Jardine Matheson was familiar to Pat Kennedy, and it had every reason to be, Jardine House was the home to INI Hong Kong, a fifty two storey tower situated in Central at 1 Connaught Place, the tallest building in Hong Kong at the time of its construction.
Jardine Matheson Holdings, a conglomerate incorporated in Bermuda, one of the original Hong Kong trading houses or Hongs, dated back to Imperial China, still earned over forty percent of its profits in China. After more than two centuries existence it was still controlled by the Keswick family, descendants of co-founder William Jardine's older sister.
Jardine Matheson, or simply Jardines, was all that remained of the old Hongs and their family associations, rather like the Wu’s, which included bothers, sisters, uncles, aunts, cousin and in-laws on their company’s roll call where kinship was the general rule. European business heads, like Pat Kennedy, were known in Hong Kong as taipans.
In the early years of the third millennium Hong Kong was a kaleidoscope of cultures and languages, though ninety percent percent of its people were Chinese, speaking many languages including, variations of Cantonese, Mandarin, Hakka, Hokkien and many other dialects that were totally ignored by foreigners. The vast majority of Europeans spoke little or no Chinese, a few expats took lessons in Cantonese, others in Mandarin, but few were fluent.
The Chinese educated classes, many of whom studied in the UK or the US, some in Swiss finishing schools, were Europeanised or internationalised, speaking excellent English, in addition to Cantonese, Mandarin and their local dialects.
Hong Kong was not affected by China’s one-child policy which had been in place for over thirty years, which meant that before 1980, most families had more than one child.
Lili was born of her father’s second marriage and had two step brothers from the first, both of whom had been born before the law came into force.
After that date Chinese families were one child families, with the exception of those in isolated rural districts. This gave rise to what was called the 4-2-1 dynamic: four grandparents, two parents and one grandchild, on whom was bestowed the entire family wealth.
On matters of religion the Chinese remained devoted to their families and ancestors with old Confucian ideas making their return. Mainland China however has been governed since 1949 by the Chinese Communist Party, an atheist institution that prohibited party members from practicing religion while in office, though in recent years there had been a return to Confucian traditions. Hongkongers on the other hand had always continued to pray to their multifarious gods.
Though three hundred thousand Hongkongers were Christians or Muslims, a great many more were Daoists or Buddhists and a pantheon of dozens of divinities was supplicated daily for favours: gods of wealth, gods of happiness, of mercy, long life, wisdom, kitchen gods, sea gods and earth gods, all were part of a long list.
As to Europeans, the better off amongst them spent Sundays on their roof terraces and the rich, like the Kennedys, in their extravagant pent house gardens entertaining friends as the sunset over the hills of Lantau Island. The Kennedys, and other who could afford it, often enjoyed weekend boating in Repulse Bay, the East Lamma Channel, or around the islands off the southern coast of Hong Kong Island. Depending on their means they owned launches, yachts or motorized junks. The larger more luxurious junks were attended by trimly uniformed Chinese boat crews, who served the owners under white canvas awnings suspended over the high poop decks, where tables were laid with white tablecloths, silver cutlery and fine glasses with wine at the ready in silver coolers while the younger women were stretched out sunbathing on the prow.
The was also Happy Valley Race Course, one of the most famous horse racing venues in the world, a meeting place for rich and poor alike. Before the handover in 1997, it was said that Hong Kong was ruled by the Jockey Club, the Hong Kong and Shanghai Bank and the Governor … in that order.
Behind the glamour of Hong Kong lurked the triads, secret societies, a kind of Mafia, with over fifty gangs and one hundred thousand or more members engaged in huge variety of illegal activities. Some of these, such as the Sun Yee On society, played a more or less visible role in the community, with emanations reaching out into every corner of China and beyond. Corruption was also omnipresent, traditionally known as cumshaw, squeeze or tea money.
Many Hongkongers and visitors like Tom Barton enjoyed an evening walk in the warm humid air along the Kowloon waterfront, watching ships pass by, and ferries toing and froing against the fabulous backdrop of Hong Kong Island with its spectacular display of lights. Every year many thousands of ocean-going ships entered or left Hong Kong Harbour, providing a permanent around the clock spectacle.
