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OBOR: What is India missing?

Officially, New Delhi is still studying the proposals and will come out with a formulation in due course of time.

Published: 05th May 2017 04:00 AM  |   Last Updated: 05th May 2017 07:01 AM   |  A+A-

India will be conspicuous by its absence at China’s ‘One Belt, One Road (OBOR) Forum’ to be held in Beijing next weekend (May 14–15). The anxieties of India’s power elite, however, remain writ large in media commentaries of senior journalists and former advisors as also in the behaviour of India’s political leaders. Officially, New Delhi is still studying the proposals and will come out with a formulation in due course of time.

The most common are the delusory analyses undermining the forum’s stature and the ones saying this is too close to PM Modi’s scheduled September 2017 visit for the BRICS Summit in Xiamen. But the real reason is that India is hurt as Pakistan has successfully hoisted the China-Pakistan Economic Corridor (CPEC) as the axis around which OBOR is being woven, with China tacitly endorsing such formulations. No doubt, a few of CPEC’s infrastructure projects will run through disputed territories and are being planned without consulting India.

But this is not the first time China is involved in infrastructure building in territories claimed by India. And CPEC can never be the axis of OBOR that seeks to connect not just the intra-Eurasian landmass but Africa, Oceania and Australasia as well. For doing this, China undoubtedly needs partners. It has set up institutions like the Asian Infrastructure Investment Bank, New Development Bank, and the Silk Road Fund to finance OBOR and India is part of these initiatives. India has already agreed to come on board in the case of BCIM (Bangladesh, China, India, Myanmar) Economic Corridor which China sees as part of OBOR. Only last week in Kolkata, India revived BCIM consultations of officials and academics that had been stalled for over two-and-half years.

But it seems India’s neighbourhood policy is becoming hostage to ‘China syndrome’ with our neighbours being excessively indulged to wean them away from Beijing’s growing access and influence. Modi's visit to Sri Lanka next week comes in less than a fortnight after the Sri Lankan PM’s five-day visit to India. This was preceded by a five-day high-profile state visit by the Nepalese president. And during the visit by Bangladesh PM Hasina, Modi chose to set aside protocol as he travelled through the Delhi traffic to personally receive her at the airport.

This visit saw India announcing a concessional line of credit of $5 billion and signing two dozen agreements promising additional investments worth $9 billion. Modi surprised everyone last December by his unprecedented and unannounced stopover in Lahore on the way back from Kabul. Likewise, Railway Minister Suresh Prabhu was quoted last week saying India is trying to develop railway connectivity with Bangladesh, Bhutan, Myanmar and Nepal to “increase interaction, tourism, trade, employment and connectivity” which sounded like OBOR.

Like it or not, 28 heads of state—including the Russian president, Turkish president, Malaysian PM, Pakistan PM and Sri Lankan PM—will attend the OBOR Forum. In addition, UN Secretary General Antonio Guterres, World Bank President Jim Young, IMF Managing Director Christine Lagarde, 80 leaders of other international organisations and over 100-ministerial-level officials along with over 1,200 delegates are set to attend it. Last week, Toshihiro Nikai, secretary-general of Japan’s ruling Liberal Democratic Party, and second-in-command after PM Shinzo Abe also confirmed his participation saying “mutual understanding between Japan and China is vital”. Nepal PM Prachanda seems all set to make a quick U-turn and participate in OBOR. Kathmandu has already announced it will send a high-level delegation.

No doubt, OBOR’s immediate backdrop explains the skepticism in some quarters. The increasing unpredictability about US global leadership today is accompanied by continuing global economic slowdown with the EU’s lacklustre growth being further affected by Brexit. Meanwhile, Putin remains entangled in complex contestations with detractors at home and abroad. So the presence of poorer states hungry for infrastructure development needs may fan China’s hegemonic ambitions.

OBOR can surely bring China far greater geopolitical influence and China-led infrastructure building will consolidate its position in global supply and manufacturing chains facilitating dumping of cheap products the world over. But then, how is closing our eyes to OBOR, especially in the face of fast shrinking number of outliers, going to help in either understanding or influencing its possible outcomes?
Whether we trust him or not, Chinese President Xi Jinping has repeatedly underlined his “three Nos” assuring that OBOR will not be used to seek political influence.

Foreign Minister Wang Yi recently said OBOR “has no direct link with any political and boundary dispute”. Instead of focussing too much on China's ambitions, a pragmatic policy would need to engage with China’s compulsions. The Gwadar and Hambantota ports show how China may be risking investments in zones of political instability and economic stagnation. But China’s economic slowdown and its social and political repercussions compel Beijing to use OBOR to amplify its ongoing infrastructure-building commitments.

China seeks to redirect its capital over-capacities in the name of building ‘global goods’ while hoping to revive its debt-ridden state owned enterprises. China has already invested over $50 billion in various projects covering railways, highways and ports and signed contracts for over $1 trillion more thus bringing down its foreign exchange reserves from a whopping $4.5 trillion to $3.5 trillion. India can best influence the process through selective participation. It will be unwise for a relatively smaller economy to compete with China on China’s terms by launching a parallel OBOR.

Swaran Singh

Professor, School of International Studies, JNU

Email: ssingh@jnu.ac.in

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