The Chinese government in 2013 announced investment in over 60 countries and international organizations in order to promote inter-regional connectivity along with economic growth and development.
This initiative is dubbed as China’s – “Great leap outwards” – as it will also help them establish a much stronger political and economic influence on the global level.
The Belt and Road Initiative or One Belt One Road name was given by President Xi Jinping, the inspiration behind this name is the Silk trade Road that was established nearly 2,000 years ago during the Han Dynasty.
This new and refurbished silk road is expected to stretch from East Asian nations to European nations. It begins from China and going all the way to Europe via Central Asia.
WHAT IS BELT ROAD INITIATIVE (BRI)?
By the end of March 2020 more than135 nations joined hands and signed a Memorandum of Understanding with China as part of its bilateral trade to help build and set up the BRI. These nations hope to complete this project by 2049.
The belt road initiative majorly focuses on infrastructure development, renovation and connectivity of airports, docks, ports, railway lines, roadways, electricity power plants along with other telecommunications services, transport and logistics networks.
The “Belt” here refers to roads and railway line networks but “roads” actually in this case mean sea lanes. All together their aim is unification of Asia and Africa.
BRI also prioritizes policy coordination, financial integration, unimpeded trade and connecting people across the world. Through this initiative corridors will be built along the world. This will include differing levels of participation from various host nations.
BRI CORRIDORS INCLUDE
- The China – Central Asia – West Asia Economic Corridor
- The China – Mongolia – Russia Economic Corridor
- The New Eurasian Land Bridge
- The China – Pakistan Economic Corridor
- The Bangladesh – China – Myanmar Economic Corridor
- The China – Indochina Peninsula Economic Corridor
About $60 billion alone will have to be spent on establishing the China-Pakistan Economic Corridor which will involve a variety of projects focused on creating a network from China to Pakistan’s Gwadar Port.
A sum total of $200 billion has already been spent on the BRI.
Investment banking company Morgan Stanley projected that the total cost of this initiative is said to go above $1.3 trillion by the end of 2027.
CLAP BACK AND CRITICISM
The project has been receiving lot of flack by several countries as the expenses have been skyrocketing. It is also been looked at as a means for China to acquire more power and control over global economy. Some have even gone to an extent of calling it more of a geopolitical experiment.
This initiative was also criticized by several nations due to China’s lack of transparency. A few investments have been using opaque bidding processes and mandated the use and requirement of Chinese organizations and banks. This has resulted in political back-lashes, many contractors have even inflated costs and a few leading ones resorted to cancellation of projects.
Another reason for outcry against BRI is that the fact that these initiatives and projects are funded through low-interest loans from Chinese banks instead of aid grants which is adding on to the already exiting pile of strain and pressure over severely hit pandemic and debt burdened countries.
Several projects have been scrapped as the unprecedented pandemic has forced the members to question its viability. Loans that were agreed upon are in or at the edge of a technical default. A few debt ridden nations have entered negotiations to defer payments that are nearing due dates. One such is the African continent who owes at least a sum total of $145 billion. Several leaders are requesting or demanding forgiveness of debt. China has even gone to the extent of cancelling granting loans to a few nations that they are sure won’t be able to payback.
SILVER LINING OF BRI
The World Bank has predicted that the BRI initiative has potential to bring down transportation time on many corridors by at least 12%. They also said that it can increase trade between 2.7% and 9.7%. Raise income up to 3.4%, lift about 7.6 million people all over the world out of extreme poverty.
World bank has also suggested that this modern day silk road could touch 4.4 billion people across 65 nations which generate nearly 40% of the world’s GDP.
“BRI might likely boost world GDP by $7.1 trillion per annum by 2040,” Center for Economic and Business Research (CEBR).
However, all these predictions were made before the coronavirus pandemic outbreak. Revised figures could be a little disappointing as several projects and initiatives have been scrapped due to the pandemic, growing resistance and lack of trust towards China and its Corporations.