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Wake up and smell the Chow Mein

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By Sir Ronald Sanders

(The writer is Antigua and Barbuda’s Ambassador to the U.S. and the OAS.  He is also a senior fellow at the Institute of Commonwealth Studies at the University of London and at Massey College in the University of Toronto.   The view expressed are entirely his own)

A television interviewer asked me if I thought Caribbean countries, and other developing territories, would benefit from the ‘war for influence’ that the European Union (EU) has launched against the People’s Republic of China.

He was referring to the announcement by the EU Commission President, Ursula von der Leyen, that the EU will launch “Global Gateway”, a scheme to compete with China’s “Belt and Road Initiative” (BRI) that has been in place since the end of 2013.

The Commission President did not try to hide that the EU’s Global Gateway is aimed at trying to stop China’s spread around the world, and its growing influence as the major creditor to more than 60 developing countries on every continent.

“We want to create links and not dependence”, she said – an allusion to the claim by the G7 countries (the rich nations of the West), that China is indebting developing countries so as to control them.

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What is striking about this new rivalry to lend money to developing countries is that it has arisen not in response to the needs of these countries for economic advancement and social improvement, but from big power rivalry for influence in their own interest.

Nonetheless, should the contest, between richer countries, result in the availability of more money to fund growth and prosperity in developing nations, it should be welcomed. Not only would it produce a larger global pot of money, but it will allow developing nations to accept loans from the rival providers that offer the best terms.

The EU has started late in this race, and the sums that it is suggesting are less than half of the $1.2 trillion that China has already put on the table for 13,000 projects in 63 countries.  The EU Commission said it will “seek” to mobilize $340 billion by 2027 (six years from now) and from a combination of public investment and, as yet unsecured, private investment.  What the EU appears to be sure of is $40 billion in export guarantees to European private investors and around $18 billion in grants.

The EU has pointed out that it has been providing “grants” while China has been providing “loans”.  But in truth the repayment terms of the Chinese loans are concessionary and affordable.  Further, they are used mostly for infrastructure projects that developing countries need, whereas EU grants are highly conditional and take very long to disburse.

Added to all this, while the EU’s “Global Gateway” was launched with much fanfare, its draft plan does not contain a list of projects it will undertake immediately.  Nor does it say to which countries.

Significantly, absent also, is any indication of if the EU will drop its criterion of low per capita income as a qualifier for access to the “Global Gateway”.  So-called middle-income and high-income countries have long been disqualified for access to grants and concessionary loans from the EU, except in disastrous situations.  The development of many Caribbean countries is measured by this flawed criterion.

Perhaps at some point that EU will actually have a serious discussion with regional groups of developing countries about their real needs and how best the EU can help – particularly as several of its members have a sad legacy of underdevelopment across every continent.   Among the EU members are France, Italy, Spain, Portugal, Belgium and Germany.  The UK is omitted from this list since “Global Gateway” is a EU project and the UK is no longer a EU member.

The bottom line is that, if this EU-China rivalry, coupled with the G7’s “Build Back Better World” – also an effort to compete with China and halt what is seen as its global influence – produces more money for developing nations, including the Caribbean, it would signal the start of a new world.   That would be especially so, if developing countries can choose the options best suited to them, and not to the lenders.   In this way, they could retain their autonomy from all lenders, spreading their exposure and seeking the best terms possible.

However, right now – especially as the global financial institutions such as the IMF and World Bank – still reflect the policies of G7 countries, China remains the lender of choice.

The G7 and leading members of the EU who built their economies on the backs of developing countries in Asia, Africa, and Latin America and the Caribbean should wake up and smell the Chow Mein.  It is everywhere.

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In Other News

REQUEST FOR EXPRESSIONS OF INTEREST

(CONSULTING SERVICES – INDIVIDUAL SELECTION)

 

OECS MSME Guarantee Facility Project

Loan No.: IDA-62670, IDA-62660, IDA-62640, IBRD-88830, IDA-62650

Assignment Title: Senior Operating Officer (SOO)

Reference No. KN-ECPCGC-207852-CS-INDV

 

The Governments of Antigua and Barbuda, Commonwealth of Dominica, Grenada, St. Lucia and St. Vincent and the Grenadines have received financing in the amount of US$10 million equivalent from the World Bank towards the cost of establishing a partial credit guarantee scheme, and they intend to apply part of the proceeds to payments for goods, and consulting services to be procured under this project. 

The consultant will serve as the “Senior Operating Officer (SOO)” for the ECPCGC and should possess extensive knowledge of MSME lending with some direct experience lending to Micro, small and medium-sized businesses, knowledge of the internal control processes necessary for a lending operation and the ability to design and implement risk mitigation procedures. The ideal candidate should possess an Undergraduate Degree from a reputable college or university, preferably in Business, Accounting, Banking or related field, with a minimum of 5 years’ experience in lending, inclusive of MSME lending. The initial employment period will be for two years on a contractual basis. Renewal of the contract will be subject to a performance evaluation at the end of the contractual period. The assignment is expected to begin on September 30th, 2021.  The consultant will report directly to the Chief Executive Officer of the ECPCGC.

The detailed Terms of Reference (TOR) for the assignment can be viewed by following the attached link below. 

 

https://bit.ly/3iVannm

 

The Eastern Caribbean Partial Credit Guarantee Corporation (ECPCGC) now invites eligible “Consultants” to indicate their interest in providing the Services. Interested Consultants should provide information demonstrating that they have:

  • An Undergraduate Degree from a reputable college or university, preferably in Business, Finance, Banking or related field; and
  • Minimum of 5 years’ experience in MSME lending. Applicants should also have:
  • The ability to design and implement risk management procedures 
  • Extensive knowledge of MSME lending with some direct experience lending to small and medium-sized businesses
  • Extensive knowledge of MSME banking operations
  • Knowledge of the internal controls necessary for a lending operation and the ability to design and implement risk management procedures
  • Experience developing and presenting information in public, including responding to questions in real-time
  • Experience lending to MSMEs located in the ECCU
  • Knowledge of marketing and communicating with the MSME sector
  • Ability to draft procedures to be used in a lending operation
  • Familiarity with the mechanics of a loan guarantee program
  • Exceptional written, oral, interpersonal, and presentation skills, and
  • Proficiency in the use of Microsoft Office suite.

The attention of interested Individual Consultants is drawn to Section III, Paragraphs 3.14, 3.16, and 3.17 of the World Bank’s Procurement Regulations for IPF Borrowers July 2016, [revised November 2017] (“Procurement Regulations”), setting forth the World Bank’s policy on conflict of interest. A Consultant will be selected in accordance with the Approved Selection Method for Individual Consultants set out in the clause 7.34 of the World Bank Procurement Regulations for IPF Borrowers. 

 

Further information can be obtained at the address below during office hours 0800 to 1700 hours:

Eastern Caribbean Partial Credit Guarantee Corporation

Brid Rock, Basseterre,

St. Kitts.

Expressions of interest must be delivered in a written form by e-mail by August 11th, 2021, to [email protected]. 

 

For further information, please contact:

Carmen Gomez-Trigg                                                            Bernard Thomas

Chief Executive Officer                                                          Chief Financial Officer

Tel: 868-620-8144                                                                  Tel: 869-765-2385

Email: [email protected]                                          [email protected]