Regional & Global groupings & agreements

Answer: China’s Belt and Road Initiative (BRI) is an ambitious infrastructure project that aims to build land and sea routes to link Asia, Africa, and Europe. Many policy analysts believe that the BRI is a state- backed campaign for global Chinese dominance and presents the following apprehensions:

• Chinese investments in strategic sectors in developing and struggling economies have led to severe degree of economic dependence of these countries on China.
• Due to the unsustainable debt-for-infrastructure deals, the host countries find themselves handing over substantial tracts of territory and natural resources to the Chinese, for example, the Hambantota port in Sri Lanka.
• Several BRI projects violate the global principle of sovereignty and territorial integrity, for instance, the China-Pakistan Economic Corridor in Pakistan Occupied Kashmir.
• Many analysts believe that China is pursuing a ‘String of Pearls’ geo-economic strategy in the Indian Ocean, through which it may seize control of the regional choke points.
• The host countries do not find opportunities to create skill and employment through these projects as almost 90% of all BRI contracts are executed by Chinese construction companies using Chinese labour.

In this context, the Build Back Better World (B3W) of G7 and the EU’s ‘Global Gateway’ are deemed as alternatives that can fund the global infrastructure gap. BRI vs B3W:

• The focus of both BRI and B3W differs. BRI is primarily focused on traditional hard infrastructure’ i.e., ports, roads, dams, railways, electric power plants, and telecommunication facilities. In comparison, the B3W focuses on “softer” outcomes, namely improvements in climate, health and health security, modernized digital technology, and gender equity and equality.
• However, the G-7 and their partners have deep experience with bilateral and multilateral development finance, which could help address the $40+ trillion global infrastructure gaps identified by it.

BRI vs Global Gateway:

• The Global Gateway, similar to the BRI, aims at upgrading transport, digital and energy networks and making them smarter, greener and more sustainable. However, its target is broader as it also includes strengthening health, education, and research systems across the world.
• The Global Gateway aims to mobilize 300 billion Euro until 2027 from public and private sources. It is in no match to the financial assistance provided through BRI. Besides, it is not fresh money and the majority of the capital consists of existing funds and loans guaranteed under different agreements. It is also questionable whether private sectors would participate or not as long-term investment in developing countries are risky.
• The Global Gateway has started later in comparison to the BRI. By the end of 2021, 145 countries, including 18 EU members such as Greece, Greek Cyprus, Italy, Portugal, and Austria, have already signed on to the BRI, and China has already invested about $2.5 trillion.
• The Global Gateway’s value-based approach conditions i.e. release of funds and investments on transparency and good governance will provide challenges as many countries in Africa and South-East Asia have undemocratic regimes.
• Global Gateway’s present focus is its periphery, mainly Africa and eastern Europe, while the BRI encompasses the 6 major economic corridors across the world. However, the Central European and East European nations are still reliant on EU structural funds and cannot take a stand against Western Europe.

The two initiatives are timely interventions. However, loans might give the lending countries power and influence over the domestic and foreign policy of the countries accepting the loans. To counter the neo-colonialist policy of any nation, it is essential that the rest of the world provides an integrated alternative approach rather than individual commitments. The developing countries also need to be aware and resist falling trap to the hidden agenda.