Belt and Road Initiative -- a critical analysis
Kazi Anwarul Masud
| August 25, 2019 00:00:00
The Asia Pacific region appears to be
enthralled by China's Belt and Road Initiative (BRI) which is basically aimed
at developing infrastructure in the participating countries. According to Eric
Brown, Research analyst of the Geopolitical Economic Risk, Belt and Road
Initiative promises to link China to both neighbouring and distant regions
along its southern and western frontiers through a massive infrastructure
investment project, including roads, rail lines, ports, energy pipelines and
digital networks. BRI promises to spend one trillion dollars which is several
times larger than the Marshall Plan undertaken for the rejuvenation of the
European economy. In total, the BRI incorporates more than 60 countries
(figures vary), affects nearly 62 per cent of the world's population and
includes more than 30 per cent of global gross domestic product. Yet despite
its impressive metrics, the project still satisfies only a fraction of the
larger infrastructure demand in the region. The Asian Development Bank (ADB)
estimates that the continent will require more than $26 trillion of investment
between 2016 and 2030.
The international community is aware of the
trade tussle between the USA and China that may trigger a global recession.
That aside, BRI may aim to supplant a China-led economic sphere in Eurasia in
place of the West-led economic system that continues to rule the world since
the Second World War.
Critics opine that the Bretton Woods
institutions and allied others have been rule-based and legally enforceable
system while China's activities in South China Sea appear to be muscular and
has sown disquiet in the adjoining countries who also lay claim on the disputed
areas. It is further said that notwithstanding the existing proposal, the
specific physical and conceptual margins of the BRI remain ambiguous. There is
no clear timeline for completion, and some projects that began prior to the
official launch date are included retroactively. Physical infrastructure
projects are complimented with intangibles like trade accords, cultural
exchanges, tourism and educational connections. In addition to transportation
networks and energy systems, BRI's infrastructure portfolio has grown to
include electronic, space, and polar elements. Besides, little progress has
been made except China-Pakistan Economic Corridor (CPEC) which too is not well
accepted in Pakistan. Any international initiative to be successful has to be
mutually advantageous to the parties concerned. In case of China, BRI would
facilitate export of overcapacity of equipment, steel and cement;
internalisation of Chinese currency; diversification of energy trade; rural
economic development of western and southern regions of China which have not benefited
from the phenomenal economic growth of China over decades. BRI is also expected
to benefit China in improving foreign market diversification and
competitiveness, and most importantly in the emergence of a central political
and economic power in Eurasia. Naturally, questions would arise about funding
of BRI projects. Asia Infrastructure Investment Bank (AIIB) comprising 93
member states, a competing structure of IBRD and IMF- and New Development Bank
(NDP) comprising of BRICS countries are expected to promote sustainable
development and infrastructure projects of the member countries.
The US from the very beginning was unhappy
over the establishment of AIIB as it did not want another multilateral
development bank to appear as a rival to ADB and World Bank. More so, the US
and Europe were averse to the authoritarian system of governance of China. The
West can take heart from the conclusion of Manixin Pei (China's Trapped
Transition) in which Pei theorises that China has reached a phase in which its
growth is stagnant. China's political system, Pei argues, cannot be reformed
because of its deep-rooted corruption issues and due to the lack of
institutional infrastructure to address these issues. Pei labels China's
situation as "self-destructive political dynamics inherent in an autocracy
caught up in rapid socioeconomic change." Fareed Zakaria refers to the
well known belief of scholars that there is a "zone of transition"
for authoritarian countries when this happens - between $5,000 to $10,000 per
capita GDP (in purchasing power terms). China is at the top of the range,
around $10,000. Given China's level of economic, social and educational
development, it is highly unusual that China, among Asian nations, has seen
almost no movement toward political reform. Manixin Pei attributes this lack of
movement to a corrupt yet unified Communist Party which zealously guard against
any encroachment on its powers. So, the Hong Kong protests are unlikely to
produce an Eastern European deluge leading to the demise of Soviet Union. More
likely it may result in another Tiananmen Square. China's open handed policy of
giving out loans have given rise to "debt diplomacy" as some of the
recipients are now unable to pay back the loans. Examples can be found in the construction
of Hambantota port in Sri Lanka, Chinese funded railway link in Laos.
There is now a significant move away from
strong endorsement of BRI in the initial period to one of negativity and
concern. French President Emmanuel Macron has urged prudence, suggesting during
a trip to China that the BRI could make partner countries "vassal state. A
report of the Council of Foreign Relations have voiced Indian concern that the
BRI is a plan to dominate Asia, warning of what some analysts have called a
"String of Pearls" geo-economic strategy whereby China creates
unsustainable debt burdens for its Indian Ocean neighbours and potentially
takes control of regional choke points. While President Trump may wish to use
India as a counterweight to China, countries like Bangladesh have to follow a
balanced policy vis-à-vis the two countries. Our natural affinity with India
notwithstanding, we have to follow our national interests wherever they lead.
Kazi Anwarul Masud is a former
Secretary and ambassador.
kamasud23@gmail.com
