Rough Patches on the Silk Road? The Geopolitics of the Belt and Road Initiative

Courtesy Victoria Pickering/Flickr

This article was published by Political Violence @ a Glance in October 2016. The post draws on the author’s chapter in a recently released Peterson Institute for International Economics Briefing volume.

China’s Belt and Road Initiative (BRI) – a plan to build a vast network of roads, rail lines, new ports, and other infrastructure improvements a in more than 60 countries, at a cost of $4 trillion – is an economic policy designed to radically expand trade and investment in Asia and around the Indian Ocean. Critically, however, it is also a security initiative with the aim of facilitating economic integration and promoting longer-run peace in the region.

The economic benefits are likely to be large, but there may be rough patches along the new Silk Road. While the proposed investments are precisely the types of trade-enhancing projects development economists have long called for, the geopolitical implications of BRI are complicated. From the restive western Chinese province of Xianjing to Jammu-Kashmir, the Myanmar-Chinese border, and the Indian Ocean, BRI-related initiatives target or traverse some of the world’s most contested territories. Major power development programs abroad – such as the US Marshall Plan and Alliance for Progress – have always been motivated by a mixture of economic and security concerns. Indeed, BRI is intended in part to address security fears emanating from these regions by improving economic prospects.

Regional Stability

Central Asia: A Dangerous Thirst

Photo: UNDP in Europe and Central Asia/flickr.

This article is included in our ‘Conflict Hotspots 2014’ dossier which can be accessed here.

On the grand scale, Central Asia’s water problems have been well documented since the fall of the Soviet Union. Journalists wrote of the apparently inexorable shrinking of the Aral Sea, once one of the four largest lakes in the world; by 2007, at a tenth of its normal size, it had split up into several smaller bodies of water. An excellent view of these broad shifts can be found at Aqueduct’s Water Risk Atlas.

Uzbek President Islam Karimov has warned of war if upstream countries Kyrgyzstan and Tajikistan pursue power generation projects that might alter, or make open to political manipulation, the supply of water needed to irrigate Uzbekistan’s cotton crops. Public anger over a decline in basic services fuelled the unrest that led to the overthrow of President Kurmanbek Bakiyev in April 2010. (See our report Decay and Decline.) Bakiyev sold water to Kazakhstan during a period of electricity shortages in his own country. Across the region corruption and neglect undermine confidence in government and contribute to political discontent.

Think Again Before Exploiting the Arctic’s Resources – Where’s the Infrastructure?

ARCTIC OCEAN – The Canadian Coast Guard
Photo: U.S. Geological Survey/flickr.

Climate change is not an ideology, as some would have us believe – it is an existential fact.  Greenland’s ice cap is melting up to four times faster than it was two decades ago, and if current predictions hold true, by mid-century the Arctic’s seas will be navigable in the summertime. This probability may frighten climate change specialists, but it is good news to those who want to access the High North’s once inaccessible resources (oil, minerals and gas), or to rely upon its shorter and therefore cheaper shipping routes. Indeed, the burgeoning interest of governments and investors in the Arctic guarantees that for better (economic development) and worse (oil spills, shipping accidents, and cultural dislocation), the human footprint will grow exponentially in the region. For those who are ready to kick-start this 21st century ‘gold rush,’ however, here’s an inconvenient question – where’s the infrastructure that is going to support it?

First, let’s begin by stating the obvious – compared to the rest of the world, the broader Arctic region still has almost no infrastructure and what little exists is expensive. Canada’s per-capita transport and communications costs, for example, are 36% higher in the Northwest Territories and 160% higher in Nunavut than in the country as a whole. These costs, driven as they are by the still-extreme climate and extended transport routes, will continue to turn near- and mid-term expectations of large-scale wealth and development into fool’s gold.

Investing in Infrastructure

Repair wanted, photo: cmh2315fl/flickr

On September 6, President Obama announced an infrastructure renewal project in the US. According the White House press release, the plan aims to create a long-term framework for the renewal and expansion of a major part of America’s transportation infrastructure (roads, railways aviation and transit infrastructure.) Its broader objectives are to contribute to the economic stimulus of the Recovery Act with a front-end investment of $50 billion.

Specifically, the plan aims to do the following in the coming six years:

  • Rebuild 150,000 roads
  • Build 4,000 miles of railroads and introduce high-speed rail systems
  • Reconstruct 150 miles of runways and upgrade the air traffic control system
  • Establish a permanent infrastructure bank to leverage capital investment in the nation’s infrastructure

This contribution is a step in the right direction, but only a step. The plan addresses only four of the 15 issues outlined by the American Society of Civil Engineers, which produces an annual report card  on the state of US infrastructure, assessing bridges, dams, drinking water, energy, hazardous waste, inland waterways, levees, public parks and recreation.

According to the most recent ASCE report, the US scored a dismal D (approx. 1.0 out of a possible maximum of 4.0.) This same report estimated a 5-year investment of $2.2 trillion would be needed to significantly improve these areas, including some 1,800 high hazard and over 4,000 structurally deficient dams, as well as 72,868 and 89,024 functionally obsolete bridges.

But, as the mid-term elections draw near, calls to reign in federal spending have grown. Republicans have vowed to oppose the plan and support among Democrats may be weak.

Ultimately, infrastructure renewal in the US will depend on murky congressional back-room deals, tough legislative cycles and the fickle political trends of the coming years.

Despite the Obama administration’s attempt to bring the issue to the forefront of domestic policy, quick action on a vital issue seems increasingly unlikely. And this is bad news for America.