Certainly, the massive loans given to the “Build! Build! Build” are starting to cost. As the big infrastructure projects and other loans are taking their toll on the economy. Therefore, the Philippines and President Rodrigo Duterte are trying to collect something. It seems like the Chinese counterparts are getting lots of collateral and salvage the spent funds in Philippines. Because, as the weeks goes by and the ASEAN friends, the one with the upper-hand is China.
This is surely not how Duterte want it too look, as they are having a bargain. There has already been putting into question the control of Benham Rise and the hard-won control of the island there. Still, the Republic haven’t fought with tooth and nail to get it back. This week, it seems like there are more installations on it. The sovereign Philippines are being toyed with by China. They are being fooled and has to accept deals, because of the loans to Beijing. Manila is indebted and has to give concessions. Why else, would this week be filled with new Chinese interference and getting licenses in the Philippines?
Weather Station Controversy:
““It is currently coordinating with concerned government agencies, as well as with the Philippine Embassy in Beijing to verify the existence or non-existence of these alleged facilities,” he said. Panelo earlier addressed this concern on Monday saying Foreign Affairs Secretary Teodoro Locsin jr. will “do his job” once the reports have been verified. China’s Foreign Ministry Spokesperson Lu Kang announced on November 1 that Beijing has already begun operating weather stations on the artificial islands in South China Sea. “These projects are designed to observe the maritime, hydrological, meteorological conditions and air qualities, and provide such services as maritime warning and forecast, tsunami alert, weather forecast, air quality forecast, and disaster prevention and relief,” Lu Kang said in a press conference” (Janine Peralta – ‘Philippines to take action if Chinese weather stations in South China Sea are verified — Palace’ 06.11.2018 link: http://cnnphilippines.com/news/2018/11/06/ph-china-south-china-sea-panelo.html).
“One of the projects included an exploration between state-owned Philippine National Oil Company (PNOC) and Chinese state-owned CNOOC Ltd., located off Calamian in southwestern Palawan province, Cusi told Manila Bulletin in a news briefing. Cusi was referring to Service Contract 57 which covers an oil and gas project awarded to PNOC’s exploration unit, and picked CNOOC as a partner. Cusi did not share details for Service Contract 72, an exploration permit held by the Philippines’ PXP Energy Corp. for Reed Bank, but clarified that the Reed Bank, another disputed South China Sea area, is not of the two” (Meanne Rosales – ‘ PH to seal 2 exploration deals with China’ 09.11.2018, link: https://powerphilippines.com/2018/11/09/ph-seal-2-exploration-deals-china/)
Chinese Telecommunication as the Third Telco:
“Philippine President Rodrigo Duterte has lauded the entry of China Telecommunications Corp., or China Telecom, in his country’s telecommunication industry, saying the Philippines stands to benefit from the “good competition” that a Chinese company will bring to the industry” (…) “Duterte said that China “has proved to be of very incredibly high quality of electronics.” “(Xinhuanet – ‘Duterte welcomes China Telecom’s operating in Philippines’ 08.11.2018).
As we see, the sudden Benham Rise in the South China Sea and the will of China to takeover the place, while the Malacañang are preoccupied with sneering at priests, Rappler and who else who hurt their pride. They are not seeing or looking away from the sovereign implications on Benham Rise. As there are talks already of military installations, but now also monitoring equipment and a weather station. Clearly, the Chinese sees it as their land, while the PH are busy trying to find out what is happening there.
Than, you have the oil-fields in the same region, where the Chinese National Offshore Oil Company (CNOOC) have gotten licenses to drill oil there. Clearly, this is all intentional, as well as they are the lucky third Telecommunication Company and getting into the Cellphone business too. This is just fitting as a glove. They are both getting territory in the South China Sea, they are getting exploitation opportunities and steady profits through a cell-phone carrier. All this they have gotten for dropping some loans, that is hard for the Philippines to repay in cash.
That is why they are allowed to get these things, as collateral for the debt. This is a game the Chinese plays well. That is why this is all happening. We have seen similar efforts done in Sri Lanka. That will surely happen in the Philippines too. As the Chinese is not forgiving with their loans. They want points on the dollar. Not loose money and certainly not lose face on the investments made. Peace.
