Potholes Develop in One Belt One Road

More intelligent observers have begun to take a sceptical look at the nuts and bolts underlying Chairman Xi’s One Belt One Road “juggernaut.”

Western press outlets have tended to cover the BRI as a triumphant PRC bid to remake global trade in its image. Only very recently has Western coverage turned skeptical. But the political sensitivity of the BRI means that information related to it is tightly controlled inside China; as a result, Western analysis of BRI is largely irrelevant to the debate inside China. __ https://jamestown.org/program/domestic-criticism-may-signal-china-scaling-back-its-bri-ambitions/

Chairman Xi is China’s “dictator for life.” Pleasing Xi is a quick road to power and riches. Xi has chosen One Belt One Road as his signature policy, so the best way of pleasing Xi is to carry out projects within the broad tent of OBOR.

The Belt and Road Initiative is evidence that the party’s once responsive policymaking system is breaking down. The rest of the world must recognize that BRI persists only because it is the favored brainchild of an authoritarian leader living in an echo chamber. __ https://foreignpolicy.com/2018/12/06/bri-china-belt-road-initiative-blunder/

Inside China, one must take care not to offend Chairman Xi, or the malefactor will soon face the executioner on charges of “corruption” or “treason.”

Outside China, OBOR is creating deep tensions in the neighborhood.

Prolonged exposure to the BRI process has driven opposition to Chinese investment and geopolitical influence across the region. In the Maldives, the pro-Beijing Progressive Party of Maldives was unseated this year by the Maldivian Democratic Party, which ran on an explicitly anti-BRI platform. The Maldives’ new president calls the BRI “a big cheat” and a “debt trap” that must be abandoned or renegotiated.

He has a kindred spirit in Mahathir Mohamad, the new prime minister of Malaysia, who has described BRI projects as a form of “new colonialism” that must be rejected. Beijing’s quest to create a stable pro-China tilt in Sri Lanka has only spawned political instability, with President Maithripala Sirisena sliding up to and away from Sri Lankan politicians connected to China as the situation demands. In Bangladesh authorities recently blacklisted China Harbour Engineering Company, one of the region’s most active BRI construction firms, on accusations of corruption.

Burma was so alarmed by regional trends that it put a hold on its own BRI-funded port project in Kyaukpyu until the Chinese agreed to cut its scale by 80 percent. Nepal and Pakistan have also demanded that China cancel or completely retool ongoing projects in their countries. In western Pakistan opposition to the initiative has turned violent. __ https://foreignpolicy.com/2018/12/06/bri-china-belt-road-initiative-blunder/

We have reported on this phenomenon before, but it makes sense to come back to an ongoing catastrophe-in-progress. Many people are slow to change their minds, once the mainstream media has made up their minds for them. But over time, even the slowest should come around to reality to some extent.

China claims to have an 86% success rate in loan repayments from the OBOR projects. That claim is extremely doubtful, given the record of Chinese banks in dealing with state owned enterprise loans over time. In other words, Chinese state banks will display whatever statistics on loan payments that please Chairman Xi. That is just basic survival sense on their part.

The Long and Winding Road

Communist officials are not expected to be savvy businessmen, and so they are not. Their most difficult task is how to maximise corruption, keeping close to the centre of power while staying away from the executioner’s axe.

BRI projects are not centrally directed. Instead, lower state bodies like provincial and regional governments have been tasked with developing their own BRI projects. The officials in charge of these projects have no incentive to approve financially sound investments: by the time any given project materializes, they will have been transferred elsewhere. BRI projects are shaped first and foremost by the political incentives their planners face in China: There is no better way to signal one’s loyalty to Xi than by laboring for his favored foreign-policy initiative. __ Incentives Matter

The entire fiasco rides on the back of Chairman Xi’s strong will, just as in Russia the grand imperial project rests upon the iron will of Putin.

But what happens when the dictator around whom the entire nation revolves, dies or goes insane?

The American founders built their system on checks and balances and distributed powers. Dictators are singular pivot points that bear the mass and provide the motive force. They are the focus of decision making and are thus indispensable to the continuation of the system.

The magical thinking that promotes projects such as OBOR and the Russian imperial project, will last up to a point, and then poof! it will be unsustainable. These magical kingdoms of the dragon and the bear are nuclear powers. You should perhaps give the matter of their instability a little thought.

Hope for the best. Prepare for the worst. Make yourselves Dangerous, in the most Dangerous location you can manage.

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