February 22, 2011 / 11:34 AM / in 8 years

Bahamas breaks ground on Chinese-financed resort

NASSAU (Reuters) - China’s ambassador to the Bahamas hailed the groundbreaking of a $2.6 billion resort project on Monday as “another milestone” in the two countries’ relationship and suggested it could herald further Chinese investment in the island nation.

U.S. diplomats have raised concern about whether the Baha Mar project, which is being financed and built by two Chinese government-owned entities, could make the Bahamian government beholden to China.

At the ceremony marking the start of construction, Chinese Ambassador Hu Dingxian said overseas investments by Chinese companies increased by 36 percent year-over-year in 2010, totalling $59 billion in 3,125 projects.

“I believe, with continued development of the bilateral relationship, more and more Chinese investors will be coming to the Bahamas to seek investment and co-operation,” Hu said.

Tourism is a major driver of the economy of the Bahamas, an Atlantic island chain that stretches from just off eastern Florida to near Cuba and has a population of 310,000 people.

The $2.6 billion Baha Mar project is the brainchild of the Izmirlian family, billionaire investors who live in the wealthy Bahamian enclave of Lyford Cay. They have extensive financial and real estate investments worldwide, including the More London development, which owns City Hall, home of the city’s mayor, in London.

Their financing and construction partners for the development, which aims to revitalize the Cable Beach hotel strip near the Bahamian capital of Nassau, are the China Export-Import Bank and China State Construction.

Hu said the Baha Mar groundbreaking was “letting this golden baby be born at the right time, in the right place and with the right people.”

He pledged that Chinese foreign direct investment would “not come at a cost” to the Bahamas, preaching the language of partnership, mutual benefits and a “win-win situation” for all parties involved.

That was unlikely to ease U.S. concerns expressed in a December 2009 diplomatic cable from the American Embassy in Nassau, which was obtained and published by the whistle-blowing website Wikileaks.

Titled “Chinese offers golden opportunities for the Bahamas,” and written by Deputy Chief of Mission, Timothy Zuniga-Brown, the cable said: “The Chinese appear committed to establishing a firm financial hold on projects, such as the Baha Mar, that will have a major impact on the Bahamian economy and leave the GCOB (government) indebted to Chinese interests for years to come.

“The government of the Commonwealth of the Bahamas is waiting to determine whether current Chinese behaviour is a result of scepticism over market conditions, or whether China is using this investment solely to establish a relationship of patronage with a U.S. trading partner less than 190 miles (300 km) from the United States.”

Hu said that with the forces of globalization driving countries together, “no country can develop in isolation.”

Editing by Jane Sutton; Editing by Andrew Hay

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