Taking a breather on China’s Belt and Road Initiative
China’s Belt and Road Initiative has got the leadership of some Pacific Island nations excited since it was first proposed by China under President Xi Jinping in 2013.
The Belt and Road Initiative is an ambitious plan by China to link Asia, Europe and Africa with a network of ports, highways and railways and it is giving tens of billions of dollars in loans to countries, in a bid to build major infrastructure development projects in the various participating nations in central Asia, Europe and the Indo-Pacific region.
Multilateral financial institutions such as the World Bank have come on board and given the initiative a thumbs up, saying the China-funded program could ultimately plug infrastructure gaps in Asia and boost global trade.
“For example, shipment times from China to Central Europe are approximately 30 days, as most goods travel by sea. Shipment times by train are about half as long, but given current infrastructure, much costlier. Hence, improving the capacity and network of rail infrastructure could radically change average travel times,” states a World Bank brief, which was published on the issue in March this year.
Therefore, it is not surprising to see Prime Minister Tuilaepa Sailele Malielegaoi, talking up the benefits of the China-proposed initiative.
“The Belt and Road Initiative is opening a vast market and bringing lots of opportunities for the world, particular for the small countries like Samoa in the South Pacific region in this difficult times and challenges posed by climate change,” he said, in an exclusive interview with Xinhua.
The Prime Minister is of the view that the initiative will have a positive effect on promoting trade, tourism and culture, hence Samoa signing a memorandum of understanding (MoU) of cooperation for the initiative, aiming to strengthen the win-win cooperation with China and build a closer partnership between the two countries.
He also criticised those pushing the “debt trap” argument, saying: “We are fortunate to have grants from China. I think all the allegation (of the China debt trap) is based completely on misunderstanding of the issues involved.”
But why should Samoa and other Pacific Island governments such as Fiji and Papua New Guinea (PNG) take that step into the deep unknown, when leaders in a number of countries around the world are stepping back and re-thinking their participation in this ambitious China-funded project?
In August this year Malaysian leader Mahathir Mohamad announced – after a five-day visit to Beijing – that his Government is halting two major Chinese-linked projects worth over $22 billion to build a rail link on Malaysia’s East Coast and a giant gas pipeline.
In a recent interview with The New York Times, Mr. Mahathir made clear what he thought of China’s strategy.
“They know that when they lend big sums of money to a poor country, in the end they may have to take the project for themselves,” he said.
“China knows very well that it had to deal with unequal treaties in the past imposed upon China by Western powers,” Mr. Mahathir added, referring to the concessions China had to give after its defeat in the opium wars. “So China should be sympathetic toward us. They know we cannot afford this.”
Close to a week ago the African republic of Sierra Leone cancelled a $400 million Chinese-funded project to build a new airport outside the capital Freetown.
The Aviation Minister Kabineh Kallon told the BBC that the project, which was due to have been completed in 2022, was not necessary and the country’s current international airport would be renovated instead.
Mr Kallon said he did not know whether the cancelled contract would lead to financial implications, and Sierra Leone remained on good terms with China.
“I do have the right to take the best decision for the country,” he told the BBC’s Focus on Africa programme.
Last month the Pakistani government announced that it will review or renegotiate agreements reached with China under its Belt and Road Initiative. The projects in question are valued at $62 billion and are part of the China-Pakistan Economic Corridor plan, which would seek to connect Asia and Europe along the ancient silk road, reports the Financial Times.
Prime Minister Tuilaepa Sailele Malielegaoi might also want to talk to his PNG counterpart, Peter O’Neill, to discuss the impact of projects run by Chinese State-owned construction companies, whose presence in PNG has led to the arrival of hundreds of Chinese workers and thereby marginalising ordinary citizens who are unable to find employment.
Nonetheless it is perhaps time for Samoa’s leaders to step back, take a breather and undertake an assessment of the benefits of signing up to such an initiative. There are leaders around the world who are weary of their nations falling into the debt trap despite the assurances by Beijing that all will be okay.
The first step towards getting that assessment done is finding out how much debt your government owes to China and doing a risk benefit analysis on whether signing up to China’s Belt and Road Initiative will add more or less to the total figure.