Grenada breathes easier as U.S. court rules in its favor
BERT WILKINSON Special to the AmNews | 7/9/2012, 4:33 p.m.
Authorities in the tiny Eastern Caribbean island of Grenada are celebrating the favorable ruling of a U.S. court in the past week that basically prevents Taiwan from garnishing overseas revenues the island earns to service loans it gave the island nation before the country switched diplomatic allegiances to mainland China back in 2005.
Grenada, which the United States invaded in 1983, was being punished by Taiwan for daring to join most of the other members of the 15-nation Caribbean trade bloc in dealing with China rather than Taiwan, which Beijing regards as a breakaway province and not a sovereign country.
So Taiwan began to look at ways to spite Grenada in international circles for de-recognizing it and making it suffer the indignity and humiliation of being kicked off the island and replaced by China, its bitter rival.
However, Justice Harold Bear of New York threw the spice island that was devastated by a September 2004 earthquake an important lifeline, ruling that Taiwan should not collect taxes and other revenues owed to Grenada by cruise liners and airlines and other suppliers simply because they had a falling out and are struggling to repay what Taiwan says were concessionary loans given to successive administrations when the two were friends.
The judge ruled that Grenada relies on tourism money "as a source of revenue for carrying out public functions." Lawyers for Taiwan and the banks through which the loans were channeled to the Caribbean nation have said they will appeal the ruling, even as local politicians and tourism officials breathed a sigh of relief and exchanged high fives in the capital, St. George's.
The outstanding loans amounted to around $30 million, according to Taiwan, and the garnishing system was in place for most of the past year.
Finance Minister Nazim Burke told the AP in June, "Taiwan naturally felt they wanted to teach Grenada a lesson as a result of its decision. What we were stunned by was the level of aggressiveness with which Taiwan pursued their position and their unrelenting resolve."
Since Taiwan disappeared from Grenada's diplomatic horizon, China has stepped in to offer millions in hurricane relief, help finish a sports stadium and disburse other forms of what is so far referred to as grant aid.
Grenada is only one of 23 countries around the world that recognizes Taiwan as an independent country, even though the regional bloc's policy is to deal with mainland China.
As expected, regional governments are supporting Grenada in its battle and will discuss the issue at the main regional annual summit in neighboring St. Lucia this week. St. Lucia, incidentally, kicked China out and replaced it with Taiwan five years ago.