November 28, 2020

Letter to Bahamas Tribune242: China is on the rise

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EDITOR, The Tribune.

WE live in a multipolar world. The United States (US) is no longer the undisputed leader of the world. is a direct challenge to US hegemony. is also a threat to the old world order because she is influencing Latin America and the . North Korea is a military challenge to US dominance. Iran is a treat to US control of the Middle East. Russia is also a treat to the US military dominance. In the Caribbean and The Bahamas the threat of climate change and crime are other aspects of the world in flux. The countries that come out on top of this new world order will be resilient and assertive of their interest.

The US has pulledcout of The Trans-Pacific Partnership (TPP), or the Trans Pacific Partnership Agreement (TPPA) – a trade agreement between , Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru and Singaporein a move designed to hinder the influence of China. On June 1, President Donald Trump announced the US would cease all participation in the 2015 Paris Agreement on climate change mitigation. This accord is designed to let states vulnerable to climate change – such as small island states of the Caribbean – a modicum of hope to mitigate the negative effects of climate change – a global problem. The US will pull out of UNESCO in 2018. UNESCO represent the soft power of the United Nations where a world order is encouraged through culture and education rather than force.

People usually choose leaders they think will be beneficial to them. China recently unveiled the Silk Road Economic Belt and the 21st-century Maritime Silk Road to allow countries to benefit from its endeavours and consequently become allies. For the Caribbean de-risking and other classification of the US have not been helpful.

The offshore industry of the Caribbean has been decimated by US lead regulation. Offshore banking is very popular in the Caribbean. It is an attempt for Caribbean countries to generate income as most are not industrialised and manufacturing is challenging given their circumstances.

The New York Times, states the Cayman Islands has US$1.9 trillion on deposit in 281 banks, including 40 of the world’s top 50 banks so offshore banking is an integral part of Caribbean economy. Fourteen nations in the wider Caribbean have been named by the US as “major money laundering” countries in the 2016 International Narcotics Control Strategy Report (INCSR). This is bad for Caribbean economies. If there is not enough benefits from the US global leadership countries will look elsewhere.

China’s President Xi Jinping visited Trinidad and Tobago in 2013 with US $3 billion in loans for Caribbean countries. The search of capital for cheaper source of labour. Human history from Roman times shows little improvement in the standard of living but from 1820 until the present day standard of living did improve drastically due to productivity improvement.

Today the world is moving to a more service driven economy. It’s predicted if a country don’t join the productive sector in the next 20 years it will be impractical in the future. Natural resources in a modern developed economy has proven inadequate. Natural resources appropriated by a small number of people does not benefit a country on a whole.

The recent Paradise Papers shows the threat of financial exposure to external shock of a develop world controlled system. Bermuda and Cayman has been named as international money laundering countries, 28% of Bermuda GDP is from financial services so they are vulnerable to international financial system which they have no control of.

Mr Trump is visiting Beijing and this demonstrates US and China are inextricably linked, similar to how the United Kingdom and the US were in the 1940’s. They have a struggle for dominance like Jamaica and Trinidad do in CARICOM but they have a symbiotic relationship. The Venezuelan influence in the Americas cannot be underestimated – see how the OAS was paralyzed in sanctioning Venezuela all because of the influence of Petrocaribe. Many Latin American and Caribbean countries have benefited from concessionary oil loans which have helped the cash flow in their domestic economy. No matter what the United States does, Venezuela will survive because they are willing to fight to the end. They have a model in Hugo Chavez. The Iran and North Korea factors are helping Venezuela by demonstrating the US is not omnipotent and dissipates power by spreading it too thin.

My view is that we are seeing a wave of resetting the international order when the head of the IMF states “if we have this conversation in 10 years’ time we might not be sitting in Washington DC. We will do it in Beijing.That’s a possibility. And it’s actually called for in the articles of the IMF – the head office has to be in the largest economy in the institution.”

China now has the world’s largest economy using purchasing parity but the second largest in actual GDP. It is expected that in about ten years China will have the world largest GDP. What does this mean for the world order? It means China will be the most powerful country in the world! Whoever got the gold makes the rule – is this true?

The recent hurricanes which decimated several Caribbean countries means they will have to rebuild. United States and Europe will not be able to assist them to the extent they desire – that’s guaranteed. CARICOM countries will stand shoulder to shoulder with them because they know that eventually they will experience a similar fate because climate change increases that possibility.

Why am I bringing all these conundrums; because as Malcom X said the future belongs to who prepare for it today. If The Bahamas prepares for a future of global change The Bahamas will come out being a beneficiary of the new world order. But, if The Bahamas act subservient to the old order it will be adversely affected. The choice is clear – build or regress.

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IMAGE: Insider Journeys

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  1. susan Moralez says

    It is a insightful commentary. keep up the good work Mr Plummer!!

  2. susan Moralez says

    The article was good, excellent work!!! I hope people take your advise Mr. Plummer!!! the Caribbean has been pawns in international power struggle. Hope that changes.

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