NDP in tailspin over Taiwan

By Sehon Marshall, press secretary, Office of the Prime Minister, St. Vincent and the Grenadines

Backdrop

Over the past two or so weeks, the opposition New Democratic Party (NDP) has been in a veritable free-fall, a drowning tail-spin, on the matter of diplomatic relations with the Republic of China (Taiwan). As the British would say, their nickers are all in a twist; thus, their gait is uncomfortable for them, and crooked to the naked eye; their words are dubious, and their voices full of deception, dripping with falsehoods and misrepresentations.  

The NDP’s recent crookedness, cussedness and confusion on Taiwan first emerged in Parliament on Tuesday, April 4, 2023, consequent upon the revelation by the Prime Minister, Comrade Ralph Gonsalves, of some home-truths relating to the NDP’s plan to ditch Taiwan and hitch its diplomatic bandwagon to the People’s Republic of China and its “One China Policy”.

On Tuesday, April 4 in Parliament, Fitz Bramble, parliamentary representative for East Kingstown, walked “straight” into the trap set by Comrade Ralph and began his dissembling on Taiwan relations, intending, whimsically on-the-fly, to reverse the NDP’s hugely unpopular “One-China, Pro-PRC Policy” in St. Vincent and the Grenadines.  He was followed in a similar vein, thereafter, by a couple of his opposition parliamentary colleagues.  Lorraine Friday, nominally Leader of the Opposition, was, however, silent as a Trappist monk.

In the dozen or so days following, various NDP spokespersons including Friday, and St. Clair Leacock (representative for Central Kingstown), and this or that fellow-traveller who specialises in spewing anti-Ralph bile and malice, worked themselves into a frenzy of further misinformation, falsehoods, and political diversions.  The effect of all this has been to expose the NDP’s folly in this vital foreign policy matter with huge, practical, domestic ramifications and bad consequences for our people.

Comrade Ralph’s home-truths

Among the unanswerable home-truths revealed by Comrade Ralph in Parliament on Tuesday, April 4, 2023, are the following:

1. The loan agreement between the Government of St. Vincent and the Grenadines (GOSVG) and the Ex-Im Bank of Taiwan (“the Bank”) of US$45 million (approximately EC$120 million) for the construction/rehabilitation/repair of mainly secondary, roads across St. Vincent and the Grenadines, contained clauses which in effect “put a hook in the gill” of the NDP in its intended quest to break relations with Taiwan and establish diplomatic ties with the PRC on mainland China.  The purported gravamen of these “default clauses” was that the lender (the Bank) is at liberty to demand repayment by St. Vincent and the Grenadines of all outstanding monies on the loan if there is, among other things, “a material change in circumstances” — a code formulation for the ditching Taiwan in favour of the PRC.
2. This loan agreement contained language similar to, or the same as, in all previous loan agreements between the Government of St. Vincent and the Grenadines and Banks in Taiwan since 2001 and before that time.  Thus, all outstanding accumulated loans would become due immediately upon the triggering of this particular “default clause”, among others.
3. The current debt portfolio owing by the Government of St. Vincent and the Grenadines to banks in Taiwan is as follows:
4. Disbursed Outstanding Debt (DOB), as at Sept. 30, 2022, as shown in the 2023 Estimates, stood at EC$99.9 million.

This aggregate, outstanding disbursement arises from the following:

• Public Sector Investment Loan

(Phase III) (EXIM Bank)        :     $13.34m

• AIA Terminal Building Loan

(Mega Bank)                 :     $16.20m

• AIA Loan (EXIM Bank) Loan  :     $18.26m
• AIA Loan (EXIM Bank) Loan 2     :     $10.7m
• AIA Loan (EXIM Bank) Loan 3     :     $23.8m
• Hotel Development Loan

  (EXIM Bank)                     :     $10.8m

• Modern Court House/

  Parliament Loan (EXIM Bank)   :     $6.75m

                                  $99.9m

• Contracted Loans between Government of St. Vincent and the Grenadines and Taiwan Banks from which there are as yet no disbursements or small disbursements [as in (a) (vi) and (a) (vii) above] are as follows:
• Hotel Development Loan

 (US $50 million)                 :     EC$135m

• Modern Court House/

  Parliament Loan (US$20 million      :           $ 54m

• Modern Port Development

  Loan (US $45 million)              :           $ 67.4m

• Secondary Roads Loan

  (US$45 million)                 :          $121.5m

Total: $177 million        :     EC$477.9 m

Minus from this $477.9 the disbursements of EC$17.5 million from Hotel Development and Courthouse/Parliament loans, the total indebtedness (disbursed, and contracted but not yet disbursed) of the Government of the St. Vincent and the Grenadines to Taiwan Banks amounts to EC $560.3 million.

• Some 100 Vincentians students are in Taiwan on university scholarships amounting, in value, to at least EC$20 million. A break in relations from Taiwan to PRC would mean a disruption of those students’ university education.
• Annually there are grants from the government of Taiwan to Government of St. Vincent and the Grenadines amounting to EC$10 million for civic development projects.
• Other cash or in-kind grants of varying amounts annually for this or that initiative between Taiwan and St. Vincent and the Grenadines.

