The Belt & Road Initiative BRI (old name (OBOR) project
initiated by China has propelled a stormy debate in India. While more than a
hundred countries have shown interest in the same, India has kept herself at
bay. It therefore becomes imperative to understand the nature of this Chinese
engagement and its strategic implications comprehensively vis a vis India’s
efforts in theme Connectivity.
China proposes to link the continents of Asia - Africa - Europe and
Australia with the BRI by land and sea routes. The theme driving the project is
indeed Connectivity and countries coming under its umbrella may not have so far
overtly expressed their doubts about its benevolent nature. However even while
expressing interest in the projects, there exists an all-pervading restlessness
among the participating states. It is of utmost importance to know the reasons
for this restlessness. India has proposed her own projects in the same
geographical areas whose theme is also Connectivity. It is worth knowing as to
how they stand different from and superior to the Chinese proposals.
Financial Drivers
China's GDP has soared to $11.9 trillion in 2017 with
large cash reserves. It goes congruous in this context that China is
aggressively establishing herself as a super-power by capitalizing this
gigantic financial potential to link multiple countries with a promise to lead
them onto the road to mutual prosperity. World has witnessed similar efforts
previously in, say, the Marshall plan whose scope but was much limited compared
to China's BRI. During 1980s and 90s Japan became a financial super power and
enjoyed almost same status as what China has achieved today. The Japanese
financial potential enabled the flight of Japanese capital to other countries.
Domestic savings increasing at faster rates - enormous funds accumulated in
current accounts - Japanese currency Yen becoming costlier - stagnated domestic
demand for goods were driving the flight of Japanese capital. Such examples in
the past did not raise any alarms globally. Why did the world not witness a
global hue and cry back then over the flight of Japanese capital to other
countries? Why is there this restlessness we are today witnessing in the
Chinese case?
Two obvious reasons. The world was convinced that Japan did not have
any monstrous invasive global political ambitions. Secondly Japan could never
become a military adversary. For its defense, it was itself dependent on USA.
The world did not witness any existential threats in Japan's rising financial
stature. No one doubted its nature as anything other than merely the rise of
financial superpower. Does China's financial super power status invoke similar
comfort? If not, then why?
Present Connectivity
China's hunger for importing raw materials and other inputs will
remain on a relentless ascending graph of international trade in immediate
future. The Chinese economy today is $3.95 Trillion out of which $3.55 Trillion
worth goods get transported via the sea routes being the cheapest alternative.
Consider just oil. China imports 85.7 lakh oil barrels per day. Their immediate
minimum need would be to use at least 5 VLCC (Very large Crude Carriers) or 50
non-VLCC carriers through sea routes. Such being the importance of China's
international trade being conducted over sea routes, China has adequately
braced herself up with securing these routes with the help of String of Pearls
initiative as well as building of artificial islands - converting them into
mighty naval bases and blocking the South China Sea to other countries beyond
the "red lines".
Scope for more
Connectivity
Asia's underdeveloped poor countries are lacking resources
(estimated awesome $1.7 Trillion) to build the basic infrastructure and
amenities required for their sustenance. Are these countries coming forward
with enthusiasm to make use of the Chinese offer and accept the funding they
are in dire need of? Yes, advisable indeed to do so, but, provided the
opportunity poses a win-win situation for China as well as the participating
country where both sides need the infrastructure and can use it at affordable
costs. Should the underdeveloped countries be desperate to grab this
opportunity?
Are sea routes inadequate?
If sea route is the preferred natural option because of minimum
costs, why does China want to engage and invest enormous capital into building
the costly land routes? The only plausible answer therefore could be to build
alternate means - "fall back" during emergency - to ensure continuity
in supply of essential goods should its sea routes get threatened or blocked
during times of conflicts. Irrespective of the gigantic level of military
protection extended to the vulnerable sea routes, fact remains that if an
adversary is bent on blocking the routes, it has enough opportunity to do so.
Who really needs BRI?
The reality is that it is China which strategically needs this
infrastructure more than the poor underdeveloped countries. Should China not
initiate the creation of this infrastructure, it faces the risk of halted vital
transportation needs. On the other hand, keeping the Chinese enormous capital
idle without investment would deteriorate its real value. If the underdeveloped
countries ought to be desperate to avail of this vital opportunity, China is
even more "vulnerable" in the absence of such infrastructure
howsoever odd or unrealistic this may look.
Connectivity or Security?
