China’s presence in Dominica

 According to a white paper on China’s foreign aid issued by China’s State Council on April 21, by the end of 2009 China had aided 161 countries and more than 30 international and regional organizations, including 123 developing countries. Of them, 30 are in Asia, 51 in Africa, 18 in Latin America and the Caribbean, 12 in Oceania and 12 in Eastern Europe. Asia and Africa, home to the largest poor population, have got about 80% of China’s foreign aid.

While the US has been preoccupied with wars in Afghanistan and Iraq, and the so-called ‘war on terror’, paying little attention to its immediate neighbourhood, the Chinese have established a presence throughout the Caribbean that, in large part, is regarded as beneficial to the people.

In Dominica’s case, in 2004 the government there broke long-held diplomatic relations with Taiwan to recognize the People’s Republic of China and sign-on to a policy of ‘one China’ – the code for agreeing with the Chinese government that there is only “One China” and Taiwan is an inalienable part of it.

On the establishment of diplomatic relations, the Chinese promised to undertake infrastructural development projects totalling over US$100 million – all of it grants. Four projects were specifically identified: a sports stadium; a new grammar school; the rehabilitation of the major road connecting the capital, Roseau, to the second major town, Portsmouth; and the rehabilitation of the island’s major medical facility, the Princess Margaret Hospital.

The Chinese have, so far, fulfilled their undertakings on three of these

projects. The stadium is built and in use, two phases of the school are complete, and work has started on the Roseau-Portsmouth road including the construction of miles of wall along the sea to help contain coastal erosion. Only the hospital project is pending and no one doubts that the Chinese will fulfil that commitment.

It should be pointed out that European Union (EU) is also helping with the rehabilitation and widening of the road from Dominica’s Melville Hall Airport to Roseau.

A significant difference in the EU and Chinese road projects is that the EU is employing Dominican workers while the Chinese use Chinese labour exclusively. While it might have been felt that the local population might have favoured the EU project, employing local labour, over the Chinese project that employs only Chinese, this is seemingly not the case.

Albeit a small number of people, asked about the Chinese not employing local labour, responded by saying that they were more interested in the projects, particularly the road, sea wall and hospital than they were in the jobs. They added that they were getting the projects for free.

Of course the latter observation is not entirely true. In return for their economic assistance, the Chinese government secures a “one-China policy” from the Dominican government in international organisations. This support is replicated from all the other small, Caribbean countries to which China provides similar help. The isolation of Taiwan and its non-recognition as a state continues to be an important element of China’s foreign policy. But, it may well be that, in the not too distant future, the Chinese government will insist on support for other – and new – aspects of both its domestic and foreign policy.

In fairness, it should be noted that in a White Paper on Foreign Aid, the Chinese government has listed as one of its Eight Principles for economic aid and technical assistance to other countries that “the Chinese government always bases itself on the principle of equality and mutual benefit in providing aid to other countries. It never regards such aid as a kind of unilateral alms but as something mutual”. China has been declaring that position since 1964.

Another consequence of relations with China is a gradual influx of Chinese into the local population. It is striking that far more retail shops in Roseau are now operated by Chinese than used to be the case.  However, while this competition may trouble local retailers, people in the street point to less expensive products sold by the Chinese that they find affordable. And, in any event, while the number of Chinese retailers – and food outlets – is growing, the overall Chinese population is not yet large enough to create an outcry.

If China is welcome in Dominica and other small Caribbean countries, it is because China has filled a void left by the United States and other Western nations.   Over the last decade, US assistance to the Caribbean region has dwindled except in the area of interest to the US – security including drug trafficking. Little attention has been paid to the interests of the region for infrastructural development, improving education and health facilities, and laying the foundations for investment that could produce employment and technical know-how.

Canada provided US$1.82 million from 2008 to 2009 for projects, but its development agency, CIDA, notes that “there are no long term bilateral projects planned in this country”.

The EU collectively stands out, among Western countries, as maintaining assistance to Dominica. That assistance goes beyond resurfacing the airport road to include a range of infrastructural projects, including improvement of the Melville Hall Airport.  EU money also provides budgetary support to the Dominica government. But, while EU support has undoubtedly contributed to Dominica’s welfare, the island’s loss of its preferential banana market in the EU significantly hurt its economy and put hundreds of small farmers out of business.

The difference between the EU and China, is that the EU does not tie its aid to support for EU foreign policy – an advantage, perhaps, in dealing with a collective of 27 nations whose policies are not directed by the interests of any one nation.

For all this, Dominica’s physical infrastructure – roads and bridges – has made great strides, and it is helping the country’s economy. Poverty fell from 39 per cent in 2003 to 28.8 per cent in 2009, and absolute poverty declined from 10 per cent in 2003 to 3.1 per cent in 2009. However, the International Monetary Fund has observed that more than 30 per cent of the labour force has emigrated, and per capita GDP of about US$4,931 is low.

Nonetheless, Dominica is an unspoiled and naturally beautiful country with all the potential of becoming the world’s leading Eco-tourism destination.   It is to that potential that this column will turn next week.