Grenada Tourism Could Be Hurt by Taiwan Loan Payment Demand

Grenada Tourism Could Be Hurt by Taiwan Loan Payment Demand
By Brian Major

An aggressive effort by Taiwan to collect a $28 million judgment from Grenada may cause travel operators to avoid the Caribbean country, badly hurting its tourism-dependent economy, according to a Grenada government official.

Cruise and airline companies, including Princess Cruises and American Airlines, have received legal papers from attorneys based in the U.S. working on Taiwan’s behalf, compelling them to turn over “any money they owe Grenada,” said Nazim Burke, Grenada’s finance minister, who was quoted in press reports. One cruise line has threatened to cancel 20 stops scheduled in late 2011 and 2012 in Grenada following the seizure effort, according to Burke.

The dispute dates back to a 1990s loan that Taiwan's Export-Import Bank made to Grenada for infrastructure projects. Grenada officials have said they could no longer pay the loans following a series of economic “shocks,” including Hurricane Ivan in 2004 and the tourism decline after the Sept. 11, 2001 terrorist attacks.

Taiwan filed won a summary judgment in a U.S. District Court in 2007 and the court has ruled in favor of Taiwan. The $28 million judgment with interest and penalties nearly equals the value of Grenada’s total 2009 exports of goods and services. Burke said Grenada will challenge the effort in court, arguing that it violates the country’s national sovereignty.