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Nine years after President Xi Jinping’s proposal, the Belt and Road Initiative (BRI) appears to be running out of steam, and China has made few new investments in third countries in the wake of the coronavirus pandemic.
While some Beijing watchers see this as a sign that China’s economy has taken a hit during the pandemic, and thanks to its zero-coronavirus policy, the Belt and Road Initiative appears to be revaluing its economic viability as recipient countries wary of debt traps .
Bangladesh Finance Minister AHM Mustafa Kamal has publicly accused the economically unviable Chinese Belt and Road project of exacerbating Sri Lanka’s economic crisis. He warned that developing countries must think twice about getting more loans through the Belt and Road Initiative as global inflation and slowing growth add to the pressure on indebted emerging markets.
“Everyone is blaming China. China can’t disagree. It’s their responsibility,” Kamal said in an interview with the Financial Times. Bangladesh, which owes about 6 percent of its foreign debt to China, last month sought a $4.5 billion loan from the International Monetary Fund to weather the economic crisis.
In fact, Bangladesh has made it clear to China that it is not willing to accept any further loans, but only grants from Beijing. Nepal has done the same, as China’s debt trap has grown, and Sri Lanka’s economic collapse has become a classic example, with 10% of Sri Lanka’s $51 billion in foreign debt owed to Beijing. The White Elephant at Hambantota Port in Sri Lanka is now under a 99-year Chinese lease after 2017, and under a debt-to-equity swap, the more than $1 billion Rajapaksa International Airport cannot be activated.
Another country saddled with Chinese debt is Pakistan, where Beijing has spent some $53 billion on projects that are far from bearing fruit, backed by the Belt and Road Initiative. Touted as a major strategic move among “milk and honey” allies, the port of Gwadar on the Makran coast remains incomplete, with Baloch insurgents growing restless by the day and targeting Pakistani troops and even Chinese workers.
Touted as Dubai’s alternative and Pakistan’s economic future, Gwadar Port is fast becoming the millstone on Islamabad’s neck. The country is now seeking a multi-billion-dollar bailout from the International Monetary Fund as it runs out of foreign exchange reserves, double-digit food and fuel inflation – a double whammy from the Covid pandemic and the war in Ukraine.
In fact, Chinese penetration of the Indian subcontinent has increased to the point where the bureaucracy and media are undermined and turned against their own country.
After Pakistan, China has invested about US$44 billion in Indonesia, US$41 billion in Singapore, US$39 billion in Russia, US$33 billion in Saudi Arabia and US$30 billion in Malaysia. Beijing has invested heavily in Cambodia, so ASEAN countries are silent bystanders to China’s unilateral changes in the South China Sea and the spread of war against Taiwan.
Opposition to China’s Belt and Road Initiative is not limited to the Indian subcontinent, but echoes in Kenya’s stalled $4.7 billion railway project. Five years after its inception, the project came to an abrupt end in a vacant lot 200 miles from its destination, Uganda. The Belt and Road Initiative is rapidly turning to a road with nowhere to go.
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