CAN THE RED DRAGON’S BELT AND ROAD INITIATIVE (BRI) IMPROVE THE DEVELOPING WORLD?

By Saloni Gala and Diva Sheth | Edited by Aman Kayal and Ruth D’souza

The pioneering One Belt, One Road Initiative (OBOR) aims to boost intercontinental and strengthen regional cooperation among countries in Asia, Europe and Africa. In order to promote international trade and open up new markets, the OBOR policy envisions a maritime Silk Road Economic Belt and an overland Silk Road Economic Belt. 

The Silk Road Economic Belt connects China to countries in Central and South Asia and then on to Europe, and on the other hand the New Maritime Silk Road connects China to countries in South East Asia, the Gulf States, North Africa, and Europe, make up the majority of the Belt Road Initiative (BRI), six additional economic corridors have been selected to incorporate connectivity with more countries.

Source: BRI Map. (n.d.). World Bank. 

Proposition

“The principle of give and take is the principle of Diplomacy, – give one and take ten” – Mark Twain

The main goal of One Belt, One Road Initiative (OBOR) is to raise significant investment funds for promoting energy and transportation, which includes building new roads, bridges, gas pipelines, ports, railroads, and power plants. Over a longer period of time, the programme is anticipated to invest $5 trillion in infrastructure, which will help close to 65 countries that account for about 30% of the world output. The focal point of OBOR China’s claim to global leadership is intended to be outlined. To have is the ultimate goal. China’s dominance in the trading region of Eurasia would  serve as a counterbalance to America’s dominance of the transatlantic trade system. Many Asian countries are wary of being used as puppets in US-Russian strategic games, while China provides insight into their socio-political dynamics, governmental backing, direct financial assistance, and rapid development. Although China’s collaboration with Iran, Syria, and Russia may not be welcomed in the West, it is very beneficial since it gives China greater international legitimacy and prominence on the international platforms.

Many of the initiatives appear to have already begun to take shape. China has previously signed bilateral ties with a number of nations, including Hungary, Russia, Mongolia, Tajikistan, and Turkey. Between China and Iran, there is a railway connection that could eventually reach Europe. New rail connections between Laos and Thailand are a major component of the One Belt, One Road Initiative (OBOR) initiative. More than 200 businesses have expressed their interest in helping out with OBOR-connected projects.

There are six particular corridors that are being discussed: China-Mongolia-Russia corridor, China to Central Asia to West Asia Corridor, the Indo-China Peninsula corridor, China-Pakistan corridor, and Bangladesh-China-India-Myanmar Corridor are some of the major trans-Eurasian land bridges. These corridors will be connected via roadways, railways, airways, waterways, and information highways. These corridors will aid in the development of commercial, industrial, and energy clusters since improved connectivity is anticipated to boost productivity.

However, India’s main concerns and a rigid stance against One Belt, One Road Initiative (OBOR), arise with suspicion and worry on the administrative aspects as the OBOR project might violate international norms and standards. India’s opposition is based on the fact that the (China- Pakistan Economic Corridor) CPEC passes through Indian territory (PoK) and China’s refusal to address this issue. Despite these concerns, few economists and strategists see the Belt Road Initiative (BRI) as an opportunity to boost the modernization of India’s infrastructure and give a new direction to industrialization and employment opportunities in India.

Today, it is undeniable that China has the financial resources, the technological know-how, and most importantly, the overwhelming imperative, in its own national interest, to accelerate the development of these nations to a degree that was unthinkable, even five years ago. It is also undeniable that the tunnel, roads, and train lines it plans to construct will pierce South Asia’s natural defences, the Himalayas, ending India’s dominance over the rest of the continent.

India’s isolation inside South Asia will only grow if it chooses not to participate in Belt Road Initiative (BRI), hastening the demise of its regional hegemony. But what would be even less excusable is that it will miss a once-in-a-lifetime chance to use China’s economic might for the advancement of India. Joining BRI will help India avoid this, and it can leverage the connectivity that the Belt Road Initiative (BRI) generates to boost trade and investment with other south Asian nations as well as with China.

