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Crafty_Dog
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« on: October 01, 2013, 11:54:25 AM »

China's Rising Tide in the Caribbean
Beijing's study of the Soviet Union's strategy in the islands is paying dividends.
WSJ
By RUSH DOSHI AND DAVID WALTER

Most American vacationers see the Caribbean as a place for sun and sand, not for geopolitical struggle. But that may change as Beijing ramps up its global power ambitions. As U.S. strategic interest in the Americas wanes, China has lavished money and attention on the Caribbean's island nations, muddying the waters in what has long been "America's Lake."

In June, for instance, Chinese President Xi Jinping visited Trinidad and Tobago to court the leaders of 10 Caribbean countries. He came bearing some $3 billion in development loans, a hefty sum for a tiny region.

At first, such largess seems straight out of China's standard developing-world playbook: From Africa to South America, Beijing has perfected the art of buying off governments, often to win natural resources for Chinese factories or to steal sovereign recognition from Taiwan.

But China's Caribbean involvement is far from business as usual. The combined Caribbean economy is no larger than that of Kansas, and only a handful of its countries—Jamaica, Guyana and Trinidad and Tobago—possess exportable resources of note. A few Caribbean microstates, such as St. Lucia and St. Kitts and Nevis, recognize Taiwan, but China stopped courting these states five years ago amid a Beijing-Taipei detente.



The best way to understand China's Caribbean courtship is to consider the last distant power to have designs on the region: the Soviet Union. Today the Caribbean is regarded as a strategic and economic backwater by Washington. But the Soviets saw—and Beijing sees—something different: an American vulnerability.

Until it collapsed in 1991, the Soviet Union viewed the Caribbean through a military-strategic lens. Moscow knew the Panama Canal was essential for moving U.S. naval vessels from the Atlantic to the Pacific. U.S. oil imports arrived at Gulf of Mexico refineries via Caribbean waterways. In the event of war, the Soviets reasoned they could disrupt these transportation lines, harm the U.S. economy, and distract attention from Europe.

In the early 1960s, the Soviets set out to foment military coups, invest liberally in regional relationships, and move naval assets to the Caribbean. To further project its power, Moscow established proxy airstrips in Grenada, surveillance facilities in Central America, even a secret submarine base in Cuba. These investments led U.S. Ambassador to the United Nations Jeane Kirkpatrick to warn in 1981 that "the Soviet Union has become a major military power within the Western hemisphere."

Beijing's analysts studied the Soviet Union's Caribbean strategy in the 1980s, writing that "Soviet expansion posed a threat to [Caribbean] sea lines" and helped "contain U.S. strategy." China and the U.S. are not in a Cold War. But Beijing's recent Caribbean push does revive the Soviet strategy to project power. The difference is that Beijing has greater tolerance for the long game and emphasizes economic and legal instruments of statecraft instead of Soviet-style military assistance and coups.

Caribbean states are suffering from chronic trade deficits, decades of stagnant growth, and record government debt. This year three governments—St. Kitts and Nevis, Jamaica and Grenada—are pursuing painful debt restructuring. U.S. aid is roughly half what it was in the 1980s. But China has a major project in nearly every Caribbean country and, including the $3 billion in loans announced in June, has provided more than $6 billion in development loans and grants to the region over the past decade.

China's assistance is a long-term strategic investment, and it can buy low and sell high since Caribbean influence is relatively cheap. State-owned China Communications Construction Co. already plans to build a mammoth commercial port in Jamaica over the next decade. Later on, China could establish surveillance facilities or sign naval-access agreements, as it has with Kiribati in the Pacific Ocean and Pakistan in South Asia. In times of crisis, China could use the Caribbean to draw U.S. attention away from Asia and Beijing's own maritime backyard, the South China Sea.

Moreover, China knows that island states have outsize political influence in international organizations where even the smallest countries carry the same weight. Jamaica is home to the International Seabed Authority (ISA), which regulates mining access to seafloors in international waters—and the billions of dollars of rare-earth minerals believed to be buried there.

China currently produces more than 95% of all rare-earth minerals, and to retain its dominance in the market hopes to become a leader in deep-sea mining. Not coincidentally, China has given aid to Jamaica and several other Caribbean states sitting on ISA committees that award contracts and write regulations for deep-sea mining.

China has also invested in Caribbean microstates in hopes of winning their votes in other organizations such as the United Nations. These states can and do provide support for Chinese positions on human rights, Taiwan and, increasingly, territorial disputes as far away as the South China Sea.

In June, Caribbean leaders meeting in Trinidad thanked President Xi for his beneficence and hailed what he calls his "China Dream" of "great rejuvenation of the Chinese nation." That may seem like empty rhetoric—but the Chinese investment that buys diplomatic blandishments today will tomorrow be used to secure still greater economic and strategic advantages.

Mr. Doshi is an analyst at Long Term Strategy Group in Washington, D.C. Mr. Walter is a writer in Hong Kong.
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