As China Makes Inroads, U.S. Efforts To Woo The Caribbean With Clean Energy Fall Flat

In January 2015, then-Vice President Joe Biden stood before Caribbean leaders gathered in Washington and declared North America “the new epicenter of energy in the 21st century,” vowing to “promote energy security beyond our borders” by exporting cheap natural gas and renewables to countries with some of the highest electricity prices in the world. 

“It’s profoundly in the self-interest of the United States to see the Caribbean countries succeed as prosperous, secure, energy-independent neighbors — not a world apart, but an integral part of the hemisphere, where every nation is middle class, democratic and secure,” Biden said. “It’s the first time in history that can be envisioned.”

Nearly a decade later, Puerto Rico the largest U.S. territory in the Caribbean is entering its sixth year since Hurricane Maria without reliable electricity. Energy prices across the region where nine of 11 countries tracked by the World Bank generated 80% of their power from imported fuels soared last year by at least 50%. Warming-intensified storms are toppling transmission lines at a growing clip, forcing residents to either buy expensive generators or accept power outages as routine fact of life. 

So when now-President Biden’s Vice President Kamala Harris attended the latest summit with Caribbean heads of state in the Bahamas last Thursday, analysts from across the region said the White House’s promise of more than $100 million in new spending on a set of projects including renewable energy fell flat. 

The White House announced the spending in a Thursday morning press release , one day after news broke that Cuba had reached a secret deal with China to set up a clandestine spy base on the Caribbean’s largest island. 

Beijing’s presence in a region regarded in Washington as the U.S. backyard has grown over the past two decades as China offered favorable terms on loans to buy more Chinese-made goods, helped build infrastructure that Western developers had abandoned, and sought to woo some of the last remaining countries that maintain diplomatic ties with the government in Taiwan. 

The vision of “an integrated North America” free from the fluctuating price of fuels drilled in warzones has faded. Instead, the Biden administration touted a series of technical programs to overhaul island nations’ electrical regulations and promote zero-carbon sources of energy. 

In Antigua and Barbua, the U.S. National Renewable Energy Laboratory is helping to train workers to install solar panels, batteries and hurricane-resistant wind turbines. In Dominica, Saint Kitts and Nevis, the State Department is providing technical assistance to help both nations turn volcanic heat into commercial geothermal power plants. In the Dominican Republic, the U.S. Trade and Development Agency is helping local regulators develop rules for adding batteries to the grid. 

While more than half of the $100 million was earmarked for aid to Haiti, the Caribbean’s most populous and currently unstable island, Harris said $20 million would support a new Caribbean Climate Investment Program “to help incentivize the private sector to partner with Caribbean nations to develop more clean energy technologies.” Another $15 million would go to the Caribbean Disaster Emergency Management Agency to help devise new early warning systems for storms and stock up on first-aid equipment and generators. 

But experts from across the Caribbean said the announcement falls far short of what the U.S. government could bring to bear in a region the U.S. has jealously controlled since Washington adopted the Monroe Doctrine , vowing to fight any rival global power that attempts to make inroads with America’s sovereign neighbors, exactly 200 years ago. 

“I’m not at all impressed,” said Calixte George Jr., an analyst and electrical engineer from Saint Lucia who hosts a popular radio program on the island. “The U.S. has the capacity to do something that would be a game changer. But that’s not happening here.” 

The China Question 

China is more prominent in the Caribbean than it has ever been as Beijing looks to expand its influence overseas and sell its goods and infrastructure-building services in more markets. Between 2005 and 2022, China invested more than $10 billion in six countries: Jamaica, Guyana, Trinidad and Tobago, Antigua and Barbuda, Cuba, and the Bahamas, according to a recent tally by the House of Representatives’ Foreign Affairs Committee. But overall spending has dwindled in the last three years. 

Still, the deal for a Chinese spy base in Cuba marks one the most direct challenges to U.S. hegemony in the region in the three decades since the Soviet Union collapsed (which placed nuclear missiles there in the 1960s). The Biden administration confirmed over the weekend that China had been running a surveillance operation in one of the U.S.’ closest neighbors for the past four years. 

Last Thursday’s press release announcing the new spending in the Caribbean was timed around the vice president’s preplanned regional summit. But Rasheed Griffith , a Barbados-based analyst who hosts the podcast “China in the Americas ,” said the announcement was “framed as a counter to China.” 

U.S. foreign policy hawks from both parties increasingly warn of the People’s Republic seeking bulwarks in the Caribbean akin to American military footholds in places like Japan, South Korea and Taiwan, which Beijing and much of the world considers part of China. 

But George, who hails from one of the only 12 countries in the world that still maintains diplomatic relations with Taiwan over Beijing, said China’s political interests in the Caribbean are primarily about cleaving support away from Taipei. 

“Saint Lucia is one of the few countries that’s still hanging on with Taiwan, along with Saint Vincents and Kitts, the Dominican Republic and Haiti,” George said. “The other place is Paraguay, and they’re looking at leaving soon. Taiwan just lost Nicaragua. So that’s been really the main Chinese interest.” 

Griffith, who tracks Chinese investments for his show and recently founded the think tank Caribbean Progress Studies Institute, said “a lot of Chinese firms are in the region because governments in the Caribbean are open to it.” What attracts island nations to Beijing is the promise of cheap imports of technologies like solar panels, which the U.S. does not manufacture at any competitive scale or price, and less onerous terms for loans than those offered by the International Monetary Fund (IMF) or other U.S.-backed institutions. 

