The ETG "Yap Paradise Islands" Proposal

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The ETG “Yap Paradise Islands” Proposal (Condensed Version)

By: Henry K.O. Norman

Chinese Exhibition & Travel Group (ETG) promises all the following, if they are only granted use of Yap land for 99 years: To convert the island of Yap, Federated States of Micronesia, to a “mega-gambling-resort,” in phase one including:

  • Ten (10) five-star international brand hotels and resorts (~4,000 rooms)
  • International exhibition/convention center with related facilities
  • An entertainment center (not clear what this means…)
  • Two eighteen-hole international championship class golf courses
  • Sports center (tennis courts, basketball fields, and other sport facilities)
  • An “ocean park”  (not clear what this means…)
  • Several (9) luxury marinas and yacht clubs
  • A passenger’s wharf (to accommodate huge cruise ships)
  • Cultural facilities (theaters, cinemas, performance stages), cable TV system
  • Commercial blocks (luxury shopping areas, duty free shop areas)
  • Apartments (condominiums) and Garden villas.

It is interesting that they plan to sell “timeshares,” condominiums, and other real estate… Current law does not allow non-FSM citizens to own title to land… Phase 2 (within five years) extends the number of luxury hotel rooms to 10,000, and the number of golf courses ~10-15. To make this work, the ETG also promises to:

  • Expand Yap Airport to accommodate large wide-body jets, transporting several thousand passengers per day, runway extension, terminals, baggage handling, emergency facilities, customs, immigration... (For extrapolations based on 4,000 hotel rooms, please see the attached Visitor Statistics (Excel))
  • Expand the Yap port facilities to accommodate mega-cruise-liners (dredging, port facilities, passenger wharf, customs, immigration)
  • Upgrade all roads
  • Build a new modern (“sophisticated”) hospital
  • Build a new power station
  • Build a new solid-waste processing system
  • Build a new waste-water (sewage) processing system
  • Build several new schools
  • Build a new State Capitol (!), even a new gas station (!)

ETG says they will provide all this (complete PRC (China EXIM Bank) financing!), if they only get a 99+100-year lease of all the land they need in order to develop the “wish list.” Except land, Yap would not have to contribute anything at all. Nothing. The PRC is so nice!

Sounds Like a Sweet Deal?

Well, consider this: Yap Islands has a total land area of less than 40 square miles (~100 Km2), and the total population is ~9,000. There are currently ~200 hotel rooms on Yap, with less than 2,000 visitors per year. There are no “Hawai’i-type” beaches on Yap, the coastline is predominantly covered by mangrove swamps. The most desirable locations (for people, and thus for hotels) are already occupied by villages.

When one looks at the numbers in relation to the Yap reality, anyone can see that the project is completely insane. Smaller developments, in the Caribbean, is costing investors ~US$3.5 billion ($3,500,000,000),[1] my “ballpark estimate” for the “Yap Paradise Islands” project is at least US$5 billion.

At this point, one has to ask: Who in their right mind would invest such sums of money in something that has a very weak potential for a return on the investment? I did some extrapolations, using Excel, that told me that: IF all 4,000 rooms are occupied 100%, 365 days/year, and IF the pure profit per room per day is $75—rather unrealistic, I think anyone in the hospitality business would agree with—it would take over 20 years to break even… Something appears to be seriously wrong with this picture, to my eyes.

4,000 hotel rooms would mean, using industry standard numbers, at least 4,000 hotel employees. And since most guests are going to be “wealthy Chinese,” that means that most — if not all — will be “imported” from China. And since it will be long-term employments, many would presumably bring their families. So, for all these hotels, at 75% occupancy, with 1.4 guests per room, we would have ~4,000+ short-term (a few days at the time) guests and ~4,000 long-term employees on Yap. Every day! With a Yap population of ~9,000, do the math…

During my stay on Yap (1999-2006), and I don’t think much have changed since then, Colonia (the “state capitol,” a small village) already suffered from:

  • A severe water shortage
  • Severe sewage/solid waste handling problems

Now, the Chinese are not stupid. Of course they see all this. So what are they really after? My answer: The beginnings of a full-fledged Air Force/Navy base (plus plenty of troop accommodation facilities). Right under the noses of the U.S. bases on Guam (some 600 miles straight north). Extending their geo-political and military influence, very similar to the Japanese fortifications of Micronesia before WWII, which built up to the attack of Pearl Harbor in 1941… The “Tourism Development” appears to be a scam, a smoke-screen. I can see no way it can be done in the way they (the ETG) has “sold it” to the Yap State government. And therein lies the clincher:

The current governor (Sebastian Anefal) and his administrations have probably been bribed, big time (this I can only speculate about, based on the very strange behavior of this “democratically elected statesman” and on the well-documented propensity for Chinese enterprises to bribe themselves past irritating obstacles such as the “will of the people” and local laws and regulations), together with the “traditional leadership” (a “Council of Chiefs”): several groups have been travelling to China, several times, being wined and dined and lavishly “entertained” (hint, hint), seduced by generous “spending money” envelopes… And private jet trips to Palikir (the FSM political center) impresses the heck out of all the other state representatives; Also, the governor has two sons that currently study, on full all-expenses-paid scholarships, in China universities (the “honorable” Sebastian makes about $23,000/year as governor of Yap State); In Kolonia (Pohnpei State), new residences has been built for leading politicians (and a Chinese brothel is already in operation there, even though prostitution is illegal in FSM—the Chief of Police and the Chief of Immigration is “monitoring” the activities (in English: the police “for some reason” look the other way (source: http://goo.gl/G8dIO and http://goo.gl/YSgES))).

