Letter: China’s colonisation of Jamaica

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Dear Sir:

Thousands of Jamaicans lining the streets of cities and major towns selling cheap Chinese-made goods have become an effective marketing strategy for Chinese wholesalers holding both wholesalers and retailer licences, giving them an unfair advantage to undermine local retail grocers.

What we would like to see is more investment in manufacturing to create jobs for Jamaicans and the industrialization of energy production to facilitate a 70 percent decrease in the cost of energy. This would be a real investment and would benefit the Jamaican people instead of the cheap subservient marginal jobs in wholesales and on infrastructure projects.

When investors use their own people from China or Mexico and delete the local Jamaican workers out of the economic equation, they have effectively and structurally removed any chances of the net benefits of economic growth accruing to the Jamaican economy and its people.

Former Secretary of State, Rex Tillerson, said Chinese investments “do not bring significant job creation locally” and criticized how Beijing structures loans to African governments. “The United States is the leading aid donor to Africa but China surpassed it as a trade partner in 2009. Beijing has pumped billions into infrastructure projects, though critics say the use of Chinese firms and labour undermines their value.”

China may have conned or bribed Jamaican politicians into accepting the future value of their investments while they reap the present value of the economic benefits. A classic case for underdevelopment at play.

“The Chinese embassy in Jamaica says it’s shocked by allegations that Chinese companies paid bribes to the People’s National Party (PNP) while the party formed the government. The allegation that Chinese companies carrying out projects in Jamaica paid ‘agent fees’ is the latest development in the campaign finance scandal rocking the PNP. The scandal deepened yesterday when senior PNP member, Dr Omar Davis publicly rejected allegations by party general secretary Paul Burke that ‘agent fees’ collected from a large Chinese contractor were not paid into the PNP’s coffers.”

Having a strategic vision is being able to determine the present value of the long term savings from a program of investment and cost cutting to support the development of a sustainable growth and economic development master plan. Any investment in our economy is only worthwhile when significant economic spin-off occurs in the economy.

Where huge debt was incurred in order to build our infrastructure we must ensure that benefits of the immediate economic impact occurs now and not blindly rely on the long term net benefit that this government is forecasting, since it may result in a negative rate of return on investment due the time value of money.

Meaning it is better to have the benefits occurring now than later. Especially at the rate at which the Jamaican dollar is being devalued.

True benefits only occur when your own workers are employed on the job, otherwise, we are speculating about future benefits. The economic leakages and why foreign direct investment (FDI) has not resulted in significant growth in GDP are twofold: (1) The consumption of imported resources (energy, goods and labour) to facilitate or build projects here in Jamaica; and (2) the ineffective and or abuse of our taxation policies, like the tax waiver.

We have very good consulting engineering and business people here in Jamaica, all the government needs to do is to practice good management of the national resources and enforce good business ethics.

The kinds of foreign investment we have seen over the last two decades have not resulted in any significant growth in the Jamaican economy. What makes it even worse is that the governments of Jamaica have traded off the net future benefits to the economy by exchanging the development rights to strategic real estate within a major transportation corridor to be developed not by Jamaican workers, but by Chinese, so there is a double take again.

“The largest economic gains from investing in transport corridors may arise from urbanization and job creation around this new infrastructure, rather than from many more vehicles using it,” said one of the report’s authors, World Bank lead economist Martin Melecky, who added: “Corridor investments involve significant trade-offs and are not all equally successful in creating large economic surpluses that spread fairly throughout society.”

“Bahl and Wallace (2007) argued that Jamaica’s paradox of high investment and low productivity might be attributed, at least in part, to having an incentive programme that channels investment to less productive sectors.”

If you were to do a correlation between GDP and FDI and you will see my point? Mark you, this occurred under both administrations. We need to get rid of the systemic and structural impediment to growth and to do so we will need strong leadership and more transparency in government.

There is also a triple take of economic exploitation because all the hard currency inflows, some US$2.03 billion, will be sucked out of the Jamaican economy when Chinese-made inferior goods are exchanged in Jamaican dollars and sent back to US-dollar foreign bank account. The economic deception of cheap Chinese goods is that they are replaced more frequently, which is a hidden cost.

Silbert Barrett

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2 COMMENTS

  1. I don’t really know the true meaning of colonization. If selling cheap goods means colonization, then Chinese people must be very proud of owning such ability. Anyway, about the investment, the Chinese companies need the profit of the construction and the workers from the companies needs to work to earn their money for life. I don’t know what should be blamed? It is the Jamaica government, not the companies, who should bear the criticism and responsibility of the employment rate of the host countries. However, I agree all the companies and politicians engaged in bribery should be punished legally. But don’t stick such label to all Chinese companies or just “China”. It only reflects your narrow judgement and prejudice.

  2. We are witnessing the “looting” of Caribbean assets by a Chinese government willing to take advantage of foreign elected politicians looking for bribes.

    This travesty of justice is happening right in front of everybody yet nobody seems to be complaining.

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