By GEORGE KOO
MAY 2, 2019
Mike Pompeo, America’s globetrotting secretary of state, has been meeting with leaders in Africa and Latin America to warn them of China’s Silk Road-styled Belt and Road Initiative (BRI). Watch out for predatory financing and debt traps, he tells them.
Close to 40 heads of state attended the just-concluded second Belt and Road Forum. As Asia Times reported, the “BRI is now supported by no less than 126 states and territories, plus a host of international organizations (including the World Bank and the IMF) – way bigger, diversified and more representative than the G20.”
Pakistani Prime Minister Imran Khan gave the keynote address at the forum. He spoke of Pakistan’s longstanding friendship with China and the benefits of the China-Pakistan Economic Corridor (CPEC). He said he was proud that the CPEC, the economic impact of which is already proving to be a “blessing” for Pakistan, was one of the first major BRI projects.
Khan noted that China has lifted more than 800 million people out of poverty and can help Pakistan do the same. With young people making up half of Pakistan’s population, Khan looked forward to Pakistani people learning and benefiting from China’s technological advances so as to maximize his country’s potential.
Khan concluded his remarks by proposing five initiatives: plant billions of trees to combat climate change, develop tourism to promote people to people exchanges and cultural understanding, establish an office dedicated to combatting corruption, learn from China how to fight poverty, and move to further liberalize world trade.
He pledged that Pakistan will work with China and fellow members of the BRI for a common future full of hope and happiness. The BRI is obviously no mirage to Khan, nor is it to President Vladimir Putin of Russia and Italian Prime Minister Giuseppe Conte, among other leaders that also attended the Forum.
In contrast to Khan’s vision of a common future, what could Pompeo possibly have said to convince heads of state in the developing world that their future lies with the US and not with the BRI?
World’s loan shark?
Professor Deborah Braütigam of Johns Hopkins published a timely op-ed, Is China the World’s Loan Shark?, in The New York Times to coincide with the Belt Road Forum in Beijing. She is a leading authority on and monitor of China’s investments in Africa.
Despite the provocative title, her analysis did not identify debt traps in Africa. She found that China’s financing in Africa was within IMF debt-ceiling guidelines for those countries. In fact, she concluded that “the idea that the Chinese government is doling out debt strategically, for its benefit, isn’t supported by the facts.”
Sri Lanka’s Hambantota port development, frequently cited by western media as the epitome of China’s capricious design to exploit the developing world, was specifically examined by Braütigam and she dismissed the accusation.
Sri Lanka’s Hambantota port development, frequently cited by western media as the epitome of China’s capricious design to exploit the developing world, was specifically examined by Braütigam and she dismissed the accusation
Because of its strategic geographical location, Hambantota has long been regarded by many international experts as having the potential to become another Singapore by providing services to shipping traffic from the Middle East to Asia. Therefore, there has always been an economic justification for the project.
Sri Lanka asked for international assistance but only China agreed to help. After the port was built, revenue failed to materialize to service the debt due to internal political infighting that prevented the full implementation of a working harbor.
China had to take possession to relieve the debt load. Even so, the debt owed to China amounted to only 10% of Sri Lanka’s total national debt – hardly enough to qualify as a debt trap.
The major gap in US-China relations is the difference between the reality on the ground and the distortion and fabrication by western media and political leaders. Secretary Pompeo is an example of a progenitor of such a gap.
Pompeo’s glorious experiment
On Pompeo’s return from Latin America, the former CIA director stopped to talk to students at Texas A&M. Boasting about his time with the intelligence agency, he said, “We lie, we cheat, we steal.” He said its entire training course “reminds you of the glory of the American experiment.”
No wonder North Korea’s Kim Jong-un does not want anything to do with this American diplomat.
Lying, cheating Pompeo is simply an extension of his boss, President Donald Trump. Trump considers veracity a sucker’s play, truth inconvenient and facts just another version of fake news.
Thus, all of American’s positions on China, whether on Huawei, 5G, artificial intelligence, IP theft, cyber hacking or any other accusations, appear suspect upon close examination. No one can tell fact from fiction when it is coming from Washington.
Gradually and steadily, the rest of the world, even America’s closest allies, are wary of Trump’s single-minded “America first” and to hell with everything else style of international diplomacy. Unlike collaboration for mutual benefit from the BRI, dealing with the US is all one way for Trump’s benefit.
The 21 Democratic presidential hopefuls that aim to replace Trump must recognize that continuing to treat China as the next great adversary does nothing to enhance US national security.
Someone with wisdom and courage needs to step forward and admit that former US president Barack Obama made a mistake when he kept his country from joining the Asian Infrastructure Investment Bank and that we are continuing to multiply our mistake by not being part of the BRI.
The winning Democratic nominee should listen to former US president Jimmy Carter, who said, “We have wasted $3 trillion on defense spending. If we divert $1 trillion into infrastructure, we’d have a high-speed railroad, we’d have bridges that aren’t collapsing and we’d have roads maintained properly and our education system would be as good as that of, say, South Korea and Hong Kong.”
America desperately needs a leader to define and seek a win-win solution in relations with China and reverse the trend toward a disastrous outcome where everyone loses.
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Dr George Koo recently retired from a global advisory services firm where he advised clients on their China strategies and business operations. Educated at MIT, Stevens Institute and Santa Clara University, he is the founder and former managing director of International Strategic Alliances. He is currently a board member of Freschfield's, a novel green building platform.