The loans that St. Vincent and the Grenadines (SVG) has received from Taiwan “put hook in the gill” of the opposition New Democratic Party (NDP) in and not the country, Prime Minister Ralph Gonsalves said on Thursday.
He made the point two weeks after he first said the loans “put a hook in the gill of anybody” in SVG who wants to break the diplomatic ties with Taiwan.
SVG has contracted EC$577 million in loans from Taiwan, up from disbursed debt of EC$99.9 million last September, and Gonsalves said the figure is likely to increase before the next general elections, constitutionally due by March 2026.
The NDP, then under the leadership of Arnhim Eustace, announced in 2016 that if elected to office it would end diplomatic recognition of Taiwan and adopt the One China policy, under which Beijing sees Taipei as a renegade state and has not ruled out force to accomplish its reunification ambitions.
The NDP has not renounced the One China policy, but its public comments suggest that under the party’s current leader, Godwin Friday, the policy is being reconsidered.
Gonsalves, who while in opposition had opposed Kingstown-Taipei ties, which was established in 1981, has maintained diplomatic relations since coming to office in March 2001.
On Thursday, he told a press conference in Kingstown that his government has deepened those relations over the last 22 years.
“And it is signalled by the fact that I, personally, I have made 12 visits, official visits, to Taiwan and Taiwan is a major partner for St. Vincent and the Grenadines.”
He said the diplomatic relations “have evolved with people-to-people relations as a family, our students, our farmers and that is there for everybody to see.
“And the NDP has said that its policy is to ditch Taiwan, and to hitch its political bandwagon to mainland China.”
He said that that decision of the NDP is very unpopular among the people of SVG.
“So, because it is unpopular, they will seek to have diversions and confusions and falsehoods and take you away from what is the main issue: Are you going to stay with Taiwan? Are you going to move to mainland China.”
He noted that on April 4, Parliament approved borrowing of EC$110 million from the government owned Export-Import Bank of the Republic of China — a loan that was organised by the government of Taiwan.
“… I pointed out that in the agreement there are two default clauses, there others, but there are two, which properly construed would indicate that it is open to the lender, the bank, to say that there is a default if the material circumstances surrounding the loan, those material circumstances having changed or altered and which affects the management of that loan,” Gonsalves said.
“Well, clearly a material circumstance is likely to be considered if you break the relations with Taiwan, and go to mainland China, the People’s Republic of China,” he told a press conference on Thursday.
“And I said that that represents a hook in the gill of the NDP. Not a hook in the gill of St. Vincent Grenadines, because there is no hook in the gill of St. Vincent Grenadines because we’re getting soft loans for developmental purposes. And we are grateful. There is no hook there,” Gonsalves said.
“The hook is in the gill of the NDP who wants to change from Taiwan to China that if they’re going to effect a change, in some miracle if they were to win government, that they more than likely, given those default clauses, that there will be the demand that you pay us all the money.”
The loans from Taiwan constitute sovereign debt, which is debt owed by SVG, rather than a political party, and which the SVG has an obligation to repay regardless of which party is in office.
Gonsalves’ Unity Labour Party won the 2020 general elections by taking nine of the 15 Parliamentary seats, one more than in the previous polls, but lost the popular vote to the NDP for the first time since 1998.
He noted that there is EC$100 million in dispersed public debt from Taiwan but there’s contracted debt, which, by 2025, would amount to EC$560 million to EC$575 million.
Gonsalves continued: “And may well be more and that if you were to change, Mainland China will have to provide that money for you, a loan of that sum, upfront, so that you, NDP, will have to take it to pay the Taiwan financial institutions which you owe.”
He said the NDP has never opposed a loan agreement with Taiwan.
“Now, when I pointed that out, I don’t know if they didn’t see it before. And in fact, the agreements before our time under the NDP administration, had similar provisions and if you were to go to China, and you borrowed the money from China, mainland China, they would have a similar provision too, that if you were to shift from them and go to Taiwan, they go want all their money,” Gonsalves said.
“So, wait, they’re little children, they don’t understand how school keeping? So, I want Vincentians to know this is a hook in the gill of the NDP, with their reckless policy. And that is perfectly alright for St. Vincent and the Grenadines because we are getting soft loans. And we are getting the soft loans for purposes which are developmental.”
The prime minister said that the NDP, on the one hand, is saying it likes Taiwan.
“But on the other, they’re maligning St. Vincent for borrowing from Taiwan. And saying that, I say that Taiwan has a hook in the gill of St. Vincent and Grenadines. I didn’t say that. I say it is a hook in the gill of the NDP who wants to change from Taiwan.”
The prime minister said the bulk of the people in SVG are “satisfied with Taiwan and the assistance which we get and the relationship generally and our relationship is not transactional but based on principles.
“You want to tell me the people in Taiwan can’t determine for themselves what system they want? I say Cuba could determine for itself what system it wants. We are clear in our head about these things, you know. And we are friends of all and we strive for a better world,” Gonsalves said.