There is absolutely nothing covert or sinister about Barbados’ evolving relationship with the People’s Republic of China, says a leading economic advisor.
In fact, Prime Minister Mia Mottley’s advisor on Investment, Professor Avinash Persuad says the recent reports in the British press were built on “falsehood” and “innuendo” and that less than 2.5 per cent of Barbados’ external debt is owed to Chinese creditors. The article in the Sunday Times headlined How Barbados went from Little England to Little China purported to explain how the island became ‘awash’ with cash from Chinese President, Xi Jinping.
And just days before the island sheds its ties to the British Monarchy by becoming the newest Republic in the Caribbean, a former Minister of Foreign Affairs and Foreign Trade is warning that any negotiations with the Asian powerhouse must be on terms that are favourable to Barbadians.
To support its claims, the author of the Times article cited the presence of Chinese labourers at the Sam Lord’s Castle, Chinese-manufactured buses, a handful of Chinese-built houses and a pharmaceutical salesman in Bridgetown who remarked “we’ll soon be ‘little China’” and feared the country would “fall into a debt trap”.
The article also referenced planned refurbishments to the decrepit national stadium, upgrades to the south coast sewage system and plans to erect Chinese-made prefab houses for those who lost their homes during the passage of Hurricane Elsa.
But Persaud noted that less than $300 million of the country’s $13.5 billion debt bill, is held by the Chinese.
“It represents nothing material. So there is no substance to this story, Barbados is not little England or Little China. Barbados is an independent sovereign country on the verge of becoming its own republic and we studiously defend our independence and we are not financially in hoc to any one particular player and we will make sure that we are not, because that will impact our ability to stand up for what is right when we need to,” Professor Persaud declared.
“This story is built on so much innuendo and falsehood that one wonders what is really driving it. The reality is that less than 2.5 per cent of our debt would be to Chinese creditors and that debt was acquired by the last administration, so that is not new debt. When this Government came to office we looked at ways of restructuring that debt,” he added.
Conversely, the economic advisor noted that American institutional investors hold more than five per cent or twice as much, which Professor Persaud doubts will fluctuate significantly.
“We have studiously followed a path of independence and guarded our sovereignty carefully and preciously, and you have heard before, we continue to be friends of all and satellites of none,” Persaud declared.
“Of course our orientation, our economy is not very connected with China at all, but China is a new world power and in fact, it would behove upon us to develop relationships with the new world power. But we don’t intend in any way to be a satellite,” he added.
A series of recent developments including a US$115 million loan for road repairs, $210 million for South Coast water repairs and a special meeting between PM Xi and PM Mottley about the redevelopment of the national stadium have magnified China’s emerging relationship in Barbados.
The issue has also emerged as a point of contention amid viral rumours that the Grantley Adams International Airport had been sold and the Bridgetown Port leased to a Chinese entity. The former has been denied by PM Mottley and vehemently refuted by airport authorities.
Maxine McClean, who served as Barbados’ foreign minister from 2008 to 2018 explained that China’s eagerness to collaborate and support various economies is part and parcel of its quest to become the premier world power.
She added that in many ways, the emerging leader has been filling voids left by the United Kingdom and the United States of America.
“Britain perhaps has to ask itself, having had such a long historic and political relationship, why is it that Barbados now has to turn to China? From the perspective of China, they are seeking to dominate the international diplomatic arena and they have the resources to do so,” McClean told Barbados TODAY.
“What we have to do as we engage with China is to ensure that our relationship is one that is maximally beneficial to Barbados and one that does not create, in the long term, significant negative consequences. I say that against the background of what we have seen reported where you see references to countries like Zambia for example,” she added.
Over the last decade or so, there has been tremendous concern about massive Chinese development loans that are backed by strategic assets like airports and seaports or precious commodities like oil and metal.
“The problem that we have had with the U.S and the U.K is that we have been classified by them as a middle income developing country, which prevented us from qualifying for certain financing and support. And so that closed the windows of opportunity in a number of areas,” said McClean.
“The Chinese have indicated that they are willing to provide concessional financing and countries have sought to pursue that.
“So the Chinese will facilitate you, but they are facilitating you on their terms. What we have to do is to ensure that as we access those resources that are made available, we do so in a way that does not create hardship in the medium to long term and the examples that you hear people citing are some countries in Africa and Asia that are now finding themselves in difficulties,” she added.