Latest World News: 10 years of the Chinas Belt & Road project: barri in South Asia
This year marks the tenth anniversary of China’s ambitious Belt and Road Initiative (BRI), a $1.4 trillion project launched by Xi Jinping with the aim of creating a modern Silk Road, linking Asia, Africa and Europe.
However, the project is viewed with suspicion given China’s desire for global dominance. These suspicions intensified when South Asian countries, signatories to the BRI, faced economic difficulties due to China’s predatory tactics, known as “debt trap” diplomacy.
With the exception of India and Bhutan, all South Asian countries are part of the BRI. Despite this, a closer look at their economic conditions shows that China’s BRI promises have not been fulfilled since the project began ten years ago.
To better understand this situation, we can look at China’s close allies, Nepal and Pakistan, both of which have strong ties to China. Pakistan joined the BRI in 2013, and even before that there had been talks between Islamabad and Beijing about creating an economic corridor.
In 2013, they announced the China-Pakistan Economic Corridor (CPEC), a multi-billion dollar project that gained momentum in 2015 when Xi Jinping visited Pakistan.
The main objective is to connect Pakistan’s southwest port of Gwadar to Kashgar in China’s Xinjiang Uyghur Autonomous Region, covering around 3,000 km. The project focuses on energy, transport and industrial cooperation.
CPEC, considered an important project of the Belt and Road Initiative (BRI), aimed to transform the Pakistani economy. It was launched at a critical time when Pakistan was facing challenges such as internal security crises due to increased terrorist attacks and economic issues such as declining foreign investment, macroeconomic instability and power shortages.
However, since 2018, CPEC progress has slowed for these same reasons. Chinese investors in Pakistan have come under militant attack, prompting Chinese leaders to demand better security measures for their citizens in Pakistan.
About $25.4 billion has been invested in various CPEC projects, including coal and hydel power projects, orange line and road infrastructure. However, China’s lending to Pakistan is believed to be driven by its own strategic interests, and the details of the projects, such as investment conditions, loans and the full scope of the initiatives, remain somewhat unclear.
Currently, Islamabad is facing its worst economic crisis since its inception. A report by the Associated Press in May 2023 found that around 50% of Islamabad’s foreign loans come from China, which affects essential services such as education, fuel and electricity as tax revenues are affected.
According to the latest estimates, Pakistan’s external debt has exceeded $100 billion, with more than $30 billion, or about a third of total external debt, owed to China.
Economic ties between China and Pakistan through CPEC are mainly debt-based, with high interest rates ranging from 4.5 to 6 percent. This has increased the financial burden on Pakistan, which is already facing economic difficulties.
In May, the expansion of the Belt and Road Initiative (BRI) to Afghanistan raised suspicions about China’s intentions to exploit the country’s abundant resources, especially given Afghanistan’s war-torn but resource-rich status. China agreed to expand the $62 billion CPEC in Kabul after the Taliban’s membership deal.
Nepal became a BRI signatory in 2017, and currently China is its largest creditor. Initially, Kathmandu accepted 35 projects under the BRI, but in 2019 they requested a reduction to just nine projects. Nepal has made it clear that it prefers grants or subsidized loans to high-interest loans with short repayment terms.
Due to the financial difficulties faced by Colombo (the capital of Sri Lanka), the Nepalese authorities have become cautious about Chinese funding. Despite reaching agreements on various projects, no project under the BRI framework has been implemented in Nepal since 2017.
For example, a new 150 km railway line linking Kathmandu and Kerung in southern Tibet was agreed in 2018, and in 2022 China pledged a $118 million grant for the Trans-Himalayan Multidimensional Connectivity Economic Corridor, which has been hailed as a way to transform Nepal from a landlocked to a land-connected country. However, these plans have yet to materialize.
Kathmandu has only proposed one project under the Belt and Road Initiative (BRI), which is the development of Madan Bhandari University in 2019. However, none of the proposed projects have been implemented, even though the BRI agreement between Nepal and China was renewed for the second time in May this year.
In 2022, a six-point agreement was signed by the two countries to increase Nepal’s engagement and exchange information on governance, legislation and supervisory practices.
