By Themba Mkhize
China’s ambition to ascend to global primacy has many foreign policy implications. As a part of this push, China has continued to expand its sphere of influence in Latin America and the Caribbean over the last 15 years.
Jamaica shares one of the closest relationships with China in the region. As such, warnings about the potential consequences of Chinese debt and the veiled predatory intentions of the Chinese are not infrequent.
But there is basis for a vibrant Sino-Jamaican relationship. China is Jamaica’s second largest source of foreign direct investment and Jamaica’s largest lender. Some of the most recognizable investments in Jamaica from China are the North-South Highway, JISCO Aluminium campus and expansion of the Jamaica Defence Force campus.
In Jamaica, capital for infrastructural development is hard to come by. On the contrary, China’s economy has grown in leaps and bounds every year since 1979. This is on the back of the manufacturing industry which provides China with capital from all over the world. As such, China is perfectly positioned to provide cheap financing options for infrastructure projects in exchange for special conditions which lock in benefits for Chinese stakeholders.
Jamaican contractors have been in vocal opposition to the nature of these deals. They come with concessions such as low interest rates and long repayment windows, but make it difficult for Jamaican companies to be competitive as the Chinese benefit form an array of duty concessions on imported equipment and purchase raw materials in the domestic market without paying general consumption tax (GCT).
In another, now shelved deal, China Harbour Engineering Company proposed USD$1.5 billion of expenditure developing a part of the Portland Bight Protected Area – Goat Island – creating 10,000 jobs and creating infrastructure to enable Jamaica to become a major logistics hub. Though this deal was shelved after public outcry and backlash, a persistent complaint has been that the promise of jobs is a promise of the lowest quality jobs on the projects, with numbers offset by large numbers of Chinese working with the Jamaicans. Senior American officials have also warned Jamaica about the long term erosion of sovereignty, labour rights, the environment, operational transparency and adherence to rule of law, observed as characteristic parts of China’s dealings with other developing countries.
Still, senior Jamaican government official and technical experts, without denying the potential of these threats, advance that the pros outweigh the potential cons – committing to deeper relationships. And there are in fact signs that the relationship is mutually beneficial.
Beyond the obvious concessions which have made capital projects more affordable through past Jamaica-China agreements (Jamaica Development Infrastructure Programme (JDIP), Major Infrastructure Development Programme (MIDP) and the South Coast Highway Improvement Project (SCHIP), for example), the new strategic framework between Jamaica and China has no provisions for new loans, allows more Jamaican companies access to the Chinese market, and includes cooperation on education, sports and climate resilience (which is interesting when modern China’s historical disposition towards the environment is considered).
Ambassador Richard Bernal has also put forward that though there are benefits and costs, Jamaica has more net-benefits from the relationship with China than net losses economically. I agree that some mutual benefits are certain and present, especially considering Jamaica’s lack of options for cheap but necessary debt from infrastructural development. The acknowledgement of benefits and potential benefits does not, however, absolve Jamaica of the risk of predatory lending. As such, this a relationship which the people of Jamaica must never allow to migrate too far out of our consciousness.
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