Silk Road to sustainability?

‘OBOR”, which stands for “One Belt, One Road”, has become the acronym of the moment in the glossary of foreign policy and investment. It sums up the enthusiasm that followed the successful Belt and Road Forum for International Cooperation, held in Beijing on May 14 and 15.

The 28-country summit was a coming-out party of sorts for OBOR, a modern economic and foreign policy vision from a modern China that President Xi Jinping first articulated in 2013.

Known as the Modern Silk Road, OBOR aims to improve physical connectivity and trade cooperation between China, Africa and Eurasian nations. The Belt component focuses on improved logistics with upgraded roads and railways from China through Central Asia and onward to the Middle East to Europe, plus manufacturing bases, ports and energy pipelines. The “21st Century Maritime Silk Road”, meanwhile, links countries to the south of China via the South China Sea, including Asean states, with Africa and southern Europe.

OBOR requires massive investments of at least US$890 billion, with most of the funds expected to come from China.

In my opinion, the modern Silk Road is the most exciting, refreshing and visionary move by China since Deng Xiaoping embarked on reforms to create a market economy nearly 30 years ago.

But despite all the enthusiasm the recent Beijing forum generated, many questions remain. Criticism was heard about the lack of emphasis on transparency and safeguards for the environment and community rights from representatives from the European Union, the US and Japan.

Of course, some of this criticism could be perceived as sour grapes from the old powers in light of the rise of Sinocentric globalisation. To be fair, their concerns should be seen as healthy scepticism. History shows us countless examples of funds for huge infrastructure projects being misused, squandered or just plain stolen, to the detriment of local communities.

Look no further than Thailand. A case in point is the World Bankfunded Pak Mun Dam in the Northeast in the 1980s. Lacking local participation and proper environmental and social safeguards, the hydropower project damaged the ecology of the Mun River and became an unused white elephant.

The importance of transparency is underlined by the fiasco of the Klong Dan wastewater treatment plant in Samut Prakan province, partially financed by Asian Development Bank (ADB). The scheme was riddled with corruption, from crooked land purchases to design modifications that ballooned the cost. What should have been a good project ended badly. The 23.7-billion-baht facility remains uncompleted. Some senior officials at the Pollution Control Department are in jail, and the political godfather who masterminded the criminal trickery has fled the country.

Don’t get me wrong. I do not dwell in the past, nor do I want to paint a bad picture of all megaprojects. But without transparency and safeguards, projects with good intentions can end in bad results.

Financing agencies such as the World Bank and ADB have gradually adjusted in order to deal with social and environmental concerns and make sure financing and procurement are accountable. The World Bank in 1997 teamed up with the World Conservation Union (IUCN) to form a commission to monitor the development of large dam and reservoir projects the bank helped to fund.

The ADB since 1995 has had safeguard policies to prevent forced resettlement of indigenous communities. Chinese funding agencies such as the Asian Infrastructure Investment Bank (AIIB) which will play major role in funding the OBOR, should emulate these models.

Indeed, some OBOR projects are already running into conflicts. Among them is Hambatotan Port in Sri Lanka where local people clashed with police over forced resettlement as the Sri Lankan government handed over the site to China to operate.

Meanwhile, the China-Pakistan Economic Corridor (CPEC) has encountered strong local resistance. Ethnic groups and leaders of smaller provinces believe their provinces’ natural resources are being exploited unfairly. India worries about Chinese-backed infrastructure being built in Kashmir, long disputed by both India and Pakistan.

As well, the Thailand leg of a high-speed rail line from China is two years behind schedule because Thai authorities are resisting Chinese demands for the rights to develop land along the railway route.

Needless to say, the challenges of the 21st Century Silk Road go beyond engineering and financing. Obviously, President Xi wants to build a road toward peace and sustainability. But a business-asusual mindset could create just another cold and hard logistics route.