The convening power of china as an emerging power-house and leader of the Globalization 2.0 is all evident during the May 14-15th The Belt and Road Forum. With a representation from over 70 countries (official delegations) from across the globe; of them about 28 heads of states, it perhaps heralds a new beginning in the global diplomacy, trade and co-operation. The Belt and Road Forum also had amuch-needed human face; was hailed as a significant contributor to achieving 2030 sustainable development goals. Participation of heads of over 14 multi-lateral bodies like the UN, its family agencies like UNICEF, UNDP, UNFPA, WB and IMF testifies to their enthusiasm to transform this infrastructure and economic initiative into a human development endeavour. BRI Spanning 65 countries and 60 percent of the world’s population, aims to redraw the trade routes for Chinese products.China has signed development assistance commitments to the tune of $8.7 billion for the coming 3 years; which stands in contrast with the USA which is reducing funding for the UN system!
While notable absentees like India have their motivations to stay away; primarily attributed to their anxiety over increasing Chinese’s dominance most of those who participated are countries that are seeking investments for their growing infrastructure needs.
With the retreating global clout of the USA and its European allies in economic and diplomatic affairs and their internal turmoil, the initiative seized by China in galvanising and rallying countries around greater trade cooperation, strategic partnerships, development cooperation are too overwhelming. It is true that the current forum in some ways is symbolic, as there is no clear roadmap is in place for this initiative which was announced about 3 years ago as One Belt One Road (OBOR). Magazines like The Economist question the practicality and coherence of the project as there are competing and conflicting motivations. There were also questionable investment choices (particularly related to environmental concerns) in several countries by Chinese companies and it has faced a backlash on this account many times.
Is it an exercise of consolidation of disparate engagements of China to show its might? How such initiatives calibrate with those spearheaded by multi-lateral agencies mandated by UN system like WTO? Would new power-axis move from the investment-economic-trade relations to geopolitical and security-centric formulation? These are some critical questions need to be addressed. Some scholars point out several pieces of proposed investments in and around South-China sea are aimed to consolidate and reinforce Chinese presence. Similarly, Indian diplomatic and security circles point out the closer economic relationship with China with Pakistan, Sri Lanka and Myanmar as an affront to redraw security situation in South Asia. It is difficult to ascertain the real and principal motivations of an exercise of this mammoth scale; though all these conjunctures play up at a certain point of time.
Based on the macroeconomic situation of China and its trade surpluses, its investment appetite can be understood. Since 2005, china invested (committed and realised) in over 120 countries to the tune of USD 1.5 trillion. Redirecting its capital overseas has been the strategy to reduce overcapacity at home as well as seeking better returns on investment. Chinese banks and financial institutions including newly created Asia Infrastructure Investment Bank have lent billions of dollars for projects across Asia, Africa and Latin America covering sectors like mining, roads, ports, railways, coal, cement, oil, electric power generation and financial services. American Enterprise Institute & Heritage foundation’s China Global Investment Tracker provides an exhaustive database of over 2200 investments that China is making across the globe since 2005. With investments of 594 billion in the energy sector, $268 billion in transport (infrastructure) sector and $146 billion in metals Chinese companies in some ways fill the significant investment gaps of many developing countries. At the same time, with a track record of over 200 troubled overseas investment projects, there is a real concern for environmental and social impacts of some of the investment decisions of Chinese companies.
It is in this context the Belt and Road Forum can be seen as a showcase event of China which has seized the opportunity of the turmoil at the top in terms of global leadership. How can we understand the Chinese version of Globalization 2.0? Would it be supportive of multilateralism and globalisation that is just and equitable, with a human face?
How do countries like Myanmar view the shaping situation in relation to Chinese influence? Historically, for the past many decades, Chinese interest has been significant in Myanmar in economic, political and security spheres. The past regime has been identified to be close to Chinese interests and even now its significant role is recognised, particularly in securing peace in northern and north-east borders of the country. In terms of foreign investment, China has been active since 2005. It invested to the tune of $ 6.9billion until 2016 in energy, real estate, transport and metals, with significant investments up until 2013. It also received backlash from some of its investment decisions, of particular significance is its collaboration with Myanmar Economic Holdings in copper mining. Similar local resistance has emerged in hydropower project as well. All these point out to the need for a more calibrated response to the Belt and Road Initiative from Myanmar side where in people’s aspirations for improved infrastructure can be met through external investments but the environmental and social impacts need to be assessed carefully. This, in fact, has been the central message from Daw Aung san Suu Kyi when she spoke at this Forum!
UpendranadhChoragudi works with ActionAid Myanmar, and the opinions expressed in this article are his own.