Almost twenty years after the transfer of sovereignty, Hong Kong retained its economic power, with its four hundred plus square miles of territory and a population of over seven million, an integral part of China, a Special Administrative Region of the People's Republic of China.
Since his move to Hong Kong Kennedy’s latent hostility towards the City of London and the British government had grown. London was a good place to live, but doing business there had become seriously risky. Of course Hong Kong was not without risks, which explained his interest in developing the bank’s business in the Caribbean, in this way he was no different to many of the Chinese and Russians he had got to know, for whom a last resort safe haven was a must if things went wrong, as he knew they eventually would.
His references were City & Colonial and HSBC, both banks had long links to the former colony. The former was founded in London, but its business was built around East Asian trade, the latter in Hong Kong. Both worked in their different ways, both were amongst the world’s largest. However, HSBC had a schizophrenic relationship with its former colonial home, where its biggest subsidiary was already based and supervised by the Hong Kong Monetary Authority.
Under the Wu family INI Hong Kong thrived in greater China, like its larger competitors, though it was small fry compared to HSBC, whose balance-sheet was nine times bigger than Hong Kong’s GDP.
The heads of state gathered together for the VII Summit of the Americas in Panama were the guests of President Juan Carlos Varela, at a state diner held in Panama Viejo’s historical park.
The park was the site of the first Spanish settlement on the Pacific coast. It was founded in 1519, and became an important port for galleons arriving from Peru and Bolivia laden with gold and silver.
At the beginning of 1671, the Welsh pirate, Henry Morgan1, attacked the city with one thousand two hundred men after marching across the jungle covered isthmus from the Caribbean coast. Morgan sacked the city, terrifying its ten thousand souls, raping, burning and killing. Many of those taken prisoner were sold into slavery.
During the attack the Spanish defender, Captain General Don Juan Pérez de Guzmán, blew up the gunpowder magazines in the desperate hope it would frighten off the pirates, but the fires and explosion destroyed the city. It was rebuilt at a more defensible site to the west, a peninsula, around which was built a system of walls and fortifications: the present day old town of Panama City, Casco Viejo.
Pat was fascinated by the story of Henry Morgan, who also sacked Granada, the rich colonial city founded in 1524 by Francisco Hernández, situated on the shores of Lake Nicaragua.
In December 1663, Morgan and his men made their way up the San Juan River, crossed the lake to reach its eastern shores, where with their Indian guides trekked through dense unexplored jungle to reach their objective. After a journey fraught with dangers, Morgan launched a lightning attack on the city, hitherto reputed to be impregnable. The Spaniards were taken by surprise and after a short fight its defenders were neutralised rounded up and locked in the cathedral. The Spanish inhabitants fled whilst Morgan and his men plundering the city with its churches, monasteries and colleges, leaving loaded with gold, silver, jewellery and other valuables.
It was the start of Morgan’s long and notoriously successful career as a privateer on the Spanish Main. Henry Morgan, the son of a Welsh farmer, was knighted by King Charles II, and became Lieutenant Governor of Jamaica where he died a rich man in 1688.
After being shanghaied to Barbados, where he was indentured, his career as a soldier commenced when he was pressed into an army led by General Venables and Admiral Penn, sent by Cromwell in 1654, to capture Santo Domingo from the Spanish. After being repulsed the English forces found refuge on nearby Jamaica, a backwater of little interest to the Spanish, where some years later Morgan set out on his own singular career as a privateer: an adventurer licensed by the Charles II to attack and capture enemy ships, as part of cash strapped England’s attempt to pursue its plan to grab part of the action from the rich and all powerful Spanish Empire in the New World.
The main event of the 2015 summit was the consecration of the reconciliation between the US and Cuba, when the American leader declared the days of US meddling in Latin American affairs relegated to history. Panama’s past had been part of a long history of Yankee skulduggery in Latin America. It was marked by the Spanish-American War with the protectorate of Cuba and its subsequent independence; and the secession of Panama from Colombia and its independence.
