Was skipping OBOR the right move?

In 1750 French political philosopher Baron de Montesquieu wrote in his “Spirit of Laws” that “peace is the natural effect of trade”. In September 2013 Chinese President Xi Jinping claimed that his One Belt One Road (OBOR) or “Belt & Road Initiative” (BRI) was aimed at “peace and co-operation”, “openness and inclusiveness”, “mutual learning”, and “mutual benefit”. He unveiled BRI’s two primary components: the overland Silk Road Economic Belt (SREB), and the sea-based 21st-century Maritime Silk Road (MSR).

The decision of our government to skip the BRI summit on May 14-16, 2017 is still being debated.  Critics say that India’s absence went against the country’s economic interests as the Summit was attended by 29 Heads of States and important government leaders who could identify 270 “deliverable goals”. They complain that India was “isolated” even in the South Asian region since all neighbouring countries except Bhutan chose to attend despite India’s boycott. In fact these countries had even signed 20 infrastructure deals with China at the Belt and Road Forum (BRF).

Was this a wise decision?  Those criticising the NDA government quote our former National Security Adviser Shivshankar Menon who said in April 2017 that the meeting would provide an “opportunity” for India. But he had also qualified this by saying that the China-Pakistan Economic Corridor (CPEC), which is part of BRI passed through Indian territory in POK. But some critics say that this particular region was never under the Maharaja’s or Indian rule. The question is, could any government overlook the “sovereignty” factor? What will happen if an Indian firm is given a contract to develop a portion of CPEC in this disputed area? Won’t this be considered an anti-national act by our print and visual media which is exhibiting supra - nationalist overtones in the wake of the Valley and LOC incidents with Pakistan and developments in Arunachal Pradesh? Could any government like the NDA which had proclaimed a muscular policy towards security, allow trade development to be prioritised over sovereignty?

The problem is that even well informed sources including foreign think tanks release prejudiced versions on BRI just as they had tried to create fear a few years ago with the “String of Pearls” theory. In India commentators are either supporting the government’s decision citing “nationalist” reasons or opposing it depending upon their political beliefs. Hence I decided to study the reaction in Australia, a comparable country, whose policies towards China had swung from Gillard-Rudd’s closer economic and political ties to Turnbull’s sharp criticism of the Chinese expansionist aims. In between we also saw Abbott’s policy of “balancing” China and United States.

A paper prepared by Geoff Wade, foreign affairs & security specialist to brief the Australian Parliament says that the aim of BRI is to expand the “Chinese economic and strategic agenda by which the two ends of Eurasia, as well as Africa and Oceania”  would be “closely tied along two routes–one overland and one maritime”. He said that the supporters of this plan welcomed the initiative which would result in new infrastructure and economic aid to the needy economies. Opponents feared that it would facilitate Chinese economic and strategic domination of the countries along these routes.

The BRI is to be achieved through 6 major economic cooperation corridors & key maritime “Pivot points” across Eurasia. While the land corridors would be China-Mongolia-Russia, China-Central Asia-West Asia, China-Indochina peninsula, China-Pakistan and Bangladesh-China-India-Myanmar, the sea corridors would build efficient transport systems linking sea ports. The plan envisages 5 areas of cooperation viz., coordinating development policies, building up infrastructure and facilities, strengthening investment and trade, intensifying financial cooperation, social and cultural exchanges. The visible result will be in building or upgrading railways, roads, ports, energy systems and telecommunications networks.

The paper cautions that all these will allow China greater benefit and access across the Indian Ocean. It says:

“Purchase and construction of port facilities and associated economic zones in Australia, Malaysia, Indonesia, Bangladesh, SriLanka, Myanmar,  Pakistan, Kenya, Tanzania, Oman and Djibouti are intended to provide China with maritime access and economic benefit across the Indian Ocean. These will connect to Piraeus, Greece’s major port, which has been bought by Chinese shipping group COSCO and which will allow direct access to the markets of Europe”

In Wade’s assessment, Renminbi would be the main trading and investment currency in the countries involved. The expansion of Chinese banks into new OBOR markets is to serve the globalisation of the Chinese economy. He also says that that ethnic Chinese settled in Asian countries have generally welcomed the project. Pakistan and Srilanka as well as some Central Asian states are comfortable with the plan but Vietnam has expressed “grave doubts”. “India has been stridently suspicious of the overall OBOR initiative and has repeatedly expressed concerns about China’s growing economic and strategic power being pursued through OBOR”

Wade recommends that Government of Australia needs “to maintain a close watch on the progress of the OBOR initiative globally” as “Australia becomes increasingly tied economically with China”. He also suggests that “Australia needs to adopt a more economically and strategically prudent attitude in determining how the Australia-China economic relationship is to further develop”.

Australia with the largest group of overseas Chinese in Oceania has reservations on the Chinese attempt to be hegemonistic in the garb of trade. Yet they decided to participate in BRI by keeping an open mind. If this example is accepted there would have been no justification for India in boycotting the Summit and making a virtue of this diplomatic discourtesy. This action has also given grist to the rumour that India is isolated in South Asia when it comes to dealing with China. The proper course would have been to send a representative to the Summit just as Australia did by deputing a minister. Even Vietnam was represented by President Tran Dai Quang despite their strident objections.

(The author is a former Special Secretary, Cabinet Secretariat)