More than 29 heads of nations came together in Beijing on Sunday to officially launch China’s massive One Belt One Road initiative, an effort that some have described as the biggest overseas development push in history. But despite the enormity of the project, which will include investments estimated at $900 billion to develop new land and maritime trade routes between China and Europe, Beijing’s most populous neighbour was conspicuous by its absence.
Explaining its decision to stay away, the Indian government released a statement saying it is concerned about China’s attitude towards territorial sovereignty and financial responsibility.
“We are of firm belief that connectivity initiatives must be based on universally recognised international norms, good governance, rule of law, openness, transparency and equality... Connectivity projects must be pursued in a manner that respects sovereignty and territorial integrity.
...Guided by our principled position in the matter, we have been urging China to engage in a meaningful dialogue on its connectivity initiative, ‘One Belt, One Road’ which was later renamed as ‘Belt and Road Initiative’. We are awaiting a positive response from the Chinese side.” — Ministry of External Affairs
The Times of India condensed this to a simple phrase that would easily resonate with Indians, saying New Delhi’s strongly worded statement suggested that the Belt and Road project “is little more than a colonial enterprise, leaving debt and broken communities in its wake”.
China-Pakistan corridor
India’s statement is generally being read as a direct response to the China-Pakistan Economic Corridor, a $62 billion package of infrastructure projects considered one of the flagship parts of the Belt and Road initiative. The CPEC connects China’s western Xinjiang province with Gwadar port, while also giving Pakistan access to other Central Asian nations. But a significant portion of the corridor runs through what New Delhi calls Pakistan-occupied Kashmir.
This has constantly caused heartburn in relations between New Delhi and Beijing. Prime Minister Narendra Modi made a reference to the CPEC at the Raisina Dialogue in January, saying “only by respecting the sovereignty of countries involved, can regional connectivity corridors fulfill their promise and avoid differences and discord.”
Saturday’s statement from the Ministry of External Affairs about the Belt and Road Initiative reiterated this.
“Regarding the so-called ‘China-Pakistan Economic Corridor’, which is being projected as the flagship project of the BRI/OBOR, the international community is well aware of India’s position. No country can accept a project that ignores its core concerns on sovereignty and territorial integrity.”
Colonial China
While the references to CPEC and sovereignty are to be expected, Saturday’s statement included objections that go beyond questions of territory.
“Connectivity initiatives must follow principles of financial responsibility to avoid projects that would create unsustainable debt burden for communities; balanced ecological and environmental protection and preservation standards; transparent assessment of project costs; and skill and technology transfer to help long term running and maintenance of the assets created by local communities.”
India has always insisted on referring to OBOR as a “unilateral” or “national” project of China’s rather than a regional, multilateral one. Indian Foreign Secretary S Jaishankar said in 2015 that OBOR is a “national initiative devised with national interests,” and that if China wanted India to buy into it, they would “need to have larger discussions and those haven’t happened.”
References to financial responsibility, environmental protection, transparency and technology transfer now expand on this idea with a more specific critique. With the CPEC, India wanted China to know that it is miffed about the initiative intruding on disputed territory. With the new references, it seems like it is trying to convince countries that are party to OBOR that getting close to China might be a bad idea.
Debt diplomacy
This is not new. Analysts have for some time warned that Beijing’s massive initiative is essentially aimed at helping China transition from a manufacturing nation into a consumer economy, get rid of excess capacity, reduce the disparity between its western and eastern provinces and, most importantly, project Chinese geostrategic power throughout the neighbourhood and beyond.
Foreign policy analyst Brahma Chellaney called the OBOR China’s “debt-trap diplomacy”, arguing that it intentionally puts partner countries in debt to increase Beijing’s leverage. Ratings agency Fitch warned in a report earlier this year that OBOR does not address the most pressing infrastructure needs of partner countries and could easily result in unviable projects and smaller nations saddled with large debts.
There have already been examples of this. In Sri Lanka, China helped build a large port and airport near Hambantota but with little economic activity emerging from either project, the loans are mounting and that debt is turning into equity, giving Beijing more control over key assets on the island country. Analysts in Cambodia have raised red flags suggesting the same thing might happen there. Seema Sirohi, writing in the Economic Times, goes further, calling OBOR “not globalisation 2.0 but dominance 3.0”. New Delhi now appears to be taking this line too.
Too little too late
Yet it is important to also note that almost every large country in the world, apart from India, was already at the table in Beijing. Even the United States of America, which initially planned to snub Beijing, sent representatives after China said it would open its market to American beef. The same applied to India’s neighbourhood. Every one of India’s neighbours, barring Bhutan, had a delegation at the Belt and Road Forum.
Never mind questions about what India’s own connectivity efforts have amounted to, whether it is the Spice Route or Project Mausam, the Indian Ocean-focused SAGAR or New Delhi’s inability to keep even Bhutan in a road project connecting the neighbourhood.
The last-minute statement from MEA suggests negotiations for India to turn up at the Belt and Road Forum failed, as have most other attempts to connect with Beijing recently – whether it is keeping India out of the Nuclear Suppliers Group or in preventing Masood Azhar from being declared a global terrorist.
India might be attempting a face-saver in bringing up questions of finances and transparency with OBOR, but it is unlikely to convince anyone beyond a domestic audience, at least for the moment.
But MEA seems to have finally made its position on OBOR clear. What will snubbing China, India’s largest trading partner, mean for events in a region that is already tense?
This article was first published on Scroll and has been reproduced with permission.