Glob­al­i­sa­tion through con­nec­tiv­ity the Chi­nese way!

Would new power-axis moves from the in­vest­ment-eco­nomic-trade re­la­tions to geo-po­lit­i­cal and se­cu­rity cen­tric for­mu­la­tion?

Mizzima Business Weekly - - CONTENTS - Chor­agudi Upen­dranadh

The con­ven­ing power of China as an emerg­ing power-house and leader of the Glob­al­iza­tion 2.0 is all ev­i­dent dur­ing the May 14-15th The Belt and Road Fo­rum. With a rep­re­sen­ta­tion from over 70 coun­tries (of­fi­cial del­e­ga­tions) from across the globe; of them about 28 heads of states, it per­haps her­alds a new be­gin­ning in the global diplo­macy, trade and co-op­er­a­tion. The Belt and Road Fo­rum also re­ceived much needed hu­man face; been hailed as a sig­nif­i­cant con­trib­u­tor to achieve 2030 sus­tain­able devel­op­ment goals. Par­tic­i­pa­tion of heads of over 14 multi-lat­eral bod­ies like UN, its fam­ily agen­cies like UNICEF, UNDP, UNFPA, WB and IMF tes­ti­fies their en­thu­si­asm to trans­form this in­fra­struc­ture and eco­nomic ini­tia­tive into a hu­man devel­op­ment en­deavor.

China has signed devel­op­ment as­sis­tance com­mit­ments to the tune of $8.7 bil­lion for the com­ing 3 years; which stands in con­trast with USA which is re­duc­ing fund­ing for UN sys­tem!

While no­table ab­sen­tees like In­dia have their mo­ti­va­tions to stay away; pri­mar­ily at­trib­uted to their anx­i­ety over in­creas­ing Chi­nese’s dom­i­nance most of those who par­tic­i­pated are coun­tries that are seeking in­vest­ments for their grow­ing in­fra­struc­ture needs.

With re­treat­ing global clout of USA and its Euro­pean al­lies in eco­nomic and diplo­matic af­fairs and their in­ter­nal tur­moil, the ini­tia­tive seized by China in gal­va­niz­ing and ral­ly­ing coun­tries around greater trade co­op­er­a­tion, strate­gic part­ner­ships, devel­op­ment co­op­er­a­tion are too over­whelm­ing. It is true that the cur­rent fo­rum in some ways is sym­bolic, as there is no clear road map is in place for this ini­tia­tive which was an­nounced about 3 years ago as one belt one road (OBOR). Mag­a­zines like The Econ­o­mist ques­tions the prac­ti­cal­ity and co­her­ence of the project as there are com­pet­ing and con­flict­ing mo­ti­va­tions. There were also ques­tion­able in­vest­ment choices (par­tic­u­larly re­lated to en­vi­ron­men­tal con­cerns) in sev­eral coun­tries by Chi­nese com­pa­nies and it faced back­lash on this ac­count on many times.

Is it an ex­er­cise of con­sol­i­da­tion of dis­parate en­gage­ments of China to show its might? How such ini­tia­tives cal­i­brate with those spear­headed by multi-lat­eral agen­cies man­dated by UN sys­tem like WTO? Would new power-axis moves from the in­vest­ment-eco­nomic-trade re­la­tions to geo-po­lit­i­cal and se­cu­rity cen­tric for­mu­la­tion? These are some crit­i­cal ques­tions need to be ad­dressed. Some schol­ars point out sev­eral pieces of pro­posed in­vest­ments in and around South-china sea are aimed to con­sol­i­date and re­in­force Chi­nese pres­ence. Sim­i­larly In­dian diplo­matic and se­cu­rity cir­cles point out the closer eco­nomic re­la­tion­ship of China with Pak­istan, Sri Lanka and Myan­mar as an af­front to re­draw se­cu­rity sit­u­a­tion in South Asia. It is dif­fi­cult to as­cer­tain the real and prin­ci­ple mo­ti­va­tions of an ex­er­cise of this mam­moth scale; though all these con­junc­tures play up at cer­tain point of time.

