Why would Beijing bother

The unfolding drama following the break-up of diplomatic relations between Taiwan and The Gambia is unraveling the inner workings of the personal diplomacy conducted by the Gambian leader which should serve as notice to Beijing.

As the next diplomatic destination of the Gambian dictator, the People's Republic of China is certainly keenly following revelations concerning the manner in which Jammeh conducts foreign policy.  It is a style that is personal with Gambia's national interest taking a back seat.  Gambians have learned in two short weeks as events continue to unfold that Jammeh's relations with Taiwan was more for his personal enrichment than for the mutual benefits of the two countries.  The demands for personal favors from Taiwan at the expense of Gambia's national interest  was not only unprecedented but disgraceful.  Jammeh makes Gambians look cheap and self-centered, and the story only gets worse as Taiwanese politicians start asking questions.

Initially, it was thought Jammeh owed Taiwan $ 10 million.  Now the figure is placed at $ 20 million by Legislator Tsai Huang-liang of the Democratic Progressive Party of Taiwan who estimated that over the years, the total outstanding loans owed Taiwan by its former allies amounted to roughly half a billion dollars. Legislator Tsai is insisting that the government should go after the defaulters to recover the outstanding amounts to avoid sending the wrong message that diplomatic allies can contract loans and then walk off the relationship without paying.

Following the diplomatic rupture, former Ambassador Shih was dispatched to Banjul to see if he could talk Jammeh into reconsidering his decision to sever relations.  He refused to meet the Shih delegation but delegated his Vice President who informs the delegation that the decision was final because when Jammeh's demands for a $ 10 million in a one-time payment, he expected Taiwan to comply because "we are brothers."  In turning down the $ 10 million demand, the Vice President intimated to the delegation that Jammeh deducted from the refusal that "Taiwan was no longer in need of Gambia's support."  In short, the personal enrichment of Jammeh is the quid pro quo for Gambia's diplomatic relations and support in international fora.

Jammeh's personal style of conducting foreign policy will not fit well with the Chinese foreign aid model. There will be more demands for accountability than what we have seen in the Taiwanese model.  The Chinese will not rush into establishing diplomatic relations with The Gambia, especially as embarrassing demands of Jammeh on Taiwan continue to be unearth by Taiwan authorities and the local media.  The Chinese will move faster only if Jammeh, the snake oil salesman he is, can sell the same story he's sold Gambians for over a decade that The Gambia is floating on crude oil.        

AMRC has outlived its purpose, it's a corruption den, and should be closed

The Assets Management and Recovery Corporation (AMRC) was established by an Act of Parliament in 1992 with a clear and simple mandate, to manage the assets and liabilities of the defunct Gambia Commercial and Development Bank (GCDB).

Two years into its existence, the 1994 coup took place and the mandate of the AMRC was extended to include newly confiscated properties of members of the Jawara regime.  But not all fell under the purview of the corporation.  In fact, many of these properties fell into the hands of members of the junta and their families, friends and supporters.  The rest, mostly less attractive, were handed over to AMRC to be managed.  many quickly fell into disrepair and dilapidation. Assets quickly turned into liabilities because the corporation was not designed to be a long-term proposition but a short-term fix to address the assets and liabilities of the GCDB.

We are being told that 72% of the entire GCDB portfolio valued at D 240 million ( about $ 8 million) has been recovered with an outstanding balance of D 94 million (about $3 million).  There has been zero collection for years, and the corporation, according to its own reporting, has ceased to collect "as large parts of these debts are unsecured and/or lack documentation since the debtors are either non-traceable or no longer in position to pay..."  Most, if not all of the collection activities of the corporation has been on commercial loans.  There has been little recovery of development loans, mainly agricultural machinery, because they were all unsecured.  The other category of GCDB liabilities were under managed fund category which were government guaranteed loans to Area Councils.  Most of these loan remain outstanding because most of these Area Councils are bankrupt, and have been so for a very long time.  They rely on government subvention to provide the minimum of services despite the local rates and levies collected from residents.

