Unravelling the Banality of Belt and Road Initiative(BRI)

This is planned by resurrecting old trade routes. 39 countries and international organisations have signed 46 agreements with China for this.[1] The plan aims to improve transportation and commerce infrastructure by lending and assisting specific developing nations while paying less attention to the beneficiaries' governance and democratic principles. As a result, China became a beneficial partner for several impoverished and developing nations in need of investment and loans. Having borrowed more than they can repay, many of these countries have been drawn into China's debt trap and sphere of influence. The worldwide scope of these BRI projects, as well as their significance in expanding China's sphere of influence and material capabilities, and hence its assertive foreign policy, has piqued the interest of the West and other regional countries. Similar debt-trap diplomacy in India's neighbourhood, with projects flowing across Pakistan-occupied Kashmir, has alarmed the Indian government.

Challenges to BRI:

Not only POK, but China’s BRI projects are also spreading all around India, locking India from all sides. China took a large number of projects around India, especially in Sri Lanka, Bangladesh and Maldives etc. but BRI is not a 100% success. Some initiatives were implemented too quickly, without adequate thought to their long-term economic advantages. In many situations, the programmes rely much too heavily on government and policy assistance. Another extreme is when implementing agencies place too much emphasis on the BRI's benefits for China alone, especially when solely assessing the limited interests of corporations without taking into account the concerns of local governments, communities, and businesses. Furthermore, while some nations support the BRI, they are unwilling to make their contributions. They assume that China will cover the majority of the costs because it is highly enthused about the BRI and will gain much from it.

Finally, there is widespread scepticism, opposition, and even public condemnation of the BRI in the international world, especially among nations along the One Belt, One Road (OBOR) route and certain regional powers.[2] The initiative has been facing several allegations against many Chinese companies from all around the world. To see the type of allegations we can briefly look into what happened in Bangladesh. Bangladesh authorities discovered that a Chinese company, China Road & Bridge Corporation (CRBC), a subsidiary of China Communications Construction Company (CCCC), engaged in road and bridge construction in Bangladesh, is involved in tax evasion while importing construction materials for government projects. Earlier in December 2020, the National Board of Revenue (NBR) opened a probe into ZTE Bangladesh, a subsidiary of the Chinese ZTE Corporation with several commercial activities around the nation, on suspicion of tax evasion. Similar allegations were found against Chinese companies which were part of the BRI project were found across the world. [3]There were other accusations of bribing the authorities in non-democratic and democratic countries to secure the project are also heard of.

Why countries chose BRI:

The initiative risks the usual concerns of large-scale infrastructure development—environmental degradation, social instability, corruption, and debt—it also promises a slew of economic benefits to the region's diverse economies, not least by addressing the region's massive infrastructure deficit and potentially jump-starting industrialization in less developed countries. Several frameworks of finance methods have emerged to support the BRI. The Asian Infrastructure Investment Bank (AIIB) and the Silk Road Fund are now up and running. The RMB has been effectively incorporated into the basket of Special Drawing Rights (SDRs).

“China has captured the world’s attention by demonstrating the urgency of boosting infrastructure development and transnational connectivity as the next stage of economic globalisation. Other global powers have been forced to respond to China with their infrastructure and connectivity plans; the demand is high, and China is the first power to try to fill it.”[4] China coming up with an initiative which is not perfect but it is the only initiative that is being available for the developing countries is one of China’s biggest advantages of wide participation of countries in the initiative.

What is it to India:

Few countries refused to join BRI/OBOR forum, and India is one of them, India received formal invitations to participate in 6 separate forums that were organized by China as part of the Belt and Road Forum in 2017, and India released a statement saying that India firmly believes “that connectivity initiatives must be based on universally recognized international norms, good governance, rule of law, openness, transparency and equality. Connectivity initiatives must follow principles of financial responsibility to avoid projects that would create unsustainable debt burden for communities; balanced ecological and environmental protection and preservation standards; transparent assessment of project costs; and skill and technology transfer to help long term running and maintenance of the assets created by local communities. Connectivity projects must be pursued in a manner that respects the sovereignty and territorial integrity.”[5] Because of national sovereignty issues, New Delhi criticized the China-Pakistan Economic Corridor (CPEC).

