A debt crisis in Sri Lanka, an economic crash in Pakistan spurred on by questionable credit lending, and Tajikistan’s mounting debt burden are all symptoms of China’s Belt and Road Initiative.
During the Han Dynasty, China played a key role in the creation and maintaining of the Silk Road, which was a world-famous trade route that brought goods from eastern and central Asia to Europe. The trade route gave China a much-needed sphere of influence and the ability to export goods at a time before transcontinental shipping was possible.
However, after the advent of faster transportation methods became available during the 15th century, the Silk Road began to decline, paving the way for nearby powers, like Russia, to eventually conquer the proprietors of the economic block for their gain, forever locking China out of the ability to gain any allies in the region, as Japan was encroaching on their eastern border as well.
Following the events of the Century of Humiliation and both world wars, the People’s Republic of China was left diplomatically isolated and economically devastated. The former was mainly due to the new communist government not being recognized as legitimate by the U.N., resulting in them having the inability to form any concrete diplomatic relations because they were seen as a separatist state from Taiwan.
In the 1970s, though, China’s position on the world stage was altered dramatically by its recognition as the official government of China by the U.N. in 1971, and Nixon’s visit to the country in 1972. These two occurrences alone led to a flood of investment entering the country as Western companies saw massive returns in building up the infrastructure of a state with such a massive workforce and potential industrial base. With all of this new money, the People’s Republic rapidly developed its country and economy, growing from an agrarian society to a globally-competitive, middle-income country.
In 2013, the Belt and Road Initiative was launched as a way for the country to, “break the bottleneck in Asian connectivity,” by investing in nearby countries to give them the infrastructure they need to participate in the global economy. When looked at through a wider lens; however, cracks in the plan’s true morality begin to show.
For instance, the construction of a port in Sri Lanka in 2017 later caused the country to crash into a state of economic ruin after the COVID-19 pandemic ravaged the country’s supply chain, causing it to be unable to sufficiently pay back its debts, a fifth of which were owned to Chinese BRI projects. In negotiating for its debt, the country ended up selling a majority stake in the port to China for a period of 99 years, meaning that they, not Sri Lanka, will preside over its usage and upkeep. A similar story occurred in Pakistan, where the construction of a series of hydroelectric dams has also caused the southeast-Asian nation to fall into a spiral of insurmountable debt. These two cases are what is known as “debt-trap diplomacy;” the act of lending one country a generous amount of money with exorbitant interest fees and predatory rates so that the creditor is forever indebted to the lender. In Tajikistan, a deal emerged from the country’s difficulty in repaying its loan that resulted in China gaining mining rights to the country’s gold deposits.
While China’s Belt and Road Initiative seems well-intentioned on the surface, it has; whether intentionally or not, been used for nefarious purposes, such as bankrupting recipient countries.
