The Belt and Road Initiative

The Asian Development Bank found out that Asia would be facing a gap in its infrastructure funding of about 26 trillion United States dollars by the year 2030. This called for the formation of organizations that would suggest ways to stop this happening. Belt and Road Initiative (BRI) was among those formed organizations. President Xi Jinping made it public in September 2013 as a strategy towards the development of the infrastructure and investment origination between Asian countries and other continents. By the time, BRI was known as One Belt One Road. Later on, on March 28th, 2016 the official outline of BRI was issued. In the year 2019 March, Italy joined the organization as the first European country to join the initiative in a partially non-binding agreement making this beneficial for Western Europe business wise and for increased geopolitical significance by connecting the Northern and Southern road corridors through South Asia to connect Europe and China (Cheng 315).

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The Belt and Road Initiative main aim was to create long-term policies that facilitate investment plans that are directed at the advancement of the infrastructure and expedition of economic unification between countries along the Silk Road, through this they would be creating diversified, non-partisan, stable, and sustainable growth in the countries involved.

The Belt and Road Initiative put an emphasis on countries that were in Asia, the Middle East, Eastern Africa, and Eastern Europe. One common aspect of the regions is that they had markets that were developing. According to the information issued by the Belt and Road portal, to this day 71 countries have joined this initiative, which represents more than two-thirds of the population and GDP of the world (Cheng 316).

The Belt and Road Initiative brings together two initiatives, the Silk Road Economic Belt that had a vision of the Chinese boosting infrastructural advancement and connectivity through encouraging the formation of economic alliances between the European and Asian countries, they intended to associate with countries that China was partnering with. The Silk Road Initiative report was conducted in the year 2016 in five regions. The report is divided into three parts. The first part gives definition of a belt, its relation to China’s interests in security, its implications, and the risks it poses on Southern and Central Asia.

The report also gives recommendations on how to maximize China and European cooperation that would help to manage the positive spillovers that would aid in putting the security concerns that arise in check. The report basically gives a description of how China’s initiatives can affect the infrastructure and how the other continents especially the European countries’ policymakers can explore this positively. Six development sections as part of the belt report were formed, namely:

1. New Eurasian Land Bridge Economic Corridor (NELBEC)

2. China – Mongolia – Russia Economic Corridor (CMREC)

3. China – Central Asia – West Asia Economic Corridor (CCWAEC)

4. China – Indochina Peninsula Economic Corridor (CICPEC)

5. Bangladesh – China – India – Myanmar Economic Corridor (BCIMEC)

6. China – Pakistan Economic Corridor.

The second part was named the 21st Century Maritime Silk Road, which was concerned, with the sea part of the Belt and Road initiative, its main concern was to form strategies that would increase investments and create collaborators along the Silk Road, for instance, the China-Pakistan corridor was formed as an extension to China’s Pearl policy. In the year 2014, Xi Jinping set aside 40 Billion United States dollars as a development fund towards the financing of the Silk and Maritime Road. China made progress to incorporate African countries into the Belt and Road Initiative with the goal of constructing modern rails in Kenya. In the year 2015, the National Development and Reform Commission of China made a report showing the joint objectives of the two branches of The Belt and Road Initiative since they complemented each other (Rolland 15).

The report outlined the guidelines that would help the organization to plan and prioritize its decisions. The joint outline encouraged collective efforts in any development strategies that are set towards advancement of regional or multinational collaboration between countries that are part of the BRI and also laying down clear communication guidelines that would cover large scale projects.

The BRI cooperation priorities based on the outline was to first promote intergovernmental union through the exchange of macro policies between governments. It also supported the development of technical systems that would enhance connectivity in infrastructural development plans. It encourages unrestrained trade and financial integration between countries. The last provision of the outline is that there should be exchange programs between members that aim at strengthening the bonds between the countries. These priorities in the outline have formed a basis of international business operations since they clearly give instructions on how interactions should be performed.

All the countries that signed the BRI agreement were bound by it and thus are supposed to follow them. The governing body that is under NDRC takes charge of coordinating the work-associated initiatives. The State International Development Cooperation is responsible for strategies and policies on foreign aid.

With Italy joining the BRI, there were uncertainties about Beijing that was also increasing their popularity amongst the European countries. Although, with the creation of European and Chinese transport links, Europe became part of the New Silk Road. Afterward, more connections were made through the building of a railway to Port Rotterdam; another one was built between Belgrade-Budapest connecting the port of Piraeus with Central Europe. Over the years, European countries started doubting Chinas economic and political intentions with the creation of the BRI. This led to the development of relations between China to help attract more countries to the IBR.

Beijing had even adapted some of IBR approaches to encourage countries to associate with China. Beijing frequently emphasized on its good intentions and described the BRI as a big source of economic empowerment. Despite China’s encouragement, Europe developed doubts towards BRI; they saw BRI as a form through which Chinese undermined the European countries, looking at the projects that they had in Africa and Sothern Asia, Chinese used their own workers instead of the locals. They also did not uphold financial aid clause instead, they give loans, thus increasing financial dependency. In the case of Montenegro, the country received loans and fell deep in debt to China.

Europe suggested a unified response towards the BRI, by developing a European connectivity plan for Europe and Asia that recommends that the EU contracts its Asian partners on infrastructure construction which sounds like a counter-narrative to the BRI.

This lays down rules that govern the quality of infrastructure development; there is an allowance for the formation of rules that govern international development and interactions between people and goods of different countries. The organization could collaborate with Australia India and Japan for sustainability purposes who would potentially meet the high standards set by EU towards the goal of attaining infrastructural development (Huang 314).

European countries such as France were concerned about the omission of social and environmental development in the BRI outline and there seemed to be little transparency within the BRI. The EU connectivity did not have restrictions about who was legible to join the organization this giving China a chance to be part of it. Though this has not been successful, they still follow through with a plan created in 2015 that mandated exchange of information that would help find a common ground for the organizations that would ultimately give solutions to the arising problems during their individual projects.

Due to the BRI, the countries from Eastern Europe would have a Eurasian land bridge in the year 2015, thus bringing together China, Central Asia, and Europe. There have been differences between how the EU connectivity and the BRI especially on the aspect of cooperation that falls under the Silk Road structure of the BRI. This caused some European countries, including France, Germany, and Britain, not to sign the final agreement (Cai 6).

In conclusion, the Belt and Road Initiative had both negative and positive impacts on the countries that were members looking at the positive it created rules and regulations that would govern business interactions between countries; it also led to the development of infrastructure in many countries but caused an increased level of financial dependency.

 

Works Cited

Cheng, Leonard K. “Three Questions on China’s “Belt and Road Initiative”. China Economic Review, vol. 40, 2016, pp. 309-313.

Cai, Peter. “Understanding China’s Belt and Road Initiative.” 2017.

Huang, Yiping. “Understanding China’s Belt & Road initiative: Motivation, Framework and Assessment.” China Economic Review, vol. 40, 2016, pp. 314-321.

Rolland, Nadège. China’s Eurasian Century?: Political and Strategic Implications of the Belt and Road Initiative. National Bureau of Asian Research, 2017.