In 1903, a treaty between the US and Colombia granted the use of the Isthmus of Panama to the US and was ratified by Washington, Colombia however was not satisfied by the terms and demanded the conditions be renegotiated. The US refusal signalled a Panamanian rebellion, encouraged by Washington, leading to the independence of the Isthmus from Colombia which was powerless faced with the overwhelming supremacy of the American navy.
Just a few shots were fired with one casualty, who Pat Kennedy learned was an unlucky bystander, a certain Mr Wong, a Chinese citizen, who was killed by a shell fired from a Colombian gun boat.
The untimely death of Mr Wong, written Wáng in standard Mandarin, seemed at first glance like a bad portent, but Pat recalled his visit to the canal museum at Miraflores, where he learnt thousands of Chinese had worked on the construction, and many of them had left their bones. He brushed the idea aside, after all Wong or Wang was a very common Chinese name.
Following Panama’s declaration of independence, Washington moved fast and barely two weeks after, the newly created state, the República de Panamá, signed a treaty granting the US exclusive and permanent possession of the Canal Zone against a payment of ten million dollars in exchange, and an annuity of a quarter of a million dollars starting nine years after; the time deemed necessary to finish the canal commenced by Ferdinand de Lesseps ten years earlier.
It was the start of a long and contentious presence of the US, which finally ended when the canal was ceded to the Panamanian government in 1999 by Jimmy Carter.
Obama’s words were not lost on those present and more especially on Pat Kennedy, who saw it as a positive sign for the Nicaragua transoceanic canal. Whatever the economics on its viability or its environmental impact, the US would not intervene … at least be seen to do so directly.
1. LIFE OF SIR HENRY MORGAN by E. A. Cruikshank 1935 The Macmillan Company of Canada Ltd 1935 See Gutenberg Project
Rio Brito was a muddy stream that flowed into the Pacific at the narrowest point of the Rivas Isthmus in the south of Nicaragua. It was the spot chosen to build an ocean port at the entry to the planned transoceanic canal. From Lake Nicaragua the river disappeared into the dry savannah-like woodland areas to the west of Rivas, an unremarkable small town crossed by the Pan-American highway.
Before the construction of the Panama Canal, the only alternative for American transcontinental transport was by sailing ship around Cape Horn, a hazardous voyage for sailing ships, and even after the arrival of early steam ships the journey was long and fraught with danger.
Before the North American transcontinental rail-road was built there was an alternative route that had existed since the time of the Conquistadors: the overland route via the Rio San Juan in Nicaragua, which became an important passage for travellers between New York and San Francisco wishing to avoid the treacherous Cape.
In the middle of the nineteenth century the commercial exploitation of this route was granted to the American shipping magnate, Cornelius Vanderbilt, by the Nicaraguan government. Ships from New York sailed up the San Juan River from the Caribbean to Lake Nicaragua and across to Rivas, where passengers and goods were transported overland to the Pacific, across the low hills of the narrow Istmo de Rivas, to the Pacific by mules trains, horses and stagecoaches.
Napoleon III formed the Nicaraguan Canal Company in 1869, but his project came to nothing when he was deposed after the Franco-Prussian War that ended in the Emperor’s humiliating defeat and exile. Any further idea to build a canal in Nicaragua was abandoned due to the country’s chronic instability, which forced governments, businessmen and investors to seek an alternative route, finally choosing Panama as the site to build their transoceanic canal.
San Juan de Nicaragua, situated at the mouth of the Rio San Juan, formerly known as San Juan del Norte or Greytown, on the Caribbean coast, was founded by the Spanish explorers who arrived in 1539.
Later the small town fell to the English, who, with Miskitos and Zambos: descended from African slaves, controlled the Miskitos Coast on and off until the independence of Central America from Spain in the aftermath of the Napoleonic Wars.
In 1848, the British took control of the town and renamed it Greytown, attaching it to the Miskito Kingdom, a British protectorate to the north.
Soon after Cornelius Vanderbilt set up his shipping company in Greytown and the town became the eastern terminus of a booming transoceanic link, with tens of thousands of travellers passing through each year on their way to the Pacific during the California Gold Rush.
