May 08, 2020
China is likely to be the mightiest economic superpower in the world by 2030. West-led economic system may be replaced by China-led economic system in Eurasia and One Belt One Road project can be a strong conducive. China's Belt and Road Initiative (BRI), commonly called One Belt One Road (OBOR) is a global development strategy for infrastructural development and investments that will connect three continents under road, rail and naval communication aiming to make a united large market, infrastructural development, mutual understanding, cultural exchange and regional integration.
During the Chinese President Xi Jinping's visit to Indonesia and Kazakhstan in 2013, the Chinese president disclosed the plan of BRI. BRI is almost similar to the ancient silk-road that existed 2000 years ago. The ancient silk road was basically a trade route designed to relieve the distress of the traders as well as to spread the trade among the countries. 126 countries and 26 organizations have already signed the project in the condition that each country will deal 20 Billion dollar development project under BRI project.
Motivations behind One Belt, One Road
Developing countries like Bangladesh, Maldives, Pakistan, Sri Lanka need the support to fasten the development in their respective countries. It is proposed that under the BRI, geographical distance will be decreased, infrastructural development and communication will be fastened. The World Bank's study concludes that the BRI transport corridors can substantially improve trade, foreign investment, living conditions of the citizens and cultural exchange. BRI financing is mostly for power plants and for transport nearly 32%. BRI aims at improving regional co-operation through better connectivity among countries. The smooth connectivity among nations will open the door for fast development. Flows of ideas, goods, and technology will increase development.
The maritime silk-road will pave the way for easy export-import that will raise the economy of every country. It will strengthen international co-operation on energy and resources. BRI will deepen cultural exchange in the region. China is proposing such BRI model which is important for achieving sustainable development goals in the aspects of peace, ecology, civil society, poverty reduction and Water Conservation. BRI will ensure more balanced regional development through better policy and intergovernmental co-operation.
But Is It Only A Commercial Project?
China is supposed to be the next hegemon, so this alluring project can be China’s one of political weapons. The 'Economist' suspects China of having political objectives through the project. For not repaying the loan taken under BRI for Hambantota Port, SriLanka has to hand over Hambantota Port and 1500 acres of land around it to China for 99 years as lease. Pakistan owes 10 Billion Dollar debt to China under BRI for Gwadar Port and China is taking advantage of Guadar port. Mattala Rajapaks International Airport under BRI loan is dubbed as the world's emptiest airport with barely any flights. Maldives also owes China roughly 1.5 Billion Dollar in debt nearly 30% of its GDP. It proves that BRI cannot solely be considered as a mere commercial project rather there may be a deep political purpose to establish control over countries and the willingness to be the next hegemon after USA.
Though China is continuously assuring environmental safety through oral words, there is a little evidence of implementing the commitment. Often the projects constructed under BRI are seen to put the environment at high risk. The rapid expansion of transport and infrastructure are somewhat worrisome. The environmental risk associated with BRI cannot be overlooked. The risk includes air pollution, water pollution, soil pollution, timber extinction and habitat destruction. Acres of land are being captured to make rail or road communication.
Most BRI deals involve China's lending vast amount of money to other countries to construct roads, railways, port, power plants etc. But China's opposition superpower USA has addressed the project as China’s high ambitious project. USA is also arguing that creating loans under BRI, China is engaging in debt trap diplomacy to spread its political influence over countries. Critics like India and USA have also warned that building infrastructural projects under BRI can cause environmental damage as it does not follow environmental standards. USA is trying to have more influence over countries to counter China and its ambitious project. India is so far stayed away from BRI. India is suspecting China's strategic presence in this region. The possibility of being laden with debt is another reason for why India is stayed from BRI.
China is continuously giving arguments in favor of their giant project and denying the accusations of having any political motives. Their argument is based on the developmental needs of the countries. Through the project they want to connect the continents with rail, naval and highways. The Chinese government also argues that the BRI shall improve the economic co-operation and international trade among the countries making the globalisation process easier and faster resulting into cultural integration as well.
Bangladesh needs huge investments as a developing country for realizing its developmental goals. Fast development seeks for deficit budget and deficit budget is filled with internal and external loan. Under BRI, Bangladesh has been promised to be provided with 26 billion dollar as loan and 14 billion dollar for joint venture functions with China. Bangladesh government has played smartly so far by balancing the loan among different countries and organizations like JICA, Japan, India, World Bank, and ADB. But Bangladesh should be conscious as its foreign loan in 2019-20 budget is approximately 12.2% of its GDP and external debt reaches 33.1 billion dollar compared to 28.3 billion dollar in the previous year. So Bangladesh needs to take essential steps so that Bangladesh might not fall in debt trap.
On the other hand, Public private partnership can be an effective alternative. We should seek domestic loan rather than foreign loan as the terms and conditions of foreign loan sometimes goes against our national interest. Foreign loan and investment sometimes ignores environmental strands of the country. So self-financing can be environment oriented.
Professor Sachin Chaturvedi, Director General of Research and Information System for Developing Countries (RIS), a New Delhi based think tank under ministry of external affairs on a seminar on belt and road initiative said, "In practice, countries often fail to negotiate a good contract that respect their own development priorities and get trapped in the undisclosed and opaque terms of engagement." Taking this into consideration, development policies should be implemented according to our national interest not by the forced terms and conditions by the lender country or organizations. Before taking loan, policy makers should be cautious of our pay ability of the loan otherwise we can be trapped in debt trap.
Undoubtedly China’s One Belt One Road project is about to bring a dramatic change in trading as well as travelling among the fellow countries. But, recent statistics and China’s behavior seems to be somewhat clouded. Many countries are being trapped into China's alluring project and find it’s difficult to cope up with the burden of the debt. Again the example balancing with the project is also evident through Bangladesh. So whether the project is a development project or a debt trap is depended on how the receiver country behaves.
Endnotes1. Will Martin, ‘The US could lose its crown as the world's most powerful economy as soon as next year and it's unlikely to ever get it back’ The Business Insider (Newyork, 10 January 2019)
Shahriar Zaman Shaon is a student at the Department of Political Science, University of Dhaka.