Belt and Road Initiative: The hurdles along the way
China's Belt and Road Initiative (BRI) is an ambitious programme which seeks to connect Asia with Africa and Europe via land and maritime network with six economic corridors. The BRI's geographical area is constantly expanding. So far it covers over 70 countries, accounting for about 65 percent of the world's population and around one-third of the world's Gross Domestic Product (GDP).
The name was coined in 2013 by China's President Xi Jinping, and the concept of the modern Silk Road was drawn from the ancient Silk Road, established throughout the Han Dynasty a thousand years ago, which was an important trade route that connected China to the Mediterranean region. The BRI contains a trade route and a trans-continental passage that links China with South-East Asia, South Asia, Central Asia, Russia and Europe by land, and a 21st-century maritime trade route, an ocean route connecting China's coastal regions with South-East and South Asia, the Pacific Ocean, and East Africa.
The project is usually represented as a trade route, which would create a "belt" of land corridors and a maritime "road" (actually a sea route) of shipping lanes. The initiative defines five major priorities including various policy coordination to expand shared interests, enhance mutual trust, and build consensus on further cooperation. Infrastructure development of this scale cannot materialise without regional connectivity.
This connectivity needs to facilitate the building of an infrastructure network that not only links all the sub-regions in Asia but also extends out to Europe and Africa. Transnational trade is one of the primary focuses of the BRI. Unimpeded trade will facilitate more trade between the nations and would remove many barriers of investment and trade and open up free trade areas to create a business-friendly environment at the regional and national level.
The initiative would also facilitate financial integration to foster currency stability, build a sound framework for investment, financing, and credit services across Asia, while strengthening the role of institutions such as the Asian Infrastructure Investment Bank (AIIB), the BRICS New Development Bank, the Silk Road Fund, and sovereign wealth funds just to name a few. People to people contact lies at the very heart of the initiative. People across borders would have the opportunity to increase interaction and mutual understanding, be aware of potential benefits from expanded cooperation, and participate for the initiative's success.
Bangladesh is an important member of BRI and has signed several MoUs for infrastructure construction and economic cooperation totalling USD 40 billion during the visit of President Xi Jinping to Dhaka in October 2016. As Bangladesh is a key maritime nation in an important geostrategic location along the Belt and Road, China has been trying to influence Bangladesh to play a major role in this geo-economic and geo-connectivity vision called the BRI. One of the six economic corridors of BRI, the old BCIM (Bangladesh, China, India, and Myanmar) corridor which began with the Kunming initiative, addressed by academic Rehman Sobhan in 1999, will become a major BRI economic corridor; in fact, it will become one of the two major maritime economic corridors of BRI.
MoUs were additionally signed for cooperation including maritime cooperation, joint practicability study on a free-trade space, new ICT framework, counter-terrorism collaboration, capability building, sharing of knowledge, disaster risk management, and cooperation on power and energy sectors. However, India has expressed its concerns regarding BRI, especially in regards to CPEC (China-Pakistan Economic Corridor) which runs through the disputed Kashmir region.
The Rohingya crisis which has soured Bangladesh-Myanmar relations is another concern for the success of the BRI. Bangladesh doesn't share a border with China and is therefore dependent on transit from China via either India or Myanmar.
Over the past five years, China's trade with countries along the Belt and Road exceeded USD 5.5 trillion. Chinese direct investment within the non-financial sectors of those countries reached USD 80 billion. China founded 82 overseas economic and trade cooperation zones in those countries, providing USD 8.9 billion worth of funds and creating 244,000 jobs. As of 2018, China signed 16 trade agreements with 24 countries and regional organisations, nearly half of them being part of the Belt and Road. Additionally, China founded 81 education establishments and 35 cultural centres. Within the first half of 2018, China spent around USD 39.3 million on Silk Road scholarships.
Still, this mega project is facing a number of challenges. This includes the costs of the projects and the capabilities of host countries to afford the debt required to finance them. Centre for Global Development report shows that eight countries along the Belt and Road are struggling to repay the loans taken to finance such projects. These nations are Djibouti, Kyrgyzstan, Laos, the Maldives, Mongolia, Montenegro, Pakistan and Tajikistan, who will owe more than half of all their foreign debt to China.
A mega project like the BRI will obviously face a lot of challenges and limitations in implementation. Primarily among them is the need for an efficient and effective management infrastructure to oversee and closely monitor its progress. BRI is certainly a grand initiative which is why it will require effective communication and strategic plans to be implemented successfully.
Thus policymakers in countries along the BRI should emphasise on policy coordination to maximise their shared opportunities and mitigate their individual risks.
Major General ANM Muniruzzaman, ndc, psc (Retd) is the President of Bangladesh Institute of Peace and Security Studies (BIPSS).