China's grandiose geo-economic project Belt and Road Initiative which is proposed at such a large scale with a strategic purpose reminds scholars of Marshall Plan of 1948 initiated by the United States for the recovery of Western Europe after gruesome devastation of the Second World War.Belt and Road Initiative aims to lays down development strategy to promote economic co-operation among countries along the proposed route.It is evident that this China-centered trading network is bigger than Marshall Plan both in terms of finance as well as geographical outreach.
Unlike Marshall Plan,China's mega project comes at a time when questions on globalization are being raised and subsequently west is following a protectionist model. When Marshall Plan was introduced globalization and Free Trade was in its nascent stage which provided unrestrained implementation of the US-led initiative.Geo-political and economical equations have changed upto a certain extent in the course of time which requires a reality-check for China.
Many countries across Eurasia have praised the project. In fact 68 countries have signed up to the scheme.But the fact is that many projects across Eurasia and Africa are either being cancelled or delayed.In November 2017,Nepal cancelled $2.5-billion Budhi Gandaki hydroelectric project citing rules violation issues. Same is the case with Hungary where High-speed railway project is delayed.
Domestic politics and economic viability of projects has been a concern in South-East Asia.In Thailand, $15-billion high-speed railway project got delayed because of environmental approval,loan terms and financing. Similarly, Indonasia's Jakarta-Bandung High speed rail project faces delays because of difficulty in land acquisition.
Tanzania has also reopened negotiations over ownership of $11-billion port in the city of Bagamoyo.Even Pakistan has cancelled $14 Billion Diamer Bhasha Dam Project citing tough financial terms imposed by China.
The message is clear.Execution of such an expensive project that too on a massive scale has its own risks. Apart from internal debt issues,there are corruption,local opposition, project delays,environmental concerns like problems which are out of Chinese control, at least for now.Slumberous implementation and frequent interruption also raise question on sustainability and longevity of the project.As seen in the past that it is comparatively easier to start an initiative than completing it successfully.At the same time, it needs to be understood that till the time project would be completed, technological upgrade will reach to a completely different level. Investment in infrastructure asset is made considering technological changes in forthcoming decades.
China also needs to revisit the history. A similar plan was rolled out by the then Japanese Prime Minister Keizo Obuchi in late 1990s. The idea was to promote Japan-funded infrastructure projects throughout Asia. But the plan was never exteriorized.
One thing which clearly distinguish between Marshall Plan and Belt and Road Initiative is the fact that Marshall Plan was implemented after a long-standing conflict across-the-board. Execution of an economic project is a lot easier in the state-of-peace than conflict-ridden situations. China knows that its enthusiastic project can never be completed without peace in the encompassing region. Middle East has been in turbulence for a long time.Security risks and Political instability in the region are hanging over and raising serious concerns.China Pakistan Economic Corridor is another example.India has not joined the project because the proposed route passes through disputed territory of PoK. Afghanistan is also willing to join the project in the near future but nothing substantial can be done without bringing peace in the region.
After taking all the calculations of economic cost and associated benefits into account, the focus goes on subterraneous geopolitical motives of China. There might be a possibility that even after loosing on economic fronts, China may gain some geopolitical advantages.It is argued that China might not be making decisions purely on the economic return from the investment.China knows how to translate geoeconomic vision into political and diplomatic influence.China has in fact increased its sphere of influence in the South Asia, South-East Asia and African region. It is evident from the fact that India has been concerned about increasing Chinese influence in the Indian Ocean Region.
China's BRI project has the potential to lead much of the world into a Debt-Trap.Indications of the same are visible. Sri Lanka has recently handed over Hambantota Port to Chinese company on a 99 year lease. Myanmar has no different story. Maldives has recently signed Free Trade Agreement with China but by doing this the tiny island is only going to get trapped in the vicious cycle of Trade deficit.
