The Belt and Road Initiative (“BRI”) also known as One Belt One Road (“OBOR”) was unraveled to the world for the first time by Chinese President Xi Jinping in September and October 2013 during visits to Astana in Kazakhstan and Jakarta in Indonesia. This mega initiative was thereafter enthusiastically promoted by Premier Li Keqiang during state visits to Asia and Europe. The Chinese government calls the initiative “a bid to enhance regional connectivity and embrace a brighter future.” Touted to be the most expansive, expensive and extensive effort rivalling (or even exceeding) the Marshall Plan in its sweep and covering a humongous number of countries in its wake, the BRI threatens to create a tectonic shift in the geopolitical order characterizing the globe today. However, is this initiative an attempt by the second biggest economy on the Planet to exercise a ruthless economic and political hegemony over the world or is this a tide that will lift all ships uniformly thereby ushering in a new era of co-operation hitherto never seen before?
Bruno Macaes, formerly Portugal’s Europe Minister (2013-15), attempts to answer the above tricky questions in what has to be one of the most informed, articulate and unbiased works – as yet, on China’s astounding aspiration. Taking an unbiased perspective and using the neutral lens of a political analyst, Mr. Macae brings to bear the potential outcomes of the BRI. At the heart of BRI, argues Mr. Macaes, lies the general principle of “Tianxia” – which literally means All-under-Heaven or World. The Chinese Tianxia, “emphasizes, togetherness, a complex network of ties between countries. They are much more substantial than mere legal ones. Virtues are regularly invoked; countries have relations of dependence, generosity, gratitude, respect and retribution.” It is this call of togetherness that bring together both land and sea components under the BRI. Known respectively as the Silk Road Economic Belt and the Twenty First Century Maritime Silk Road, the Belt Road courses through the continents of Asia, Europe and Africa. China is pulling all stops to ensure that finance is not a constraint for the materialization of this epic scheme. “The Asian Infrastructure Investment Bank, founded on December 25, 2015, with its headquarters in Beijing and an authorized capital of $100 billion – about half of that of the World Bank – considers Belt and Road projects as one of its investment priorities. Thus it approved $509 million in investments for its first four projects on June 25, 2016……in Bangladesh, Indonesia, Pakistan and Tajikistan….” Funding for the BRI seems to be of no issue whatsoever to China. “Industrial and Commercial Bank of China, the largest bank in the world by assets, is already taking part in 212 projects relating to the Belt and Road, with credit facilities exceeding $67 billion.”
However, this very seemingly unending slush of funds has the pernicious potential of setting the participating countries on the path towards perdition. The debt trap into which the recipients of Chinese funding might find themselves, may force the borrowers to relinquish strategic assets in their own territories to the lenders. Consider this: “In December 2017, Sri Lanka formally handed control of Hambantota port to China in exchange for writing down the country’s debt. Under a $1.1 billion deal, Chinese firms now hold a 70 percent stake in the port and a 99 year lease agreement to operate it.” China itself has acknowledged this fact. “In April 2018, Li Ruogu, the former president of the Export-Import Bank of China, argued publicly that most of the countries along the routes of the BRI did not have the money to pay for the projects for which they were involved…..the countries’ average liability and debt rates had reached 35 and 126 percent respectively, far above the globally recognized warning lines.”
And then there are the issues of sovereignty and territorial security. Just a day before the event unveiling the BRI, India pulled out of the gathering citing that in the currently envisaged form, the BRI would impose unsustainable burdens of debt. Also the fact that the proposed China Pakistan Economic Corridor (“CPEC”) would wind through the disputed areas of Gilgit and Baltistan in Pakistan-occupied Kashmir did not further India’s enthusiasm either for the project. The recent standoff at the Doklam plateau between the Chinese and Indian armed forces over the incursions of China in the Himalayas reflects the fragile state of political relations between the two Asian behemoths. India however, is not the only nation that is wary of the China initiative. Many of the littoral states with whom China is hemmed in, in a maritime dispute over the ownership of islands are expected to be locked into the BRI providing a much needed leverage and boost to China’s claims of marine supremacy. President Donald Trump has expressed his aversion to the BRI by terming it “insulting.” After becoming the leader of Malaysia following a shock election victory in 2018, Mahathir Mohammed has been outspoken in his desire and determination to terminate many “Chinese contracts” which were consummated by the erstwhile Government led by the now ousted and infamous Najib Tun Razak. Rampant corruption and utter disdain to the process of tendering are cited to be the main reasons underlying this move. Similarly, there has been stiff opposition to the Laos-China railway. Estimated to cost US$5.95 billion with 70% of the railway owned by China, while Laos’s remaining 30% stake will be mostly financed by loans from China, the exorbitant costs of the project now threatens its viability.
The very pivot of global politics and economics threatens to be upended by the BRI. A new world order that has China at its pioneering front has set off multiple scenarios of dystopian possibilities. While the project itself entailing a humongous estimated outlay between $4 – $8 trillion is a long way from being concretized and consummated, it has set off conflicting tremors with each shock having its own peculiarity and profound implications.
A good way to grasp such wholesale ramifications would be to get hold of Bruno Macaes’ work.