Instead of winding down the operations of AMRC, the regime decided instead to expand its mandate indefinitely "to venture into sectors such as agriculture, property rental and sales of forfeited property as competitive prices" as if they have learned nothing from the GCDB experience were almost all of the loans extended for development purposes ( agriculture ) turned out to be unrecoverable.  Adding sales of forfeited properties to the corporation's mandate only fuel the property confiscation binge the regime is on.  The continued existence of the AMRC perpetuates a cycle of corruption in the properties market, distorting it in the process.

The corporation has been operating deficits, at least since 2011 and the decline persists.  For instance, the turnover of the corporation in 2011 was D 19.4 million, down to D 9.7 million in 2012 - a year described by management as turbulent times but yet promised as they did the previous years, that the "corporation will grow from year to year." The corporation rental income has suffered a precipitous decline over the years because most of its rental properties, according to their own reports, "are vacant due to bad state of repairs" and all efforts are being made to repair them so that they can be put back in the market.  The idea of AMRC had never been to play the role of a landlord.  It was to manage the liabilities and assets of the defunct GCDB and close shop after the main objectives have been achieved.


  

Will Trust Bank underwrite Jammeh's $10 million Taiwan loan?

Taiwan Ministry of Foreign Affairs official responded to media reports by suggesting that, in the past, government extended loans to its diplomatic allies through state-controlled local commercial banks.

The Ministry further revealed that in contracting these types of loans, a clause was inserted in the loan agreements that gave local banks the right to bring up lawsuits against the borrower in the event of a default. Loans contracted this way, that is, through local commercial banks, are treated by the government as ordinary or regular business loans.

Following the severance of diplomatic ties with Banjul, the government of Taiwan revealed that The Gambia had such similar loan contracted through Taiwan's Export-Import Bank in the amount of US $10 million. This loan should not to be confused with a similar amount demanded of the Taiwanese in cash by Jammeh that was subsequently turned down in January this year because it was against Taiwan's foreign aid policy to dish out unreceipted cash loans

Trust Bank Ltd. is the only known local bank that is government-controlled.  Social Security and Housing Finance Corporation and the Gambia Ports Authority are two government entities that constitute the single biggest shareholding voting block or 42.46%.  The next single biggest shareholder is Databank Securities with 22.12%.  The balance of the voting power is shared among groups of investors, both publicly and privately shares, who are friendly to and stalwarts of, the ruling APRC of Yaya Jammeh.

If Trust Bank is effectively the guarantor of the loan, will it underwrite it or pursue the regime of Yaya Jammeh in court with the view to ensuring that it fulfills its financial obligation to its former friend and diplomatic ally?  It is unimaginable, in my estimation, that Trust Bank will take the lawsuit route given the nature of the Jammeh regime, and its symbiotic relationship with Trust Bank.  So the most likely scenario is for Trust Bank to underwrite the loan to keep the Jammeh regime happy rather than risk default and its attendant consequences.  Meanwhile, we will still want to know the authority for the loan, legislative or otherwise, and its proper accounting.  We hope this is not too much to ask of our friends in Banjul.

Taipei's messy gunboat diplomacy

There is growing demand from Taiwanese politicians for their government to take full account of all of the outstanding loans owed by former allies with the view to reclaiming them.

There appears to be growing frustration in Taipei over outstanding debts owed by former diplomatic allies. Gambia has now joined the ranks. Despite successful court battles and law suites victories against Taiwan's against them, some of whom have refused to repay their loans, there is still over $150 million outstanding loans that are still being subsidized by Taiwanese taxpayers.  How long Taiwan will be saddled with these loans that taxpayers must continue to subsidized before additional legal measures are taken - if additional legal recourse is available to government - is anybody's guess.

