GUYANA: European Union flags downsides of Chinese loans; Gives More Sea Defence Grants

Mr. Javier Nino Perez

The European Union (EU) on Wednesday December 15, 2021 raised concerns about the pitfalls of borrowing from China to finance and build major infrastructural projects.

Deputy Managing Director for Americas, European External Action Service Mr. Javier Nino Perez, during a question and answer session at the University of Guyana, disagreed with those who say that China offers better conditions.

He said China would not invest or trade with countries and create a greater understanding of each other.  “The Chinese project is not as much as building something together as much as it is about seizing space, trade links, trade benefits infrastructure projects. This is one element that we have to keep in mind,” he said.         

Mr. Nino Perez recalled that China had invested “heavily” in a 600-kilometre motorway in Montenegro but when that country could not repay the loan, the 10-year old contract had provided for China to seize parts of the country physically. “There is a lot of reading between the lines that one needs to do when understanding and when assessing the Chinese investment,” he said.

Unlike the EU that provides grants, he said China mostly provides loans that need to be repaid economically, politically or in terms of infrastructure

The Deputy Managing Director for Americas, European External Action Service said that while China and the EU cooperate and discuss many areas including climate change, trade disputes, digital agenda, and investing in infrastructural projects, they were “systemic rivals” in the way they regard democracy, human rights, democratic freedoms, rule of law, good governance, the rights of minorities, religious rights ,  and gender sights.

“We are rivals because, at the end of the day, the EU are going to define a societal model that will persist for the next few decades…This is an issue where China is clearly a rival,” he said.

Guyana has picked two Chinese companies to build a new Demerara Harbour Bridge and the Amaila Falls Hydropower Project.

Latin America Research Professor with the U.S. Army War College Strategic Studies Institute, Evan Ellis earlier this month said in an analysis titled “Chinese Engagement in Guyana: An Update” that the United States should not attempt to block Guyana or other Latin American nations from doing business with China. Instead, Professor Ellis advised the US to insist on transparency, the rule of law, and competent government institutions that can make well-informed and equitable decisions in awarding contracts, approving acquisitions, and enforcing labor, environmental, and other laws for all firms operating in the country.

He said alternatives to Western sources of investment are desirable, insofar as the country is currently benefitting from a petroleum-fueled economic boom.  Professor Ellis recommended the U.S. Development Finance Corporation is a logical tool to channel U.S. investment toward Guyana, if the focus of Guyana’s current opportunities in the petroleum sector does not conflict with the desire of the current U.S. administration to focus on “green” projects.

US Congressman Mark Green  has told the House Foreign Relations Committee’s subcommittee on Western Hemispheric Affairs that he is working on a law to make American businesses relocate from China. “I’m working on a Bill that will prioritise moving critical parts of our supply chain out of China and back to the Western Hemisphere among our allies and partners. Not only will this Bill help confront the rise of China in the region but will also increase economic opportunities and reduce some of the push factors leading to illegal migration. It’s a win for the United States and it’s win for Latin America,” he has said.

China has loaned Guyana monies to rehabilitate and modernise the Cheddi Jagan International Airport and construct major roadways.

Guyana is a signatory to the China Belt and Road Initiative through which that Asian country had hoped to build the Lethem-Linden road or a rail. That idea seems to have since fallen by the wayside.

European Union provides more funds for sea defence works

President Irfaan Ali and Mr. Javier Niño Pérez

The European Union (EU) is providing another 7.5 million Euros for the further rehabilitation of Guyana’s sea defence, Deputy Managing Director for Americas, European External Action Service Mr. Javier Niño Pérez announced on Tuesday.

He said the decision to provide the additional cash to Guyana is because the country has managed the 30 million Euro disbursement that has seen at almost 10 kilometres of sea defence being rehabilitated, the maintenance of another 60 kilometres and the planting of six new mangrove sites.

“The release of this budget support is, first of all I think, a proof of trust so we are saying is that we have a true partnership and we trust Guyana to manage this money that will go directly to the treasury of Guyana and it also means that you have provided proof of good management of the finances and the proof of realisation of the works that we are paying for today,” he said during a joint news conference with President Irfaan Ali.

The EU official also praised the Guyana government for ensuring that there is a 30-percent increase in the representation by women on the Sea Defence Board. Mr. Pérez highlighted that the mangroves are not only a good sea defence mechanism but they also help to clean the air.

President Irfaan Ali said discussions between the EU and the Guyana government on new project programming are “ongoing” and “promising”. He said the high-level EU delegation’s visit to Guyana was aimed at defining a strategic way forward, emerging challenges and opportunities as part of the development of a framework.

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Comments

  • Winston  On 12/16/2021 at 1:34 pm

    Guyana……….Beware of the Trojan horse at the gate. China is making these magnanimous gestures throughout the Caribbean, South America and Latin America hoping to get a stranglehold on major pieces of these countries.

    Hopefully the government will scrutinize all agreements/contracts made with China to ensure that there is no takeover by China of any the Guyana’s natural resources if things go South. We don’t want to see any government of Guyana selling out our country in order to bank their retirement proceeds.

  • Bibi  On 12/20/2021 at 6:05 am

    I am so pleased and relieved to read that you are aware of how the Chinese operates and I sincerely hope that our Government will terminate the contracts with the Chinese to build the Demerara bridge and Amalia Falls project. Don’t be fooled by those crooks!

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