Did Beijing send the money for Taiwan?
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- Parent Category: Nov 2011
- Category: Week ending Nov 12th, 2011
- Published on Saturday, 12 November 2011 23:33
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New evidence has surfaced in St. George's about an attempt that was made by the former New National Party (NNP) government of Prime Minister Keith Mitchell to get Mainland China to take care of millions of dollars in outstanding debts to Taiwan.
Grenada moved with speed after the passage of Hurricane Ivan in September 2004 to break ties with Taiwan and recognize Mainland China in the face of a more lucrative offer of aid from Beijing.
THE NEW TODAY has obtained the copy of a letter dated November 10, 2004 in which the then NNP administration was engaged in negotiations with emissaries of Mainland China for Beijing to take over the debt repayments with the Republic of China on Taiwan.
The letter was prepared by Richardson Andrews, the Special Advisor to Prime Minister Mitchell to head of the Keppel Foundation, the group that was negotiating the talks aimed at getting St. George's to recognise Beijing and to sever ties with Taiwan as part of the One-China policy.
Andrews told the Chinese emissaries that the NNP would like the Taiwanese debts to be treated as a separate matter in whatever financial package that Beijing was giving to Grenada as part of the switch in diplomatic ties.
He made it clear that Dr. Mitchell and his government did not want the Taiwanese debts to be part of the proposed US$50 million package from the Chinese on the Mainland as part of any accord to dump Taipei.
"...We had proposed the treatment of the Taiwanese liabilities as a separate item. It is necessary for several important reasons to eliminate the Debt to Taiwan. However, if you treat the paying off of the Debt and the community based projects as part of the initial USD 50 million, it will dilute significantly the impact of your generosity and help with our post-Ivan relief development. We need to find a way to handle the Debt to Taiwan without weakening your cash assistance", the Richardson Andrews letter said.
It is not clear whether the requested funds from Mainland China were given to Grenada, however, Taiwan is now pressing the East Caribbean island to recover in a one-off payment all of the 76 million E.C dollars owed to it from four outstanding loans.
As a public service, THE NEW TODAY reproduces in full the Richardson Andrews letter which gave some insights into the attempts made by the Mitchell government to get Beijing to handle the monies owed to Taiwan:
10th November 2004
Mr. Frank Hwang
President
Keppel Foundation
17 Tennyson Lodge
Paradise Square
OXFORD OXI 1UD
ENGLAND
Excellency,
Reference is made to your letter dated 9th November 2004 containing a reply to my letter of 4th November 2004.
Taiwan Debt
As requested in your letter, I can advise you that the size of the Debt to Taiwan is now USD30 million with interest about USD3 million. Other community-based project is approximately USD 2.0 million.
We have noted with satisfaction that you have confirmed the cash payment of UDS 50 million, which was offered to the Honorable Prime Minister. It was his understanding that this was an improvement on the previous offer of USD 35 million.
Your new inclusion of the Taiwanese Debt and other related liabilities on the increased offer of USD 50 million therefore came as a surprise and required some reassessment on our part.
As you are aware, we had proposed the treatment of the Taiwanese liabilities as a separate item. It is necessary for several important reasons to eliminate the Debt to Taiwan.
However, if you treat the paying off of the Debt and the community based projects as part of the initial USD 50 million, it will dilute significantly the impact of your generosity and help with our post-Ivan relief development. We need to find a way to handle the Debt to Taiwan without weakening your cash assistance.
One way is to treat the Debt as a separate payment, and to make the payment as such. Alternatively, you could establish a repayment reschedule, but the times will need to be negotiated with the Taiwanese, before hand.
Another alternative would be to treat the Debt repayment as one of the elements that will go into the initial 5-year Programme of Cooperation. The scheduling of the programmed repayments would have to come from negotiations with Taiwan.
In any event, we think that a significant initial payment on the Debt settlement would need to be made upon the normalisation of relations, and that such payment should not form part of the proposed USD 50 million cash payment.
The Treasury Deposit
In thanking you for the conclusions so far, we would recommend that the payment of the USD 50 million take the form of three cash Treasury deposits of Tranches of USD 30 million, USD 10 million, USD 10 million during the first year of normalisation of bilateral relations.
The Stadium Complex
We have taken note with pleasure your agreement to undertake the work to be done to make Stadium ready for the International World Cup of 2007. The reconstruction and expansion of the Stadium Complex is of great significance to Grenada. It is of great symbolic and physcological value to the Nation. It is also of great sporting significance.
The hosting of the World Cup in early 2007 in Grenada is also of high international significance. It is the equivalent of World Cup in Soccer, or the Olympics in Athletics. Given the high national and international value placed on the selection of Grenada as a Venue for many of the Matches, failure to complete Stadium on time will be (a) national disaster and shame of immense proportions, which cannot now be entertained.
We are therefore pleased to note your commitment to complete this project in 2006. The estimated cost of this project is about USD 40 million.
It will necessary for your professionals to examine soon the Plans already in place and the upgrades to meet the international standards, and the additional requirements, which Grenada has already committed itself to meet.
It is also of great national and psychological value to Grenada for its people to be participants in the reconstruction and expansion work of the Stadium Complex. We would recommend that room must be left for the use of local labour, local contractors, and local professionals.
Government will however, provide appropriate permission for the non-Grenadian personnel particularly at the managerial levels.
You will readily appreciate that the transfer of relationship is of great significance in many respects, and that watertight arrangements are clearly required to bind the new relationship. These arrangements would need to transcend changes in regime or political administrations.
Programme of Cooperation
With respect to the Programme of Cooperation, it would be good to put a figure on the financial commitments that would be assigned to the programme.
We propose a programme worth USD 10 million per year. We could discuss an appropriate time period for the commencement of the programme.
As indicated we are still working with the travel arrangements for the early part of December, if we can reach conclusions on these small issues during the next week or so.
I wish to convey the positive sentiments, which our discussions have generated; and I am convinced that we shall be able to overcome any impediments in the way of a new relationship.
Please, accept, Excellency, the assurance of my highest consideration
Richardson Andrews
Special Advisor to the Prime Minister
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