Beware of those who come bearing gifts

‘Beware of those who come bearing gifts’. The origin of this expression was the Trojan War. The Greeks could not break through the fortifications and get into the city of Troy. The Greeks then built a large elegant wooden horse – the Trojan horse – and sent it as a parting gift to Troy. They opened the gates and took the horse into the city. The belly of the horse was full of armed soldiers who then captured the city of Troy.

The story of the Trojan War gave rise to two expressions. “A Trojan horse” (a devious manoeuvre to get into a country or organisation) and “beware of those who come bearing gifts”.

I was reminded of the Trojan horse when reflecting on the excellent book written by John Perkins called the ‘Confessions of an Economic Hit Man’. In the world today modern versions of Trojan horses are being used by global powers to infiltrate into countries, to secure their interests. Perkins’ book gives an insight into a model used by the USA. This helps to understand the dangers that can come with gifts.

 

The essence of the story related by Perkins

There appears to be a murky, grey relationship between various US State agencies and the private sector. When it is decided that a military base is required in some country, a major construction company comes into play. They prepare unsolicited project proposals. They read the boss man of the country, and if he is egocentric, they will propose stadiums or airports to be named after him. If he is development-oriented, it will be big infrastructure projects.

The construction firm then prepares a fictitious project report that shows a major positive impact on GDP growth. The project report serves a dual purpose. It helps the boss man in the country to justify the project and enables the World Bank (that gets a nudge from the State agencies) to approve the loans. The construction company makes a killing on the contract and there is enough to grease the wheels in the country to secure local approvals.

This process goes on with more projects until the country is nearly bankrupt as it cannot meet the interest and loan repayments. Uncle Sam then comes with a rescue package and the country is totally dependent for survival on the USA and has no option but to agree to the US building their military base.  

 

Debt is a many-headed monster

If you borrow you have to repay the principal as agreed and pay the interest when due. The country has to use its tax and other revenue to pay both. When the revenue is utilised to service debt, less is available to look after the wellbeing of the citizens. If more debt is taken to repay old debt, the problem gets compounded and less and less money is available to meet the needs of the people.

It is easy to slide into a dark hole with a sticky bottom like Greece. It has no money to service the interest or to make the loan repayments. But Greece dare not default on loan repayments as this will make it impossible to get any funds in the future. So Greece goes to friendly countries for help. They say they will help, provided Greece takes tough measures to cut expenditure, and save funds to meet loan commitments.

So when I was thinking about the Trojan horse, the plight of Greece and strategies used by global powers, my mind drifted to China and the Silk Route story! 

 

The Silk Route

China has started a razzmatazz about the Silk Route. This was an unimportant piece of history. It was quite simply the sea route used to take silk to Europe. In recent times, China is suddenly ringing bells and blowing trumpets about the Silk Route. Reviving the Silk Route is the theme! 

They are focusing on Sri Lanka in this Silk Route saga. They have selected Sri Lanka to be involved in its 21st century Maritime Silk route at the upcoming Xi’an Silk Road International Tourism Expo. China is sponsoring in Sri Lanka an oratorical contest on the theme ‘Human Development Inspired through 21st Century Maritime Silk Route’. There was a seminar at the Lakshman Kadirgamar Institute on the Silk Route, etc.

‘Why this hubbub about the Silk Route?’ is a good question to ponder.

 

China needs the Silk Route for oil

China is heavily dependent on imported oil. They do not have a land route to get oil. Getting one will not be an easy task.

China has to use the sea route to get oil. The same route used by the silk merchants is now used by China to import oil. They want to make this a safe and sure route for China. They see this like a valuable necklace from China to Africa with countries being the diamonds on the necklace. They would like to control the diamonds so as to ensure that the sea route will be secure in the future.

Are they discreetly trying to make countries like Sri Lanka on the Silk Route subservient to China?

 

Beware of the Chinese that come bearing gifts of loans

A lot of our infrastructure has been financed with loans from China. Some of these are unsolicited projects that come in a package with a loan to fund the project, and Chinese construction companies to execute the project.

So China is getting a triple whammy. They get the interest on the loan, the construction company makes profits, and it opens the door to get hoards of Chinese into the country. This will enable them to build local contacts and to infiltrate all segments of our society.

 

The latest example of this ploy 

China’s Exim Bank will provide the funds for the Southern Highway extension from Matara to Hambantota. The construction will be carried out by Chinese companies, AVIC, CSCEC, and China Harbour.

 

Sri Lanka owes a lot of money to China

There are various estimates of the extent to which Sri Lanka is indebted to China. The figure mentioned by the Chinese Ambassador recently was Rs. 1,000 billion (50 billion Yuan)

If Sri Lanka continues to borrow from China there will come a point where the pressures of bankruptcy will loom in the horizon. When we find it difficult to utilise ever-increasing sums of Government revenue to pay interest and loan repayments, as this will impact our ability to provide for the wellbeing of Sri Lankans, China can emerge as the saviour, agreeing to reschedule loan repayments and interest payments. Then we become a subservient state and China will tick one box on the Silk Route for oil and say that is now secure.

 

China and corruption

There is rampant corruption in China. President Xi Jinping himself announced an anti-corruption campaign. Some very top level officials like Bo Xi Lai and Zhou Yong Kang have been tried and convicted. The media reported that 15,450 were convicted of corruption in 2014. This indicates an ethos of corruption in China. Therefore when China pursues foreign construction contracts, as corruption is a way of life in China, it is most likely that they will have no inhibitions about using corruption to get their contracts.

 

Global power games

The global powers will pursue their objectives relentlessly. Ethics and morals will not stand in their way. So Russia annexed Crimea which was a part of Ukraine. The Americans are bombing ISIL in Syria. It will be quite normal in the context of global power games for China to use every ruse to safeguard the maritime route for oil. They will probably use all the tools used by global powers; loans, gifts, and endeavour to ensure that the political parties that support them remain in power!

We will warrant the full treatment as our strategic location makes Sri Lanka one of the most important countries on the maritime Silk Route for oil. Hence, China comes bearing gifts of loans. The Greeks used their Trojan wooden horse stuffed full of people to get into the city of Troy. The Trojan horse of China are their construction contracts which enable them to get thousands of Chinese into Sri Lanka.

 

Beware of China who comes bearing gifts

China is big and powerful. We cannot give them the two finger sign and have President Jinping, jumping. The door that was opened to them fully should now be quietly shut.

P.S. A friend who read the draft said you should steer clear of Chinese restaurants. Shame. I rather like Peking duck!