Question then arises as to why China feels the need to prepare for a
military confrontation vis a vis the world, unlike Japan of 80s, unless it aims
as a first step at displacing USA from its position no. 1 in the Asia to become
the unchallenged global political and military super power? In all fairness,
BRI fails to pass the label as a mere development project.On the contrary it
betrays the concealed security related intentions. The "win" options
for China in the project are not limited to overreaching security concerns but
include her hegemonic political and financial designs spreading over four
continents.
Financial Viability
The questions on financial viability of such proposals further
strengthen the ambiguity over its hidden objectives. Number of sub-projects which were not
originally a part of OBOR have now been added to BRI but the purpose is
ambiguous. The project BRI is not just a road building project - the catch word
here is a "Belt" - a corridor - of prosperity planned along the
proposed roads. The adjoining land would be marked for new industries and trade
to come up and would promise to create new job opportunities much awaited in
the poor underdeveloped participating countries. Here the ambiguity continues.
Who manages the belt – the corridor and by what rules? Will the rules be
mutually agreed to or imposed by China? Which country will set up the new
industries and in which verticals? China alone? Participating countries? Will
China allow industries to be put up by other countries? Will their citizens get
a fair opportunity to compete? And if such opportunities are not viable, how
far could the participating countries remain rooted to the project? Can the new
industries provide employment to locals or only to Chinese? Some of the African
countries' and Pakistan's experience shows that the key positions are held by
Chinese.
Chinese Capital being provided is of course not for free consumption
- there is a heavy premium - interests rates higher than those available from
other sources. Even if one accepts the risk of this high interest rate capital,
what could be the repayment modality? Ostensibly, BRI being an alternative fall
back to sea route, does China really intend to set up profitable industries
here? What if industries set up by participating countries do not take off
well, how does one pay back the loans?
This could emerge as the debt traps which are already a reality in
the case of under-utilized Hambantota port of Sri Lanka. Sri Lanka, faced with
the crisis of inability to repay the loan, was left with only choice of
converting debt into equity and surrendering 85% shares to CMPH China Merchants
Port Holding and parting with the land for 99 years lease thereby letting China
have control of the strategic port that oversees important sea-lanes in Indian
vicinity. In addition, Chinese firms
have been given operating and managing control of the nearby Mattala Airport,
built with Chinese loans of US$300–400 million, because the Sri Lankan
government had been unable to bear the annual expenses of US$100–200 million.
Similar questions exist regarding projects in Kenya, Malaysia, Maldives and
Indonesia.
Security of Routes
Protection of the BRI projects is a major concern as the route
passes through politically unstable and dangerous lands. e.g. CPEC which is a
part of BRI would amply explain this concern. The region where India carried
out the surgical strike in 2016 is not far away from the slated CPEC route. The
Nangarhar region where America dropped the Mother of All Bombs is likewise
nearby the planned CPEC route. This clearly indicates that the route passes
through areas where terrorist organisations operate freely and challenge the
government of the day. As Xi Jin Ping says that development provides security,
security is also a pre-condition of development. If the route is not secured,
can the belt remain secured and provide the vital stability to the financial
ventures and industries slated to come up? Can we be assured that the supply of
water, electricity, raw materials and human resources would remain unhindered
in such provinces? If not, how could we assume that industrialists -
capitalists would come forward to set up such factories and businesses along
the belt? Pakistan has allotted 12000 regular security personnel to the
security of CPEC this which is an overbearing additional cost. In the Gwadar project, China likewise has
also deployed its own security personnel to protect its interests. The security
of the Gwadar project and the road linking it is governed by Chinese officials
who have framed the rules themselves and monitor the management. In other
words, the region is under Chinese control giving rise to objections such as
sovereignty of the land being surrendered by participating countries to the
project.
Connectivity - A double
edged weapon
Especially with respect to CPEC, India apprehends that once the
regions get joined, the radical Islamists from Chinese province of Uighur could
easily move southwards creating a new security challenge to India. After the
announcement of launching of CPEC, Pakistan has moved its Hatf XI missiles very
close to Indian border. This has resulted into India revisiting its policy of
No First Use and re-evaluating the adoption of "Cold Start". This is
indeed a serious matter.