Based on the macro eco­nomic sit­u­a­tion of China and its trade sur­pluses, its in­vest­ment ap­petite can be un­der­stood. Since 2005, china in­vested (com­mit­ted and re­al­ized) in over 120 coun­tries to the tune of USD 1.5 tril­lion. Redi­rect­ing its cap­i­tal over­seas has been the strat­egy to re­duce over ca­pac­ity at home as well as seeking bet­ter re­turns on in­vest­ment. Chi­nese banks and fi­nan­cial in­sti­tu­tions in­clud­ing newly cre­ated Asia In­fra­struc­ture In­vest­ment Bank have lent bil­lions of dol­lars for projects across Asia, Africa and Latin Amer­ica cov­er­ing sec­tors like min­ing, roads, ports, rail­ways, coal, ce­ment, oil, elec­tric power gen­er­a­tion and fi­nan­cial ser­vices.

Amer­i­can En­ter­prise In­sti­tute & Her­itage foun­da­tion’s China Global In­vest­ment Tracker pro­vides ex­haus­tive data­base of over 2200 in­vest­ments that China is mak­ing across the globe since 2005. With in­vest­ments of 594 bil­lion in en­ergy sec­tor, $268 bil­lion in trans­port (in­fra­struc­ture) sec­tor and $146 bil­lion in met­als Chi­nese com­pa­nies in some ways fill the sig­nif­i­cant in­vest­ment gaps of many de­vel­op­ing coun­tries. At the same time, with a track record of over 200 trou­bled over­seas in­vest­ment projects, there is a real con­cern for en­vi­ron­men­tal and so­cial im­pacts of some of the in­vest­ment de­ci­sions of Chi­nese com­pa­nies.

It is in this con­text the Belt and Road Fo­rum can be seen as a show case event of China which has seized the op­por­tu­nity of the tur­moil at the top in terms of global lead­er­ship. How can we un­der­stand the Chi­nese ver­sion of Glob­al­iza­tion 2.0? Would it be sup­port­ive of multi lat­erlism and glob­al­iza­tion that is just and eq­ui­table, with hu­man face?

How do coun­tries like Myan­mar view the shap­ing sit­u­a­tion in re­la­tion to Chi­nese in­flu­ence? His­tor­i­cally, for the past many decades, Chi­nese in­ter­est has been sig­nif­i­cant in Myan­mar in eco­nomic, po­lit­i­cal and se­cu­rity spheres. The pat regime has been iden­ti­fied to be close to Chi­nese in­ter­ests and even now its sig­nif­i­cant role is rec­og­nized, par­tic­u­larly in se­cur­ing peace in north­ern and north-east bor­ders of the coun­try. In terms of for­eign in­vest­ment, China has been ac­tive since 2005.

It in­vested to the tune of $ 6.9bil­lion un­til 2016 in en­ergy, real es­tate, trans­port and met­als, with sig­nif­i­cant in­vest­ments up un­til 2013. It also re­ceived back­lash from some of its in­vest­ment de­ci­sions, of par­tic­u­lar sig­nif­i­cance is its col­lab­o­ra­tion with Myan­mar Eco­nomic Hold­ings in cop­per min­ing. Sim­i­lar lo­cal re­sis­tance has emerged in hy­dro power project as well.

All these point out to the need for a more cal­i­brated re­sponse to the Belt and Road Ini­tia­tive from Myan­mar side where in peo­ple’s as­pi­ra­tions for im­proved in­fra­struc­ture can be met through ex­ter­nal in­vest­ments but the en­vi­ron­men­tal and so­cial im­pacts need to be as­sessed care­fully. This in fact has been the cen­tral mes­sage from Daw Aung san Suu Kyi when she spoke at this Fo­rum!

Photo: EPA

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