Friday, March 09, 2012

Taiwan Squeezes Grenada on Debt

The consequences of "Checkbook diplomacy" are still reverberating in the Caribbean, where indebted nations struggle with retaliation from the Taiwan government for switching to China....
After a string of bad economic setbacks – including devastating hits by hurricanes Ivan and Emily in 2004 and 2005 – Grenada stopped paying back some $28 million in loans it received from Taiwan, according to court documents. A judge in New York, who has jurisdiction under terms of the loans, ruled Grenada owes $25.9 million in outstanding principal and interest to Taiwan, and that Taiwan's Export-Import Bank could go after the money via the US legal system.

Now, the money airlines and cruise ship operators previously paid to Grenada in landing and docking fees is going to pay off the loans, sapping the country of funds to keep its air and sea ports running. Virgin Atlantic, Delta, and British Airways recently began paying into a court-established escrow account instead of the Grenadian ports authority.


The Thomas administration says Taiwan’s position is, in part, retribution for the way the two countries split, but that decision was made by the previous Grenadian administration.
Taiwan has called in its loans because Grenada dumped Taiwan in favor of China. Interesting, the switch in 2004 was triggered by the typhoon, and a letter surfaced which claimed that Beijing had agreed to pay off the debt to Taiwan. However, the money was never transferred, it is claimed....
Grenada moved with speed after the passage of Hurricane Ivan in September 2004 to break ties with Taiwan and recognize Mainland China in the face of a more lucrative offer of aid from Beijing.

THE NEW TODAY has obtained the copy of a letter dated November 10, 2004 in which the then NNP administration was engaged in negotiations with emissaries of Mainland China for Beijing to take over the debt repayments with the Republic of China on Taiwan.

The letter was prepared by Richardson Andrews, the Special Advisor to Prime Minister Mitchell to head of the Keppel Foundation, the group that was negotiating the talks aimed at getting St. George's to recognise Beijing and to sever ties with Taiwan as part of the One-China policy.

Andrews told the Chinese emissaries that the NNP would like the Taiwanese debts to be treated as a separate matter in whatever financial package that Beijing was giving to Grenada as part of the switch in diplomatic ties.

He made it clear that Dr. Mitchell and his government did not want the Taiwanese debts to be part of the proposed US$50 million package from the Chinese on the Mainland as part of any accord to dump Taipei.

"...We had proposed the treatment of the Taiwanese liabilities as a separate item. It is necessary for several important reasons to eliminate the Debt to Taiwan. However, if you treat the paying off of the Debt and the community based projects as part of the initial USD 50 million, it will dilute significantly the impact of your generosity and help with our post-Ivan relief development. We need to find a way to handle the Debt to Taiwan without weakening your cash assistance", the Richardson Andrews letter said.
According to that website, the Chinese appear to have stiffed the Grenadans on the debt deal. After they made a deal with the then-ruling party, they switched sides and supported the other party, and also brought in Chinese laborers rather than using locals on construction projects (article). Hard to say whether anything on that site is true, but it sure is interesting.
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Anonymous said...

US support for Taiwan? It is more like US support for KMT right now. Mr. Obama has lost my vote.

Anonymous said...

not "bullying", just threatening.

Anonymous said...

Have a citation on the quotas for Taiwanese students in the US? Was this for undergrads (which I know of very few) or graduate schools? What years were they in effect?

For 100 years, the US prohibited Asian immigration into the US, which is why the racial makeup of the US is what it is, so in a sense, whatever the quota was, it's only a minor improvement over a major wrong.