Earlier this year, there was controversy and confusion in Kathmandu when China unilaterally claimed that the newly inaugurated Pokhara International Airport was a “flagship project” of BRI China-Nepal cooperation. However, the Nepalese Foreign Minister clarified that the implementation of projects under the BRI is still under consideration and no projects have yet been implemented.
In fact, the airport was funded by a $215 million soft loan from China’s EXIM bank in 2016, a year before Nepal became a BRI signatory.
Similarly, in June, China’s Ambassador to Nepal, Chen Song, wrote on Twitter that the inauguration of the WeChat Pay cross-border payment service would be another step towards financial connectivity and one of the five aspects of cross-border nexus under the BRI. However, Kathmandu has repeatedly stated that there is no implementation of BRI projects in Nepal so far.
It seems that Beijing’s unilateral declarations of plans under the Belt and Road Initiative (BRI) in Nepal are mainly aimed at showing China’s increased visibility and influence in the region.
While discussions of BRI projects have mostly revolved around infrastructure, Nepal’s preference for concessional loans or grants over commercial loans (which Beijing prefers) indicates its distrust and caution of China’s intentions. Nepal wants interest rates and repayment periods to align with funding agencies such as the Asian Development Bank and the World Bank. Furthermore, Nepal insists that BRI projects should be open to free and fair bidding, raising concerns about China’s motives and actions in the region under the guise of BRI.
Lack of clarity and ambiguity regarding funding modalities in Nepal remains a significant impediment to project implementation.
Nepal and Pakistan should be cautious about China’s geostrategic goals through the BRI, as it may aim to assert regional dominance in South Asia and potentially push economically weaker countries further into debt traps.
The predatory tactics employed by China are also contributing to the gradual loss of importance of the BRI, a decade after its launch.
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An Overview of Global Events in 2023
In 2023, the world witnessed a myriad of events that left a lasting impact on global affairs. From political developments and economic shifts to environmental challenges and breakthroughs in science and technology, the year was marked by significant changes and a sense of urgency for collective action. Here’s an overview of some of the latest world news in 2023.
Political Unrest and Diplomatic Strides:
In the political arena, several regions experienced unrest and geopolitical tensions. The ongoing conflict in the Middle East continued to dominate headlines, with efforts towards peace and stability remaining elusive. However, there were also moments of diplomatic breakthroughs as nations engaged in dialogues to ease tensions and work towards lasting solutions.
The global economy faced both challenges and opportunities. Trade disputes between major powers affected markets, while some countries grappled with debt crises. On the other hand, emerging economies showed resilience and promising growth, fueling optimism for a more balanced global economic landscape.
Innovation surged forward in the tech industry, with breakthroughs in artificial intelligence, renewable energy, and space exploration. Quantum computing achieved milestones, promising radical transformations across industries. Renewable energy sources gained traction, with many countries setting ambitious goals to combat climate change.
Climate Crisis and Environmental Resilience:
As the climate crisis intensified, extreme weather events wreaked havoc in various parts of the world. Wildfires, hurricanes, and floods reminded humanity of the urgent need for climate action. In response, governments and communities across the globe doubled down on efforts to reduce carbon emissions, invest in sustainable infrastructure, and protect biodiversity.
Health and Pandemic Management:
Health remained a global priority as countries continued to combat the COVID-19 pandemic. With the emergence of new variants, vaccination efforts and public health measures remained crucial to curbing the spread of the virus. There were also significant advancements in medical research and technology, offering hope for better preparedness in handling future health crises.
Sports and Cultural Milestones:
Amidst the challenges, the world found moments of joy and unity through sports and culture. International sporting events brought together athletes from diverse backgrounds, promoting solidarity and camaraderie. Cultural exchanges and celebrations showcased the richness of human diversity and fostered mutual understanding.
In conclusion, the year 2023 was a dynamic period filled with significant events that shaped the course of history. From political unrest to technological advancements and environmental challenges, the world witnessed the complexities of the global landscape. While obstacles remained, there were also encouraging developments and collaborative efforts towards a more sustainable, peaceful, and prosperous future for all nations. As we move forward, the lessons learned from these events serve as a reminder of the importance of collective action and cooperation to address shared global challenges.