US should wake up to China’s looming influence in PR, author says
By John McPhaul
jpmcphaul@gmail.com
Puerto Rico is headed for a reckoning over its political status in which independence could well be the result, creating a vacuum which a major geopolitical player will seek to fill. That player is China.
That is the premise of a highly readable book, “America’s Last Fortress: Puerto Rico’s Sovereignty, China’s Caribbean Belt and Road and America’s National Security,” by a prominent local businessman, Alexander Odishelidze, who warned that the United States had better stop treating Puerto Rico as “a possession” and begin to understand the importance of the island as a valuable strategic partner in its dawning global rivalry with China.
Odishelidze said that during a speaking trip to Hong Kong in 2018, he was told by a mergers and acquisition (M&A) professional who was acquiring properties for the benefit of Chinese interests, that the group the professional represented was then negotiating to purchase the abandoned former U.S. naval base in Roosevelt Roads.
“It’s possible that my jaw physically dropped to the floor at this news,” the author said.
Unless the U.S. wakes up to what’s at stake with China’s interest in Puerto Rico, it could find its global rival firmly implanted on its doorstep, Odishelidze said.
“Puerto Rico is America’s last fortress in the Caribbean and it’s time to understand what’s at stake in the island’s sovereignty debate,” he said.
Puerto Rico, because of its status as a U.S. “possession” is currently the only part of Latin America that has not yet been openly and heavily influenced by the Chinese, said the author.
He gave examples such as Panama, where the construction of four new Chinese-financed bridges across the Panama Canal have been announced; Venezuela, which has received more than $67 billion in loans from China; Cuba, where billions of dollars of debt have been written off by Chinese investors; and Nicaragua, where a new Chinese-financed trans-isthmus canal has been contemplated.
“[It] is in the best interest of China to try to transition Puerto Rico away from U.S. statehood and toward national independence,” Odishelidze said. “Once that is achieved, Chinese investments there can pour in, quickly turning Puerto Rico into another client state -- just like so many other Caribbean and Latin American countries.”
In the case of Roosevelt Roads in Ceiba, which the U.S. Navy abandoned in 2003 following a wave of protests over the 1999 death of Vieques security guard David Sanes in a Navy training accident, the U.S. gave up a piece of real estate that it could use to launch “any operations against potential enemies who challenged the U.S. in the Caribbean,” the author said.
“We find ourselves in the surprising situation for many reasons, but primarily due to China’s Belt and Road Initiative -- a long-term infrastructure investment plan to create an unbroken trade route for Chinese goods to circle the world without interference from any other country,” Odishelidze said. “If it is successful, the plan would be a geopolitical masterstroke, setting up China for the same kind of soft-power status in the twenty-first century that Britain and America enjoyed in the nineteenth and twentieth centuries, respectively.”
Odishelidze said the M&A professional he met in Hong Kong told him how it could be possible for a foreign interest to purchase the former naval base while concealing the true identity of the buyer by acquiring the property through a U.S. hedge fund as a “directed investment,” the author said.
“This way China could invest the purchase price in the hedge fund and ‘direct’ it to buy the naval base, limiting their share in the profits,” Odishelidze said. “The hedge fund would get the fees for the acquisition and China would get the property without their name attached to it -- creating the appearance of a domestic U.S. acquisition.”
Calls to the Local Redevelopment Authority for the former naval base seeking comment on the current status of property investments at Roosevelt Roads had not been returned as of press time.
Much of Odishelidze’s book, written in English, is devoted to an account of the history of how Puerto Rico ended up in its status predicament and the most recent efforts to settle the issue with plebiscites that went nowhere -- an account that will be familiar to anyone who knows Puerto Rican history and tracks the status issue.
To tell that story, Odishelidze draws on his experience as a statehood advocate, providing an insider’s perspective of just how much “money talks” in Washington, D.C.
The author said that support for statehood seems to be waning, judging by the results of recent elections, including the 2020 elections in which pro-statehood Gov. Pedro Pierluisi Urrutia won with just 32 percent of the vote.
“But even if statehood is currently out of favor, the U.S. should be wary of what could happen if the relationship between the island and the mainland doesn’t change for the better in the near future. With so many Puerto Ricans wanting more say in their own affairs, the door is open for another economic superpower to step in and give people what they want,” he said. “As it happens, one such nation -- China -- has been investing heavily in the Caribbean over the past decade and is starting to cast its eye toward Puerto Rico. If America doesn’t wake up to this imminent threat, they may suddenly find their prized ‘possession’ firmly and irretrievably in China’s grasp.”
Odishelidze also unravels status politics, laying bare what he says are the true interests at stake in the debate.
For instance, he says that the status quo Popular Democratic Party (PDP) finds its support from corporations that enjoy a healthy tax dodge under the current “colonial” status, and by the same token many wealthy statehood supporters would abandon ship if they saw any chance of statehood actually becoming a reality, to protect themselves from paying federal income tax and any inheritance tax.
“Many wealthy Puerto Ricans talk statehood but oppose it behind the scenes,” Odishelidze said.
The remedy for Puerto Rico’s status predicament, the author suggests, is a plebiscite that offers a choice between two status formulas that provide the island’s residents with the sovereignty they have shown that they desire and at the same time keep the island in the U.S. fold: statehood and “independence with free association” with the United States through a formally concluded and ratified agreement between the two countries.
“I don’t know what Puerto Rico’s relationship with the U.S. will be in the future, but one thing is for sure: Puerto Rico’s current colonial status is on its way out,” Odishelidze said. “Unless America’s leadership wakes up -- and soon -- political independence for the island is imminent in my opinion. America must decide whether it wants to retain its influence in Puerto Rico or cede its last fortress in the Caribbean to a rapidly ascendant Chinese.”