While Taiwan is still recovering from a diplomatic thunderbolt that struck last week from the direction of Banjul, there's obvious self-assessment and diagnostics being carried out to establish what actually happened, and why neither the Foreign Affairs Ministry, including the Foreign Affairs Establishment, nor the Taiwan Embassy staff in Banjul saw it coming.   Like in any messy marriage breakup, there's always enough blame to go around with the unavoidable finger-pointing, and the 18-year Taiwan - Gambia relationship is no exception.  Recriminations have started emerging from sources that do not wish to be identified revealing additional loans that The Gambia may have contracted with the Ex-Im Bank of Taiwan totaling $ 20 million. What the amount was for is not yet clear but it must have been for the procurement of goods and services originating from Taiwan.

Is it possible that all or a portion of the $ 20 million from the Ex-Im Bank of R.O.C. went towards the procurement of the three boats "donated" to the Gambian Navy by the government of Taiwan to replace the previous four vessels delivered in 2009?  If these were outright gifts, then what was the loan spent on.  As a Gambian eloquently put it on my Facebook page, "I hope someday soon, Taiwan would come out, not in a retaliatory fashion, but in the name of accountability, to tell us some of the things they have done for/with the regime in Banjul."  He continued " that shouldn't be seen as breach of any (diplomatic) confidentiality but instead being accountable to the Gambian people who are going to bear the brunt of the loan repayment..."

It should be noted that Taiwanese President Ma Ying-jeou agreed to the deal to replace the four 50 ton Dvora class (known in Taiwan  as Hai Ou or Seagull) during his April 2012 visit to Banjul.  One of these 50 ton vessels reportedly "suffered serious damage" suspected to have been linked to the 2005 massacre of 50 African nationals, including 44 Ghanaians.   According to diplomat.com, the group of African nationals was reportedly picked up by the Gambian naval vessels in international waters, transported to Gambia and hacked up by "security forces, axes, machetes and other weapons.  A Commonwealth Human Rights Initiative report linked Jammeh to these heinous crimes.  Jammeh withdrew Gambia's membership from the Commonwealth last month, and abruptly severed diplomatic ties with Taiwan last week.  It could all be attributed to coincidence, and it may not all be.  Time will tell.

Meanwhile, it is hoped that in due course the Taiwan government will shed light on these loans particularly as reports start to emerge suggesting that some of these marine assets have found their way into Moroccan waters where they are being operated privately - assets meant for the Gambia and the Gambian Navy to ensure, in the words of the Gambian Vice President in receiving these vessels, "that our territorial waters are well protected, together with our marine resources, and address banditry at seas as well as deter or punish the criminals", as quoted by the local newspaper, The Point.

Unlike the $ 10 million in cash that Yaya Jammeh demanded from the Taiwan with the specific request that a receipt was not needed which was refused, the Ex-Im Bank of R.O.C. was receipted and goods and services invoiced, and thus should be easily identified.  We hope the government of Taiwan will make this information public so that the matter can be pursued.  The Gambian people deserve to know what is being contracted in their name by a regime that has now been shown to be corrupt, and therefore undeserving to be shielded from public scrutiny.     薩內 甘比亞           

Gambia's economy continues to be mismanaged

Roger Nord, Deputy Director, African Department of the International Monetary Fund (IMF) visited Banjul, and after a closed door meeting with Mrs. Isatou Njie-Saidy, Vice President of The Gambia told reporters that she assured him that "her government is committed to ensuring the economic growth (registered), is sustained, inclusive and creates jobs."

The Fund representative suggested to reporters that the message he received from the Vice President although "clear" but he implied that the regime's were neither convincing nor reassuring. After all, the same reassurances have been given by the same regime to the same donors in the past by the Jammeh regime only to fail in following through with their promises. 

Mr Nord's response to Gambia's Vice President is that whereas a message was clear, there seem to be no sign that the Gambian authorities are committed to neither their word nor to implementing mutually agreed policies between the Fund and Government.  Combing through Fund Mission Reports dating to 2000 to date, the same warnings seemed to have been standard issues to a regime that promises a great deal about a deficit that keeps rising uncontrollably, not to speak of a domestic debt that now stands at an unsustainable level of 33% of GDP.

