Loans and grants being given to Saint Vincent and the Grenadines (SVG) by Taiwan are part of what that country considers as Official Development Assistance (ODA).
This was stressed by Ambassador of Taiwan to SVG Peter Sha-Li Lan during a visit to BOOM FM’s OMG in the Morning radio programme with Dwight “ Bing” Joseph.
Ambassador Lan explained that ODA is very common when two countries are working together.
“I want to send a very clear message to all our friends, all Vincentians here. There has always been partnership between two friendly countries. ODA is the term for that and that exist everywhere,” Ambassador Lan commented during the interview last Tuesday.
The ambassador’s comments comes on the heels of issues being made with SVG’s debt to Taiwan which stands at approximately EC$477.9 million, and according to Prime Minister Dr. Ralph Gonsalves, can go up as the government tries to accomplish specific developmental goals.
Ambassador Lan’s comments also comes on the heels of the Prime Minister’s comment that the debt is a hook in the gill of the New Democratic Party (NDP) if that party comes to power and wants to sever diplomatic ties with Taiwan in preference to mainland China.
According to the Organisation for Economic Co-operation and Development (OECD), ODA is defined as government aid that promotes and specifically targets the economic development and welfare of developing countries, noting that ODA remains the main source of financing for development aid.
Ambassador Lan explained that when Taiwan was a small developing nation, ODA helped it to install critical infrastructure like airports and highways and Taiwan had to repay loans just like many other developing countries.
He said it is normal for more established countries to offer assistance through ODA and this is done by all countries around the world and Taiwan has been doing that with SVG.
The ambassador stressed that through grants and loans, this country has been able to do bilateral projects which were jointly implemented.
“That is what we are doing here for four decades,” he noted, while adding that SVG is following the developmental model which pushed Taiwan to become the eighth largest economy in Asia, and the 20th largest in the world.
He said when loans are being considered, this is done under intensive consultation between the two governments and the commercial bank that will be lending the money, “as we want to make sure that those loans will eventually benefit all Vincentians here through useful programmes”.
Ambassador Lan added that Taiwan has always shared its experience with SVG and that includes knowledge of how that country moved from an agricultural society by growing small and medium businesses, upgrading to heavy industry, (for example ship building, petro chemical) and then to a knowledge based industry.
“What we did, we did not do that alone. When we were trying to turn small and medium business into steel mills and heavy industries, we did not have the money to start,” Ambassador Lan said while adding that expansion of an economy includes upgrading infrastructure.
He said that they launched 10 major construction projects in 1980s and built their first highway system while modernizing their ports, railroads and airports.
“Does that sound familiar?” the ambassador questioned, while pointing out that in SVG, the government has built an international airport and is currently modernizing the port.
“It is almost on the same path as we experienced,” he said, while adding that their ODA partners came from the Middle East (borrowed to build their highway) and the United States of America (USA) that made available a loan for airport modernization.
The ambassador said that loans of this nature are an investment in the future of the country and once SVG wants to do something to benefit people and lack the funds, Taiwan, drawing from their own experience, will help as their friends helped them.
He said that in Taiwan, nobody criticized the government about the loans.
The ambassador also noted that the figure being spoken about does not represent the real numbers as all the loans and grants available to SVG have not all been drawn down.
He said that when one looks at the figures you have to understand that these are contracted loans, meaning that is the ceiling of the total number of loans.
“… Right now if you look at the figure, I think SVG is making the drawing of the loans very carefully, step by step, so I don’t think the majority of the loans are being used, drawn or spent so it is really up to SVG
to determine how you are going to really use the loans…
“… If everything goes like designed, from our experience again, from those major construction projects, those projects after completed or partially completed will start to benefit everybody in the county making money,” Ambassador Lan commented. He said when you contribute to economic growth through infrastructure, it benefits everyone.
“We are just playing a small role as a friend to help SVG,” he pointed out adding that debt repayment is part of a strategy and policy and SVG has good borrowing terms.
Ambassador Lan also told host Joseph that SVG is not at a stage where asking a question about what would happen if the country is unable to repay a loan should be asked.
“ …We are not getting to the stage where we should be discussing the questions you are asking, but as good friends we will work together to see what is going to happen and if it goes the way it was designed, I don’t think you have to worry about that (repaying), because only small portions of loans being dispersed and spent and you are still under the process of constructing so we will be patient and await the process.”