THE GIST of Editorial for UPSC Exams : 04 MAY 2019 (An image makeover of the Belt and Road Initiative (The Hindu)

An image makeover of the Belt and Road Initiative (The Hindu)

Mains Paper 3 : Economy
Prelims level : BRI
Mains level : Infrastructure

As the Second Belt and Road Forum (BRF), reviewing progress of the Belt and Road Initiative (BRI), concluded in Beijing on April 27, China had reason to be satisfied.
The summit segment was attended by 37 heads of state or government.
The list included strategic partner Russia and almost all from Central and Southeast Asia, two important areas of BRI operation.

The Chinese leadership claimed the attendance rebutted allegations that BRI is a geopolitical tool and exploitative “debt trap” driving countries into dependence on China.
It would be more realistic to see it as indicating China’s economic clout and the desire of most countries to hedge their bets in the current turbulence in great power relations.
Concerns about the viability of BRI projects have not dissolved; it is just that immediate benefits sometimes obscure the direness of future consequences.

Over the years, the structure and implementation of the BRI have attracted negative comment, including from some of the countries represented at the forum.
There is a litany of complaints: that projects are selected as per Chinese priorities, with inadequate consultation with recipients; terms are agreed bilaterally and non-transparently with the leadership, and benefits do not trickle down to the population; contracts go to Chinese companies, are implemented by Chinese labour, with raw materials and products from China;
The most projects are over-valued and economically unviable; most financing is by Chinese loans on unrealistic terms, leading eventually to “debt traps”; foreign companies and private investment are spurned; corruption flourishes in the absence of transparency, labour laws are flouted and environmental compliance is lax.
Above all, the BRI exhibits China’s geostrategic ambition for economic dominance and political hegemony.

President Xi Jinping’s speeches and the final forum communique silenced this criticism by promising a total makeover of the BRI.
They declared that it will be guided by extensive consultation, joint contribution and shared benefits. Cooperation should be transparent, people-centric, green and clean, with zero tolerance for corruption.
Project evaluation, tendering, bidding and implementation would meet international standards.
The right of participating countries to define their developmental priorities would be respected, as also their laws, sovereignty and territorial integrity. Foreign investment would be welcomed.
Economic, social, fiscal and environmental sustainability of projects should be ensured, with emphasis on debt sustainability.
In short, it was a promise to transform the BRI, in one fell swoop, from all that it was into all that it should have been.
The question is how this rhetoric will translate into action.

The other remarkable feature was the launch of the “Belt and Road” as an overarching framework for bilateral and plurilateral cooperation. China announced a clutch of “Belt and Road” scholarships, training courses and exchange programmes.
Groups of countries launched cooperation mechanisms for ports administration, accounting standards, tax administration, banking, intellectual property, sustainable cities, energy and dispute settlement, among many others.
Some of these mechanisms were facilitated by UN agencies. China listed 283 “deliverables” from the forum, comprising Chinese initiatives, bilateral and multilateral agreements, investment projects and financing arrangements.
An important potentially the most impactful initiative of the BRI has gone relatively unnoticed.
Mr. Xi announced in 2017 that it would enhance digital connectivity and integration of big data to build the “digital silk road of the 21st century”.
Digital connectivity infrastructure is to be built in tandem with physical connectivity.
This arouses U.S. (and wider) concerns that with its lead in 5G network technology and deep pockets, China will establish dominance of its 5G standards and equipment in Eurasia and beyond.
The sudden image makeover of the BRI may well be intended to open up a more accommodating attitude to this technology insertion.

The debate in India about whether or not we should join the BRI will probably be reignited in the wake of its new avatar.
The opposition to the China-Pakistan Economic Corridor determined absence at the forum. There is no specific opportunity for India in any other element of the BRI.
India’s attitude to it has to be set in the larger picture of the relationship with China, which combines a strong economic partnership with major strategic challenges, further complicated by the global geopolitical flux.