No matter how carefully a project is planned, something may still go wrong with it. Murphy’s famous law says: “If anything can go wrong, it will.”
Who knows it better than China?
Billed as the world’s most ambitious infrastructure project ever at an investment of USD 600 billion, China’s dream of networking nearly 70 countries across Asia, Africa and Europe and replace America as the planet’s Supreme Power, has turned into a nightmare with Beijing facing a severely shrinking economy in the aftermath of the Covid-19 pandemic.
But China is still putting up a brave face, even applauding the Belt and Road Initiative (BRI), formerly known as the One Belt, One Road (OBOR), lest the Communist rebels waiting in the wings gang up against the present dispensation.
On March 11, President-for-Life Xi Jinping applauded the BRI during the closing session of the National People’s Congress (NPC) at the Great Hall of the People in Beijing.
The facts are, however, different. Even in China’s so-called ‘all-weather’ ally Pakistan, only 32 of the total 122 projects announced under the BRI could be completed since 2013. And adverse economic climate has forced Beijing to cut back on new loans and investments under the BRI due to the country’s shrinking economy, aggravated by Covid-19, which has made these projects financially unviable, according to The Kabul Times.
Within a year, China’s investment in the BRI shrunk by a whopping 54 percent to USD 47 billion in 2020, the Green Belt and Road Initiative Centre, a research organisation, has disclosed.
Wang Xiao Long, Director-General of the Chinese Foreign Ministry’s International Economic Affairs Department, said 20 percent of the BRI projects were seriously affected while another 30-40 percent witnessed adverse impact due to economic downturn.
During the 2020 pandemic, China’s economy nosedived, so much so that its lending under the BRI plummeted from USD 75 billion in 2016 to a trickle of USD 3 billion in 2020.
Not only economic downturn, the BRI projects are also plagued with other problems in different countries. These include rampant corruption, lack of financial transparency, unfair loan conditions, fears of debt-traps, and negative social and environmental impacts.
In Pakistan’s restive province of Baluchistan, for example, Chinese officials and workers have suffered the wrath of native population on several occasions, despite the Pakistani Army ‘protecting’ them. Also, political opposition, for the first time against China, has increased. Many intellectuals and politicians have even denounced the BRI’s flagship conglomerate, the USD 60 billion China-Pakistan Economic Corridor (CPEC) through Baluchistan, as the beginning of yet another ‘East India Company’s attempts to colonize a country’.
Rapidly shrinking growth has forced Beijing to tighten fiscal discipline and work on financial risk, which would translate into lower prospects of China pumping money into the BRI projects now, media reports said.
The Rhodium Group, an independent research organisation, said that the progress or growth of the BRI projects had begun decelerating even before the Covid-19 outbreak late in 2019. The Chinese investment became stagnant and even decelerated in most of the developing world in the past three years.
Since the inception of the BRI in 2013, China had been trying to woo developing or poor African and Asian countries through complex loans and investments terms and conditions, triggering fears of debt-traps in many countries. The pandemic’s outbreak, however, came as a bolt from the blue to China itself as it threw millions out of jobs and businesses went bankrupt. This disrupted cash flow and made a huge impact on the country’s economy.
Now the contraction in Chinese lending is expected to further widen the overseas lending gap as well. As the BRI stumbles, China’s diplomatic image as a dependable development partner would be dented, The Kabul Times said.
Many see the BRI dream going bust, even turning into a nightmare.
James Crabtree, Associate Professor at Lee Kuan Yew School of Public Policy, Singapore, said China will have to walk on the tight rope since the BRI loanee countries want their loans to be cancelled while Chinese people are against overseas spending in such difficult times.
Bradley Parks, Executive Director of AidData, a research laboratory, cited difficulties in construction activities, which would lead to “a significant slowdown” in the implementation of the BRI.
“With the sustainability of financing for the BRI projects already posing a challenge and Chinese capital expected to be mobilized to first meet its domestic needs, the pandemic as well as its induced economic slowdown will be a further setback and may even sound the death knell for some BRI projects,” said global law firm Norton Rose Fulbright.