In addition to this, India’s willingness to participate and obviously create greater economic viability would also generate greater goodwill within important sections of the Chinese state. This goodwill may well have an impact on other aspects of politics, such as the Nuclear Suppliers Groups (NSG) and the readiness to put more pressure on Pakistani state actors to combat terrorism both covertly and overtly. India can function as a “swing factor” by participating in the CPEC particularly and the OBOR more broadly across Central Asia and Southeast Asia.

India will need to start the process. The Indian government will need to rebuild, reposition, and enlarge its foreign policy apparatus as well as develop and strengthen its military diplomacy and the nation’s intellectual capacities in its immediate neighbourhood in order for all of this to succeed.

With the potential to extensively contribute to regional integration, political stability, and economic empowerment while transforming Asia into a genuinely global participant, the Belt and Road plan has plenty to offer. China is already affecting and reshaping the global order in a variety of ways simply because of its size, and developing countries that rely on Chinese investments can even feel the effects of China’s domestic economic woes. The adage “When China sneezes, the world catches a cold” takes on a completely new significance in this new period and has enormous utility for business forces, diplomatic circles, and intelligence czars.

Regarding the One Belt, One Road plan, it is undeniably a multilateral economic system with strong undercurrents of China’s international political ambitions that has enormous potential to usher in a new age of global governance. However, it is preferable to join the movement at this point rather than ruminating on conspiracies and unfounded worries. The only way for Europe, India, and the US to deal with Chinese expansion is to first embrace and comprehend it before finding their place in the new system. Once they establish their stakes and influence, China’s power play won’t be the only factor affecting how well the global order works.

Opposition

“This is a national Chinese initiative. The Chinese devised it, the Chinese created a blueprint … and a national initiative was devised with national interests. It is not incumbent on others to buy it … if this is something on which they want a larger buy‑in, then they need to have larger discussions, and those haven’t happened.”

– Indian Foreign Secretary, Subrahmanyam Jaishankar 

The Belt and Road Initiative is controversially the most ambitious transnational mega infrastructure project visualised by a country, single-handedly. One Belt, One Road (OBOR), is at the centre of Xi’s foreign policy and has the potential to transform the geoeconomics of the entire Eurasian region and beyond. The One belt One Road is one big mistake and there are several challenges and risks posed on the recipient countries and its neighbours. By restoring China’s status as world power, this may help realise the ‘Chinese Dream’ by legitimising the Chinese Communist Party’s  leadership. Hawkish counter movements are being undertaken with ‘debt-trap’ as their nucleus. China is using the ‘cheque-book policy’ to engage with emerging economies and is building relationships on financial resources and strategic capital. By lending money to nations for dubious projects and increasing leverage, experts have noted how China is driving nations into its debt trap.

China’s high risk loan (Kynge & Yu, 2020) China faces wave of calls for debt relief on ‘Belt and road’ projects. 

The high-profile Chinese project in Sri Lanka was retained for Hambantota port- former president, Mahinda Rajapaksa’s political base. The inability to repay the debt has led the Chinese to lease the port for ninety-nine years. Hence, Chinese investments have negatively impacted the Sri Lankan economy to be debt-driven and stagnant. By not repaying loans, one is essentially giving China control of important national assets. 

China has meddled in the domestic affairs of BRI funded economies such as Zimbabwe, Laos, Cambodia and Pakistan.The pandemic and the Russia-Ukraine conflict has only exacerbated problems and China is brewing with capital flights- $3.8 trillion over the last decade. Stock market and real estate bubbles, bad loans in banks, and other maladies, have started to emerge as a result of the ocean of credit that has fuelled so much of its recent prosperity. Simply said, Beijing has less money now to spend abroad, especially when it is bleeding billions. Japan, France, Germany and India have come out openly against this exclusive and not “inclusive” (as it should be) system. Washington has said that the projects are made in China, made for China.

