Tuesday, April 23, 2024

G-7 allurement for the Developing Nations

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DIPLOMAT MAGAZINE “For diplomats, by diplomats” Reaching out the world from the European Union First diplomatic publication based in The Netherlands. Founded by members of the diplomatic corps on June 19th, 2013. "Diplomat Magazine is inspiring diplomats, civil servants and academics to contribute to a free flow of ideas through an extremely rich diplomatic life, full of exclusive events and cultural exchanges, as well as by exposing profound ideas and political debates in our printed and online editions." Dr. Mayelinne De Lara, Publisher

By Sazzad Haider 

During the summit of G7, which was held recently in Carbis Bay, England, leaders of seven wealthy countries formulated a speed breaker to impede the hyper moving Chinese BRI train in more over 138 countries in the world.  Therefore, the Developing Nations of the glob could feel great mitigation as G7 leaders promised to pledge investment for building infrastructure in poorer countries in a bid to counter Chinese Belt and Road initiative.   

In 2014,  President Xi Jinping,  supreme leader of China instigated Belt and Road Initiative (BRI) for the Chinese desire to take up its “due place in the world” 

For implementing BRI, China has allocated huge fund to build infrastructures such as railway, road, port, power- generation and telecommunication networks. 

Moreover, China has invested in improving efficiency and security of the major sea ports along the Maritime Silk Road. According to the BRI blue print, China also wants to extract oil, gas and mineral resources from the Arctic and planned to promote Arctic travel.   

In accordance with media sources, China has already invested $1 trillion in the BRI and several trillion is due to be invested over the next decade. Comparatively, the USA invested $13 billion in the Marshall Plan (which is roughly equivalent to $130 billion in today’s money) for reconstruction of Western Europe after the end of second-world war. Therefore, the BRI is the largest investment project in the history of the planet. So far, 138 countries of Asia, Europe, Africa and Latin America have signed moreover 170 agreements with China under the BRI framework. Hence, the Chinese economic giant, the third dragon of China has begun to roam on the world. 

However, the BRI has been criticized for dominating subscriber’s economies through long-term control of infrastructures, natural resources and associated land assets. China may steer the BRI countries market, labor and exports by transferring the Chinese-owned production units to those countries. Besides, in the context of security measures, the Chinese liberation army could dominate all the geographical routes of the BRI area and could intervene in internal affairs of subscriber countries. Some analysts fear a “debt trap” of the BRI to loan subscriber countries and doubted the efficiency of Chinese banks. 

Moreover, China financed low cost coal-fired thermal power plants in subscriber’s countries are emitting carbon into the air. Other low-cost products by BRI finance would increase environmental hazards in future. The BRI plan for Arctic could fracture the polar ice; furthermore, it could ruin the immemorial peace and sanctity of this solitary polar region.   

President Xi Jinping is the most authoritative leader after Mao Zedong in the history of new China. Xi has held two other more powerful posts; the head of the Communist Party and commander-in-chief of the central military commission without terms limits.  Xi Jinping has promoted vigorous growth of military might and geopolitical influence in accordance with his “Chinese Dream”. He is accelerating all efforts to gain the paramount role on the stage of the global chess board and subdue the USA’s dominance. 

There has always been intense rivalry between the USA and China for different issues just as the South China Sea, cyber security, human rights, intellectual property rights and trade war. Like other gigantic projects, the BRI creates a global polarization and has attracted wide-spread criticism.  

The mammoth project has been floated for implementing President Xi Jinping’s dreams rather than economic implication. Estimated investment range from $ 1trillion to $ 8 trillion is far from reality and unrealistic expectations. This far- fetched estimate is downplaying the BRI projects. 

Many Chinese citizens expressed opinion that China has expensed a huge sum of money abroad and ignoring domestic demands. Even some projects particularly in Africa were over extended and not properly assessed for financial risks. The BRI projects need to address risk assessments in aspect of financial, environmental and social issues. Some critics termed the BRI projects as lacking in transparency and the deal terms are unfavorable for recipient countries.  According to critics, the BRI is a ‘debt trap’ (31) for loan recipient countries. They fear that China could use the ‘debt trap’ for expanding its dominance and for gaining superiority over recipient countries. Even China can interfere in internal politics and can use the BRI projects as regime changing tools like the colonial period when western companies entered into different countries of Asia, Africa and Latin America to do business and end of the day, they became owners of those countries. 

The fate of Hambantota port in Sri Lanka has exposed the new Chinese imperialistic attitude. Sri Lanka developed the Hambantota deep sea port with huge amount of debt from China under the BRI framework. This port failed to meet the expected feedback and became unable to adjust the loan interest. To ease the pressure of loan adjustment, Sri Lanka handed the port over to China in December 2017 with a controlling equity stake and a 99-year lease. 

The example set a concern that the BRI could be a Trojan horse for China-led regional development while China could assert influence in control military and other institutions of the BRI subscribers. 

Hence, fear spread, that the Chinese economic expansion could be turned into a political expansion. 

In recent history, we have experience of the global alliance of military formation and branding as defense pact as like as Warsaw pact or NATO alliance. In past, these two military alliances did nothing for wellbeing of human but only demonstrated the panic all over the world. Weapon manufacturers & sellers were the sole beneficiaries of so called defense pacts.  Colossal resources were involved for making destructive instruments instead of making hospitals, educational institutes, road and other infrastructure for human development. 

Many economic forums have existed all over the world since the second -world war. Most of the alliances have been formed with same level of economy or inherited same culture or regional integrity. The BRI has more diversification -a wider arena for economic cooperation and a huge involvement of human resources. 

Moreover, the BRI also inspires others to form similar gigantic economic forums for human wellbeing.  Undoubtedly, `G-7 money to Developing Nations’ has been influenced by Chinese infrastructure investment policy as well as “debt diplomacy.” 

G7 plan, known as the Build Back Better World (B3W) initiative worth $40 trillion will provide a transparent infrastructure partnership to help Developing Nations by 2035.  

But, G-7 move for Developing Nations is expected to be included environmental hazards free policy, ensuring low interest rate and, of course, less intervention in subscriber’s internal politics.  Otherwise, Developing Nations will be deprived from actual economic benefit from G-7 money and to be used as pawn of the gigantic world players.  

About the author:

Sazzad Haider, Photographer Habib Raza.

Sazzad Haider is a writer and filmmaker living in Bangladesh. Editor & Publisher of The Diplomatic Journal.

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