“African leaders should not turn the continent into a giant collector of donations and loans from wealthy nations—they must find other plausible means to help established their economic security so as to minimize poverty. This incoherent blunder on the mainland must be scrutinized.” – Duop Chak Wuol
As The 2018 Beijing Summit of the Forum on China-Africa Cooperation (FOCAC) is scheduled to happen on the 2nd and 3rd December 2018, there is time to remember how the Chinese is operating on the African Continent. The Chinese isn’t coming with empty giving hands of donations or even charity. They come with intent of interests and needs of resources from the continent, by offering loans, serving and building through state owned enterprises (SOE) in various of countries, whether it is roads, ports or railroads are built by Chinese Companies, by Chinese Workers and often on Chinese loans. Therefore, they might end up as Chinese owned enterprises, whose vital for transportation and export of needed minerals and whatnot from the continent.
Instead of coming with loans and direct-aid with strings like Western Powers has done over the last few decades, the Chinese are coming with friendly loans, but the Heads of State should know that the Chinese doesn’t play. They want value for money and expect a return, if it doesn’t they might snatch the new crown-jewel or anticipate to get perks from the state. If that is some sort of trade-off or licenses to extract mineral resources or even minor taxation like toll-roads, where the piece of cash will be sent to Beijing and not the capitol of the country where the road is built. That is how these people operate. They are not in it to play or be giving, but gain advantage and have the upper-hand.
This can be shown by what the State Media in China writes in Xinhua Net wrote today and what a CARI report on the same funds are saying. The Chinese portray the funding as investments on the Continent, as the funds are most likely pushed as loans, which burdens the states and that they have to repay. Loans are not given, but issued because of lack of direct funds to build those infrastructure and investments done. So, what I am saying isn’t mere speculation, but a narrative that has to sink in.
“China’s investments into Africa surged by more than 100 times from 2000 to 2017. In the past three years, annual Chinese direct investment into Africa was about 3 billion dollars on average. By the end of 2017, China’s investments of all kinds into Africa totaled 100 billion dollars, covering almost every country on the continent” (Li Xia – ‘Facts & Figures: China-Africa ties: cooperation for shared future’ 02.09.2018 link: http://www.xinhuanet.com/english/2018-09/02/c_137438845.htm).
“From 2000 to 2017, the Chinese government, banks and contractors extended US $136 billion in loans to African governments and their state-owned enterprises (SOEs). Angola is the top recipient of Chinese loans, with $42.2 billion disbursed over 17 years. Chinese loan finance is varied. Some government loans qualify as “official development aid.” But other Chinese loans are export credits, suppliers’ credits, or commercial, not concessional in nature. China is not Africa’s largest “donor”” (China Africa Research Initiative – ‘DATA: CHINESE LOANS TO AFRICA’ Version 1.1 August 2018).
They might try to conceal the reality, just like make-up is used on the face to fade the age or even marks that shows stress or pimples. However, the Chinese cannot be able to lie about their intent. They would not offer these sums of cash, without expecting a turnover or even profits. The Chinese wouldn’t allow all these billions of US Dollars spent on these nations to be spoiled and lost on the streets of Lome, Harare, Addis Ababa or Nairobi. They anticipate a return on the loans, either straight cash or getting pieces of the built infrastructure to advance the value of the Belt and Road Initiative (BRI).
That the Heads of State in Africa should be concerned as they are getting in debt traps, instead of being in cycle of positive growth, they are getting new loans to pay the old ones. They are using the same creditor to secure new loans on top of the old-debt. That is how it will continue, until a point where they cannot pay the defaulted debt and the Chinese would then come to snatch something of value to recoup the failing debt. Because they don’t want to write-off the big money without having anything in return. That is what the Chinese has done in Sri Lanka and might start elsewhere. There might be soon more control of port in Djibouti or railroad of Kenya, even the Ethiopia-Djibouti railway line too. As they want their value of money.
They might be all smiles and photo-ops in Beijing these days, the smiles and added loans to dozens of countries. The added “investments” and deals struck, but the Chinese will not do so without getting something in return. To think otherwise, is to be naive and think they don’t have an agenda by doing it.
There is nothing like a free-lunch and the people will learn that, the Heads of State will not directly pay the debt, but the states will do so. Maybe not in this decade or next 5 years, but sooner or later. The bill for the coffee and biscuit will come. Than it is all eaten, but tab still has to be cleared. Peace.
