Chinese And U.S Foreign Aid And Investment In Jamaica Managing Differing Relations For Development

The primary national interest for any developing country such as Jamaica is the development of its economy. As such the very purpose of foreign aid and investment programs to developing countries is to accelerate their economic development where satisfactory, that is achieving a self-sustaining rate of growth.Traditionally, being in the'backyard'of the US, one of its main trading partners, Jamaica benefited from foreign aid and foreign direct investment as a means of furthering the country's development process. However due to the gradual changes and contest of the international system priorities of the US has changed significantly diminishing foreign aid and direct investment.During the Cold War period, US aid in Jamaica was sustained depending on the leader at that time. In the context of the Cold War, triangular relations were defined as a competing relation where a developing country was playing a great power from the non-communist side against another great power from the communist side. In Jamaica's case, leaders like Norman Manley were trying to maximize the national interest by playing the United States against Cuba the communist/Soviet satellite in the Caribbean. However in the post-Cold War era the main focus became economic development.Then, at the turn of the 21st century, along came China. Chinese foreign policy's view on foreign aid and investment has remained consistent and is still looking towards development as its overall goal in relation to developing countries. Even though the US and China may be seen as having competitive influences within the region causing scholars to question China's ulterior motives, China's main goal is development, providing developing countries, in this case Jamaica with new opportunities.China's evolving role in the Caribbean not to mention Latin America and thus the western hemisphere is raising interest in the academic world. The leading question that has been asked so far is why is China giving aid and investing in this region-a pacific region-even though it is an Asian regional power? But the main focus will be on what makes Chinese aid different from US aid to Jamaica and consequently how can developing countries like Jamaica best take advantage of aid and investment opportunities, may they come from a developed country (here US), called North-South cooperation or from a fellow developing country (like China), called South-South cooperation.This paper proposes an approach for the management of aid and investment by taking a look deeper than the typical China threat debate as to China's presence in Jamaica and thus Latin America and the Caribbean. This approach starts out with the fact that here identity matters. China identifies with Jamaica being a fellow developing country resulting in South-South cooperation while the US, a developed country and the world's only superpower, fully enjoys North-South cooperation with Jamaica. As a result the very nature, amount, areas and conditionalities of foreign aid and foreign direct investment, are proven to be different based on the differing identities. Furthermore the recipient's management of aid and investment from two different donors also matters. The combination of aid and investment from these different donors and appropriate management will bring about a better chance of development for Jamaica.Chapter 1 The Historical Framework of Relations:Sino-Jamaica and US-JamaicaJamaica, a small state, centrally located in the Western Caribbean and the common factor when introducing the historical framework of relations of both the US and China. Jamaica is the largest English speaking island in the Caribbean, and a natural leader in regional bodies such as CARICOM. Though it is situated in what has traditionally been a US sphere of influence since its independence, China's interest lies in Jamaica's economic development, for instance Jamaica is now China's largest trading partner in the Caribbean.The aim of this chapter is to illustrate how each relationship developed before and post-Cold War demonstrating how each actor contributed to the creation of these relationships in terms of aid and investment.Chapter 2 The Driving Force of RelationsWhy has China, an Asian regional power, expanded its presence through foreign aid and foreign direct investment in Latin America and the Caribbean, a pacific region (a geographically far distant eastern pacific region)? Some scholars mention possibilities of "resource seeking", to isolate Taiwan diplomatically, neglect and disinterest from the US while others'go back to the China threat debate. The fact is that identity matters and is the driving force of relations between both US-Jamaica considered as North-South Cooperation and Sino-Jamaica considered as South-South Cooperation. Additionally, this chapter aims at illustrating the differing agendas due to the differing roles in the international system.Chapter 3 The Traditional Donor versus The New Provider:Comparisons between Foreign Aid and Direct Investment in JamaicaHattori puts forward the fact that these theorists assume that "foreign aid consists of material goods or services that are owned or controlled by donors, the allocations of which may vary according to their purpose and interest." This paper accepts Hattori's proposition that the purpose and interest of an aid donor determines the nature of aid provided. Thus the differing nature of aid allocated to Jamaica by its'social relation'with both the US and China respectively is a direct result of their different interests and purposes. I propose that these interest and purposes can be attributed to an important extent to their differing identities-North-South and South-South Cooperation.With regards to the nature of aid, U.S. foreign aid and investment generally includes humanitarian relief, security assistance, and economic development which have had varying success. For the case of Jamaica, US foreign aid and direct investment is mainly security assistance-military and police aid-as well as economic development and social aid. While Chinese foreign aid on the other hand is firmly economic in nature but also has a mixture of project aid and what is considered as tied aid in Jamaica.Due to the limited information of aid statistics from China it is difficult to get a valid and accurate account of how different the amounts of aid are between SSC and NSC. However results have shown that the nature and conditionalities of aid from both NSC and SSC are different.Chapter 4 Impact of NSC and SSC Relations in Jamaica:Pros and ConsThe promotion of economic development requires a multifaceted interplay of actions. Thus the failure of one system can lead to cascades of failure in other parts of the economy. Jamaica must organize their multiple activities in ways that maximize their collective efficiency.How we ask? Aid, in keeping with the Paris declaration principle of ownership, allows for donor countries to work alongside the GOJ to attain Jamaica's chance to finally define their own line of conduct according to their national interests and thus economic development, while simultaneously respecting each relationship. Vision 2030-Jamaica's National Development Plan-facilitates this. The vision states that by 2030 Jamaica will reach developed country status. It is based on seven Guiding Principles which put people at the centre of Jamaica's development while giving precedence to elements that are crucial to delivering "a world-class quality of life for all Jamaicans and reflect the key pillars of change needed to realize the Vision for the nation." These principles include transformational leadership, partnership, transparency and accountability, social cohesion, equity, sustainability and sustainable urban and rural development. Thus "Jamaica the place of choice to live, work, raise families and do business" pooled with funding and resources from both NSC and SSC, can positively impact on the nation and have a better opportunity at fulfilling its Vision 2030. The impact of these relations can be seen through Jamaica's four (4) National Goals.ConclusionThis paper thus enforces that identity matters in defining the nature of foreign aid and investment a donor country will offer a recipient. It also underscores the importance of the recipient's role in determining the efficacy of foreign aid and investment in encouraging development in the recipient country.In the scheme of things US and Chinese aid complement each other, in that the different assistance modes, allows for aid to be spread strategically, making Jamaica's national goals more achievable. If Jamaica adopts a strategic step by step approach in which concentration is on areas that are believed can have the maximum impact on its socio-economic development, that is, with proper management of resources and funding from both NSC and SSC, Jamaica can have a better opportunity at fulfilling its Vision 2030, becoming " the place of choice to live, work, raise families and do business"Managing these differing aid donors will bring great opportunities to economic development in Jamaica. These opportunities include having more donors in a non-competitive manner-during the Cold War it was more about political allegiance and now it's about economic sustainability-with increasing diversity and complementary capabilities that each country gains from these relationships.