China has been criticized by the scholars for its unfair trade practices,illegitimate gains and dubious intentions. Critics even call Chinese investment in Africa a model of economic colonialism.However, it is to be understood that a quick encirclement of territory is only possible on maps.Chinese policy of no-strings-attached investment leaves no room for such apprehensiveness, at least for now.
Unlike Marshall Plan,China's mega project comes at a time when questions on globalization are being raised and subsequently west is following a protectionist model. When Marshall Plan was introduced globalization and Free Trade was in its nascent stage which provided unrestrained implementation of the US-led initiative.Geo-political and economical equations have changed upto a certain extent in the course of time which requires a reality-check for China.
Many countries across Eurasia have praised the project. In fact 68 countries have signed up to the scheme.But the fact is that many projects across Eurasia and Africa are either being cancelled or delayed.In November 2017,Nepal cancelled $2.5-billion Budhi Gandaki hydroelectric project citing rules violation issues. Same is the case with Hungary where High-speed railway project is delayed.
Domestic politics and economic viability of projects has been a concern in South-East Asia.In Thailand, $15-billion high-speed railway project got delayed because of environmental approval,loan terms and financing. Similarly, Indonasia's Jakarta-Bandung High speed rail project faces delays because of difficulty in land acquisition.
Tanzania has also reopened negotiations over ownership of $11-billion port in the city of Bagamoyo.Even Pakistan has cancelled $14 Billion Diamer Bhasha Dam Project citing tough financial terms imposed by China.
The message is clear.Execution of such an expensive project that too on a massive scale has its own risks. Apart from internal debt issues,there are corruption,local opposition, project delays,environmental concerns like problems which are out of Chinese control, at least for now.Slumberous implementation and frequent interruption also raise question on sustainability and longevity of the project.As seen in the past that it is comparatively easier to start an initiative than completing it successfully.At the same time, it needs to be understood that till the time project would be completed, technological upgrade will reach to a completely different level. Investment in infrastructure asset is made considering technological changes in forthcoming decades.
China also needs to revisit the history. A similar plan was rolled out by the then Japanese Prime Minister Keizo Obuchi in late 1990s. The idea was to promote Japan-funded infrastructure projects throughout Asia. But the plan was never exteriorized.
One thing which clearly distinguish between Marshall Plan and Belt and Road Initiative is the fact that Marshall Plan was implemented after a long-standing conflict across-the-board. Execution of an economic project is a lot easier in the state-of-peace than conflict-ridden situations. China knows that its enthusiastic project can never be completed without peace in the encompassing region. Middle East has been in turbulence for a long time.Security risks and Political instability in the region are hanging over and raising serious concerns.China Pakistan Economic Corridor is another example.India has not joined the project because the proposed route passes through disputed territory of PoK. Afghanistan is also willing to join the project in the near future but nothing substantial can be done without bringing peace in the region.
After taking all the calculations of economic cost and associated benefits into account, the focus goes on subterraneous geopolitical motives of China. There might be a possibility that even after loosing on economic fronts, China may gain some geopolitical advantages.It is argued that China might not be making decisions purely on the economic return from the investment.China knows how to translate geoeconomic vision into political and diplomatic influence.China has in fact increased its sphere of influence in the South Asia, South-East Asia and African region. It is evident from the fact that India has been concerned about increasing Chinese influence in the Indian Ocean Region.
China's BRI project has the potential to lead much of the world into a Debt-Trap.Indications of the same are visible. Sri Lanka has recently handed over Hambantota Port to Chinese company on a 99 year lease. Myanmar has no different story. Maldives has recently signed Free Trade Agreement with China but by doing this the tiny island is only going to get trapped in the vicious cycle of Trade deficit.
China has been criticized by the scholars for its unfair trade practices,illegitimate gains and dubious intentions. Critics even call Chinese investment in Africa a model of economic colonialism.However, it is to be understood that a quick encirclement of territory is only possible on maps.Chinese policy of no-strings-attached investment leaves no room for such apprehensiveness, at least for now.
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