“If you owe your bank a hundred pounds, you have a problem. But if you owe a million, it has.” – John Maynard Keynes
There are worries about the rising levels of debt the Philippines has to China. That should worry all Filipino. Since, this will be repaid, even as the infrastructure projects under the President is served now. The time for repaying these debts will come. This might be the next one after President Rodrigo Roa Duterte might have to answer for that. But he should be worry himself of the levels he is putting the Republic in, unless he wants important parts of the infrastructure be “given” to the Chinese as a way of repaying the debt like Sri Lanka did.
“The conclusion of an agreement with China to manage the Hambantota port was seen as inevitable after the government buckled under Chinese pressure when the China Communication and Construction Co Ltd, which was building the port city, demanded USD 143 million as compensation for the stalling of the work. The Sri Lankan government was also compelled to renegotiate the Colombo Port city project last year, which had been suspended due to criticism about the Chinese ownership of 20 hectares of freehold land as well as controversy over the project’s possible negative environmental impact” (Smruti S. Pattanaik – ‘New Hambantota Port Deal: China Consolidates its Stakes in Sri Lanka’ 17.08.2017).
This story should be worrying for the Philippines as the rising debt to China will come to roost one day. Duterte has accepted and taken it for his projects, but will it be sustainable. That is something he himself should ask himself and also if they can repay this debt without paying a high price.
Jovito Jose P. Katigbak reported in June 2018 this: “Another issue worth noting is debt sustainability. There are concerns that borrowing heavily from China will lead the country into a debt trap. A 2017 Forbes article contends that the Philippine government debt could swell up to USD 452 billion by 2027, which translates to a debt-to-GDP ratio of 197 percent. The estimated figure is based on an annual 10 percent interest rate on loans levied by the Chinese government, hence tying the Philippines into a “virtual debt bondage”” (CIRSS Commentaries – ‘BRIDGING THE INFRASTRUCTURE INVESTMENT GAP THROUGH FOREIGN AID: A BRIEFER ON CHINESE ODA’ June 2018).
If the Filipino doesn’t get to worried about the amount they are borrowing from China. It isn’t only Sri Lanka who has eaten over more debt than they can swallow and has to repay with other means. There are worry in the Pacific island of Tonga.
As reported from Tonga: “Chinese aid in the Pacific region has increased dramatically in recent years and the country has become the region’s second-largest donor. Tonga’s debt to China has been estimated to be more than $100m by Australia’s Lowy Institute think-tank. The prime minister told local media last week that countries would get together to ask the Chinese government to “forgive their debts”. “To me, that is the only way we can all move forward, if we just can’t pay off our debts,” he added. Beijing has refused to write off loans in the past but has given Tonga an amnesty on repayments” (Simone Rench – ‘Tonga premier to ask China to ‘forgive’ Pacific debts’ 21.08.2018 link: https://www.publicfinanceinternational.org/news/2018/08/tonga-premier-ask-china-forgive-pacific-debts).
We have seen what the Chinese done to the Sri Lankan and Tongan counterparts. Both of instances could be happening to the Philippines. Not that you wish that, but the repayments of the growing debt will happen at one point. Even if there is long grace-period of lower rates on the interests as promised to Manila. You can wonder when the Beijing want to recoup the funds and the debt.
Right now, Duterte has a good relationship with Beijing, but when do they feel they have invested enough in the Build! Build! Build! (BBB) projects and wants profits and returns on the investments?
Because the Chinese will not do this forever. They might act nice at first and investing in infrastructure projects as a part of the Belt and Road Initiative (BRI), but when time goes by and lack of repayment hits the fan. The familiar faces of Beijing will get their value for the money and the sovereignty will be taken away. As a port, a piece of mines or exploration of some sort of industrial output will go directly to Beijing and a state owned company. Since they will get their repayment for all the offered debt to the nation.
That is what Duterte is risking, if it is oil exploration and extraction, mineral resources or even ports that is vital to the business done in the Philippines. Does he wants to risk that for the signature building of the BBB?
What is up with President Rodrigo Duterte?
First it was the Benham Rise, where the Philippines won’t send the army or the field researchers on it. As the Chinese have named the area and several government leaders are we’re at one point saying that the Republic wasn’t sovereign to have control over it. Therefore, they have already shown deep weakness towards Beijing. They have accepted to muffled and tussled with by Xi Jinping and his brigades, as the Philippines are less powerful, than the Chinese.
