Belt And Road Initiative – Expanding The Chinese Envelope

The 2nd ‘Belt and Forum Initiative’ meeting at Beijing concluded last weekend. It saw the participation of heads of states from 36 countries. Over 90 institutions, including the UN and the IMF and nearly 5,000 participants including media, academic, corporate and others also participated in the forum. This included all Southeast Asian countries, except Indonesia, all Central Asian republics except Turkmenistan; 2 out of 8 South Asian countries, Mongolia from East Asia, UAE from West Asia, 12 European nations including Russia and Azerbaijan, 5 countries from Africa (as against only Ethiopia and Kenya in 2017 meeting), and one from Latin America (Chile).

Many big countries were conspicuous by their absence at the 2nd BRI meeting including three out of five BRICS members, the United States, UK, Germany, France, Japan (only represented by the ruling party representative), South Korea, Australia, Spain, Turkey and others.

Days before the forum meet, China released its assessment on “Belt and Road Initiative: Progress, Contributions and Prospects”. In March 2015, Beijing had released a white paper explaining the focus areas on policy coordination, connectivity, trade promotion, financial integration and people-to-people contacts. The 2nd forum as well as its attendant meetings included concepts such as “shared future”, “new norms of globalisation”, multilateralism and others suggesting to the extended envelope and strategy of China.

President Xi Jinping, in his speech at the meeting underscored “high-quality, sustainable, risk-resistant, reasonably priced, and inclusive infrastructure” building in the BRI areas. This has become more pressing for China to clarify after a series of BRI projects attracted criticism on “debt-trap diplomacy” such as in Sri Lanka, Kenya and others; while corruption has rocked Malaysian politics. The 2nd BRI conference CEO forum concluded agreements worth $64 billion but details about the deals were not made public.

Strong support for the BRI came from smaller states which need finances for connectivity projects. But, Russia, fully endorsed the BRI with President Putin suggesting to the merger of the Eurasian Economic Union with the BRI, a move initiated in 2014. Surprisingly, Mr. Putin, in his speech linked lack of economic growth to the spread of terrorism and illegal migration. This implied that Russia could participate in the China-Pakistan Economic Corridor projects in the future.

Malaysia has cancelled several BRI projects accusing China of promoting corruption. Pakistan too has, cancelled the $14 billion Diamar-Bhasa dam. Pakistan’s Senate has reported that 93 percent of proceeds from Gwadar port will go to China. Turkey is also concerned with debts involved in the BRI projects, in addition Ankara has criticised China’s handling of Uighurs in Xinjiang province.

It needs to be seen what the impact would be on the two forum meetings held so far, of the BRI both on regional and global economic orders as well as on individual countries. In the economic sphere, the total investments in the BRI projects is less than $100 billion, as against the initial 2013 announcements of over $1 trillion. Also, at the 2nd BRI forum meeting, Chinese leaders suggested exploring possibilities for “joint funding”.

Significantly, despite two meetings there have been no efforts at institutionalisation of the BRI and it remains China-led. BRI also lacks membership, with some countries participating in the first forum in 2017 but skipping the 2nd meeting in 2019. There is also no definition of the projects under the BRI and some projects under the previous ‘Western Development Campaign’ of the late 1990s are incorporated into the current flagship programmes.

A joint communique issued after the three-day event stated that “We respect sovereignty and territorial integrity of each other and affirm that each country has the right and primary responsibility to define its development strategies in accordance with its national priorities and legislation”. However, this statement appears to be non-serious given the fact that the CPEC projects pass through India’s Kashmir region, which is under Pakistan’s illegal occupation. Indian has conveyed its persistent opposition to some of the CPEC projects to Beijing.

Script: Prof. Srikanth Kondapalli, Chairman, Centre for East Asian Studies, JNU