A Chinese bank now owns Uganda’s only international airport, due to the Ugandan government’s failure to repay on time the loan granted by Beijing under the ‘Belt and Road’ infrastructure project (BRI) with which the Chinese communist regime is appropriating important assets from other developing countries.
The China Import and Export Bank of China now owns Uganda’s Entebbe International Airport because the African country failed to repay on time a loan it took from the Chinese bank in 2015 of $207 million and one of the clauses of the contract was that if they failed to repay, they had to hand over the country’s only international airport, through which over 1.9 million passengers travel per year.
According to the report, the airport is not the only national asset that the communist regime has appropriated through its loans.
In March 2021, current President Yoweri Museveni sent a delegation to Beijing to renegotiate the contract in an attempt to avoid losing their airport, which they used as collateral to get the loan, but the Chinese regime turned them down.
Interestingly, the loan was intended to remodel and modernize the airport, which was completed just as the CCP will take possession of it.
Predatory ‘Belt and Road’ loans used by the CCP to grab other countries’ assets
The Belt and Road initiative began in 2013 as a CCP project to link China directly to Europe but then expanded to South America and Africa.
Critics see the initiative as a way for the CCP to expand its influence globally, but as different developing countries agreed to be part of the project, other negative aspects of the arrangements came to light.
According to a Breitbart report, Beijing grants loans at a very high-interest rate (4.2 per annum) and sets very short repayment terms, an average of ten years, and sets prices for construction too high, forcing countries to take out loans that they cannot afford to repay.
The report is based on an analysis by AidData that made a comparison of Organization for Economic Cooperation and Development projects with those of the BRI and concluded that:
“China has used debt rather than aid to establish a dominant position in the international development finance market.”
Furthermore, other predatory aspects of the BRI is that the CCP uses its own companies and its own labor to carry out infrastructure works, so the actual costs of the projects are never made public to the partner country where the works are carried out and are very feasible to be much lower than what they ultimately charge for doing them.
In 2018, the Maldives’ finance minister, Ibrahim Ameer, alleged that the Chinese regime inflated the prices of all its infrastructure projects leading the government to attempt to disassociate itself from Beijing in the long run.
Brad Parks, the report’s author, explains that one of the ‘deals’ the CCP makes is to take the host country’s natural resources using debt from infrastructure projects.
For example, when it issues the loan – which Beijing knows the country will ultimately be unable to repay – it also signs a parallel contract to buy the country’s natural resources in which it is interested.
When it ‘buys’ the natural resources, the CCP deposits the funds in bank accounts controlled by the Chinese state. Once the host country fails to repay the debt, it keeps the money in that account.
Government corruption, facilitate CCP expropriations
In December 2017, Sri Lanka lost the Hambantota seaport for defaulting on one of its loans to a Chinese bank.
However, the government took on new debts to the CCP of over $50 billion for BRI projects, which like the case of Uganda, not given the corrupt practices of the CCP, is very likely to have bribed the government to go back into debt.
In poorer countries in South America, such as Argentina, Ecuador, Venezuela, the CCP promises ‘investments’ in infrastructure projects that are often not finalized in exchange for these countries rich in mineral resources, giving them access to these in parallel agreements.