Secondly, Duterte has again shown that he is this weak, as the war-planes and war-ships are put into the South China Sea, as the administration will not react or make a diplomatic spat with them. Even if this is military movement in the nearby area or anything else. Its like he has lost the power of sovereign nation and become a groveling poor uncle to the grandest family member in Beijing. Rodrigo just have to bow his knees and kiss the ring. Accept to be violated and played with, instead of standing ground on the principals of his state. That is not going to war, but questioning the motive of Beijing. Since, they are putting a lot of force close to its borders. That should worry him as the President of his Republic.
“The Philippines said it is “closely monitoring developments” in the area, but diplomatic actions against China’s intrusive behavior will not be publicized. “It is not our policy to publicize every action taken by the Philippine government whenever there are reported developments taking place in the West Philippine Sea and the South China Sea,” the Department of Foreign Affairs said. The department noted the improved relations between China and the Philippines under President Rodrigo Duterte and said it will avoid steps that could undermine the situation. “Moving forward, we are taking a different approach to avoid any drawbacks and challenges,” the department said. Duterte on Saturday said he cannot do anything to oppose China’s militarization of the islands and that he would not risk deploying forces in the South China Sea. However, he said he will eventually bring up the dispute later in his term” (Mikhail Flores – ‘Philippines stops short of condemning China over bombers’ 21.05.2018, Asia Nikkei).
This here shows how careful the Philippines are with their powerful neighbor. They might do something later, they accept to kicked in the guts by the Chinese and trying to keep cool. Usually, Duterte is a hot-head who speak his mind first and begs for forgiveness. Therefore, this is a bit weird coming from him and his administration. He has no trouble getting rid of enemies and people who questioning his powers. However, the Chinese can power-play and mock him even, in his backyard with their military force.
You can wonder if the promised Chinese investments deals and aid agreements are the reasons for this carefulness, as well as the lack of territorial integrity on Benham Rise and now with the militarization of the South China Sea. It is like the Chinese are not as friendly as it seems, more like they want to show their strength and not play on others people’s terms, but their own. If they are toying around with the Philippines and showing whose the boss.
It must hurt the pride of Duterte, who likes to be the strong-man, the big-man, the ones whose words matters and decrees are honored. Now, he is played around by Beijing and has to anticipate his next actions. That is not typical Duterte, not at all.
A humiliation doesn’t fit him or his republic well, it is weird. Peace.
In New York this week the United Nations General Assembly of the 72nd Session. We can clearly see that the world has changed. Not to the better, but a grim state of affairs. Where the greatest nation and former superpower United States of America (USA) having their President on direct war-talk at the General Assembly. This is not something that is normal, I can never recollect anyone talking like this at this venue. That the United Nations are used in this way is flabbergasting, but Trump never cares about audience or how it affects them. As long as he get PR and becomes the megalomaniac as he always is. Someone, should have learned him this, but the flawed education and obvious indifference of the world. Has been transpired to world long time ago.
I will look first at the most striking words President Donald J. Trump has against the North Korea, than do the same from North Korea Foreign Minister Ri Yong Ho. This will be interesting, before discussing their approach from the General Debate at the UNGA. Look!
President Donald Trump on the 19th September:
“If the righteous many do not confront the wicked few, then evil will triumph. When decent people and nations become bystanders to history, the forces of destruction only gather power and strength. No one has shown more contempt for other nations and for the well being of their own people than the depraved regime in North Korea. It is responsible for the starvation deaths of millions of North Koreans, and for the imprisonment, torture, killing, and oppression of countless more. We were all witness to the regime’s deadly abuse when an innocent American college student, Otto Warmbier, was returned to America only to die a few days later. We saw it in the assassination of the dictator’s brother using banned nerve agents in an international airport. We know it kidnapped a sweet 13-year-old Japanese girl from a beach in her own country to enslave her as a language tutor for North Korea’s spies. If this is not twisted enough, now North Korea’s reckless pursuit of nuclear weapons and ballistic missiles threatens the entire world with unthinkable loss of human life. It is an outrage that some nations would not only trade with such a regime, but would arm, supply, and financially support a country that imperils the world with nuclear conflict. No nation on earth has an interest in seeing this band of criminals arm itself with nuclear weapons and missiles. The United States has great strength and patience, but if it is forced to defend itself or its allies, we will have no choice but to totally destroy North Korea. Rocket Man is on a suicide mission for himself and for his regime. The United States is ready, willing and able, but hopefully this will not be necessary. That’s what the United Nations is all about; that’s what the United Nations is for. Let’s see how they do. It is time for North Korea to realize that the denuclearization is its only acceptable future. The United Nations Security Council recently held two unanimous 15-0 votes adopting hard-hitting resolutions against North Korea, and I want to thank China and Russia for joining the vote to impose sanctions, along with all of the other members of the Security Council. Thank you to all involved. But we must do much more. It is time for all nations to work together to isolate the Kim regime until it ceases its hostile behavior” (Donald J. Trump, 19.09.2017).
