$577m in loans from Taiwan ‘put a hook in the gill,’ PM says

St. Vincent and the Grenadines now owes Taiwan EC$577.9 million, up from EC$100 million last September.

Prime Minister Ralph Gonsalves said the loans “put a hook in the gill of anybody” in St. Vincent and the Grenadines (SVG), who wants to break the diplomatic ties with Taiwan.

The main opposition New Democratic Party (NDP) announced in 2016 that it will sever diplomatic ties with Taiwan if elected to office.

The party has not formally announced any review of the policy, although public statements by the party since then have suggested that the party might have reconsidered that policy.

iWitness News understands that then party leader, Arnhim Eustace made the 2016 decision without much consultation with his party’s top brass.

Sources in the know have told iWitness News that despite his public statements, Godwin Friday who replaced Eustace as NDP president and leader of the opposition in 2017, feels that the party is saddled with the pro-China policy and is seeking an appropriate time to announce that the NDP has reverted to its pro-Taiwan stance. 

Last week, SVG-Taiwan ties came into focus as Fitz Bramble, MP for East Kingstown, erroneously said in Parliament that it was the NDP that established Taipei-Kingstown ties.

The relationship was established by the St. Vincent Labour Party administration in 1981 and the NDP maintained them from 1984 to 2001, when the Gonsalves-led ULP came to office.

After Gonsalves pointed out Bramble’s error, the opposition MP responded:

“The fact is that the New Democratic Party has always been a long-standing friend of the government and people of Taiwan, and we don’t intend to change that.”

Later in the debate, NDP Chairman, Daniel Cummings, who is also MP for West Kingstown, welcomed “the funding from our friends in the Republic of China and Taiwan”.

Cummings joined his colleagues in commending Taiwan, “who have been assisting us in so many ways”, adding, “As a matter of fact, some would say without them, we wouldn’t be able to do anything in our country.”   

In opposition, Gonsalves had been a critic of SVG-Taiwan ties and had argued the case for establishing relations with China.

However, his government has maintained relations with Taiwan, saying they are based on principle, and has accused the NDP of acting in a transactional manner as regards its pro-China policy. 

Speaking at a signing ceremony for an EC$120 million loan from Taiwan on Wednesday, Gonsalves said that the loan agreements that his government has signed with Taipei includes clauses that would make all outstanding loans payable immediately if SVG ends diplomatic relations with Taiwan.

He spoke on the issues multiple times this week, including on Tuesday, in Parliament, which authorised, with bipartisan support, the borrowing of EC$120 million, which is to be spent on road repairs through 2027. 

The prime minister noted that the leader of the opposition had remained silent when Bramble made his comments in the national assembly, but had attempted to walk them back in an interview with a local publication. 

“But you know why they went into a real problem. They didn’t realise something,” Gonsalves said, adding that he wanted to emphasise and speak even more on sections of the agreement with Taiwan that he had quoted in Parliament the previous day.

“You seem in this agreement there are a couple of interesting clauses, not only in this agreement but in other agreements which we sign,” the prime minister said.

“I point out, essentially, that these agreements put a hook in the gill of anybody who want [to] change the relationship in St. Vincent and Grenadines. Go ahead. If you think you’re a big fish. Leh we see how you can deal with this.”

He said that he drew the issue to the attention of the opposition, adding, “nobody among them realised it before”. 

Gonsalves continued: 

“I will deal with the issue in the agreement of default. And I’m doing this so that Taiwan can hear me, Beijing can hear me, the world can hear me, the people of St. Vincent and Grenadines can hear me. And, just in case the opposition didn’t hear it well yesterday, they can hear it again…”

He quoted the loan agreement as saying: 

“Under the rubric material adverse change: any event or series of events or any circumstances whether related or not, including but without limitation, any adverse change in economic or financial condition of the borrower occurs or arises which, in the reasonable opinion of the lender, may or would have a material adverse effect on the borrower or its ability or willingness to perform or comply with any of its respective obligations under this agreement…

“It becomes unlawful or in the lender’s opinion is contrary to any applicable official statement, guideline or policy of any authority not having the force of law, but is recommended for voluntary observance of the country of any party hereto for the loan to be made or maintained by the lender or the borrower to perform any obligation hereunder or there occurs was such a change of circumstances which the lender determines as having materially changed the basis of the agreement or would materially affect the lender’s continuing administration of this loan, or this agreement or any part thereof.”

The prime minister commented: 

“In other words, if you go and you change — the agreement doesn’t say it explicitly but the language tells you that the change in circumstances, material circumstance, you can’t manage the loan — them not me — it’s in the ballpark. 

“So, you say you’re taking up your marbles and you’re going play the game in Beijing. The agreement says that you have to pay back the money right away. And the law of the state of New York applies.”

The prime minister noted that as of Sept. 30, 2022, the government owed Taiwan EC$99.9 million.

And, since then, the government has borrowed US$20 million for the modern Parliament and the court complex, US$62 million for the port project, US$50 million for the Marriott Hotel and US$45 million for the road rehabilitation project, for a total of US$177 million or EC$ $477.9 million. 

“Now, not a little drop of money we owe Taiwan, you know,” Gonsalves said.  

He said that about 100 Vincentian students are in Taiwan receiving EC$20 million worth of education.

Gonsalves said that if SVG severs ties with Taiwan, these students would either have to return home or complete their education in Beijing.

“I’m giving you what are the facts of life and I’m a sober, balanced, clear-thinking individual in relation to these matters,” the prime minister said.

“As I said, I don’t have a ‘for sale’ sign in the metaphoric shop window of the Ministry of Foreign Affairs. This country is not for sale.”

The prime minister said that constitutionally, his government can remain in office until March 2026, adding that his government will take more loans from Taiwan before then. 

“So, if by some miracle you get into government — the other side I’m talking about — $700, $800 million dollar EC,” Gonsalves said.

“‘OK man, Beijing go give me that.’ That’s how they think. Want to sell the country. Well after they give you that to pay off Taiwan, but they give you that as a loan because they ain’t giving you grant for that

“Anybody who thinks that and them thing they will help them out. They would believe that pigs could fly. But maybe they think so,” Gonsalves said. 

“They think that anybody could trust them? Certainly, the Taiwanese wouldn’t be able to trust them. And I tell you this, the leadership of the People’s Republic of China will never trust them. Because their relations are entirely transactional, devoid of any sort of solid principle. They know the price of everything and the value of nothing,” the prime minister said. 

He said that his government “sees that there’s one Chinese civilisation with different political expressions of that Chinese civilisation”.