The Indian perspective of the BRI will be apparent with respect to India-China relations which are characterised by the four Cs: conflict, competition, collaboration, and containment. There is consequential economic dissymmetry between the two. Therefore, although Indians are far more anxious about the emergence of China, the Chinese are relatively calm about the rise of India. Pakistan owes China more than $6 billion, with a total credit flow for the China-Pakistan Economic Corridor, a significant part of the BRI, totaling over 40 billion dollars. As a result, Pakistan’s economy is highly indebted, has a widening current account deficit, and has nothing in the way of foreign exchange reserves. It has borrowed USD 40 billion which will rise to USD 80 billion over the course of 30 years. 

The CPEC happens to be the flagship project of the initiative which passes through the Indian territory under illegally Pakistan-occupied Kashmir (PoK) and this is alarming for India along with a strong Chinese presence in and around the Indian Ocean.The Modi administration is concerned as it strongly believes that physical connectivity must be based on “universally recognized international norms, good governance, rule of law, openness, transparency and equality”, and that which safeguards sovereignty and territorial integrity. The government has also asked them to halt these undertakings. New Delhi abstained from attending the BRI summit at Beijing in 2017 and has provided its valid reasons to adhere to environmental and ecological preservation criteria.

It boils down to the fact that post COVID-19, China shows vested interests in strengthening global supply chains and export markets.The BRI’s primary focus has been on connecting the Chinese economy with Europe through the Eurasian landmass, given the substantial number of nations involved. This will lead to the Chinese Yuan gaining momentum. The challenge for India is that the BRI will significantly increase China’s influence in India’s neighbourhood and marginalise Delhi’s regional hegemony. If India participates, this would imply that it accepts the inevitable rise of China to dominate in Asia.

Conclusion

Finally, it may be claimed that even though the One Belt, One Road (OBOR) initiative has certain potential benefits, India has legitimate territorial concerns regarding the Pakistan-occupied Kashmir (PoK). In light of the rising protectionism occurring around the world, the Belt Road Initiative (BRI) is extremely significant. If India is sincere about boosting its economic growth and addressing unemployment, it must collaborate economically with China by taking part in OBOR.

On a global scale, the OBOR project’s initial euphoria also appears to be giving way to some rising worries about governance challenges and the potential for indebtedness among the member countries. All of these problems require careful assessment and evaluation. Since the project is still in its early stages, it is challenging to determine how successful it has been. 

REFERENCES-

Nayak, P. B. (n.d.). One Belt One Road: The Indian Perspective. Biblioteca Jurídica Virtual, ISBN 978-607-97629-3-3. https://archivos.juridicas.unam.mx/www/bjv/libros/12/5550/24.pdf 

Why India Must Embrace China’s One Belt One Road Plan. (2016, August 13). The Wire. https://thewire.in/diplomacy/india-must-embrace-chinas-one-belt-one-road-plan 

One Belt, One Road: What Lies Ahead for India? (2021, October 12). Usanas Foundation. https://usanasfoundation.com/one-belt-one-road-what-lies-ahead-for-india 

Time to Rethink India’s Approach on OBOR. (2016, October 26). ICS Research Blog. https://icsin.org/blogs/2016/10/26/time-to-rethink-indias-approach-on-obor/ 

  The Many Problems with China Belt and Road Initiative. (2018a, August 5). https://www.livemint.com/Opinion/Aqj4qxXvt3x7yCDkkyL58M/The-many-problems-with-China-Belt-and-Road-Initiative.html.

Belt and Road Economics: Opportunities and Risks of Transport Corridors. (2019b, June 18). https://www.worldbank.org/en/topic/regional-integration/publication/belt-and-road-economics-opportunities-and-risks-of-transport-corridors.

The Belt and Road: The Good, the Bad, and the Mixed. (2019, April 15). https://thediplomat.com/2019/04/the-belt-and-road-the-good-the-bad-and-the-mixed/.

Indian Perceptions of the Chinese Belt and Road Initiative. (2019, September 19). https://research.hktdc.com/en/article/MzYzMDM2MTMy.

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