Gwadar Port Projects Ground Reality: BRI And ‘And Debt Trap’ – OpEd

“There are two ways to conquer and enslave a country: One is by the sword; the other is by debt.”  — John Adams

Belt and Road bailout lending reaches record levels, raising questions about the future of China’s flagship global infrastructure program. A new study according AidData report (March 27, 2023). Analysis of a new dataset demonstrates that, by the end of 2021, China had undertaken 128 rescue loan operations across 22 debtor countries worth $240 billion. These operations include many so-called “rollovers,” in which the same short-term loans are extended again and again to refinance maturing debts. The BRI has left countries drowning in huge debts, the IMF’s numerous lending programs for developing countries create those same “Debt Traps”.

2023 marks the 10th anniversary of the Belt and Road Initiative (BRI) proposed by Chinese President Xi Jinping BRI a great hybrid idea a new experience to some countries on connectivity. President Xi Jinping’s BRI plan, launched in 2013, has changed China’s overseas lending. The big difference between China and other sources of financing is that Chinese banks have used ‘Debt rather than Aid’ to establish a dominant position in the Global finance market”.

BRI is part of a grand strategy to build alliances, project influence, and reshape the international balance of power in Beijing’s favour in all spheres. China has now eclipsed traditional lenders, including the World Bank, the International Monetary Fund (IMF) and all the creditor nations of the Organization for Economic Cooperation and Development put together. 32 international organizations and roughly 146 nation-states have signed onto the BRI. China ranks as the second-largest individual lender to developing countries just behind the World Bank.

BRI Disenchantment

There are growing signs of ‘Disenchantment’ among so called BRI aided countries. A large number of the BRI infrastructure projects have encountered major implementation problems like corruption scandals, quality, labour violations, environmental hazards, and public protests. Project suspensions and cancellations are on the rise.BRI Debt-Trap Diplomacy offers projects or loans on terms that end up being too difficult for countries to repay, eventually compelling them to accept political or economic concessions. 

Through the BRI, China has cemented itself as an economic giant with the capability and to lend massive amounts of capital to countries needing donors. China when lending money charge high interest rates like other international institutions. However, what is happening here that has been raising concerns around the world is how China seemingly structures its lending programs and interest rates to entrap the borrowing country into a never-ending spiral of debt. Then when a country is not able to repay the loans, China takes over its economy creating further dependence. See how it works: 

Sri Lanka’s Hambantota port  

China has been providing loans for development to Sri Lanka since 2005. Sri Lanka has been facing an economic crisis and   due to its inability to repay the debts. Due to its debt to China, which exceeds $ 1 billion, Sri Lanka has been compelled to hand over the use of the Hambantota port  to China on a 99-year. This tactic and its outcome have been identical throughout Africa, Asia, and Latin America in nations that have borrowed billions of dollars from China. 

Pakistan Gwadar Port Project  Ground Reality?

Gwadar, with its deep-water port, is a fulcrum for Pakistan and China’s economic development projects, earning it the title of the “Crown Jewel” of the China-Pakistan Economic Corridor (CPEC). The city is often envisioned as a future Dubai in the region, but the growing destitution of its people tells a different tale. 

For a long time, the people of Baluchistan have opposed the infrastructure project, which would stretch from Gwadar Port in Baluchistan to Xinjiang Province in western China. The adopted development policies are discriminatory and overlook the concerns and apprehensions of the local people.

Pakistani leaders have been proclaiming that the CPEC is going to be a “Game Changer” for the country as it would boost development and welfare of the people.  Pakistan’s economic future hinges upon the success of the CPEC with Gwadar Port as its major component. When China decided to develop the Gwadar Port for the ambitious CPEC, and the China Overseas Port Holding Company (COPH) acquired the “Gwadar Port  on lease in 2013 for 40 years.” It became essential to address the country’s economic woes as it could attract foreign investment. But the rights and apprehensions of the local people were entirely overlooked. Assurances were given but not kept.

Despite the top leadership from both countries getting involved to keep things on track, it all appears to be going slow.  But the biggest of them all is what Pakistan and the Chinese investors did not expect ‘Resentment and subsequent pushback from the local Baloch population. CPEC and other projects in Gwadar are envisaged to serve Chinese interests. The locals have largely been forgotten. The windfall infrastructure “Game Changer” boom has so far robbed many of Balochi livelihoods.

Balochis also fear an exploitation of the region’s natural resources like oil and gas to benefit Chinese companies and people from other regions of Pakistan. Newly built roads and highways, a modern port and an airport are being showcased as the faces of development in the Gwadar region. Balochis feel Outsiders in their own land.Secessionist feelings and a strong resentment for the regime in Islamabad have long thrived in Baluchistan. Extremist groups have been active in Baluchistan, and have carried out several attacks.

The unrest is directly threatening Chinese interests.

China has been pushing Pakistan to ensure a secure environment for implementing CPEC projects in Baluchistan.

10th Anniversary:

China continues to boast about its economic partnership with Pakistan especially the CPEC projects in the port city of Gwadar during the 10th anniversary of the BRI, ground reality is that many of these projects remain unfinished. In the Gwadar port, everywhere there were Chinese and Pakistani flags. However, it appeared like a pomp and show where the “greatness” of the relationship between Pakistan and China was put on display. It is hard to visualize Gwadar as the launch pad of a new global paradigm, but that is what Beijing would have the world believe. CPEC is on the verge of crisis, as is the BRI itself. (media outlet Nikkei Asia).

Lately, the CPEC projects have slowed down in Gwadar and elsewhere in Pakistan due to floods earlier and now Pakistan is facing the economic and political crisis. Local protests and failed govt strategies derail CPEC projects in Gwadar. Pakistan CPEC especially Gwadar Port project appears to have run into some very rough weather.