Foreign Minister Ri Yong Ho on the 23rd September:
“Since Trump uttered such reckless and violent words provoking the supreme dignity of the Democratic People’s Republic of Korea (DPRK) at this very platform, I think it is fair enough for me to make a response in the corresponding tone. During his 8 months in power, he has turned the White House into a noisy marketing place full of crackling sounds of abacus beads and now he has tried to turn the UN arena into a gangsters’ nest where money is respected and bloodshed is the order of the
day. The absurd reality that the person like Trump, a mentally deranged person full of megalomania and complacency, the person who is chastised even by American people as “Commander in Grief, “Lyin King”, “President Evil” is holding the seat of the U.S. President, and the dangerous reality that the gambler who grew old using threats, frauds and all other schemes to acquire a patch of land holds the nuclear button; these are what constitute the gravest threat to the international peace and security today. Due to his lacking of basic common knowledge and proper sentiment, he tried to insult the supreme dignity of my country by referring it to a rocket. By doing so, however, he committed an irreversible mistake of making our rockets’ visit to the entire U.S. mainland inevitable all the more. None other than Trump himself is on a suicide mission. In case innocent lives of the U.S. are lost because of this suicide attack. Trump will be held totally responsible. The respected supreme leader Comrade Kim Jong Un stated: as a man representing the DPRK and on behalf of the dignity and honor of my state and people and on my own, I will make the man holding the prerogative of the supreme command in the U.S. pay dearly for his speech calling for totally destroying the DPRK. Trump might not have been aware what is uttered from his mouth but we will make sure that he bears consequences far beyond his words, far beyond the scope of what he can handle even if he is ready to do so” (Ri Yong Ho, 23.09.2017).
The words are really out of bound. It is not the ordinary, it is no code, no brief statement that could been for many issues or many nations. In this particular event both gentleman and representatives of their nations went in for the kill. First Trump went on his way to offend and endanger the situation. The special thing is that both Yong Ho and Trump claims they are on a suicide mission, either its the American President or the North Korean one. There both of them are saying it. If this is true, than them both are possibly killing themselves and their nations for some brownie-points. That has clearly not sunk in at any of the parties.
The second thing you see, is how they both are envisions the United Nations and their role. That Trump think its a tool for his use and that the powers inside UN are for his causes and favors. He will see in the future that he is wrong. Since that is a consensus and majority vote in favors of sanctions and change of protocol towards a state. Nothing that happens on just a popularity contest. North Korea on the other hand, is worried about the vision Trump has and his agenda to destroy them. That is natural defense from them, as they have the worries of the rest world blowing them to bits. Trump doesn’t understand that others has self-defense and natural reactions to threats. Neither understanding the consequences of his actions. Which makes it ironic, that the North Korean counterpart see the same.
This here will not end here with these statements from either parties. The tide has not turned. And that is sad since the conflict and warfare will hurt someone in the end. Just like the United States Sanctions against North Korea and sudden move by China to stop selling Petrol. Not that anyone want another state with Atomic Bombs, but clearly it is hard to trust Trump with it either. He is not the stable world-leader, its hard to know if his fit to it. Since, he attacks without thinking consequence of his actions.
We will see how this goes, but these sort acts and statement cannot become the new normal. This sort of diplomacy and risk-taking shouldn’t be played on the grand-stage like this. It is not the place and neither is the possible result. United States should know better, they have been involved in conflicts for decades and are vital part in plenty. North Korea, who knows the Americans has interests in the South-East China Sea, should be careful, but they have to answer to not lose face. That is natural in the circumstance. They are squeezed by sanctions and further pressure, the United States knows this. United Nations should be used for peaceful means and possible place for debate for a better future. Not create war… Peace.