The ongoing strategic contestation in the Indo-Pacific has spilled into infrastructure development projects. Australia, Japan and the US announced the Blue Dot Network (BDN), a trilateral partnership for infrastructure projects in the Indo-Pacific region. In November 2018, three national agencies i.e. Australian Government through the Department of Foreign Affairs and Trade, the United States Overseas Private Investment Corporation (OPIC), and the Japanese Bank for International Cooperation decided to lead the initiative and develop infrastructure for energy, transportation, tourism, and technology to ‘help stabilize economies, enhance connectivity, and provide lasting benefits throughout the region’. Under the BDN, the respective “governments, the private sector and civil society are to promote high-quality, trusted standards for global infrastructure development” and provide “globally recognised evaluation and certification system for roads, ports and bridges with a focus on the Indo-Pacific region”.
There are at least two important reasons which prompted the US led consortium to conceptualize BDN. First is the Chinese Belt Road Initiative (BRI) which has now spread across Asia and Europe. Under the Initiative, a variety of projects are underway and include road and rail networks, bridges and tunnels, special economic zones, digital and telecom networks and port related infrastructure. The China's National Development and Reform Commission has recorded that as on 31 October 2019, the country signed 197 Belt and Road cooperation documents with 137 countries and 30 international organizations totaling nearly US$ 950 billion. Also, China’s non-financial direct investment in these countries reached US$10 billion dollars and bilateral currency swap arrangements with 20 countries including RMB clearing arrangements with seven countries had been established.
Although the quality of Chinese projects has not received adverse reportage, but the terms of reference for contract (fiscal and management) for these projects have attracted international concern. These have been widely labeled as ‘debt traps’ involving long lease (Sri Lanka, Pakistan, Maldives, Ethiopia, Kenya and Malaysia), and in some cases as long as 99 years. In response China hosted two Belt and Road Forum and the 2019 Forum titled ‘Belt and Road Cooperation: Shaping a Brighter Shared Future’ was solely for infusing confidence in the international community over the BRI and dispel issues of transparency, accountability and particularly ‘debt trap’. The US has ‘repeatedly called on China to address these concerns’ which continue to plague the BRI.
The second issue is about port projects under the BRI which can serve as strategic outposts for the PLA Navy for ‘access and basing’. These are also the seaward nodes of the economic corridors and connectivity links that run deep into the heartland which is dotted with economic industrial zones that can be quickly upgraded into military industrial complexes during crisis. Interestingly, many of the ports projects are co-located with naval bases and can ‘provide for and service’ Chinese military assets during long distance deployments.
The Chinese strategic intent is quite palpable in the Indian Ocean, and ports such as Colombo, Hambantota, Gwadar and Djibouti are demonstrative of the Chinese strategic intent. PLA Navy ships and submarine are now a common sight in the Indian Ocean. This clearly debunks the earlier Chinese assertions that all its commercial port projects are purely for economic purposes and there are no strategic-military undertones. In fact, Chinese maritime infrastructure project programmes can now be branded as ‘inherently dual’ in nature and flexible to serve a number of purposes.
The US led BDN appears to be overly ambitious given that most countries are in desperate need of financial and technological assistance to build infrastructure. Although the number of countries signing new projects under the BRI may be declining, many recipient countries still appear to be quite sanguine about the Chinese support notwithstanding the fear of debt. This can be easily discerned from the large assembly of over 40 heads of state and high level delegation who were in Beijing in May 2019 to participate in the 2nd Belt and Road Forum.
China’s ability to craft cooperation and extract a favourable bargain is noteworthy. Beijing is able to impress on recipient nations that the BRI is a not a ‘geopolitical tool’ and this perception is ‘simply a misunderstanding, misrepresentation and biased view of the BRI,”
China is signaling the US that it has global interests and building ports is an expression of its politico-diplomatic and economic strength. Also, it is not deterred by the US’ National Security Strategy (NSS) released in December 2017 which identifies China as a competitor and cautions that China’s infrastructure investments and trade strategies reinforce its geopolitical aspirations.
Further, China believes that the PLA Navy is capable of operating simultaneously in the eastern and western theatres thereby tiding over the tyranny of geography and its interest now span from the Yellow Sea to the Red Sea. China will pursue an aggressive naval strategy to support operations in the Indian Ocean and beyond.
Finally, leaving aside the contestation and competition emerging from BRI or BDN, both initiatives can be the panacea for economic growth and development of several countries that have been deprived of opportunities.
Dr Vijay Sakhuja is associated with Kalinga International Foundation, New Delhi.