China will never surrender control of BRI projects to participating
countries. Connectivity is a double- edged weapon in Chinese hands which can be
used in the interest of the participating country and if and when China decides
to jeopardize its interests as well. This is not a mere bookish threat, but one
supported by recent instances. In 2016, when Mongolia had planned to welcome
Dalai Lama on its soil, China threatened with consequences. Brushing the
threats aside, Mongolia welcomed Dalai Lama's visit. As a punishment for this
"disobedience", China retaliated by blocking the road to Mongolia -
stopping food supply - leaving its 20 million people starving and shivering
without electricity in temperatures like -50 degrees. In another example, on smelling that Norway
had planned to honor Dalai Lama with Nobel Prize for Peace, China boycotted
its trade with Norway forcing it to change its decision. So, can one be assured
that BRI nations would not face similar arm-twisting in future? In short, while
the participating country may hope to enjoy development and prosperity, the
fear of getting enslaved by China will keep hovering and be a hanging sword on
the participating countries' head.
China's belligerent disposition in these incidents is a major hurdle and
is indicative of why China's coveted claim to be the world leader cannot be a
success.
Trust Deficit
The examples above are sufficient to explain why China is not
perceived as a responsible global power. There is a Trust Deficit experienced
especially by its neighbors with each one of whom China has initiated a border
dispute. Even when a conflict does not apparently exist, China unethically digs
out border disputes with neighbors. Should an occasion arise for mutual talks,
during the negotiations, the Chinese do not focus on resolving the issue but on
constantly changing the goalposts and ensuring that the issues are kept hanging
perpetuating instability, uncertainty and tensions benefiting the Chinese
position. China's over-sized military power far exceeds her defense requirement
and its further building and flaunting prove to be deterrents to normalization
of relations. In Asian scenario, China considers India to be its rival not only
in financial domain but also in political sphere. Keeping consistent with this,
it unabatedly weaves traps to demoralize India. The two other countries
disillusioned and feeling hurt by Chinese strategy are Japan and Australia.
Convergence of Strategic
vision
China cannot claim its status as Asia's number 1 till it DISPLACES
USA from this position. Therefore, the Chinese game plan formulates strategic
challenges to not just Japan or India but mainly to USA militarily and
financially. While the former US governments under-rated this danger, Trump
govt has re-evaluated the risks and has focused on mitigating them. China's
posturing has therefore forged convergence of strategic vision and closer
relations between these countries which is also being seconded by other smaller
countries in south Asia. Noteworthy is the fact that these countries are
looking forward to India to take the initiative to harness China. In response,
without losing the sight of China's short term and long-term goals, India has
chalked her own plans around the theme of Connectivity bringing these aspiring
countries together for sharing prosperity and encouraging mutual respect in a
win-win situation truly reflecting Prime Minister Modi's vision of Sab ka Sath
Sab ka Vikas.
India's Offerings
"Na aankhein jhuka kay, Na aakhein utha kay, balki ankhonse ankhein
milakay - India's foreign policy will be implemented" - This was the
promise made by Shri Narendra Modi to the electorate and he has lived by it on
taking oath of Prime Ministership. A strong and stable immediate neighborhood
is a catalyst of development and security and therefore India's vision is to
first stabilize and develop its neighborhood. Adoption of "Act East"
vision is also based on the same sound principle of collaborative development.
As 10 ASEAN leaders met in New Delhi on India's Republic day 2018,
Narendra Modi wrote an op ed published in 10 languages by 27 newspapers in
which he has stated that "India and ASEAN nations have relations free from
contests and claims. We have a common vision for the future built on commitment
to inclusion and integration, belief in sovereign equality of all nations
irrespective of size and support for free and open pathways of commerce and
engagement." This explains the
ethos of Modi's vision of the sound base for building strong relationships
among countries with "shared values and common destiny".
Thus, the theme of Connectivity as envisaged by India vis a vis that
of China are rooted differently. India's projects are carted to satisfy the
mutual priorities of development and are scalable. They meet need of the hour
and are realistic and financially viable. They leave no room for risk of debt
traps. This lessens the risk of financial failures or financial burdens. The
projects are not biased towards Indian investors. There is sufficient
opportunity to local entrepreneurs in availing of the projects' benefits and
scope for local employment. Indian ventures where involved look upon them as
means to earn decent profits and not profiteering.
As was ably demonstrated in the case of Afghanistan, India holds
cultural sensitivities in high esteem. This enhances the chances of projects
being accepted wholeheartedly and enthusiastically and reduces the risk of
local resistance. Finally, India aims
not at arm twisting but hand holding with its participating countries. Unlike China,
India does not have major disputes with the participating countries. All in
all, India is not posturing itself as a overpowering stick dangling terms
dictating financial or military super power but as a true collaborator in
upliftment, progress and development of all.
