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By Scott Morgan
What a difference a year makes. Over the last ten months the Dominican Republic has severed relations with the Republic of China (Taiwan) and has formally established ties with the People’s Republic of China. What does this entail in the grand scheme of things?
It has been known that one plank in the Chinese effort to isolate Taipei from the international community is to buy off the support of those Governments that at that specific point of time do have diplomatic relations with the Island Nation.
What is interesting regarding the above mentioned funds is that just a little more than half (USD$1.6 Billion) were already designated for infrastructure projects within the Dominican Republic. Already a USD$600 Million loan was made to the country from China’s Export-Import band to upgrade the power distribution system. There has been a slight increase in the export of raw materials specifically aluminium and nickel to China.
Already China has financed 35 ports in various locations around the globe. One Hambantota in Sri Lanka is now under the control of China for the next 99 years after defaulting on loan payments. There are several locations in Africa where there are concerns that missing payments could result in Chinese control over several infrastructure projects to collect arrears.
This move has flown under the radar of the United States as it deals with other crisis spots in this hemisphere such as Venezuela and Nicaragua. The lack of reaction from Washington can create diverse reactions such as having more investors in the Dominican Republic - which is actually good for business to the fiery rhetorical comments from the Neocons on Television. A prosperous Dominican Republic is a positive sign for the Caribbean in general.
One potential drawback for this deal could be in the Tourism Sector. Although there has been a 33% increase in the number of Chinese tourists travelling to the country it does pale in comparison to the numbers that travel to the island from the United States. So, there appears that there will be no specific change in relations with the United States in the immediate future.
How this relationship grows will be determined by the size and the scope of Chinese Engagement with Santo Domingo. There have been 18 bilateral agreements signed between the countries covering matters such as immigration, education, aviation, tourism, financial matters and promoting commercial interests and even sports. These initiatives have not had a major impact yet on the Dominican Republic. Exports have increased but a huge gap remains in imports coming in from China.
Another risk is the concern regarding corruption in the country. Shifting focus away from the Western Rule of Law will create situations which could cause worry within the Caribbean and should not be ignored by the United States in general.
It has been known that one plank in the Chinese effort to isolate Taipei from the international community is to buy off the support of those Governments that at that specific point of time do have diplomatic relations with the Island Nation.
It appears that the amount offered to Santo Domingo to switch was a cool USD$3 Billion. This was a bargain in the high pressure world of international diplomacy.
What is interesting regarding the above mentioned funds is that just a little more than half (USD$1.6 Billion) were already designated for infrastructure projects within the Dominican Republic. Already a USD$600 Million loan was made to the country from China’s Export-Import band to upgrade the power distribution system. There has been a slight increase in the export of raw materials specifically aluminium and nickel to China.
One potential trap considers a need that the country that has the potential of turning into a trap is the dream of improving the Port of Arroyo Barril.
Already China has financed 35 ports in various locations around the globe. One Hambantota in Sri Lanka is now under the control of China for the next 99 years after defaulting on loan payments. There are several locations in Africa where there are concerns that missing payments could result in Chinese control over several infrastructure projects to collect arrears.
This move has flown under the radar of the United States as it deals with other crisis spots in this hemisphere such as Venezuela and Nicaragua. The lack of reaction from Washington can create diverse reactions such as having more investors in the Dominican Republic - which is actually good for business to the fiery rhetorical comments from the Neocons on Television. A prosperous Dominican Republic is a positive sign for the Caribbean in general.
One potential drawback for this deal could be in the Tourism Sector. Although there has been a 33% increase in the number of Chinese tourists travelling to the country it does pale in comparison to the numbers that travel to the island from the United States. So, there appears that there will be no specific change in relations with the United States in the immediate future.
How this relationship grows will be determined by the size and the scope of Chinese Engagement with Santo Domingo. There have been 18 bilateral agreements signed between the countries covering matters such as immigration, education, aviation, tourism, financial matters and promoting commercial interests and even sports. These initiatives have not had a major impact yet on the Dominican Republic. Exports have increased but a huge gap remains in imports coming in from China.
Another risk is the concern regarding corruption in the country. Shifting focus away from the Western Rule of Law will create situations which could cause worry within the Caribbean and should not be ignored by the United States in general.
(Image: Miguel Vargas and Wang Yi[Ed] via Google Images)
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Hey Morgan,
ReplyDeleteThere's one question that needs answers: why do the Chinese need so many Ports and is anyone surveilling their activities there?
Cheers
The British Empire ruled the world by controlling the Sea. The lesson is not lost on the Chinese. World trade and oil trade is dependent on shipping. Transport by truck or aircraft is costly, weight limited and is not suitable for heavy and bulk goods. With their new navy of numerous vessels the Chinese require many ports to obtain refuelling and location advantages. At any time of choice the Chinese government could stop much of the world's sea trade, or win political points by merely threatening to do so. The Chinese are aware that you do not have to invade what you already own by other means, by skilful use of funding and taking advantage of corrupt officials. Not all of Foreign Loans or Foreign Aid goes into infrastructure, enough finds its way into pockets to change just who wears the pants in a country. The Chinese are laughing all the way to the bank, because they own the bank. Strategy conquers tactics.
DeleteIf Stephen Cheney is correct then what will the war against China look like? They are already inside our borders: will be worse than the Jihadist war on us?
ReplyDelete