Sailing ships and steamers from New York and New Orleans docked in Greytown where passengers and goods were transferred onto river boats that made their way up the San Juan River past dense tropical jungles to San Carlos on the shores of Lake Nicaragua, which, almost thirty three metres above sea level, drained into the Caribbean via the Rio San Juan.
At the time when Vanderbilt’s company transported passengers overland from the lake shore to the Pacific, a plan to build a canal had already been envisaged. However, when construction of the Panama Canal started the plan was shelved. Then, to pre-empt competition with the Panama Canal, a treaty was signed with the Nicaraguan government in 1916, giving the Americans exclusive rights to build a canal along Vanderbilt’s route. It was not until 1970 the treaty was finally rescinded, leaving the door open to other projects.
Hernán Cortés is said to have written to the King of Spain: He who possesses the Rio San Juan could be considered the owner of the world.
*
Pat Kennedy drove from Managua to San Carlos, where a fast launch was waiting for him at the point where the lake emptied into the Rio San Juan. He had planned an expedition, more like an excursion, to explore one of the proposed routes for the canal as part of his ad hoc fact finding mission, which he deemed necessary before investing time, effort and money in Wang’s canal project.
San Carlos was not like he expected, it was a muddy shanty town with tumbledown shacks and shabby wooden buildings perched on stilts over the river banks. There he changed boats for the journey would take him nearly two hundred kilometres, through what was a vast nature reserve; an uninhabited pristine tropical jungle, to Greytown, where the river, which some called el Desaguadero, drained the lake into the Caribbean.
The first leg led to El Castillo seventy kilometres downstream, a couple of hours from San Carlos. The once powerful Spanish colonial fort with its thirty two canons, the bane of river pirates, was perched on a grassy knoll overlooking a cluster of gaily coloured houses that lined the banks of the river. The Castillo de la Inmacula was a sombre, moss-covered mass, built to dominate the strategic junction on the river where the crocodile infested rapids formed a natural barrier, making it easy for the Spaniards to intercept enemy ships, where only experienced boatmen could navigate the treacherous stretch of the river.
From then on any remaining vestige of civilisation was left behind as the river wound its way deep into the jungle. On either side of the muddy green waters of the river lay a dense rain forest, silent except for the cries of birds and the whooping of howler monkeys.
Mark Twain, one of Vanderbilt’s passengers on his Rio San Juan riverboat steamer, wrote a description of the area in 1886:
Dark grottos, fairy festoons, tunnels, temples, columns, pillars, towers, pilasters, terraces, pyramids, mounds, domes, walls, in endless confusion of vine-work-no shape known to architecture unimitated-and all so webbed together that short distances within are only gained by glimpses. Monkeys here and there; birds warbling; gorgeous plumaged birds on the wing, Paradise itself, the imperial realm of beauty-nothing to wish for to make it perfect.
Travelling from West to East in the middle of the nineteenth century was the Russian revolutionary, Mikhail Bakunin, who crossed Nicaragua on his way to New York and Europe, from Siberia via Japan and San Francisco to spread his ideas: that revolution was instinct and not thought; destruction so long as there was anything to destroy; and rebellion when there was nothing to rebel against. All of which was to Karl Marx’s orderly mind midsummer madness.
Bakunin could have never imagined teams of Chinese engineers, geologists and environmental specialists from Communist China, working on plans, mapping topography, in preparation for an invasion of giant earth movers, for what would be one of the largest engineering projects the world had ever seen, comparable to China’s gigantic Three Gorges Dam. The future canal would be capable of handling supertankers and giant container ships of much greater tonnage than the Panama Canal, even after its multi-billion dollar expansion.
As Pat Kennedy poured over the technical, financial, environmental and commercial feasibility studies, he recalled all such mega projects such as the Aswan Dam and the Three Gorges Dam had been derided by experts of every ilk, who predicted doom and disaster. That did not deter Pat, to his mind it was a noble cause that would pull millions of Nicaraguans out of their misery.
Even the existence of two volcanoes rising above Ometepe Island on Lake Nicaragua did not deter the investors, though the volcanoes were a permanent reminder that Nicaragua straddled an active geological hot spot with all its inherent risks.