The Gambia spends about 25% of all domestic revenue collected annually on servicing the interest on its external debt.  Internally, government is crowding out the private sector by running high domestic debt thus limiting access to credit the banking system.  Limited access to credit, coupled with a hostile environment have resulted in businesses fleeing The Gambia for neighboring countries like Senegal.  The Fund has documented on numerous occasions the regime's insatiable thirst for domestic borrowing, and it is yet unsuccessful in curbing the domestic borrowing spree.

Consequent to the exponential growth in domestic debt, the job-creating capacity of a shrinking private sector has been contracting over the years adding to the chronic unemployment problem which has become structural in nature, pointing to the need to review the role of the Central Bank with the view to reinforcing its statutory role of managing or checking inflation and adopting monetary policies that encourage employment.

In the closed door meeting with Gambia's Vice President, the IMF representative seemed to  have politely reminded her that to achieve sustainable economic growth that is both inclusive and creates jobs, the regime must first stabilize the economy, keep inflation low, stabilize the foreign exchange markets by allowing the floating exchange rate mechanism without interference from the Presidency, and to control the fiscal deficit. Perhaps with the exception of the foreign exchange issue which is a recent  phenomenon, all the prescriptions enumerated by the Fund representative have been standard advise which have gone unheeded for years by a regime that continues to display monetary and fiscal imprudence.

As regards the stability of the foreign exchange market, the regime destabilized it this summer with the unilateral decision of Yaya Jammeh to directly intervene in the market by pegging his own rates against the U.S dollar and other currencies in direct contravention of the Central Bank Act.   Monetary policy is the exclusive preserve of the Central Bank.  The interference in the foreign exchange market by the Presidency has resulted in an unstable and distorted forex market that will take years to correct itself.  The floating exchange rate mechanism that has been in place since January 1986 and served the economy well was interrupted by a dictator with little regard for fiscal and monetary order.

The IMF official did not only warn the government of the challenges facing the country but advised strongly that government spending must be tailored to fit "available resources."  The inability of the Jammeh regime to pursue fiscal and monetary prudent policies is just one more reminder that the international community is dealing with a highly indiscipline and unpredictable regime that must be reined-in, one way or the other.

The IMF official was understandably skeptical of the assurances of the Vice President Isatou Njie-Saidy who on her 5th official visit to Taipei last month looked Taiwanese President Ma Ying-jeou straight in the eye and assured him that the Taipei-Banjul diplomatic relations was as solid as a rock.  We all know how that turned out.  

   

Students in Taiwan are victims of Jammeh's greed

Sources in Banjul said that the Taiwanese Minister of Education, Chiang Wei-ling has informed the Gambian authorities that the 276 Gambian students in Taiwan have gained temporary reprieve until the end of the current term which ends in January 2014 when all of them must return home.

These students are the innocent victims of a corrupt regime that made no attempt to protect them from becoming collateral damage resulting from the fall out of the dictator's decision.  The trauma that these students are going through at the moment could have been avoided by a competent and caring government by simply taking preemptive measures.  The students learned about their dilemma the same time as the rest of the world except Yaya Jammeh and a couple of his advisers.

Of the 276 students currently studying in Taiwan, 175 of them are on Taiwanese government scholarship which is part of the development aid of the government of Taiwan to The Gambia.  The other 101 students are considered to be on private scholarship which, in the opaque language of Yaya Jammeh, means that they are being financed directly from the dictator's picket which, for all intents and purposes, is an extension of the national treasury. Therefore in the eyes of Gambians, the entire 276 are being financed by Taiwan from proceeds of the financial aid package provided to the Gambia in the name of the entire Gambian population.

Criticism has been leveled against the scholarship selection process, including how representative is the group currently in Taiwan, but that is less important now given the problems they face.  We must focus all attention on trying to relief the students' distress brought about by a corrupt government that places higher premium on the personal welfare of one individual than a group of 276 Gambian students in Taiwan.

The temporary reprieve given to the students by the government of Taiwan on humanitarian grounds is welcomed.  It allows students to complete the current term.  Under the reprieve, even the students in the senior class would not have fulfilled their degree requirements and must go home without being graduated. This batch of students, we hope, will be allowed to complete the full academic year to allow them to receive their degrees.

