KINGSTOWN, St. Vincent, CMC – Prime Minister Dr. Ralph Gonsalves says St.Vincent and the Grenadines currently owes Taiwan EC$577.9 million (One EC dollar=US$0.37 cents), a significant increase over the EC$100 million tag last September.
Gonsalves says the loans “put a hook in the gill of anybody” with plans to break diplomatic relations with Taiwan, which China considers a renegade province.
St. Vincent and the Grenadines is among a handful of Caribbean Community (CARICOM) countries with diplomatic relations with Taiwan, the others being St. Lucia, Belize, Haiti, and St. Kitts-Nevis.
In 2016, the main opposition New Democratic Party (NDP) announced that it would sever diplomatic ties with Taiwan if elected to the office established on August 15, 1981.
Political observers note that the party has yet to announce any policy review formally. However, public statements since then have suggested that the party might have reconsidered that policy.
The observers note that despite his public statements, Dr. Godwin Friday, who replaced Armin 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, the island’s relationship with Taiwan became focused as opposition legislator Fitz Bramble erroneously said in Parliament that the NDP established diplomatic relations with the Asian country.
But after Prime Minister Gonsalves pointed out Bramble’s error, the opposition legislator responded by saying, “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, 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.”
While he had been in opposition, Prime Minister Gonsalves, the longest continuously serving head of government since St. Vincent and the Grenadines became independent in 1979, had criticized diplomatic relations with Taiwan and argued a case for establishing ties 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.
At a signing ceremony for a EC$120 million loan from Taiwan on Wednesday, Gonsalves said that his government’s loan agreements with Taipei include clauses that would make all outstanding loans payable immediately if the island ends diplomatic relations with Taiwan.
He spoke on the issues multiple times this week, including on Tuesday in Parliament, which authorized, with bipartisan support, the borrowing of EC$120 million to be spent on road repairs through 2027.
Gonsalves noted that the Opposition Leader 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 realize something,” Gonsalves said, adding that he wanted to emphasize 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 exciting clauses, not only in this agreement but in other contracts we sign.
“I point out, essentially, that these agreements put a hook in the gill of anybody who wants [to] change the relationship in St. Vincent and Grenadines. Go ahead. If you think you’re a big fish. Let us see how you can deal with this,” Prime Minister Gonsalves said, adding that he drew the issue to the opposition’s attention and that “nobody among them realized it before.
“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, and 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 stating that “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 the economic or financial condition of the borrower occurs or arises which, in the reasonable opinion of the lender, the mayor 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.”
Gonsalves said, “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 will 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.”
Prime Minister Gonsalves said that as of September 30, 2022, the government owed Taiwan EC$99.9 million.
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, noting that an estimated 100 nationals are studying in Taiwan and receiving EC$20 million worth of education.
Gonsalves said that if the island severs ties with Taiwan, these students would either have to return home or complete their education in Beijing.
“I’m giving you the facts of life, and I’m a sober, balanced, clear-thinking individual about these matters. As I said, I don’t have a ‘for sale sign in the Ministry of Foreign Affairs metaphoric shop window. This country is not for sale.”
Prime Minister Gonsalves 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, they give you that as a loan because they aren’t giving you a grant.
“Anybody who thinks that and the 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 solid principle. They know the price of everything and the value of nothing”.
Prime Minister Gonsalves said that his government “sees that there’s one Chinese civilization with different political expressions of that Chinese civilization.”
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