A senior United States (US) official has advised countries in the Caribbean to be wary of accepting investment from China. In fact, he said doing business with companies in the West may be a better option.
US Secretary of State Michael Pompeo, speaking at a policy discussion session on US-Caribbean relations during a two-day visit to Jamaica, said there are better alternatives to accepting money from China, with which his country is engaged in a trade war.
“It’s tempting to accept easy money from places like China. But what good is it if it feeds corruption and undermines your rule of law? What good are those investments if in fact they ruin your environment and don’t create jobs for your people?” he questioned.
“There’s a better alternative. We all know it and we can all achieve it together. Western firms, American firms operate according to values proven to produce good deals and quality work, the work that we do in democracies, things like transparent contracts, the respect for the rule of law, honest straightforward accounting practices. That’s why I’m proud to be America’s Secretary of State and advocate for American companies to come and want to participate and invest in places like Jamaica and the region.”
Responding to questions about why he had singled out China, which has been visible in the region in offering aid and bringing investment, Pompeo said countries in the region should “evenly” and “thoroughly” examine investments from anywhere.
However, he added: “The Chinese Communist Party does present a particular challenge and we’ve made no bones about saying to nations, ‘Just make sure that this is a transaction that is on the up and up’, that it is square, that this investment is being made for economic purposes.”
Declaring that the US “love[s] the Chinese people”, he acknowledged that his country has enormous investment from China, and there are also American companies that invest in the East Asian nation. He noted that the US had just completed the first phase of a significant trade deal with China.
“But,” he added, “here’s what America is doing: We are making sure that when Chinese companies come invest in America, they are doing what President Trump said. It’s going to be fair; it’s going to be reciprocal. That is, American businesses that invest in China should be permitted to do so on the same basis that Chinese companies that invest in America. The same thing for trade. If there’s going to be a tariff in one place, well, it ought to be reciprocal. We simply want to compete on a fair and level basis.”
Pompeo also stressed the need for transparency when accepting investment.
“You owe it – we all owe it – to the people of our nations to make sure that when foreign direct investment is taking place, that it’s coming truly for the right reasons – that it’s not coming for a national security reason to put at risk the privacy of the citizens of Jamaica, right; it’s not coming to have a political outcome; that it’s truly an economically based – it is a risk-adjusted return on investment being sought by that capital provider.
“When that’s the case, if it’s a European company, great; if it’s a company from Africa, fantastic; if it’s a company from the Caribbean, so much the better. But every nation has an obligation to make sure that the money that’s coming to the country is doing so for the betterment of its people and not for some political or national security purpose,” he said.
Outlining how the US was helping business in the region, Pompeo said a Growth in Americas initiative, of which Jamaica is a charter member, was launched last December with the aim of helping countries catalyze private investment in infrastructure.
“We’ve created a new Development Finance Corporation (DFC) that works inside of our State Department. It can help your private sector stand on its own….We look forward to working with Haiti to identify how the DFC financing can help its economy,” he added.
Regarding the energy sector, the Secretary of State said the US is gaining steam in the sector and expanding collaboration.
Taking a dig at the oil arrangement which Venezuela has with some Caribbean countries, Pompeo added: “PetroCaribe is fading into the sunset, as the Maduro regime itself will do.”