Even other members within Brics have been reluctant to embrace belt and road projects, arguably for fear of alienating key Western powers which with they have close relationships.
However, one of the largest among them, Brazil, has revealed plans to join the initiative. As reported in the Post, Brazilian president Luiz Inacio Lula da Silva has stated that his administration is putting together “a proposal to join”.
The rapidly expanding family of Brics nations can economically benefit from taking part in the Belt and Road Initiative, in the form of infrastructure networks linking them to the world’s second-largest economy, measured by gross domestic product. Member-nations also benefit from being connected to each other and having alternative sources of project financing.
Chinese labourers work at a construction site in Egypt’s new administrative capital, 45 kilometres east of Cairo, on March 16, 2021. The project is a part of the Belt and Road Initiative. Photo: EPA-EFE
Yet, against these positive attractions, these countries have been factoring in the potential disapproval of Western nations that have engaged in a flurry of rival initiatives to the Belt and Road Initiative. But Western countries are now perceived to be in a state of political disarray and, in the case of the United States, a problematic fiscal state.
China appears to be taking advantage of its strengthened position of international authority as geopolitical rivals mired in domestic woes are less willing or able to take any united stand against other nations that support the initiative.
Hung Tran, a non-resident senior fellow at the Atlantic Council’s Geoeconomics Centre, writes that “many Belt and Road Initiative loans have been concluded using Chinese laws and dispute settlement mechanisms instead of Western ones, such as British laws traditionally used in international bank lending”. According to him, China is “continuing to open up to the outside world, but presumably more on Chinese terms and less on Western terms”.
China’ ability to fund infrastructure projects that enhance its own access to global trade and investment has been increasingly questioned as the financial implications of the mammoth project becomes clear. However, a number of developments suggest that a bolder approach might be taken by the initiative going forward.
An electric train on the China-Laos Railway arrives in Yuxi, Yunnan province on December 3, 2021. The China-Laos Railway falls under the Belt and Road Initiative. Photo: Xinhua/AP
The bank has been conservatively managed under president Jin Liqun, China’s former vice-minister of finance. Jin also previously worked as a senior official at both the World Bank and Asian Development Bank. He has kept the AIIB at arm’s length so far as relations with the Belt and Road Initiative are concerned, contrary to initial expectations that the bank would be a major funding source.
However, high-level financial sources have recently suggested to me that Jin’s current five-year term at the AIIB is unlikely to be extended and that the bank could become a more important funding source for the initiative.
Moreover, Brics has its own bank with US$100 billion in authorised capital. Based in Shanghai, the New Development Bank is led by Dilma Rousseff, the former president of Brazil, one of the main shareholder countries. Brazil’s move towards joining the Belt and Road Initiative could be followed by similar overtures on the part of other Brics members that stand to benefit in terms of transport and trade links.
New Development Bank president Dilma Rousseff arrives at an event in Rio de Janeiro to unveil a global coalition against hunger, on July 24. Photo: Bloomberg
Meanwhile, the Brics grouping has continued to expand to include Iran, Egypt, Ethiopia and the United Arab Emirates joined in January. Thailand and Malaysia have announced an interest in joining. Indonesia is looking into it. And Vietnam has said it is paying attention to Brics expansion. Xi has said that he supports Kazakhstan joining.
As observed in a briefing published by the Observer Research Foundation, “Although Brics as an entity has not signed any memorandum of cooperation with the [Belt and Road Initiative], nor has it ever jointly published any statement of intent about taking part in China’s flagship project, in Chinese strategic thinking, the [initiative] and Brics are deeply connected.”
Before long, Western nations may awake to a changed reality, one where their traditional trade and investment dominance has been undermined and the authority of multilateral institutions they control has been eroded.
Anthony Rowley is a veteran journalist specialising in Asian economic and financial affairs
