OBOR Troubles: China's ambitious plan
for setting up a modern Silk Road connecting Asia with Europe has hit potholes
in many countries.
File Photo:
Chinese President Xi Jinping, third from left, walks with Russian President
Vladimir Putin, third from right, and other leaders as they arrive for a group
photo during the Belt and Road Forum outside Beijing, China, Monday, May 15,
2017. (
China’s ambitious plan for setting up a
modern Silk Road connecting Asia with Europe has hit potholes in many
countries. In Pakistan alone, projects worth around $14 billion are at stake.
This has happened even as China and Pakistan have come very close to each other
in recent years. The proposed Silk Road aims to connect the two continents
through railways, ports and other facilities.
Associated Press reports that
Diamer-Bhasha Dam project in Pakistan was stopped in November last year when
the chairman of Pakistan’s water authority said that Beijing wanted an
ownership stake in the hydropower project, which was against “Pakistani
interests.” The dam was among the several other projects being developed by
both countries.
The news agency reports that several projects
under Chinese president Xi Jinping’s ambitious ‘Belt and Road Initiative” (also
referred to OBOR – One Belt, One Road) are being “delayed, canceled,
renegotiated” from Pakistan to Tanzania to Hungary. Reason: Disputes have
emerged about the costs. Host countries have also complained of getting “too
little” out of the projects that mostly favour Chinese companies. China is also
facing a political backlash in some countries because of fears of being
dominated by the biggest economy of Asia.
The OBOR initiative includes a maze of
roads and port projects including CPEC, Bangladesh, China, India, Myanmar,
(BCIM) Economic Corridor, New Eurasian Land Bridge, China-Mongolia-Russia
Economic Corridor, China-Indochina Peninsula Economic Corridor and 21st century
Maritime Silk Road.
OBOR was first announced by China in
2013. It is a loosely defined umbrella term for China-backed or financed
projects in 65 countries – from the South Pacific through Asia to Africa and
Europe, including projects like oil drilling in Siberia to the construction of
ports in Southeast Asia, railways in Eastern Europe and power plants in the
Middle East.
In May last year, several media reports
across the world had criticised the China-led initiative. In fact, the New York
Times had described OBOR as “Global commerce on China’s terms”. “Mr. Xi is
aiming to use China’s wealth and industrial know-how to create a new kind of
globalisation that would dispense with the rules of the ageing
Western-dominated institutions. The goal is to refashion the global economic
order, drawing countries and companies more tightly into China’s orbit,” NYT
had then said.
On Thursday, Associated Press reported
experts as saying that OBOR has not yet become a “win-win” situation for China.
“Pakistan is one of the countries that is in China’s hip pocket, and for
Pakistan to stand up and say, ‘I’m not going to do this with you,’ shows it’s
not as ‘win-win’ as China says it is,” Robert Koepp, an analyst in Hong Kong
for the Economist Corporate Network, a research firm, told the agency.
Some of the OBOR projects that have been
derailed or disrupted, as per AP report, include:
·
Nepal: Chinese companies’
pla to build a $2.5 billion dam was canceled by Nepal in November after the
country’s authorities reached the conclusion that contracts for the Budhi
Gandaki Hydro Electric Project violated rules requiring multiple bidders.
·
Hungary: The European Union is
examining whether Hungary has violated the trade bloc’s rules by awarding
contracts to Chinese builders of a high-speed railway to neighboring Serbia
without competing bids.
·
Myanmar: Plans of a Chinese
oil company to build a $3 billion refinery were canceled in November last year
due to financing difficulties.
·
Projects in Asia,
Africa, and the Middle East: Consulting firm BMI Research has
compiled a database of $1.8 trillion of infrastructure investments announced
across Asia, Africa and the Middle East that include Chinese money or other
involvement. Many of them are either still in the planning stage or up to three
decades in the future.
·
Pakistan: Both countries are
developing facilities with a total cost of $60 billion including power plants
and railways to link China’s far west with the Chinese-built port of Gwadar on
the Indian Ocean. The visit of a Chinese assistant foreign minister in
November, however, couldn’t lead to an agreement on railway projects in the
southern city of Karachi valued at $10 billion and a $260 million airport for
Gwadar. In November, Pakistan Water and Power Development Authority chairman
withdrew from joint development of Diamer-Bhasha Dam in Gilgit-Baltistan, which
is part of Kashmir region and also claimed by India.
·
Thailand: Work on a $15 billion
high-speed railway was suspended in 2016 after complaints that too little
business went to Thai companies.
·
Tanzania: The country’s
government has reopened negotiations with China and another investor, the
government of Oman, over ownership of a planned $11 billion port in the city of
Bagamoyo. The Tanzanian government has failed to raise $28 million for its
contribution, and it is unclear what share it might get in the project.
·
Sri Lanka: The country’s sold an
80 percent stake in a port in Hambantota to a Chinese state-owned company on
December 9 after it failed to repay $1.5 billion borrowed from Beijing to build
it. This led to complaints that the deal was too favorable to Beijing
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