“Negotiations” with the PRC/ETG has been going on for a long time, in complete secrecy: the people of Yap has not until quite recently become aware of what is going on, but still no hard facts whatsoever has been publicly announced. Nothing. This about a project that—if allowed to proceed—will change the lifes of all Yapese for all future time! Good-bye traditions! Fare-well culture! Hello misery!

Among the “Yapese on the street” there is a strong, and growing, opposition against the project, everywhere… but being Yapese, it is not in their custom to question decisions made by their Chiefs! “Democracy” exists only on paper. Governor Anefal of course knows this: he wants the project to start (that is, deliver what he’s presumably been well paid for, in advance), before his term runs out (in 2014). The Senators, and the Speaker, of the Yap State Legislative Branch (of the government (which is patterned after the U.S.)) have done several brave attempts to make the governor at least let the people know what’s going on, so that people can build their own opinions on what they would like to happen to their islands, and to their accustomed lifestyle, traditions, and rich unique culture — but to no avail.

I have tried, for over one year now, to disseminate as much information that I can, predominantly via two Facebook groups and my own personal network of Yapese friends (altogether ~1,500 individuals). However, I am not convinced that my voice is really heard — or if it is, to what extent the Yapese can grasp the magnitude of the proposed invasion…

One has to understand that Yap has only been subject to “Western” influence for a little more than a century. It is a very isolated (two flights per week, currently), and very traditional place, and the de facto rulers are still very much the Chiefs (who are not elected such, but are born to their positions of power). Yap also has a rather strange “caste system,” imposing severe discrimination between the various “ranks” (where the Chiefs—of course—belong to the highest ranked caste). There is no way these people can envision the size of the “landslide” heading their way—not because they are stupid (they are not!), but because the picture the Chinese are painting is simply not part of their “internal world view,” their mind sets… Few people (anywhere, actually) can comprehend sums of 1,000,000 or more, never mind billions (my favorite “eye-opener” is “One billion seconds is equal to 31.4 years”): they simply cannot see the outrageous discrepancy in investment size versus possible ROI (virtually nil, as I see it: Yap is not even close to being the ”paradise island” that the Chinese are selling!).

How long this has been going on (in secrecy) is not known, but based on one of the ETG “sales pitch” slide presentations, where the narrator at one point says that “The first hotels on Yap will become operational during 2013”  — this year (!) — my guess would be, at least five years, with negotiations presumably running in to various snags on the way, delaying the original plans.

Early March 2012, according to the governor: “No proposal exists that we can make public.” Fortunately, I have friends in the administration that “leaked” a document called “Yap State Counter-Proposal #1” (http://goo.gl/6dkPH), which is dated February 2012. In this document, nothing is mentioned about casinos.

During April 2012, ETG intensified their “village indoctrination tours,” using a hastily crafted “brochure” which looks very much like a regurgitation of the governor’s “counter-proposal,” but with lots of praises about the great benefit of casinos added! I have attached my “annotated” version of this brochure (See http://goo.gl/wRiXH, all highlighted text is mine, all the rest is verbatim original ETG propaganda).

So therein lies, just maybe, the real angle: PRC wants to make an investment in the FSM, in preparation for taking over the role of “John Frum” (a “cargo cult” figure (look it up)), or “sugar daddy” to the Yapese, so they can continue living with no need to do any serious work themselves, as for the past fifty years of USA taxpayer support, when the Compact of Free Association with the U.S. runs out, in 2023. Thus extending PRC military influence to cover an area of the Western Pacific that is almost as big as the continental USA (but mostly water). And since there is no way they can get any real ROI from just running a few hotels, casinos are ideal for several reasons (ripping off suckers, and to “launder” dirty Chinese money), potentially making a nice side-catch through impossible-to-control gambling activities.

There is no question in my mind that, if this project is allowed to take off, in a short time the Chinese will also import hordes of prostitutes (thousands of construction workers away from their families for long periods of time, plus thousands of wealthy luxury hotel guests “looking for action”…): Casinos without hookers? Yeah, right! Just like Lost Wages and Atlantic City, right! One should note also that both gambling and prostitution are illegal in current FSM and Yap State law… I am quite sure that ETG sees no problem with this, as all they will have to do is to pay off the right people in the right positions, to have the laws changed to fit their plans. Money does strange things to people, and greed is a mighty powerful motivator…

ETG is even talking about wholesale village relocation, should they be located where ETG wish to build their concrete colossuses, promising “We will build new villages for you, and you will be handsomely compensated”… Outlandish!

The ETG seems cock-sure that they will get what they want (most likely, they have bought promises of changes to Yap State Law, in favor of prostitution, gambling, and land title ownership). They already operate on Yap, trying to set up land-lease contracts, from their own office (a room at the Trader's Ridge resort) in Colonia, with several representatives semi-permanent residents. Their English-speaking representative on Yap, a Chinese named Yang Gang, has stayed on Yap since last year.

Please download and peruse my compilation of Yap/ETG related information, from www.tinyurl.com/yapetsina (~10 megabytes). Its table of contents is running several pages, so there is a lot to absorb, but you can pick and choose!

Henry Norman
Tagaytay Highlands, Philippines
https://sites.google.com/site/microtechnonstop   Email: henry.ko.norman@gmail.com

 

[1] Ground was broken in February on Baha Mar, a 1,000-acre resort-casino at the city of Nassau on New Providence Island, Bahamas. When completed in 2014, it will encompass 3,500 rooms in six hotels and a number of condominium buildings. Grand Hyatt, Rosewood and Morgan hotels will be built simultaneously, along with restaurants and spas. Construction of a water park and golf course will begin in late 2012. Designed by RMJM, the complex also includes a 100,000-sq-ft casino and 200,000-sq-ft convention space. The estimated cost is $3.4 billion. (Source: http://goo.gl/lt4IM)