals working in the oil industry that China had pumped $24.5 billion into as of 2013 in “Go Out” and invest another of its initiatives, this one , the establishment of a Chinese military base in Djibouti a country about $1.5 billion in debt to Beijing, its hosting of China -Africa Defense and Security Forum with 50 African countries hosted by, get this, China’s Ministry of National Defense, showing that China is now bold enough to pull its lupine covers back on the Red Riding Hoods that are the Heavily Indebted Poor Countries that it preyed upon with promises to build and enrich, not occupy militarily or yolk economically.
A study by the Centre for Global Development found that 23 out of the 68 countries roped into China’s Belt and Road Initiative are in significant debt distress. It is now more necessary than ever before for the Coalition Government to show Guyanese their debt obligation to China; now that China is flaunting its economic grip by courting its enemy in front of its face. With a kind of economic sadism China likes to play the role of boxing promoter and referee in countries it has lured into its debt trap. But there are some that are re-working their ties to this imperialist.
Pakistan is demanding better contract terms from China. Thailand rejected China’s loan terms for high speed rail because they were unfair. Malaysia cancelled China’s pipeline venture because of unfair contract terms. Nepal scrapped a $2.5 billion contract for a hydroelectricity project, accusing the Chinese company of financial irregularities. Ecuador is renegotiating its oil prices to China because they were scammed.
Guyana, so far, has made no public statement on China’s offer to help Guyana’s enemy, Venezuela, now mired in financial morass under dictator Nicolas Maduro. May be the International Court of Justice pending verdict but it would be reassuring to hear the Foreign Ministry how impactful China’s announcement to loan 5 billion is since, to extrapolate the the well known idiom, the friend of my enemy is my enemy.
Venezuela’s repayments to China will be mostly in oil…the lifeblood of the Belt and Road, or Silk Road or One Belt One Road or whatever slogan they rebrand their conartistry to appeal to the guileless and the needy so its not unexpected to see them plant a flag where oil flows.
But for all they are allowed to drain from Guyana, the free and tax-free run at it’s rich resources of oil, bauxite, small business opportunities, it’s still quite curious, isn’t it, that President Granger is yet to have the privilege of a personal, one on one, meeting with President Xi... and is just relegated to receiving warm greetings from agents of Xi with cold smiles and practiced charm.
As diplomatically incorrect as that is, there may be a plausible explanation.
Xi met with Maduro just a few days ago..and in Venezuela…right across the border. The fact that he could have hollered at President Granger and didn’t made us more curious and this is why it would have been good for explanations to come from the Ministries that are in the business of providing this information.
China is indeed loving on Venezuela now but it’s no ordinary love affair.
From 2007 to 2014, China lent Venezuela $63 billion. It continued to prop up Maduro and his failing revolution because its loan agreement was to be repaid in, you guessed it, oil. And in typical Beijing fashion, they are now refusing to renegotiate the price of that oil even though Venezuela is near financial collapse. This, we’re thinking, is why Beijing would pump 5 billion into Venezuela because then they would be able to pay their bond holders on whom they’ve defaulted and lost credit rating. With a good credit rating investors would be attracted and the oil industry will be restored and Xi will get his $63 billion.
This seems to be the reason behind the whole loan thing and the appearance of the actual Xi in Venezuela but there is still some thinking along the line of standing. There’s this thing about milestone or millstone which is assigned to the seat a country selects at China’s loan table and we’ve seen the Malaysia’s and Thailand’s move up in seating order by demanding a reworking of the crude rapacity that are contract terms. Guyana, meanwhile, remains in its feeding chair and on a diet of rising debt stock in an apparent state of economic catatonia.
Xi is not unnerved by Guyana even if an unstable Maduro is in the mix. He may have already weighed the gains of appeasing Maduro and tapping in to that country’s oil which is infrastructure- ready, against the investments already made in Guyana which is not near $63billion and much of which was paid forward with the bad bauxite, lumber, precious metals and oil contracts that have already given China windfall.
Look.
China is on a mission for for wealth, power and influence in this hemisphere and without a single illusion or pretence. Its expectation for war torn Venezuela to pay up and at pre-war agreement rates is testament to its soullessness and wretched dedication to its enterprise.
As financially strapped Guyana remains coy in the face of China, using it as its cash dispenser but does little to get from under its onerous debt, it can rest assured that China will be coming there, too, for its pound of flesh.
