New Internationalist - 11.2019 - 12.2019

THE FACTS

MORE MONEY,

MORE PROBLEMS

The Center for Global Development has
found that the BRI is ‘unlikely to cause a
systemic debt problem in the regions of the
initiative focus’ given the size of most loans
in relation to the recipient nation’s GDP and
rate of growth. However, it identifies 23
countries that could have a high risk of ‘debt
distress’ and eight of ‘particular concern’.

CLIMATE BREAKDOWN

A government document states that the BRI ‘pursues
the vision of green development and a way of life and
work that is green, low-carbon, circular and sustainable’.
China is currently building Latin America’s largest solar
plant in Argentina, which is scheduled to produce 500
megawatts of power.

However:

91% of energy loans went to the fossil-fuel industry
between 2014 and 2017.

China is financing 102 gigawatts of coal power
outside its borders. That’s 25% of all coal power, which is
the world’s dirtiest fossil fuel, in the world.

China has not mandated ‘binding environmental
standards’ for its banks and companies overseas.^4

COMMIT TED AND PROPOSED CHINESE-

FINANCED COAL POWER (TOP 10)

DEBT IN DJIBOUTI, LAOS AND

PAKISTAN (US$, MILLIONS)

Source: Institute for Energy Economics and Financial Analysis

Source: Center for Global Development and South China Morning Post

15,000

10,000

5,000

0

BANGLADESH

VIETNAM

SOUTH AFRICA

PAKISTAN

INDONESIA

MONGOLIA

EGYPT

ZIMBABWE

RUSSIA

PHILIPPINES

IOU

Laos

Djibouti

Mongolia

Kyrgyzstan

Montenegro

Pakistan

The Maldives

Tajikistan

Megawatts (MW)

Construction

Pre-construction

DJIBOUTI

LAOS

PAKISTAN

1,727 1,496 1,464 1,200

15,903 10,782 8,604 4,186

278,913 195,239 58,014 6,329

GDP

Public

debt

External

debt

Debt to

China

IN FOCUS

HAMBANTOTA PORT In 2012, a mere 34 ships docked in
the Hambantota Port in Sri Lanka – a vanity project of the
then President Mahinda Rajapaksa. The uneconomic port was
handed over in a majority share to China for 99 years, along with
15,000 acres of surrounding land. Locals took to the streets over
the loss of their land, clashing with police, while Indian officials
worried that China might use the port as a military base in future.

CHINA-TO -LONDON EXPRESS In January 2017 the first
direct freight train from China to the UK arrived in Essex. A
BBC report quoted a Chinese company as saying the new trade
link was cheaper than air freight and quicker than maritime trade.
This is true. But, as the South China Morning Post pointed out,
there is unlikely to be much demand for the service given how
much cheaper it is to send goods by sea.

THE KHORGOS GATEWAY This flagship ‘dry port’ in

Kazakhstan features huge cranes loading shipping containers

onto trains, rather than ships, before they travel westwards.

Most goods that pass through currently end up in nations like Iran and

Uzbekistan. The Central Asian Republics have seen much fossil-fuel

infrastructure being built as part of BRI, such as the Turkmenistan-

China gas pipeline, which will have an annual capacity of 55 billion

cubic metres.

‘JEWEL IN THE CROWN’ With $54 billion worth of

projects planned, including hydroelectric, coal-power and

wind-power stations, highways, fibre-optic cables, city transit systems,

airports and special industrial zones, Pakistan is called the jewel in the

crown of BRI. The centrepiece is the Gwadar port on the southwestern

coast, Pakistan’s largest industrial project since independence. China

values having a port here as it allows ships to avoid the Malacca

Straits, between Malaysia and Sumatra, one of the world’s busiest and

narrowest shipping routes that is regularly patrolled by the US.

1 Bruno Maçães, Belt and Road: A Chinese World Order, Hurst, 2018 2 Hurley et al, ‘Examining the debt implications of the Belt and Road...’, Center for Global Development, 2018, nin.tl/BRIdebt

3 Derek Watkins et al, ‘The world, built by China’, The New York Times, 18 November 2018, nin.tl/builtbychina 4 Lili Pike, ‘Green Belt and Road...’, ChinaDialogue, April 2019, nin.tl/greenBRI.

NOVEMBER- DECEMBER 2019 25