Home » ROADBLOCKS FOR OBOR
29 Nov 17/Wednesday.
The Chinese dream of selling OBOR as a mega project met with roadblocks from many nations including its long-time strategic partner Pakistan. Will these roadblocks for OBOR mean a win for its arch-rival India is a matter to be seen in the near future. A series of setbacks recently have dampened the spirit in the Chinese camp especially their policymakers.
One of the biggest setbacks came in the form of cancellation Daimer-Bhasa hydro-electric project by Pakistan at a total cost of $14 billion. This was the result of strict conditions which were to be satisfied by the Pakistani side for ownership of the project. According to Muzammil Hussain, Chairman of Pakistani Water and Power Development Authority (WAPDA), the project is not doable as it is not viable, and is against the national interests of Pakistan. He had given his remarks in Public Accounts Committee on the status of Daimer-Bhasa Hydro-Electric Project, which is being considered by Pakistani Government as one of the mega projects undertaken by it.Earlier the Government of Pakistan had approached various global financial bodies for financing the project. However, as the project fell in disputed territory these financial bodies showed their reluctance and refused to finance the project, as India had serious objections to the project.
A detailed report about WAPDA – Public Accounts Committee incident is here.
“To bait fish withal: if it will feed nothing else, it will feed my revenge.”
Shakespeare, Merchant of Venice.
It may be noted that Chinese may consider granting few concessions to ensure that OBOR rolls out smoothly. Pakistan has already made it clear by publicizing its displeasure so that it can cash into the home turf advantage. By the statements Mr Hussain it is clear that Pakistan already considers the project is against its national interests and is just short of portraying it as Shylock, the merchant of Venice. China tried to short-change Pakistan by trying to take its pound of flesh from the meatiest part i.e. the securitisation of this project by pledging of another operational project in Pakistan and taking charge of the entire operational and maintenance cost. There seems to be a serious misunderstanding or crack between erstwhile all weather friends.
On 12 November 2017 the Deputy Prime-Minister of Nepal, Kamal Thapa tweeted that Nepal has scrapped Budhi Gandhaki hydro-electric project, $2.5 billion contract with China’s Gezhouba Group. “The project was concluded in an irregular and thoughtless manner and rejected under the direction of Parliamentary Committee,” he said. This was a bilateral deal – the MOU which was signed in June 2017 – covered the building of a 1200 MW hydro-electric project at a distance of 80kms from Kathmandu if Nepal agreed to join OROB. This project is presently being awarded to India.
Before Nepal’s scrapping of the Budhi Gandhaki hydro-electric project, the $3.6 billion Myitsone dam, in Myanmar to tame river Irrawaddy (Ayeyarwady River) was scrapped by the then President of Myanmar Thein Sein on 30 Sept 2011. However, China is still continuing its efforts with Myanmar quite persuasively to revive this project. The Myanmar Government of date, has quite obviously seen how Sri Lankans Government was short-changed by China with respect to the Hambantota port project. Had the project been completed as planned in 2017, it would have been the fifth largest hydroelectric project in the world producing 6000MW of power.
The Chinese cunning ways to secure regional hegemony has now been superseded by its more important economic imperative. Its slowing economy which bloated till recently has slowed unable to maintain its momentum has internally started crumbling. The Chinese Polity is aware of the same, thus is not able to concentrate in the same vigor as in the past. Based on this 19th party Congress had recently emphasised on a market-based allocation of resources and a shifting towards greater rewards to risk the overall profile of investments.
Chinese are encountering these issues at a time when Indian is trying to vigorously reach out towards its neighbours after a change in the regime in India under Prime Minister Narendra Modi. When the Indian PM visited Philippines, he reiterated a need for need and commitment for a free and open Indo-Pacific region. He joined the Japanese initiative which was a strategic initiative by the Quad, i.e. the US, Japan, India and Australia, that was being resisted by previous Indian regime under Prime Minister Manmohan Singh. This is to ensure freedom of navigation and overflight and lawful commerce in international waters and overall maritime security and infrastructure development and rule of law in the Indo-Pacific. The regional reference “Indo-Pacific” instead of “Asia Pacific” has added significance and changed perceptions.
It clearly shows Indian concern on increased Chinese influence in the common neighbourhood of India and China, which was not previously appreciated by Indians. This also shows that the concern of these countries is not the South China Sea but to the South of South China Sea and thus not require Chinese in their fold. Thus, in a way limiting if not eliminating the Chinese influence.
Our Detailed report on Indo-Pacific Quad is here.
Indian diplomatic corps can surely pat themselves as they have been able to convince most of their neighbourhood countries that their commercial and non-commercial engagements with India can rejuvenate their economies more securely than engaging with the Chinese. In the time Indian economy has been growing slowly and sturdily inspite of world economy showing a negative trend. This indeed has been a feather in its cap which attracted most of the world economies to welcome their preferential offers to Chinese offers.
It’s now for the Pakistan as a nation to think what course of action it will take such that its future is secure and sound. Hope the Pakistani leadership keeps the national interest on top.