We would like to appeal to the Taiwanese authorities on behalf of the students for the extension of its reprieve on humanitarian grounds to allow all the current Gambian student population to stay and complete their respective course work to graduation, provided they meet the required academic standards.  To maintain the scholarship program will go a long way in alleviating the trauma that these students are going through. for being abandoned by their government.  The government of Taiwan, we hope, will make every effort to shield the students and well as the Gambian people from any negative consequences of the actions of Yaya Jammeh.  

A responsible government that puts the welfare of its citizenry ahead of the desires of its leaders would have taken measures to minimize the trauma that these students are likely to experience for years to come even if they are allowed to stay.  Instead, the Jammeh regime decided to abandon 276 of them in Taiwan while the dictator and his cronies pursue their individual interests elsewhere.  The youth, especially students, are the staunchest supporters of the Jammeh regime, and yet they have often been the victims of the dictatorship.

Yaya Jammeh demanded more that $ 10 million in cash from Taiwan in January

The revelation by the Taiwanese Foreign Minister that Yaya Jammeh demanded more than $10 million in cash from the Taiwanese government is only the tip of the revelation iceberg.  When every thing is said and done, we will come to realize that the Taiwan - Gambia diplomatic relations was a marriage of convenience between a country that was and still is yearning for international recognition, and a military-cum-civilian regime that was desperately in search of legitimacy and financial aid to stay afloat, in the midst of international condemnation following a military seizure of power in 1994.

The diplomatic break-up announced officially in Banjul last Friday took every body by surprise - everybody but Jammeh and a couple of his drinking buddies.  His Ambassador to Taipei was unaware, and so was his Foreign Minister and the entire cabinet. The Taiwan dossier is a closely held secret in The Gambia which is and personally managed by Yaya Jammeh.  The idea to established diplomatic relations came from a couple of civilians, one of whom was a journalist, who suggested it to the Armed Forces Provisional Ruling Council (AFPRC).  The Chairman of the AFPRC was convinced of a financial windfall of not only his cash-strapped government but to individual members of the ruling council, all of whom have never seen a $100 bill prior to seizing power.

The prospects of receiving financial aid package from Taiwan in the midst of an international sanctions against the military regime while enriching themselves, all at once, was an irresistible proposition.  Diplomatic relations were established in 1995 and the marriage was immediately consummated with a $ 35 million financial aid package.  How that money was spent, and who got what, is still being debated within Gambian circles.  It is hoped that the Taiwanese will assist those interested in, and similar cases involving the use of financial aid to The Gambia meant to improve the lives of ordinary Gambians.

Taiwan's Minister of Foreign Affairs, in responding to a legislator's questions, confirmed that Jammeh "made a financial request" in January.  During the exchange at the meeting of the legislature's Foreign Affairs and National Defense Committee, the minister did not deny the lawmaker's assertion that "the request was for more than US $10 million in cash".  This specific request was made by Jammeh in January for non-project related matters which was the basis for Taiwan's refusal to grant the request.  It is hoped that the authorities will catalogue the number of times similar requests (if any) for cash were made by the Gambian leader.  Since it is against official foreign aid policy to grant such requests, we are assuming that even if cash requests were made by Jammeh, they were all denied.  Of equal importance to Gambians is whether other senior Gambian officials, acting in the name of the Gambian people, have made similar cash demands from the Taiwanese government.  Gambians deserve answers from Taiwan even as Jammeh has decided to part company.

The fact that Yaya Jammeh made cash demands to Taiwan is a shameful act, and we are glad that his request was turned down by Taiwan.  To make cash requests in my name, and in the name of every Gambian is criminal.  The revelations coming from Taipei also serve as notice to mainland China, that establishing diplomatic relations with The Gambia under the present regime is a treacherous venture fraught with risks.  It is, therefore, absolutely necessary to ensure that mitigating measures are taken before consummating the marriage between Banjul and Beijing.  The interest of ordinary Gambians, in whose name these illegal and personal cash demands are made by Jammeh, must be protected against a very corrupt regime.