The effect of these home-truths

Comrade Ralph pointed out in Parliament on Tuesday, April 4, 2023, that the sum effect of these home-truths is that a break in diplomatic relations from Taiwan and a move to the PRC, would mean that the PRC would have to fork out at once by 2025; (if by some miracle the NDP forms the government) at least EC$560 million to pay for the Taiwanese debt plus $20 million for the scholarships plus an annual top-up in grants.  That is “the hook in the gill” of the NDP with dire practical consequences for St. Vincent and the Grenadines.  The PRC would not involve itself in such transactional diplomacy to the extent of the magnitude required.  Neither the PRC nor the ROC (Taiwan) would ever trust a NDP government which puts up a “For Sale” sign in the shop-window of the Ministry of Foreign Affairs.  Thus, the practical shambles of the NDP’s misguided foreign policy.

Confusion, falsehoods, and bombast by NDP’

In the aftermath of the parliamentary debate on Tuesday, April 4, the NDP’s spokespersons compounded their follies on this issue with silly and false utterances.

Among the more egregious examples of their silliness and untruths are the following:

1. “Ralph hides Taiwanese Ambassador when the ULP allies come to SVG” according to St. Clair Leacock, referencing the absence or low-keyed presence of the Taiwanese Ambassador from the official functions when the Presidents of India, Cuba, and Venezuela visited St. Vincent and the Grenadines.  Does Leacock not realise that it is an elementary tenet of diplomacy and foreign relations that a host country does not embarrass its visiting guest by having him/her meet officially the representative of country with which the visiting guest’s country does not have, or refrains from having, diplomatic relations?  This is particularly so in the situation of the tussle between mainland China and Taiwan.
2. The falsehood that St. Vincent and the Grenadines owes Taiwan more money than any other country or financial institution.  What are the facts?

The Estimates of Revenue and Expenditure for 2023 passed in the House of Assembly in December 2022 show that on September 30, 2022, the disbursed public debt of St. Vincent and the Grenadines stood at EC$2.166 billion of which the disbursed debt from Taiwan (as detailed earlier) amounted to EC$99.9 million.  These Estimates also show the following external debts larger than that from Taiwan:

• Disbursed public debt owing to the World Bank (including International Development Association – IDA): EC$587.6 million;
• Disbursed public debt owing to the Caribbean Development Bank (CDB): EC$414.6 million;
• Disbursed public debt owing to the ALBA Bank/Venezuela: EC$127.2 million

Please note that the contracted loans from the World Bank/IDA and the CDB exceed the disbursed debt owing to these institutions.  For example, none of the EC$270 million (approximately) soft-loan from the World Bank for the Acute Referral Hospital at Arnos Vale (and for health strengthening) has been yet disbursed; there are also other undisbursed sums from other loans from the World Bank.  Similarly, of the EC$300 million (approximately) soft loan from the CDB for the Modern Port Development at the Rose Place area, only a small portion was disbursed at the accounting date of 30^th September, 2022.

Please note, too, that the disbursed debt owing to Venezuela would have been much larger but for the fact that St. Vincent and the Grenadines was granted 100 percent debt relief of the Petro Caribe debt of some EC$200 million.

Further, the disbursed public debt owed by the government and statutory bodies/public enterprises to domestic/local financial institutions and bond holders as at Sept. 30, September, 2022 amounted to EC $555 million of which EC$135 million was to the Bank of St. Vincent and the Grenadines, more than the disbursed debt owed to Taiwan.

In any event the loans owed and/or contracted to Taiwan are soft-loans (long amortization periods at low rates of interest) which are used for the development of St. Vincent and the Grenadines.  That is the vital issue here which the NDP is bent on ducking! Taiwan’s loans and grants have been to the enormous benefit of St. Vincent and the Grenadines; Taiwan has no hook in the gill of St. Vincent and the Grenadines.  The hook is in the NDP’s gill!

•  “Taiwan is a problem for SVG” is the underling narrative by the NDP and its fellow-travellers.  This is absolute rubbish.  The fact of the matter is that Taiwan has been an excellent friend of St. Vincent and the Grenadines.  The “hook in the gill” is in the fish called the NDP.  The NDP wants to abandon Taiwan; it wants to leave the bone and go for the shadow.  It would be expensive and harmful for St. Vincent and the Grenadines to make that switch.  That is the nub of the issue here.

Conclusion

St. Vincent and the Grenadines and Taiwan have had excellent relations for 42 years now.  Over the last 22 years, our countries’ ties have been deepened.  Taiwan is now part of our extended family.  One marker of this is that Comrade Ralph has visited Taiwan 11 times as Prime Minister.  Only Cuba and Venezuela have received more official visits from Comrade Ralph.  St. Vincent and the Grenadines has no quarrel with mainland China but we do not, and cannot accept, the “One China Policy” of mainland China.

If at the stroke of the pen, a powerful neighbour can erase a country known as Taiwan (24 million people and large economy), can St. Vincent and the Grenadines not also be easily erased, by a powerful, though different, neighbour?  Ponder that query!   

NDP has to wheel and come again.  It has no credible direction, no credible foreign policy, no compelling developmental narrative for St. Vincent and the Grenadines and our people!

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