Nine years after it was launched by President Xi Jinping, the Belt and Road Initiative (BRI) appears to have lost steam with virtually no new Chinese investment in third countries following the Covid pandemic.
Although some observers in Beijing believe that this is an indicator of the impact that the Chinese economy has had during the pandemic and as a result of its policy of zero Covid, it seems that the BRI is in a reassessment with the recipient countries wary of the debt trap. and its economic viability.
Bangladesh Finance Minister AHM Mustafa Kamal has publicly blamed the economically unviable Chinese BRI projects for exacerbating the economic crisis in Sri Lanka. He warned that developing countries should think twice about borrowing more through the BRI as global inflation and slowing growth add to the strains on indebted emerging markets.
“Everyone blames China. China cannot disagree. It is their responsibility,” Kamal said in an interview with the Financial Times. Bangladesh owes six percent of its external debt to China and last month requested a $4.5 billion loan from the IMF to overcome the economic crisis.
The fact is that Bangladesh has made it clear to China that it is not willing to accept more loans, only subsidies from Beijing. Nepal has taken up the same argument as the Chinese debt trap looms and the economic collapse of Sri Lanka, which owes Beijing 10% of its $51 billion external debt, has become a case in point classic Sri Lanka’s white elephant Hambantota port now has less than a 99-year lease from China after 2017 under a $1 billion-plus debt-for-equity swap from Rajapaksa International Airport a non-starter.
Another country reeling under Chinese debt is Pakistan, with some $53 billion being spent by Beijing under the auspices of the BRI on projects that are nowhere near being realized. Considered a major strategic initiative among the “milk and honey” allies, the port of Gwadar on the Makran coast is still not full with Baloch insurgents targeting the Pakistan Army and even to Chinese workers.
Gwadar Port, which was presented as an alternative to Dubai and Pakistan’s economic future, is fast becoming a millstone in Islamabad’s neck. The country is currently seeking a multibillion-dollar IMF bailout with depleted foreign reserves, double-digit food and fuel inflation, a double whammy from the Covid pandemic and the war in Ukraine.
In fact, Chinese penetration in the Indian subcontinent has increased to a level where the bureaucracy and media have been compromised and working against their own country.
After Pakistan, China has invested about $44 billion in Indonesia, $41 billion in Singapore, $39 billion in Russia, $33 billion in Saudi Arabia and $30 billion in Malaysia. Beijing has made massive investments in Cambodia because ASEAN countries are mute spectators to China’s unilateral changes in the South China Sea and its war on Taiwan.
The outcry against China’s BRI is not limited to the Indian subcontinent, as its reverberations can be heard in the stalled $4.7 billion railway project in Kenya. Five years after its launch, the project ends abruptly in an empty field, 200 miles from its destination in Uganda. The BRI is on a fast track to nowhere.
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