BRICs
It was a strange feeling, from where he stood in Nicaragua, the rest of the world seemed far away, indeed so far away that Kennedy had almost forgotten it. What Pat could read in the newspaper headlines, or the text than ran by under news reports on local television, concerned exclusively the Latino world. It was logical when he thought about it, after all it was vast: a continent running from the Grande Canyon to the Antarctic and englobing most of the Caribbean, sharing the same civilisation, greater than that of Anglo-Saxon North America, vaster in geographical terms than China, Europe, Australia and the Middle East combined, and with immense mineral resources, agricultural lands and human wealth.
News of Ukraine, Syria and other flashpoints was eclipsed by events such as the inauguration of the newly elected president of Uruguay; the capture of Mexico’s most wanted drug lord, capo of the Knights Templar drug cartel; food shortages in Venezuela; and the growing economic problems of Brazil.
What brought him back to the problems that more directly concerned him, was a report that Russia had offered to supply arms to Argentina on a lease-lend agreement, including a squadron of Sukhoi Su-24 supersonic, all-weather attack aircraft, which could only reinforce Buenos Aires’ claims to the Falklands.
Perhaps Putin was grabbing at straws, but it was nonetheless worrying given the sabre rattling of Cristina Fernandez de Kirchner, a distraction in the imbroglio surrounding the mysterious circumstances of Alberto Nisman’s death, a crusading prosecutor who had dared accuse Kirchner of attempting to cover up Iran’s suspected role in a deadly attack on the Argentina-Israel Mutual Association in Buenos Aires in 1994, one of the deadliest terrorist bombings in the country’s history.
It seemed Argentina was as desperate for allies as was Russia. Both were in dire economic difficulties. Argentina’s a long running story compared to Russia’s, the latter until recently one of the booming Brics. With the commodities crash the once glorious Brics had become one of what the financial press was calling the Fragile Five
Pat savoured the sobriquet, coined by a research analyst at Morgan Stanley. He loved buzz words especially those with technical connotations. Brics was out. Fragile Five was in. Or was it six he wondered mentally listing the countries: Turkey, Brazil, India, South Africa, Indonesia and Russia. In any case all fading stars, their currencies on the slippery slope after the collapse of commodity demand.
After a few days of wet Atlantic weather the sky brightened and the temperature shot up into the mid-twenties. Spring had finally arrived in the Basque Country and as Marie-Claire set her sights on the local tennis tournament, Jack Reagan took Robert Moreau up on his offer: a run down to Getaria on his new toy, a high powered Italian rigid-hulled inflatable.
The green landscape offered a very pleasant change from London where Reagan had been setting up an offshore company with his accountants to reduce the growing burden of taxes as Labour seemed set to win the coming elections. Polls and forecasters were undecided and the possibility of a hung parliament did not bode well as Nigel Farage’s UKIP and the Scottish National Party threatened to upset the traditional left-right balance. In France things were not much better as the country vacillated under François Hollande; Mr Nice had promised a lot, especially a clean government, which now seemed to be anything but that.
The boat’s rigid hull sliced smoothly through the waves with remarkable stability even at seventy or eighty kilometres an hour. Reagan hung onto a handgrip beside Moreau, who stood at the wheel grinning as they plunged through the foam. The boat was equipped more like a go-fast than a pleasure boat and Reagan soon found himself hanging on for life as Moreau accelerated and swerved to avoid swells and waves putting the boat through its paces.
It was thirty kilometres to Getaria, half an hour of sport, past the sloping slab-like, mille-feuille cliffs and small creeks, past the natural channel between the mountains that led to the ports of Pasajes, past the islands and peninsula that protected Bay of San Sebastian and finally into the small fishing port of Getaria.
Moreau was delighted by the performance of his boat. Almost addicted to speed and danger he carefully measured risk; as a diver his life could depend on his finely honed judgement.
After securing the boat, they made their way along the quay and wandered up the slope and through the arched gate set in the ramparts of the old town. There Moreau chose a restaurant terrace from where he could survey his toy. Times were still hard in Spain with unemployment standing at twenty six percent, fifty for the under twenty fives, and any one of the boat’s numerous hi-tech accessories could fetch enough cash to see a hard-up Moroccan or Latino immigrant through the summer.
