BRI- Economic Injection or Global Dominion?
“Supreme excellence consists of breaking the enemy's resistance without fighting.” -Sun Tzu
The key to raising the global economic stature has always been international trade, right from the Harappan civilisation to the Roman era and to date existing throughout history. A major reason for the connection of trade routes into an extensive transcontinental network dating back to the Roman era was China and the silk developing there which gave birth to the economic lifeline -- the Silk Route.
China, again, in its pursuit to global development or “geopolitical power” is recreating the medieval silk route through its economic affluence as a modernised infrastructural boom – Belt and Road Initiative originally called One Belt One Road Initiative launched in 2013. A double trade corridor with a goal of improving trade relations through infrastructural investments. The Belt and Road Action Plan devised in 2015 as a $900 Billion project claims to kindle a ‘new era of globalisation’. China marks this to be the golden age of commerce that will be a boon to all.
BRI was taken up as a pet project in the Paris Peace Forum of 2018, international organisations like the International Monetary Fund and World Bank specifically debated for a more inclusive multilateralism in order to positively impact and support smaller less developed countries in the lines of growth and inclusion along with a subtle warning against divisive globalisation that till date has proven is only in the interest of the wealthy.
Redefining the Global Order or Disorder?
China’s dialogue on a new connected multilateralism, through the Belt and Road Initiative (BRI), relies on this very same inclusive project with the only difference that it is now led by a non-Western and non-democratic superpower. What is clear here is the ambition to significantly dominate the world -if not be the direct authority- through making the rules economically.
The success of The New Silk Road highly depends on clearly executed and well-implemented rules and procedures. What comes to question, here, is that does this project require an independent organisation or will it be handling strategized decisions and conflict resolutions in a multilateral way? Who is to make that decision?
Given the fact that China has already lent $8 trillion for infrastructure in 68 countries that is 68% of the global population and a third of global GDP gives it autonomy over it. With 140 countries and 32 international organisations already a part of the Belt and Road Cooperation, it could lead to an increment of 6.2% in global trade and a 2.9% rise in global real income according to a World Bank report.
At this point, BRI has more than six economic corridors through Asia, Europe and Africa, which is also a basic controversy with a $50 billion China-Pakistan Economic Corridor (CPEC), something India continues to put efforts for building international consensus against. Pakistan by far enjoys a unique status of being an important player, by virtue of being an earnest member of the Belt and Road Initiative (BRI)
This can be more of a strategically planned geopolitical hegemonic effort than an infrastructural based economic developmental play of China growing to be more trade-friendly than its protectionist rival ‘USA’. China being a capitalist inclined country enjoys the BRI “shared growth and dividends” coexisting with the Marxism-Leninism theory, proving the fact that capitalism needs a calculated political boost. The BRI is a Chinese political project despite a number of other partners joining the effort and contributing to the fund.
Unlike the traditional agreements that aid in the elimination of market access barriers, conditional entry and harmonise rules, there are no dedicated laws or comprehensive trade/economic partnerships associated with the BRI making it an unconventional trade agreement. This emphasises the fact that the Belt and Road Initiative is not regularised under any formal Institution and the power of execution lies with multiple stakeholders.
Network of foreign trade agreements, bilateral investment treaties and other international investment agreements that China is linked to are the only legalities related to BRI, which does have a standard that it is to abide by but not legally bound to. This again sets in the fear of a China centred sphere of influence and an abundance of debt traps.
What does China achieve?
China claims the BRI project to pursue development and aims to profit off mutual benefit, conveying the message of hope but what are the direct wins for China?
This Trans-Eurasian trade infrastructure will strengthen countries like Myanmar (see Fig. for Kyaukphyu port built under BRI) Laos and Vietnam in the south of China, along with its domestic less-developed border regions, envisioning sustainable development, free trade areas and harmonization of technical standards. Opening up trade relations with new markets will help procure its energy and raw material supply and keep the Chinese economy afloat. Paving the way to make it’s domestic transport and telecommunication companies a global brand. The BRI venture is also a method to keep the Chinese manufacturing industry buoyant, which has a boatload of steel and heavy equipment- a lucrative outlet for these high-end industrial goods.
The Five Pronged Structure
China aims to enhance monetary circulation globally through coordination and cooperation in the monetary policies thereby integrating not only financially but politically as well, also setting up various financial institutions as a complement. Moving along the lines of the medieval Silk routes, BRI will facilitate transport connectivity with the heavy infrastructure injected in the project, needless to say, this will be a boon to the trading industry, with minimal trading barriers and low investment with higher returns as economic integration worldwide. This will be a step up in policy communications, encouraging multilateral macro policy exchange, but will have its own drawbacks with disagreements among countries having different purposes.
Cultural exchange is always a byproduct of trade and economic connectivity, this will grow an understanding between people and nations but with conditions, till and when they have similar ideologies, a huge barrier to media cooperation.
The BRI plot can be a land grab design for China or a way of solving its overcapacity problems or both!
The Indian Imperative
A $46 Billion colonial operation plotting on debt-ridden communities which China may deny to be a plot towards global dominance but this can take many silent turns concerning all those countries whose political framework do not align with that of China’s.
India boycotted the First BRI summit in 2017 along with many others who oppose this project like Japan, South Korea or North Korea and the Group of Seven (G7) industrialized nations. Prime Minister Modi has specifically been voicing against the China-Pakistan Economic Corridor which could do great damage to India with two of its bordering countries joining hands.
BRI might be the solution to China’s domestic problems, an economic masterpiece, but it also, Challenges India to rethink the whole gamut of its foreign policy objectives. Our government continues to vociferously oppose this radical change, but we will just have to wait and watch to see where this takes our country and the rest of the continent.