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India: Belt and road initiative

Belt and road initiative


Cherry-pick the BRI and look for business opportunities that can be fruitfully exploited

Belt and Road’s West Passage 1exits from Xinjiang’s Alashankou (Khorgos), running through Kazakhstan


India needs to get off its high horse on the Belt and Road Initiative (BRI). It is a Chinese project, funded and largely executed by China in third countries.

True, New Delhi has the right and duty to object to the project including what we call Pakistan Occupied Kashmir. But in reality, this is a  pro forma complaint, since the road there between China and Pakistan has been operational since the 1970s. We have since has many occasions to talk to Pakistan on a variety of areas, but the Karakoram Highway has never been on the agenda.

Chinese motives in investing in Gilgit-Baltistan do not have to do with their support for Pakistan, but their self interest in stabilizing the area which is proximate to their troubled province of Xinjiang. The Pakistani role in that area has been dubious, to say the least. The military has encouraged migration of Sunnis Islamists into that area so as to alter its sectarian balance. That process has resulted in a great deal of tension and even riots.

As a sovereign country, New Delhi had the right to boycott the Belt and Road Forum last year and campaign against the scheme. But it does sound a bit condescending when we warn other countries not to fall into the Chinese debt trap. They, too, are sovereign, presumably they are run by mature people and if they choose to fall to Beijing’s wiles, there is nothing India can do.

India’s official statement of May 13, 2017 boycotting the Belt Road Forum was full of self-serving remedies like the need for connectivity projects to be based on “recognized international norms, good governance, rule of law, openness, transparency and equality.” Further, they should not create unsustainable debt for communities and must develop skill and technology for communities.

Who is going to decide that these norms are being observed ? Certainly not a country that has officially criticized the project. This is best left to development banks and financial institutions to warn recipient countries. This is what the IMF and the ADB have done. At a conference in China IMF Managing Director Christine Lagarde warned that the BRI could put a huge burden on countries which have a massive public debt to start with. Likewise, the ADB has cautioned against unsustainable borrowing to fund infrastructure projects which could get countries into a debt trap. But neither the IMF, nor ADB have all that great record in forecasting developments.

Actually, what India could do is offer practical alternatives, instead of these catch-all nostrums.  But since we lack the money to even develop our own shoddy infrastructure, it is unlikely that we can come up with funds to compete with China on that score.

This is not to say that the BRI doesn’t have problems. It does. A Washington-based think tank, Center for Global Development has recently reported that 23 nations are at a risk of debt problems because of financing associated with the BRO, eight of high risk category, they said were Pakistan, Maldives, Mongolia, Tajikstan Kyrgyzstan and Laos. IN all likelihood, China is fully aware of the situation and has no problems in continuing to offer these countries loans because it serves its geopolitical ends to create dependencies on its periphery.

There have been brave words by the Americans and the Japanese about coming up with alternate financing models. But nothing concrete is on the table. The Japanese run an impressive Overseas Development Assistance (ODA) model, but even they do not have the resources or the energy to rival the scale and scope of the BRI which extends from Europe, to the Middle-East, Central Asia, South-east Asia, Africa and the Indian Ocean.

One of the intriguing possibilities arising from the Wuhan summit is the possible of some form of Indian participation in the BRI. Since the BRI is a grab bag of Chinese investments and development projects it is just a matter of labelling.

Following the Wuhan summit, Chinese Vice Foreign Minister Kong Xuanyou, who is the counterpart of Foreign Secretary Vijay Gokhale,  said that there were no differences with India on the issue of inter-connectivity. When it comes to connectivity India does not exclude this cooperation. He noted that it was not a big issue as to whether India had to accept “the expression Belt and Road initiative.”

For their part, the Chinese seem quite willing to accommodate India to the extent they can. The report that India and China will develop cooperative projects in Afghanistan could be the thin end of the wedge. This opens up the possibility of other “third country projects”, say in Nepal or Bangladesh. For the moment Pakistan  is out because it is not willing to open its borders to India.

In any case, there is no such thing as a “membership” of BRI and it is not necessary to express official support for it to do business with China. And truth to tell China-India business ties are actually booming.

What New Delhi needs to do is to cherry-pick the BRI and look for business opportunities that can be fruitfully exploited. It can also adopt a more constructive attitude and engage Beijing in a discussion over the objectives of the BRI schemes in areas of its own interests. Taking a hard-line is not going to achieve much, but a lot could be gained through old-fashioned give and take kind of diplomacy.

This commentary originally appeared in Greater Kashmir.


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