In 2021, Trinidadian Finance Minister Colm Imbert defended his country’s decision to accept a $1.4 billion loan from China instead of the IMF, arguing that the regulatory overhauls and public spending cuts required as a condition by the latter lender would have meant “punishing” his population. 

“With the Chinese loan, it is nothing like that,” Imbert told The Daily Express , one of Trinidad’s largest newspapers. 

The Chinese, he said, only stipulated that, because the loan was meant to buttress Beijing’s foreign policy needs, Trinidad must spend the money on Chinese equipment, vaccines, medical supplies or any other goods manufactured in China.

Scholars in the West have long debated whether China was offering a benevolent alternative to Western lenders or laying a “debt trap” to ensnare poor nations as unwilling recruits to its side in an emerging Cold War with the U.S. A lengthy 2020 review of Chinese loans by the British think tank Chatham House concluded that Beijing’s “fragmented and poorly coordinated international development financing system is not geared towards advancing coherent geopolitical aims.” Rather, the researchers found, it is a straightforward means of boosting China’s own economy by selling more goods and earning interest abroad.

In 2021, China gave out more than $40 billion in loans to distressed countries, coming its closest yet to rivaling the IMF’s nearly $69 billion issued that same year, The New York Times reported . In March, The Associated Press published an analysis of a dozen countries most indebted to China including Pakistan, Kenya, Zambia, Laos and Mongolia found that paying back interest on the debt is draining foreign currency reserves and diverting tax revenues needed to keep schools open and provide electricity. 

But the terms of China’s loans don’t mandate spending cuts and economic changes that are the norm when borrowing from the IMF. 

“That’s part of the export drive,” Imbert said. “But it is not a conditionality where the government of China is coming and saying, ‘Look, send home 20,000 public servants, double the price of electricity, triple the price of water’ it’s not that.” 

Puerto Rico’s Woes Loom Large

Contrary to what China hawks say about investments in Jamaican roads and the Dominican electrical grid, “there is no strategic competition” to cleave the Caribbean away from the U.S., Griffith said.  

“Caribbean people exist within American culture. American culture is a Caribbean culture,” he said. “We wear the same clothes. We watch the same TV. We eat the same food. We have the same desires. We’re geographically predisposed to be in the American empire.” 

But Washington’s retreat from playing a more active role in developing the Caribbean, diverting resources to multilateral institutions like the World Bank and the IMF, has diminished American soft power in the region, Griffith said. 

George agreed, noting that he could easily identify projects funded by the British, Chinese and French governments across the Caribbean but not the U.S. 

“If somebody asked me what I can identify within Saint Lucia that I would say is a U.S. government project,” George said, “I’d have to go back probably into the 1960s.”  

The apparent decline of American prosperity in the Caribbean may be most acute on the largest island to fly the stars and stripes. 

Between 2007 and 2020, Puerto Rico which the U.S. conquered during the Spanish-American War of 1898 and subsequently rendered a “territorial possession” of U.S. Congress shuttered nearly 700 schools as the island government struggled to repay its debt to the Wall Street equivalent of loan sharks. 

At more than 33 cents per kilowatt-hour of electricity, Puerto Ricans pay more than triple the national average rate, higher than any U.S. state   a reflection of the territory’s dependence on imported oil, coal and diesel to generate power. That’s despite the fact that nearly half the population lives below the poverty line, making the island poorer than the poorest U.S. state. 

Those high costs don’t include quality service. After Hurricane Maria decimated the aging grid in September 2017, Puerto Rico went 11 months without islandwide electricity, and has since endured weekly, if not daily, outages even as a private company took over the distribution system and hiked rates at least seven times in the first year. 

While the federal government has promoted programs for rooftop solar, the U.S. has focused its reconstruction efforts on building a centralized electricity system with natural gas imported from U.S. fracking fields as the primary fuel. Months after handing the publicly-owned distribution system over to a private consortium, regulators in Puerto Rico gave the New York-based natural gas company New Fortress Energy control over the island’s generating system. (The deal has drawn criticism from inside the Biden administration, according to the Puerto Rican news outlet Noticel .)

“Puerto Rico could be a model that other island nations could follow,” said Cathy Kunkel, a San Juan-based energy analyst with the nonprofit Institute for Energy Economics and Financial Analysis. “Figuring out how to build a resilient system that’s based on decentralized, clean power generated near where it’s used is something every other country in the legion has an interest in as well.” 

The collapse of the relative middle-class American living standards that Puerto Rico saw in the late 20th century, when Washington lured manufacturers to the territory and sought to bolster the territory as evidence of its capitalist system’s superiority to communist Cuba, is part of a larger shift of U.S. interests elsewhere, George said. 

“We’ve seen this since the end of the Cold War,” he said. “There has been very little U.S. interest in the Caribbean.” 

While attitudes have changed, U.S. influence over the region’s fate has not, Griffith said. At the end of the day, he said, independent Caribbean nations need to decide for themselves how to increase development and become more economically competitive. But much of that future hinges on the ability of money and people to flow easily between the economic powerhouse of the U.S. and the small, outlying islands it neighbors. 

Griffith doesn’t expect U.S. immigration and tax policy to change at the behest of Caribbean people. But he pined for the last century’s “Pan American thoughts in early U.S. foreign policy.” 

“Where did that go? This idea of a shroud of competition with China is a red herring. The real problem is, why did Pax Americana devolve so much?” he said. “Because we’re always going to be together, muddling through for me, at least isn’t enough.”