What is India Doing About it

India individually doesn’t have enough resources to compete with China’s Belt and Road Initiative, but after neglecting the geographically near neighbours in its foreign policy, India is coming back to the neighbours to maintain or regain the influence it has over its neighbouring countries. China took up many projects in India’s neighbouring countries, whose foreign policy is strategically important to India and their relationship with China is a factor between India and China relationship. India was not able to compete with BRI on larger projects but it did manage to keep its competing stance by securing a few projects and maintaining good relationships with neighbours, India managed to get a project which was granted to a Chinese company from Sri Lanka.

Following an Asia Development Bank-backed competitive offer, Sri Lanka's Cabinet agreed in January 2021 to award renewable energy projects on Nainativu, Delft or Neduntheevu, and Analaitivu islands to Chinese business Sinosoar-Etechwin. India was quick to communicate its worry to the Sri Lankan side over the Chinese project planned for Palk Bay, about 50 kilometres off the coast of Tamil Nadu. New Delhi proposed funding the same project with a grant rather than a loan. Colombo, unable to choose a side for almost a year, placed the project on hold, reportedly offending China. In a recent news conference, the Chinese Ambassador in Colombo expressed rare criticism of the projects being halted for "unknown reasons," saying it conveyed the wrong message to potential investments from foreign countries.[6] India and Sri Lanka have also agreed to establish a Maritime Rescue Coordination Center (MRCC), indicating more defence sector cooperation between the neighbours.

India is also started to tighten its ties with countries like the Maldives by taking up small projects and assisting them in all ways like defence, people-to-people relations, cultural development.

Usual Options:

Supranational organisations such as the International Monetary Fund, World Bank, Asian Development Bank, and others are also key sources of funding for infrastructure projects. However, such groups often support only financially feasible initiatives. As a result, metropolitan projects such as metro tracks, bridges, and flyovers are frequently supported by these institutions. When compared to other private sector organisations, these financial institutions demand a lower internal rate of return (IRR). Other services are provided by institutions such as the Asian Development Bank and the World Bank to improve the execution of infrastructure projects. This implies that even if they do not directly fund a project, they aim to add value by offering advisory services such as loan guarantees, policy advice, and so on. These institutions frequently provide treasury services to infrastructure projects. This is done to ensure that money is used as efficiently as possible.

Now we are going to look into what kind of efforts the US and its allies in Europe and other parts of the world are putting toward countering the BRI.

Alternatives:

There are already existing alternatives for the BRI, below is the list of alternatives, which may not be 100% suitable as an alternative for BRI for reasons listed later, but these are the best the rest of the world is offering as of now.

The Build Back Better World (B3W)

The Build Back Better World (B3W) project is a worldwide development funding proposal led by the United States that was initially unveiled at the G7 summit in June 2021. Its claimed major goal is to provide USD 40 billion to assist developing economies in recovering from the COVID-19 pandemic, with a particular emphasis on nations in Latin America, the Caribbean, Africa, and the Indo-Pacific area.[7]

B3W also provides a chance to advance G7 goals by reorganising and rebranding current foreign development programmes in the context of a new grand narrative. It enables the United States to supplement its domestic infrastructure expenditure by demonstrating the possibilities of domestic private infrastructure capital, and it serves as a vehicle for the Biden administration to pursue its foreign policy (Center for Strategic and International Studies, 2021). Offering an alternative to the BRI might provide a way for the United States to realise its long-held goal of "pivoting" its political and economic power to Asia.

Coordination, funding and diplomacy are the biggest challenges for B3W. The project is still in its early stages, and it has yet to carry out any large-scale initiatives (unlike the BRI).

The EU’s “Global Gateway”

During her State of the Union speech on September 15th, 2021, EU Commission President Ursula von der Leyen presented the EU's next iteration of its global connectivity strategy: "Global Gateway." The strategy's core aims and major target were stated unequivocally in the speech: competing with the Belt and Road Initiative (BRI). The exact terms of the plan, on the other hand, are far more unknown. Except for a reference to the project included on the agenda of the EU-Africa Summit in February 2022, precise details about what and how big Global Gateway will be were sadly absent. On the 1st of December 2021, The European Commission and the High Representative for Foreign Affairs and Security Policy issued a 14-page Joint Communication to shed further light on the Global Gateway strategy's contents. Global Gateway is notable in three respects. First, it reflects the EU's tightening position against China and the BRI. Second, it emphasises the necessity for the EU to invest in a more cohesive, "smarter," "geostrategic" approach to connectivity in order to protect its own interests. Third, and maybe most importantly, Global Gateway is concerned with branding.

