Under even normal conditions when times are good, even in the 14 years the Barbados Labour Party was in office, not even then [would we get such a low interest rate],” he said…Very few funders…in the world would lend a developing country the size of Barbados and with the issues facing Barbados financing at the fixed rate of 2.5 per cent – Chris Sinckler, Minister of Finance signing a loan deal with Chinese Export-Import Bank of China
The government of Barbados signed what was described by Minister of Finance Chris Sinckler as a historic agreement with the Export-Import Bank of China on the 17 November 2015. The proceeds of the USD170million loan it was reported will be used to redevelop the derelict Sam Lord’s Castle property into a five star hotel by Wyndham management company. When the matter was debated in the House of Assembly the talking heads on the government side highlighted [with glee] that Barbados was able to secure the sizeable loan from the Chinese at a low fixed rate of 2.5%.
BU is not anti-investment, however, Barbadians should be concerned about a poor credit rating that has created limited options to borrow on the global capital market thus leaving the Chinese willing lenders. We have seen how the Chinese – like the others – have ‘marauded’ the African continent with an insatiable demand for natural resources. Given the geopolitical considerations developed countries use to shape foreign policy positions someone must inquire – what is in it for the Chinese given an expanding role in Barbados and the Caribbean.
There is the saying those who do not learn from mistakes made by others are condemned to repeat them.
BU has taken note that the Chinese Export-Import Bank of China (EXIM) is one of the key financial players involved in the failed hotel resort project in the Bahamas. Baha Mar is described as the largest and priciest resort in the Caribbean tagged at $3.5 billion. EXIM is also described as one of three banks in China charged with funding state sponsored projects. So far all the media reports that have chronicled the Baha Mar fiasco gives insight how a small island can be negatively impacted when the Chinese flex muscle. Then again those who support expanding the relationship will say how are the Chinese different to the Americans or Europeans. Always remember he who pays the piper calls the tune.
We should be cautious about borrowing large sums of money from the Chinese at a time we are financially vulnerable.
Those who are not familiar with the Baha Mar story follow the link – The Ghosts of Baha Mar: How a $3.5 Billion Paradise Went Bust.
Thank you to A-Fish who was a regular contributor to BU for highlighting this issue, he sends his regards to Bush Tea, Miller, Caswell, AC and the rest of the BU family.