No such thing as a free chow mein

No free chow mein. That was my first thought as I tried to interpret the words of Minister of Public Works and Communications Robeson Benn in relation to the airport expansion project that “we [meaning the government] had to enter into an agreement because we had a very narrow window in September where a Chinese Vice Premier came to the Caribbean with several billion dollars to fund projects and it was the only opportunity we had then to fund this undertaking.” Call it boldness, recklessness or madness, Mr Benn was honest in telling Guyanese how the country arrived at the decision to bind the people of the country with a debt of more than thirty billion dollars, in secrecy and without any feasibility study. While the government’s methodology might frighten some and shock others, many would not be even mildly surprised at the clear insight into the government’s thinking.

Hitch the wagon to the Yuan
It should be no irony that Guyana – with no foreign policy compass, philosophy or ideology – should have chosen to hitch its wagon to the Chinese star, or rather their bulging treasury. After more than fifteen years under the thumb of the IMF, Guyana had exhausted and benefited from all the opportunities associated with being a low income country. With an extended downturn in the West which was, as far as Guyana was concerned, too picky about transparency and accountability, China fitted well with the mendicancy economics admitted to by Robeson Benn. Even so, Mr Benn, better known for heavy action, sledgehammers and bulldozers than for thoughtfulness, could have cited hundreds of reasons for electing to go down the Chinese road.

The Economist, one of the most influential publications in the world, this year launched a weekly section devoted to China, the first time in seventy years that it singled out a country for detailed coverage. The accolade has nothing to do with the virtues of the country. It is still a Communist state regulated by internal police, does not take criticisms lightly, is largely anti-religion and its one child per family policy is sometimes executed in the most cruel and callous way. In one recent case, local state officials forced a young mother to abort her child seven months into the pregnancy due to China’s one-child limit law. The birth of the child would have violated the one child per family policy. While child stealing is not official policy, with a country as vast as China, state officials are reported to confiscate “illegal children” and ship them off to orphanages from where they are sold.

In the face of the rise of China to its status of might, Hillary Clinton and the USA suddenly decided that the wall of human rights could not withstand the might of the Chinese economic juggernaut. In so doing, the US left serious questions about China to be raised by other groups and individuals.

Whatever anyone might think of China, its economic story is a miracle. The miracle, the story goes, began in 1985 with a steamship conference of ten foreign economists, including one Nobel prize-winner and about two dozen Chinese, swapping ideas on how to lead and manage a vast country with a population approaching a billion. In 2010 China displaced Japan as the second largest economy in the world. And some time in this current decade, it is expected to overtake America. That is a feat without a historical parallel.

What makes the rise and rise of China so fascinating is that it has happened in less than a generation. Only 20 years ago, China was a long way from being a global superpower. After the student protests in Tiananmen Square in 1989, China faced isolation abroad and doubts and threats at home from the old stalwarts. In what turned out to be a masterstroke, in 1992 Deng Xiaoping set out on a “southern tour” to sell his reforms and its benefits, arguing that that was the only way to save the Communist Party. Seemingly oblivious to what has happened around it and across the world, the Chinese dragon has moved relentlessly to establish itself as a superpower in its own right.

China then applied all the Western theories about export led growth, promoting itself as a low cost location with hundreds of millions of its hardworking people willing to provide their labour at rates well below those in the West, with modern infrastructure and a stable economic system. It certainly helped too that as China was heading in this new direction, the US and the rest were pushing globalisation and the removal of all barriers to trade. That could not have come at a better time for the Chinese. China became manufacturers to the world with shelves upon shelves of America’s stores stacked with Chinese goods. Indeed I just read that the US Olympic Team uniforms are made in China! What an honour! And what indignity!

The good
China has now overtaken the US in steel consumption, mobile phones, exports, fixed investment, energy consumption and car sales. Its education system and research and development capability have made huge strides. And using the overarching measure of them all, China’s economy is projected to overtake that of the USA by 2018, if not earlier. It is hard to imagine that in 2000, its economy was only one-eighth that of the USA.

