China's Belt Road Initiative: Opportunities and risks

THE Duterte administration's pivot to China and away from the country's traditional allies has not been a secret. Very early in his presidency, the commander in chief wasted little time in visiting China, where he virtually proclaimed his allegiance to the rising Asian power while announcing a strategic distancing from Washington.

On the surface, there is something to be said about this turn. Both the Duterte administration and Beijing had been big on infrastructure as a hallmark of and testament to development. Duterte's Build Build Build Program is touted to usher in an unprecedented "golden age" in infrastructure, geared to finally bring an end to enduring economic gaps while bringing about elusive inclusive growth.

Concretely, this ambition seems to find an echo in Beijing's vaunted Belt Road Initiative. Unveiled in 2017, the former One Road, One Belt initiative is ostensibly aimed at projecting China's leadership and influence in directing the global free trade regime. With China's huge infrastructure development largesse, BRI stands as a reiteration of Beijing's commitment to globalization especially in the wake of an apparent retreat into protectionism of the United States under Donald Trump.

In particular, China is expected to invest up to $5 trillion in transcontinental infrastructure over the coming decade, connecting its industrial heartland to the world's largest consumer markets in Western Europe. Even the Asian Development Bank acknowledges that Asia alone confronts an estimated $8 trillion in infrastructure spending gap over the same period, with some $1.7 trillion needed in the developing countries. BRI's agenda, then, all things considered, should be a welcome development.

At a recent forum organized by the private think tank Stratbase Albert del Rosario Institute, political science professor and geopolitics expert Richard Heydarian was quick to stress the geopolitical dimension of such a global infrastructure development initiative.

BRI's objectives, he noted, are aligned with Beijing's geopolitical goals, including its long-term plans of developing landlocked hinterlands and underdeveloped regions, outsourcing internal productive glut and infrastructure overcapacity, assisting and promoting troubled state-owned enterprises, and developing its trade partners' basic infrastructure to reverse what had been an anemic trend in global trade, among others.

Thus, for a country like the Philippines, the decision to participate in such a large-scale program, even if the benefits seem evident, should be approached judiciously. After all, many still remember the botched NBN-ZTE national broadband deal in 2005, which was marred with corruption and which dealt then President Gloria Macapagal Arroyo a decisive political blow.

Experts, including Heydarian, have seen similar dangers in BRI, the ambition of the program understandably multiplying the attendant risk.

"Some Chinese projects during the previous administrations had become controversial because of corruption, an overall lack of transparency, and problems in accountability," Heydarian said. In his study, he noted that several Chinese contractors have been blacklisted by the World Bank for similar charges, something that the Duterte administration at one point even defended.

"Although some analysts say that BRI is a promising initiative for infrastructure global development, it has also been criticized for being too ambiguous and murky, prompting states to exercise more caution in screening Chinese contractors and applying strong safeguards to prevent being trapped into so-called debt diplomacy," said Stratbase ADRi President Dindo Manhit.

The solution, of course, is in the reliable safeguards of checks and balances supposedly built in the unwieldy government bureaucracy. Defending the pivot to Beijing as strategic, it is now incumbent upon the Philippine government to exercise due diligence in its dealings with China: Ensure that a competitive bidding process is observed, enforce strict standards in good governance, and never stray away from environmental sustainability and stewardship.

Other countries, such as Seychelles and Sri Lanka, have reportedly already fallen into the Chinese debt trap in the form of completed infrastructure that has little to no use in the context of the country's economy, white elephants that now bond the debtor country to Beijing's whims.

What Heydarian posits is to advocate for a win-win rather than be duly enchanted by Chinese promises – take advantage of the infrastructure push courtesy of the BRI by promoting inclusive growth and providing jobs for the locals instead of relying on fully integrated Chinese supply of capital, technology, and even labor.

It represents an indispensable infrastructure boost for the Philippines and other countries in Asia, but China's track record necessitates that the initiative be welcomed with "cautious embrace."

His warning is dire otherwise: "If this will not be guaranteed, the Philippines' engagement with China will be meaningless and unsustainable," he said

Topics: Orlando Oxales , China's Belt Road Initiative: Opportunities and risks
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