Image created by media on China ‘Belt and Road Initiative’ unrealistic
─ Min. Greenidge further clarifies misinformation in sections of the media on ‘Belt and Road Initiative’
─ heavy indebtedness attributed to changes in international financial market
DPI, Guyana, Thursday, August 23, 2018
Economist and Minister of Foreign Affairs, Carl Greenidge, in further clarifying the inaccuracy of media reports regarding the China ‘Belt and Road Initiative’, said it is highly unlikely that countries receiving loans or grants from China can become heavily indebted from one loan.
Minister Greenidge said heavy indebtedness is also attributed to changes taking place on the international market.
“As seems now to be fashionable in the media, you [media] try to traumatise the public by portraying every single action of the government as being the first step in a process of meltdown of apocalypse or domination or something like that. Let’s get off of that. Economics is serious business,” Minister Greenidge stated.
He noted that there are clear issues pertaining to debt and aid, pointing to the current debate on the utilisation of aid.
Citing Guyana’s case in the early 90s, the minister said the country became a highly indebted country as a result of increased interest rates contracted even in the pre-independence years.
“Some of the indebtedness has nothing to do with recent borrowing or careless borrowing; it may have to do with what is happening in the market, the money market, long after you borrow, this was Guyana’s case,” he noted.
Further, Minister Greenidge said the only possible hazard with China is the fact that it does not offer automatic rescheduling of debt, however, there are other easier options available.
The Paris Club is a group of officials from major creditor countries whose role is to find coordinated and sustainable solutions to the payment difficulties experienced by debtor countries.
The Foreign Minister said while China is not a member of the Paris Club, it does work out with countries, through bilateral agreements, debt rescheduling.
Although the Paris Club has a system of automaticity in relation to debt rescheduling, Minister Greenidge said debts are not reduced beyond a certain level.
On July 27, Minister Greenidge and Chinese Ambassador to Guyana, Cui Jainchun, signed a Memorandum of Understanding (MOU) within the framework of China’s Silk Road Economic Belt and the 21st century Maritime Silk Road, more commonly referred to as the Belt and Road Initiative.
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By: Stacy Carmichael
Image: Jameel Mohamed