Metzl: Bahamas will have to hedge its relationships with U.S., China
The Bahamas could have to one day choose between its relationship with the Chinese or the Americans, an expert in Asian affairs Jamie Metzl said yesterday, adding that China can call in the debt countries in the region owe at any time, which could have detrimental consequences.
Metzl, who is a senior fellow of the Atlantic Council and a former staff director of the U.S. Senate Foreign Relations Committee, told an audience at Royal Fidelity’s Bahamas Economic Outlook (BEO) at Baha Mar yesterday that many countries in the Caribbean have accepted “vanity projects” like stadiums from the Chinese, only to find themselves trading those projects for huge debt or votes at the United Nations.
Metzl said the Chinese have positioned themselves strategically in The Bahamas, even through an investment like the Baha Mar project. He added that, while it is likely a legitimate business interest for the hotel property’s Chinese investors, it is as much a strategic move by the Chinese government.
Metzl said The Bahamas will have to hedge its relationships with both the United States and China in order to ensure it gets the most out of every business deal for its economy and its people, and is careful not to simply incur debt while attempting to maintain good foreign relations.
“Because of where you are, The Bahamas will always have and need to have a very close relationship with the United States,” he said.
“At the same time, China has been moving very aggressively into this region, and I have not the slightest doubt that there will come a time that The Bahamas will be, like Jamaica, faced with a very difficult and gut wrenching choice.
“Right now the smartest thing for The Bahamas to do is hedge between the United States and China, because if you’re getting something from China and it worries the United States, you can say to the other ‘what can you do for us’.
“The problem is The Bahamas does not have that much leverage, particularly with China. Chinese are very smart and very strategic, and they are doing what makes sense given their stated goals of being a leading, global, comprehensive power by the year 2050.”
According to the Office of the United States Trade Representative, the United States’ goods and services trade with China was valued at almost $650 billion in 2016, while its trade deficit with China in 2016 was almost $350 billion. It marks China as its largest goods trading partner, despite the two countries’ often strained diplomatic relations.
It was reported last week that China allegedly used a building gifted to the African Union, which is being used as the African Union’s headquarters in Ethiopia, as ground zero for spying activities.
Moroccoworldnews.com reported that computer servers inside the building were found to be at peak data transfer in the middle of the night, and investigations found the servers were linked to servers in Shanghai. It was also alleged that the Americans and British may have also been spying on the headquarters, according to the story. It said the African Union has since swapped its servers.
The Chinese built The Bahamas a national stadium as a gift, facilitated a huge loan for a road improvement project, and facilitated Baha Mar while simultaneously purchasing a landmark tourism property downtown. They have been interested in agriculture on the Family Islands and have inquired about fisheries. It is rumored that the American Embassy purchased new property in downtown Nassau because of China’s ownership of a hotel adjacent to (directly across the street from) its current operation.
Metzl said strong government systems are required to effectively leverage the gifting and investment relationship with countries like China. he said a country must have a clear development and human resource strategy.
“The governments making the decision to take on the debt are different people than the people who will be called upon in the future to repay that debt,” Metzl said. “So unless you really know where you’re going, unless you really have a strategic development and human resource strategy as a country and you have a governmental culture so that people are held accountable… you can really get into a dangerous position.”
He added that many people still do not know what was negotiated between the government and the Chinese in the Baha Mar deal.
Metzl exclaimed, “Everything comes with a price.”