China’s Belt and Road Initiative and the ASEAN: Cooperation or Opportunism? - Blueboard by Diana J Mendoza, PhD

November 13, 2018
Photo from Asia Insurance Review

It is more than five years now since China’s President Xi Jinping introduced the Silk Road Economic Belt in Kazakhstan in September 2013 and the 21st century Maritime Silk Road in Indonesia in October 2013. The Belt and Road Initiative (BRI) or the One-Belt-One-Road (OBOR) officially became China’s national development strategy in November 2013 and was included in its 13th five-year plan in March 2016 as part of the strategy to deepen China’s reform and opening as well as to establish new mechanisms for economic development.
 
Given the huge infrastructure investments needs of the Association of Southeast Asian nations (ASEAN) to implement its Master Plan on ASEAN Connectivity (MPAC) 2025, the BRI or OBOR offers an opportunity for both mainland and maritime ASEAN. Based on the Asian Development Bank’s (ADB) data, the region’s infrastructure investment needs will total US$2.8 trillion (S$3.68 trillion) between 2016 and 2030, or about US$184 billion annually. 
 
Nonetheless, with the existing political and organizational issues as well as policy and institutional barriers within the ASEAN, there are apprehensions that the Chinese ambitious project for connectivity may undermine ASEAN’s regional efforts at connectivity or the MPAC 2025 (MPAC), and consequently, deepen existing economic divides among the ASEAN countries. What is at risk is the fundamental objective of MPAC 2025 which is “to establish a seamlessly connected ASEAN that will deliver tangible benefits to ASEAN citizens”.
 
Last year, in what was considered as the highest profile diplomatic event for China, Xi Jinping  opened the Belt and Road Forum for International Cooperation in Beijing, China with the five guiding principles to steer the Belt and Road Initiative toward greater success, namely, 1) peace, 2) prosperity, 3) opening up, 4) innovation, and 5) connecting different civilizations. Promoting the BRI as a new model of win-win cooperation, he declared that China will not encroach on other countries’ internal affairs, export its own social system and model of development, impose its own will on others, or resort to outdated geopolitical maneuvering.
 
Five years have passed, it becomes imperative to ask, Is China keeping its “promise”? What are the dynamics in ASEAN member states relating to China’s transcontinental multi-billion Belt and Road Initiative?
 
What follows is a brief survey of some of the challenges that some ASEAN member-states face. The focus is on the ASEAN people who are the intended beneficiaries but who are at greater risks than their governments and elites.
 
Observations, and to some extent, complaints in the region emphasise the lack of workers and companies’ participation in the BRI-related projects. Most investment and construction projects funded by China are done by Chinese companies employing Chinese workers.
 
In Brunei, for example, the Pulau Muara Besar project has angered some locals as they compete with Chinese workers for employment. The entry of thousands of Chinese workers, shipped into Brunei to build the refinery and petrochemical complex in this country’s small island, seems to exacerbate country’s employment problems with the unemployment rate at 6.9% already.  Nonetheless, with oil and gas reserves probably running out in the next 20 years, Chinese investment is welcome. 
 
In Cambodia, civil society groups are protesting against the 36,400-hectare project in the country’s southwestern coast. The international eco-tourism and trade centre project has led to thousands of locals forcibly evicted, resettled on land and houses of poor quality with limited access to utilities and given inadequate compensation. The Lower Sessan II hydropower plant project may lead to the eviction of almost 5,000 people from their villages once operational with around 40,000 people living along the Sesan and Srepok rivers losing their livelihood that is dependent on fishing. To date, China is the largest investor in Cambodia’s energy sector and other infrastructure projects.  Cambodia’s longest-serving Prime Minister is China’s strongest ally in the region and in the ASEAN.
 
In Laos, the most expensive infrastructure project, the Laos-China railway, is also causing displacement among those living in the Phu Din Daeng Village. Families in the affected areas were told by the government to relocate to pave way for the railway which requires around 3,832 hectares of land. Neither relocation nor compensation have been provided to more than 4,000 Lao families that will be affected.  For Lao government, the project is the key to “transforming their ‘land-locked’ country into a ‘land-linked’ country”.  Like Cambodia, China has emerged as Laos’ largest donor and source of foreign direct investment.
 
Potential environmental degradation is a problem that usually accompanies any infrastructure project.  In Indonesia, civil society groups are protesting the 510-megawatt hydroelectric dam on the Batang Toru river under Chinese loan.  Both local villagers and conservationists fear that the dam may “irreversibly alter” the river’s ecosystem hence, threatening the livelihood of thousands of people who reside downstream. In 2017, threatened indigenous people in North Sumatra protested their eviction from their ancestral land. Equally alarming is that the hydroelectric dam also threatens to damage the ecosystem of the Batang Toru forest, “home to Critically Endangered Sumatran tigers and orang-utans”.  Around 800 orang-utans are in danger of extinction.
 
In Myanmar, local protests against Chinese-operated Letpadaung copper mine continue for expropriating land without providing the displaced families adequate compensation and for damaging the environment. Protests also continue relating to the controversial $3.6 billion, 6,000-megawatt Myitsone Dam project. In 2010, more than 2,100 people from five villages were forcibly resettled.
 
The Myitsone Dam project was suspended by the government in 2011 due to protests over its enormous flooding area and environmental impacts. The project also angered locals because of the fact that 90 percent of the dam’s electricity was expected to go to China. To date, China is heavily courting Myanmar’s government to restart work on the dam to help meet its growing power demands.
 
The most recent controversial Chinese mega-project in Myanmar is the Kyaukpyu port on the western tip of Myanmar’s conflict-torn Rakhine state. The USD10 billion project that includes a new deep-sea port (USD 7.5 billion) and an industrial park (USD 2.5 billion) is planned to be “an entry point for a 480 mile (770km) pipeline delivering oil and natural gas to China’s Yunnan province”  giving “China an alternative route for energy imports from the Middle East that avoids the strategic chokepoint of the Malacca Strait”.  The government of Myanmar is currently renegotiating to scale down the project to avoid a debt trap.
 
Is the $900 billion BRI project really a win-win cooperation? Who is winning, and who is winning much more?
 
Diana J Mendoza, PhD is the Chair of the Department of Political Science at the Ateneo de Manila University.  This article is based on her ongoing research on “The ASEAN and the BRI: Connectivities and Dis-Connectivities”.