To do that China needs all the raw materials it can puts its hands on – steel, bauxite, timber, zinc, copper, gold, silver, etc – and has targeted the third world and particularly Africa. As counterpoints to the colonial powers and the gunboat diplomacy of the US, and with an eye for corrupt politicians, the Chinese were received with a mix of hope and fear, fascination and suspicion, and gratitude and disappointment by most of Africa’s fifty or more countries.

The records show that China has boosted employment in Africa and made all kinds of basic goods, clothing, footwear, toys, shoes, watches and radios more affordable. Trade has expanded while China’s loans to poor countries have surpassed the World Bank’s. Much of those have gone to Africa.

The bad
But the fears and suspicions were not without sound basis. The story is all too familiar of conmen operating in mainland China and ripping off their own people. The opening up of China to both foreign and local media, access to the internet and a few high profile human rights advocates have exposed some of the worst excesses of shoddy construction, fake milk, counterfeit products bearing brand names and expired, useless and dangerous drugs. The practitioners however did not disappear and soon formed part of the exports from China to Africa. They break immigration, customs and tax laws routinely and have no qualms about bribing local officials.

An article appearing in The Economist last year would find resonance with Guyana. It spoke about slapdash Chinese construction work and of serious defects to buildings and roads constructed by them. Local employees of Chinese businesses are almost invariably stuck in low level positions while even the middle level positions and all the senior positions are held by Chinese. These are not anecdotal and are easily cross-checked by what happens wherever the Chinese go.

The Chinese have a long and proud history and seldom do anything without the most serious study. Their strategy is to exploit other countries’ resources while conserving their own, a policy they may have copied from the West and most particularly America. But they are also selective. While Africa has only 10% of the world’s oil reserves, China now receives an estimated one-third of its oil imports from Africa. A closer look at the countries with which it does most of its business indicates that China likes to deal with very poor countries and to invest in assets for their own benefit and financed by their loans. If the road leads to a copper mine or a seaport, the Chinese are excited to build it – with Chinese management, labour, equipment and capital.

The ugly
There is a fear that China has become too successful. With millionaires galore, there is huge expectation among the masses and the workers, many of whom are becoming restive. Social unrest has been common and while the internal police have been condign in clamping down on them, the lid could just pop. One thing China has is a pathological fear of religion. It has been particularly intolerant of the Moslems and Buddhists whose spiritual leader the Dalai Lama they see as a mortal enemy and for which they make the Tibetans collectively pay.

The power has spawned arrogance and their disdain of other world leaders including President Obama has been evident. They suffered for a long time over British domination of Hong Kong. They bristle over Taiwan. Their annual spending growth on defence and security is always in double digits. They can afford it with reserves in excess of three trillion dollars, that is, three and twelve noughts.

In addition to a party that believes it has to control everything, Guyana also shares with China the conspicuous princelings, the offspring of the party dynasty who receive the best education the state can afford and are then offered assets and opportunities to share in the largesse of the country. The PPP/C government believes in private capitalism while in China it is state capitalism. In China they shut down internet sites. In Guyana, the government starts up its own to attack others.

It believes in prestige projects on a gigantic scale and sells the idea to third world politicians who will grab at any passing dollar. Corruption is taken quite seriously in China and can lead to public ridicule and in extreme cases to execution. It ranks 75th. on the Transparency International Corruption list but could not care about Guyana’s 134th place. For the Chinese that matters not. What matters to them is that there is a government willing to enter into agreements which allow them to lend some of their nation’s huge reserves while gaining access to Guyana’s resources. Hopefully, the Chinese must think, they will charm the rest with all forms of blandishments.

That Robeson Benn could get away with what he said is an indictment to all Guyanese. But not surprising. After all, look no further than the Chinese supply and construction of the clearly defective Skeldon Plant without any meaningful guarantee and then being awarded further contracts. Next week I will look at some of their investments including the ferries, the Mocha-Mocha mini-hydro plant, BOSAI and the airport deal which dealmaker Mr Bharrat Jagdeo has indicated should be revisited.

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