Jagdeo sees China as new major source of foreign direct investment in the Caribbean

There is no doubt that the Chinese delegation to the Third China-Caribbean Economic and Trade Forum, journeyed to Port-of-Spain earlier this month with the specific intention of dazzling the region with its new-found status as one of the world’s few genuine economic giants.

In one fell swoop the Chinese have made it clear to the Caribbean that Beijing is prepared to “pick up the slack” arising out of the sharp reduction of bilateral aid from the region’s traditional partners in the west and, moreover, that its ties with the Caribbean can now go far beyond the government-to-government agreements that had characterized an earlier era.

In the aftermath of the two-day Port-of-Spain forum we have learnt that that the Chinese have concluded not one but two loan agreements with the region, each worth US$1 billion. One of the two loan agreements is designed to finance bilateral private sector projects that will witness fresh waves of Chinese private sector enterprises working alongside regional businesses while the other, a loan granted on preferential terms, targets support for state-driven technical assistance projects. Those apart, China will donate US$1 million to the Caribbean Development Fund and provide a US$200 million grant to finance capital projects in the wider hemisphere. These various funding agreements will be administered by Exim Bank of China and the grant by the Inter-American Development Bank (IDB).

President Bharrat Jagdeo

President Bharrat Jagdeo, whose administration has evinced an unmistakable enthusiasm for doing business with the Chinese, is almost certainly not the only Caricom head of government to recognize the enhanced significance of the Chinese presence in the region. As the only regional head of government to address the plenary session of the two-day forum, he acknowledged Caricom’s recognition of China’s ascendancy to the status of a global economic power as well as its role as the major source of foreign direct investment in developing countries. China, the Guyanese President noted, given its phenomenal industrial growth, manufacturing capability and huge market for goods and services, holds a critical key to the economic development of the region. Regional governments and business entities, he told the forum should refine their development strategies to take account of the China factor, shifting their focus from the dependency syndrome that has traditionally characterized aid and economic ties with the North.

President Jagdeo says that he sees major benefits accruing to the Caribbean from the further cementing of trade relations with China including non-reciprocal trade and partial scope agreements and access to financial instruments that facilitate private sector trade and investment projects that require no state guarantees.

Before an audience that included representatives of more than 40 Guyanese business enterprises, President Jagdeo said that opportunities were now being created for private sector cooperation to supplant the traditional government-to-government ties that had traditionally characterized economic relations between China and the Caribbean.

By way of further formalizing what is clearly perceived on both sides as a long-term relationship, the Port-of-Spain Declaration was signed, bringing into being the Guyana-China Business Council comprising the China Council for the Promotion of International Trade (CCPIT) and the various regional business support organisations including, in the case of Guyana, the Private Sector Commission and the Guyana Manufacturing and Services Association. The council, according to the GMSA, will facilitate the exchange of business delegations, organizing ‘road shows,’ investment seminars and trade fairs and enhancing market information exchange.

The Guyana private sector delegation represented a number of local business sectors including information technology, construction and engineering, tourism, alternative energy, leather refining and commercial merchandising for electrical and electronic products and household items. Stabroek Business understands from the GMSA that local private sector representatives were able to hold one-on-one meetings with their Chinese counterparts and that those meetings served to lay a foundation for longer-term business partnerships.

GMSA President Clinton Williams has said that the CCPIT has undertaken to review the profiles of Guyanese business organisations and to circulate these in the wider Chinese business community in order to create appropriate business-to-business partnerships.

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