The continuing crisis hit many small property developers who had seen Hendaye as an Eldorado, many of whom went bust. Others were in hock to the banks with huge debts as the value of the land they had bought or the properties they had built plunged by more than thirty percent in value.
For a brave investor, with money to spare, it was the moment to make a killing. But Jack Reagan was not tempted, things were looking up for him in London, where the value of his central London properties had shot up. The prospects in the UK were not looking bright as Labour seemed poised to win the election, but whatever happened London and the South East would, as usual, be relatively unaffected.
Nevertheless, Reagan had the impression that the Spanish economy had turned a corner. One of his friends from San Sebastian had recently picked up a handsome flat in Benidorm, which in spite of its reputation was packed to overflowing as tourists deserted North Africa and Greece: high rise condos were appreciated by certain Spaniards in the same way Miami was by Americans.
Property buyers from Northern Europe were also making a timid appearance, especially those from the UK where the strong pound made prices fifty or more percent less than in 2008.
As Reagan looked around things were definitely more buoyant, perhaps it was the warm weather, but people seemed to have money to spend, the restaurants were busy, more than he had seen for the past three or four years, in addition prices were low, almost ridiculously so compared to London, certain restaurants and bars proposed lunch at twelve euros: starter, main dish, desert and wine. Robert assured him not only were they inexpensive, but the food was good.
They chose a sea food restaurant that enjoyed a good reputation for its quality. Every morning fresh fish was bought directly in the port just fifty or sixty metres beyond the ramparts when the fishing boats returned each morning after a night at sea.
Moreau order a bottle of Txakolí, a young, fruity, local white wine and poured two glasses. His own was symbolic, as a diver he avoided alcohol and excesses. After tasting the wine they then inspected the display of fresh fish: a sar for Moreau and a merluza for Reagan, and watched as the restaurant owner prepared them, then placed them on the grille over a bed of glowing charcoal embers.
The crowd was the same that Reagan had seen on his previous visit to Getaria in September, the difference this time was visitors, after stopping to inspect the menus displayed outside the restaurants, went in. Spain, a proud country had been forced to swallow the harsh medicine imposed by the ECB and Germany, and now their efforts appeared to be bearing fruit.
The two friends exchanged stories of pre-crisis Spain, when money was as abundant as the Iberian sunshine, when Spaniards thought they had made it, believing the bad old days of the more distant past had gone forever, it was a time when their economy boomed, with jobs for everyone and more. The return to reality was brutal and the diet draconian.
“So how’s the diving?” asked Reagan as the waiter prepared his merluza.
“There’s not many fish, too many divers. That’s why we’ve decided to go to Panama with Johanna, you know, the vet from Toulouse.”
“Yes, of course.”
“She’s found a couple of good places … Santa Catalina and Bocas del Toro.”
“Panama,” Reagan said pensively.
Have you ever been there?
“No, but I’ve heard it’s a great place to open a bank account.”
“Well, Pat Kennedy’s there at the moment.”
“I thought he was in Hong Kong.”
It’s his new thing.
Knowing Pat they both laughed.
“What about Tom Barton?”
“Well he’s not with Sophie Emerson now.”
“No, it seems they’ve gone there own way. Still friends it seems.”
“Pity.”
Reagan had become friendly with Tom Barton after being introduced to him a couple of years earlier by Moreau. The two had much in common, they had both had grown up in London and both had French partners … at least at the time. That was nothing really very extraordinary, but sufficient for most people to feel connected by their common experience. In addition to that and by a much more unusual coincidence the two men had, in quite different circumstances, links with the small Caribbean island of Dominica.
“Tom invested quite a bit in Miami I heard.”
“That’s right, when property prices collapsed he picked up several nice appartments for next to nothing, now they’re worth ten times more.”
Moreau had survived the crisis for the simple reason his money spinning pharmaceutical firm would survive any crisis given the France’s penchant for medicine, which almost verged on hypochondria. He had speculated on property, a little further to the north, in Biarritz where many Russians had invested heavily the luxury property residential market.
A lot of things had happened in the previous five years, events that made Jack Reagan think twice when it came to parking his money. There was the lesson of Cyprus, where Russians were taken to the cleaners after