In August, the Chinese Premier Li Keqiang met with officials from Thailand, Laos, Vietnam and Cambodia and offered them Chinese vaccines.
Cambodia’s PM Hun Sen said his country highly
appreciates the efforts of their friend China. Earlier the Philippines
President Duterte had beseeched China for vaccines. China’s foreign ministry
had confirmed it would give Philippines priority access. Latin American and
Caribbean nations will get $1 billion in loans for coronavirus medicines. Sinovac
Biotech, a Beijing vaccine maker, is running a vaccine trial on 4200 health
workers in Dhaka. The Chinese company will provide 110,000 free vaccine doses
to Bangladesh. Pakistan will not touch any vaccine other than a Chinese vaccine.
“There will certainly be no strings attached.” Said Ruan
Zongze, VP of the China Institute of International studies. “It is for a global
public good.”
On hearing that, an academic from Indonesia said: “Should
we be suspicious or grateful? Probably both.”
*****
Moneylenders. Pawnbrokers. Usurers. Loan Sharks.
We know the character of Shylock who lends money to Antonio.
They agree to keep Antonio’s pound of flesh as security. When Antonio is
bankrupt and unable to return the loan, Shylock demands his pound of flesh, as
agreed.
*****
China has been lending big money to Sri Lanka. During the
2015 Sri Lanka elections, China financed Mahinda Rajapaksa’s election campaign through
a Chinese port construction company. The secret payments were confirmed by
documents and checks in a government investigation. Over the years, Sri Lankan debt
grew beyond what Sri Lanka could repay. The China Development Bank, generously,
widened a credit line by $700 million, lowered the interest rate, and delayed the
payment timeline by two years. Anyway, a loan is usually given against a
collateral.
In 2017, Sri Lanka couldn’t bear the pressure any
more. After months of negotiations, the Sri Lankan government officially handed over the strategic port of Hambantota and 15,000 acres of land around it to
China on a 99-year lease.
Tajikistan owed China $2.9 billion. It handed over
1158 sq km territory to China to reduce the debt to $1.2 billion. Other nations
in a similar debt trap are Pakistan, Madagascar, Mongolia, Maldives, Kyrgyzstan,
Montenegro, Iraq, Ethiopia and Laos.
Modern Shylock manages to get his pound of flesh.
*****
China’s role in international trade is well known. It
is difficult to find a house without a single ‘made in China’ product. What is
less known is China’s role in global finance.
The Paris Club is a group of creditors which coordinates their
activities in relation to debtor countries. China is not part of it. It has no
disclosure requirements. It can lend to countries with nobody except the
borrower knowing the terms and conditions of lending. That gives rise to many
hidden debts. The Chinese state is the sole lending body. It is not governed by
any market forces. At least 50% of China’s lending to developing countries is
not reported to IMF or the World Bank. Between 2000 and 2017, China’s total lending
to foreign countries rose from less than $500 billion to more than $5 trillion,
or from 1% to 6% of the global GDP. That makes Beijing a bigger lender than
either IMF or the World Bank. China’s lending involves higher interest rates
and shorter maturities, forcing the debtors to get the loans refinanced often.
Djibouti’s debts to China are now higher than 80% of
its annual economic output, Ethiopia’s is 20% and Kyrgyzstan’s 40%. All these
countries will administer the Chinese vaccines to their populations, irrespective
of their effectiveness.
*****
Imperialists can subjugate nations through guns or lending.
China is very successful with the latter. More on that tomorrow.
Ravi
हळूहळू सगळीकडे स्वतःचे पाय पसरत आहेत
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