The Asia Africa Growth Corridor (AAGC)

The Asia Africa Growth Corridor (AAGC), a project aimed at enhancing African development, was unveiled by India and Japan at the 52nd Annual Meeting of the African Development Bank on May 25, 2017. It is also an essential component of the Indo–Pacific Region's India–Japan Vision 2025.

According to its official vision paper, which was presented in May 2017, the AAGC intended to focus on four core issues:

(1) development and cooperation initiatives

(2) high-quality infrastructure and institutional linkages

 (3) capacity and skill development

(4) people-to-people partnerships.

Its growth and successes have been fairly modest; there have been no significant event updates to the website. The website also includes eleven discussion papers about the project, the most recent of which was updated in January 2018. So yet, the AAGC has produced no tangible accomplishments. This slow pace might be ascribed in part to a lack of a defined agenda. As of this writing, the AAGC's most comprehensive agenda was its original vision paper, which was published in May 2017.

‘Burden sharing model’: no single country has enough resources to counter or compete with China’s BRI initiative in Indo-Pacific, the Burden Sharing Model can be a way for the countries to come together to offer the countries another option which is more reliable, efficient and most of them all more profitable to the receiver country.  The Asia Africa Growth Corridor (AAGC) can be an example of this Burden Sharing Model, but it can be implemented in a more simple manner where small scale projects can be taken up by a few developing countries coming together as well, which can result in economic activity in more developing countries.

Conclusion:

To create or remount a genuine contest with the BRI, states must evaluate political, economic, and social factors. structural and branding difficulties BRI is also facing challenges. India will need to collaborate with its regional partners to provide alternate connectivity options to its neighbours. So far, India has been tardy in defining, developing, and executing a consistent approach to regional connectivity. Although India has identified nations like Japan as crucial partners in developing a response, little progress has been made in developing a strategy. To safeguard its strategic interests and maintain its dominance in South Asia and the Indian Ocean area, India urgently requires a structured framework to provide an alternative to Chinese-led connectivity projects.[8] Good competition always provides space to work efficiently and better, China experienced a near-monopoly situation when it came to BRI, but the rest of the world needs to catch up faster than ever to keep the power and quality in check.

Notes

[1] Chatzky, A., & McBride, J. (2020, January 28). “China’s Massive Belt and Road Initiative. Council on Foreign Relations.” https://www.cfr.org/back-grounder/chinas-massive-belt-and-road-initiative

[2] Fang Jin, “The Belt and Road Initiative: Progress, Problems and Prospects”, Chapter 9, Parallel Perspectives on the Global Economic Order https://www.csis.org/belt-and-road-initiative-progress-problems-and-prospects#:~:text=With%20the%20enhanced%20infrastructure%20connectivity,China%20and%20other%20countries%20involved.

[3] Business Standard “Chinese firms linked to CPEC projects evade tax commitments in Bangladesh”

[4] Harsh V. Pant, Premesha Saha “Mapping the belt and road initiative reach, implications, consequences”,

[5]Ministry of External Affairs, Media center, Spokes Person response, 13 May, 2017 https://www.mea.gov.in/media-briefings.htm?dtl/28463/Official_Spokespersons_response_to_a_query_on_participation_of_India_in_OBORBRI_Forum

[6] Srinivasan, Meera, “Indian power projects replace Chinese ventures in Sri Lanka”, The Hindu, 29 March 2022, https://www.thehindu.com/news/international/indian-power-project-replaces-chinese-venture-in-sri-lankas-northern-islands/article65269733.ece

[7] The White House (2021, June 12). “FACT SHEET: President Biden and G7 Leaders Launch Build Back Better World (B3W) Partnership”.https://www.whitehouse.gov/briefing-room/state-ments-releases/2021/06/12/fact-sheet-presidentbiden-and-g7-leaders-launch-build-back-betterworld-b3w-partnership/

[8] Darshana M. Baruah “India’s Answer to the Belt and Road: A Road Map for South Asia” Carnegie India, 21 August, 2018 https://carnegieindia.org/2018/08/21/india-s-answer-to-belt-and-road-road-map-for-south-asia-pub-77071

Pic Courtsey-Afdhal at unsplash.com

(the views expressed are those fo the author and do not represent views of CESCUBE.)