Since the launch of Belt-Road initiative (BRI) at Bao Forum in October, 2013 up-till now numbers of countries that have embraced BRI have gone up from 60 to 110. As many as 29 countries of Asia, Europe, Africa and Latin America sent their heads of states to attend the summit by mid May, 2017. The article to examine to what extant BRI proved to be a success story in last three years, try to unfold the obstacles the initiative is facing and will propose remedies as well.
South and East Europeans who are often indebted and need to foreign investment sent their heads of states. Energy rich Central Asians, Argentines and Chileans sent their Presidents too. Russia and Turkey are interlinks between Asia and Europe and these two countries are regional powers as well. They want their own projects like Russia’s Eurasian Union and Turkey’s Middle Corridor Plan to be linked to BRI. China-Pakistan-Economic–Corridor most important in liking West China directly to Ocean and Sri Lanka’s Colombo and Hambantota ports are important middle points of Maritime Silk Road. So presence of heads of Pakistan, Turkey and Sri Lanka proves that the BRI is supported by pivotal countries which are most essential for the success of the project. Vietnam, Cambodia and Laos show that even countries with high growth rates do not want to miss the bus. Indonesia, Malayasia and Vietnam’s presence is most soothing since it proves despite all geo political problems with China in South China Sea, the country is eager to cooperate economically. Presence of Argentine President shows change in government through electoral process does not reduce enthusiasm for BRI.
The U.S. sent important attendants at the last moment. The U.S. President Trump himself great construction business person and he may have great interest in BRI which by itself is about mammoth construction. Japan sent General Secretary of ruling Liberal Democrat Party who is second most powerful man in Japan after Prime Minister Abe. So Japanese businessmen don’t want to miss the bus too.
Europe & Belt Road
Many of Europe’s major logistics companies have put a large amount of effort into promoting Europe-China rail transport in 2016. Now, in 2017 we must see these efforts start producing results. Europeans initially thought BRI is a mere pipeline for China to dump cheap products onto European markets. Now that concern is largely refuted. European freight forwarders, manufacturers, and policy makers are now waking up to the fact that these newly enhanced trade corridors are providing ample opportunity to get more of their high-value products to the booming markets of China and the rest of Asia. European pharmaceutical, chemical, automotive, luxury, and food companies started jumping in throughout 2016 — a movement that’s expected to grow in the coming year. European law makers also found to admire Chinese President Xi Jing Ping’s defence of globalisation in Davos Summit 2017 in sharp contrast to anti immigrant and anti open economy stand of Trump’s U.S. administration. High external debt and high fiscal deficits among European countries like Spain, Italy, Greece, etc. also making BRI a great opportunity for Europe. Still Europeans continue to have several issues while joining Belt Road.
European concerns can be summarized as 🙂
Chinese companies’ practice of bringing Chinese labour for developing projects may be politically disastrous in face of rising anti immigrant mentality across Europe.
Belt-Road was promoted on various levels by overlapping institutions. This lack of institutionalisation may be confusing for the European law makers.
Increased connectivity may boost illegal trafficking, organized crime, counterfeiters.
General sense of distraction from economic and political crisis in EU.
China has repeatedly said that it will invest according to the host country’s laws. In case of legal suit against development of Colombo port city, China clearly stressed that they are ready for accepting the judgment from Lankan judiciary. Ultimately, Colombo Port City started again. Europeans must be shown these examples to make them feel confident that Belt Road will never violate laws of any countries.
Regarding institutionalisation, China has formed Asian Infrastructure Investment Bank (AIIB), New Development Bank (NDB), Silk Road Fund to finance Belt Road projects. If there is any concern regarding institutional arrangement, room for dialogue is always open. EU countries’ refusal to sign trade deal in the last moment can be tackled gradually. We must keep in mind indebted South Europeans and East Europeans sending heads of states moving more towards BRI. This is causing more panic among West Europeans especially Germany.
India: An Isolated Non-attendant
It is only India that deliberately refused to send delegations in BRI Summit. Officially India claimed since CPEC project investing in Pakistan controlled Kashmir which it claims, India cannot recognize BRI. The point is that China invested there in 1960s Karakoram highway as well. Why India never raised any question then? BRI takes Kolkata as only important part of BRI. That is because Kolkata is inter-link between China, India and ASEAN. New Delhi may be more skeptical about BRI because it watches ex-capital of British India, Kolkata as its potential rival. In fact West Bengal chief minister Miss Banerjee was denied permission to go to Beijing. Hence, like Germany afraid of losing East and South Europeans indebted to it, Delhi is scared with the rise of Kolkata. BRI needs to take these beneficiary aspirations into account whenever they get deprived by existing political order.
Belt and Road: Three Years On
While 2016 saw some relatively large infrastructure building steps taken along the Belt Road, year 2017 should double down on this momentum. China started production on some of its previously unrequited MOUs, such as the Khorgos SEZ in Kazakhstan. We should also closely follow the developments of key emerging Belt Road projects in 2017, such as the New Port of Baku at Aylat, which just really got started in 2016, the Anaklia deep sea port, which is set to commence construction in 2017, the Baku-Tbilisi-Kars rail line, Terespol municipality in Poland, where new dry ports with cities are being built and especially, the China-Pakistan Economic Corridor, which just began running in beta a couple of months ago. In January, an 80% share of the Hambantota deep sea port and the Mattala International Airport (the world’s emptiest) are be officially signed over to Chinese companies and the highly controversial Colombo Financial City should see significant construction progress throughout the year.
The year, 2017 may also be the year that the overland and maritime sections of the Belt Road really start coming together. Xiamen, on the southeast coast of China, directly feeds into a rail line that goes to Lodz of Poland via Chengdu at the new Fujian Free Trade Zone. Gawdar port is joining ocean and West China through CPEC. The port at Bandar Abbas in Iran is also looking to become a key connection point between ocean and overland Silk Road trade corridors in 2017. While the now Chinese-controlled Piraeus port in Greece is the western terminus of China’s Maritime Silk Road which meets the rail and highway network of Europe.
The most important key to success is China’s patience, respect for other countries’ sovereignty and judiciary and government and above all people. BRI consists of many infrastructure projects and so it may take time for people and part of law makers to understand the benefits. So patience and respect are the only pillars which can give BRI success. Reluctance of Germany and India show that beneficiaries like East Europe, South Europe and Bengal may get deprived of benefits from BRI. The role of such beneficiary people will play key role in BRI in future. These beneficiary aspirations must be taken into account for making BRI a success.
DISCLAIMER: The views and opinions expressed in this article are solely those of the author and do not necessarily reflect the official policy and position of Regional Rapport.