18 September 2020, NIICE Commentary 5970
Aastha Binzani
Announced in 2013 by Chinese President Xi Jinping, the Belt and Road initiative (BRI), a set of initiatives aimed at enhancing connectivity, development, and infrastructure, has become the centrepiece of China’s economic, foreign, and security policies. The South Asian region is central to the BRI due to its geostrategic location. One of the major projects of BRI, the China-Pakistan Economic Corridor, passes through South Asia. Therefore, its policy in the region has attracted the attention of scholars, policy-makers, and security communities across the world.
Scholarly debates have focussed on the strategic and economic dynamics of the initiative at the regional and intra-regional levels. While these are significant aspects of the initiative, as infrastructure and regional connectivity projects like the BRI change the existing structures of power and the patterns of influence, thereby radically changing the dynamics of geopolitics, the local political, economic, and environmental factors interact with regional dynamics and play an equally significant role, something that the existing literature around the BRI has overlooked. Therefore, this essay attempts to analyse the interplay of the local factors and the regional dynamics to study the BRI in South Asia.
The local politics of countries in South Asia have the potential to hamper the implementation of regional projects. The China – Pakistan economic corridor (CPEC), the linchpin of BRI in the region is a case in point. The CPEC aims to connect China’s western region to the Pakistani port of Gwadar in Baluchistan through a network of highways, rail, and pipeline infrastructure. The section of CPEC in Baluchistan has been subjected to deadly attacks by Baloch separatists, thereby raising security risks and costs of the project. Pakistan has deployed a 13,700-personnel-strong Special Security Division for the protection of CPEC projects and Chinese workers. There have also been reports of militant Baloch factions expanding their range of operations to Sindh province and its capital Karachi, which might pose risk to CPEC projects there. Domestic political dynamics in Sri Lanka also add to the uncertainties of project implementation, given how most of the projects were halted by the newly elected Sirisena – Wickremesinghe government in 2015, after President Sirisena issued warnings about the possibility of the island nation becoming a “colony” at the hands of China. However, the projects were resumed a year later after making certain changes to them. Therefore, the local political dynamics are a major factor in shaping the contours of the BRI projects.
Local economic factors play a crucial role in shaping the outlook of the recipient states towards the initiative. All the BRI participant countries in the region suffer from poor infrastructure and are in great need of investment. These countries have embraced the connectivity and infrastructure plans of the BRI as they match with their own growth aspirations. The initiative has the potential to drive economic development in South Asia. However, the ability of these countries to repay loans to China raises concerns about the phenomena that has come to be termed as “Debt Trap Diplomacy”, with Sri Lanka emerging exemplary in this regard. The term refers to a purportedly deliberate strategy pursued by China under which it gives loans for BRI related projects to countries that will have difficulty repaying them, forcing such states into debt traps which are followed by seizing of assets by China to repay the loan. Sri Lanka’s Hambantota port was acquired by a Chinese state-owned firm via a 99-year lease in 2017 when the Sri Lankan government could not service its loan. Suffering a severe balance of payment crisis, the Pakistani government shelved a major coal-based power plant project to China. Loss of livelihood of local communities as a consequence of BRI related projects such as East Bay Expressway in Pakistan led to protests by the local fishermen following the beginning of construction work. The economic viability of the BRI projects is not only associated with revenue generation after completion but also with the overall economic situation of recipient countries. The debt servicing from revenue generated from BRI-created infrastructure is such an example. Therefore, the dynamics of the local economic factors is also a major variable that shapes the viability of the BRI projects, thereby impacting the long-term trajectory of the project.
Analysts have largely ignored the role of environmental factors in shaping BRI projects. There has been some apparent attention that has been paid to environment-related concerns within the 2015 document titled “Vision and Actions on Jointly Building Silk Road Economic Belt and 21st‐Century Maritime Silk Road” by the Chinese government, claiming the BRI will “promote ecological progress” while conducting business, joining “hands to make the [new] Silk Road an environment‐friendly one”. However, environmental damage and its wider impact on local society have economic and political implications, hence, it is imperative not to forget the adverse impacts that may lead to opposition from local communities and political groups. For instance, there was a campaign against the Chinese funded Colombo Port City project in Sri Lanka, with critics pointing out various factors such as the “adverse impacts” on marine ecology, environment, and fishermen’s livelihood, after which, the project was briefly halted due to local pressure. Concerns about environmental degradation may adversely impact the implementation of the initiative.
Regional dynamics of security and geoeconomics shape strategic choices of smaller countries, especially considering the tensions between India and China in the region. India, which is the dominant power in the region has decided not to participate in the BRI, citing threats to sovereignty and territorial integrity, especially since a part of CPEC passes through Pakistan Administered Kashmir, which India claims as its territory. India is also suspicious of China’s intentions and motivations behind the initiative. All Participating states in the region (except Pakistan) have traditionally had close trade and investment ties with India and have depended on it for security. All of them, however, want to reduce their dependence on India and view China not just as an important economic partner, but also as a counter-power to India. All BRI countries in the region, except Pakistan, want to maintain good relations with both India and China. Pakistan’s relations with India, on the other hand, are marked by hostility and suspicion, which has led to Pakistan’s increased dependence on China for security, turning the latter into its most important partner. Therefore, regional dynamics of power also inform the approaches of states towards the BRI.
Interactions between the two variables, which are local factors (Political, economic and environmental) and regional dynamics, in varying ways, inform the participating states’ approach to the initiative and will have a bearing on the implementation and implications of BRI – related projects, thereby shaping the contours of the initiative in the region. Nepal, for instance, has adopted a very cautious and slow-moving approach. It took Nepal three years to join the initiative due to internal political instability and pressure from its traditional ally, India. However, no real progress has been made since then, given differences over funding (with Nepal preferring grants over loans) and concerns over risk potential. Whether or not China meets its objectives in the region will depend on the shape the BRI will take, which in turn will be determined by the approaches of the participating states towards the initiative. Since the interaction of the above-mentioned set of factors plays a defining role concerning the BRI and its implementation, it becomes imperative that due attention be given to these for China to achieve a comprehensive result.
