Belt & Road Initiative (BRI): Significance & Challenges of OBOR - UPSC Notes

The Belt and Road Initiative BRI was earlier known as One Belt One Road. It is a strategy launched by the People’s Republic of China to connect Asia with Africa and Europe via land and sea networks. This is to improve regional integration, increase commerce, and stimulate economic growth. The One Belt One Road is an ambitious initiative to build two new economic routes connecting China to the rest of the globe. However, the programme is about much more than just infrastructure. 

This article on the Belt and Road Initiative UPSC will be extremely beneficial in the upcoming UPSC preliminary and General Studies Paper II of the Mains examinations. 

In this article on the Belt and Road Initiative UPSC, we will look into the objectives, working, and India’s stand on the BRI as required for UPSC.

Also, check out Shanghai Cooperation Organization (SCO) here.

What is the Belt and Road Initiative?

One Belt One Road (OBOR) is also known as the Belt and Road Initiative BRI. It is a global infrastructure development strategy adopted by the Chinese government in 2013. Its aim is to invest in more than 150 countries and international organizations. It is considered a centerpiece of the Chinese leader Xi Jinping's foreign policy. 

Read about International organisations Here.

Why the name the Belt and Road Initiative BRI?

The China Belt and Road Initiative BRI is named after the ancient Silk Road. It is a network of trade routes that connected China to the rest of the world for over 1,500 years. The BRI seeks to revive these ancient trade routes and create new ones.

The name "Belt and Road" is a reference to the two main components of the BRI: 

The Silk Road Economic Belt: The Silk Road Economic Belt is a land-based route. It connects China to Central Asia, Europe, and the Middle East. 

The 21st Century Maritime Silk Road: The 21st Century Maritime Silk Road is a sea-based route. It connects China to Southeast Asia, South Asia, Africa, and Europe.

Study the article on the South China sea dispute here.

Objectives of the Belt and Road Initiative

The Belt and Road Initiative BRI aims to enhance global trade and stimulate economic growth by developing infrastructure and broadening trade links between Asia, Africa, and Europe. It focuses on building roads, railways, ports, and energy projects to create a modern Silk Road.

• The China Belt and Road Initiative is viewed as a critical component in the Chinese government’s efforts to revitalise the economies of the country’s core provinces, which have historically lagged behind richer coastal areas.
• The government uses the Belt and Road Initiative to stimulate and support businesses in these central regions, offering large budgets and pushing companies to compete for Belt and Road contracts.
• In that regard, it is comparable to the Marshall Plan that ended World War II — with the key distinction being that China assists other countries only based on common economic interests.

Study the article on BRICS here.

Working of the Belt and Road Initiative

The BRI works through a network of agreements and investments in infrastructure projects. China collaborates with participating countries. It provides funding and expertise for constructing and upgrading transportation and energy infrastructure, which facilitates improved trade routes and economic connectivity.

• The BRI consists of a Silk Road Economic Belt, a land route connecting China to southeast Asia, south Asia, Central Asia, Russia, and Europe.
• It is a 21st-century Maritime Silk Road, a sea route connecting China’s coastal regions to southeast and south Asia, the South Pacific, the Middle East, and Eastern Africa to Europe.
• The initiative specifies five primary objectives:
  • Coordination of policies
  • Connectivity of infrastructure;
  • unhindered trade;
  • financial integration; and
  • connecting people
• The BRI has been linked to a massive investment programme in infrastructure development, including ports, roads, trains, airports, power plants, and telecommunications networks.
• Volumes of Chinese state-led BRI lending have been declining since 2019. The BRI now emphasizes “high-quality investment,” including increased use of project finance, risk mitigation techniques, and green finance.
• The Belt and Road Initiative BRI is becoming an increasingly important umbrella framework for China’s bilateral trade with BRI partners: as of March 2020, 138 nations had joined the BRI by entering into a Memorandum of Understanding (MoU) with China.

Study the Act East Policy of India Here.

India’s Stand Over the One Belt One Road Initiative

India has expressed concerns over the BRI, primarily due to the China-Pakistan Economic Corridor (CPEC) passing through Pakistan-occupied Kashmir, which India claims as its territory. Consequently, India has not officially endorsed the initiative, citing sovereignty and strategic concerns.

• India has seen One Belt One Road with respect and skepticism. India has opted out of the OBOR, citing sovereignty, procedural, and leadership concerns. The key reason for India’s non-participation is the CPEC, which runs through Pakistan-occupied Kashmir (PoK). China is thought to be sensitive to India’s claims over PoK.
• Certain decisions that have an impact on India and are interpreted as China’s undisguised ambition for hegemony include the signing of a maritime agreement with Sri Lanka, the sale of eight submarines to Pakistan, the expansion of facilities at Gwadar port, and the construction of a base in Djibouti in Africa.
• India has two major concerns.
  • The first objection concerns the CPEC, a flagship OBOR project connecting Xinjiang in China and Gwadar in Balochistan via PoK and Gilgit-Baltistan. It is a Chinese initiative taken on its own. India sees it as an attack on its sovereignty as well. India favors regional cooperation, but it also aspires to hegemony.
  • It is concerned that Gwadar will become a Chinese naval station. India anticipates that China will encourage all countries and organizations to participate constructively.
• India also has other challenges, such as competent Chinese-built infrastructure all the way up to its borders with Tibet, Nepal, Bhutan, and Bangladesh.

Study the Five Finger Policy of China here.

Advantages of the Belt and Road Initiative to India

Despite India's reservations, the BRI could offer potential advantages. This includes improved regional connectivity, increased trade opportunities, and access to new markets, which could stimulate economic growth and development in the region.

• One Belt One Road Initiative is viewed as a danger to India’s sovereignty; however, the development of the Gilgit Baltistan region might diminish security challenges in India.
• India’s participation in the rest of the BRI strengthens her influence in decision-making to build the CPEC along lines that are beneficial to both India and Pakistan.
• Being a part of CPEC would allow India to direct trade in the oceans to a greater extent, which it has not been able to do with the existing infrastructure.
• As a result, India must consider economic reconnection with Pakistan while leaving the political matter on the back burner.
• The completion of CPEC is critical because a stable and economically robust Pakistan is required for peace and prosperity in the region; also, if India joined CPEC, it would have gained access to the POK region.

Study the article on the China-Indian ocean region forum here.

Disadvantages of the Belt and Road Initiative to India

The BRI poses strategic challenges to India. This includes increased Chinese influence in South Asia and neighboring countries. Additionally, it raises concerns about the economic and political sovereignty of countries heavily indebted to China due to BRI projects.

• China has assisted some of India’s neighbors, including Pakistan, Sri Lanka, and Bangladesh.
• India has avoided participating in the effort out of concern that it will increase China’s strategic position.
• The prospect of being saddled with debt is why India has remained away from the project thus far.
• Connectivity initiatives must adhere to financial responsibility guidelines to avoid projects that would create unsustainable debt loads on communities.
• Another source of concern for India is the projected China-Pakistan Economic Corridor (CPEC), which will run through Pakistan-occupied Kashmir (PoK).

Learn about the McMahon Line between India and China here.

How can India counter the China Belt and Road Initiative?

India can counter the BRI by strengthening regional partnerships and investing in its own infrastructure projects like the International North-South Transport Corridor (INSTC). It can also engage in multilateral forums to promote alternative economic and connectivity initiatives.

• India has laid out its rebalancing plan in response to China’s Belt and Road Initiative BRI, emphasizing the provision of soft loans for a variety of economic and capacity-building projects across continents.
• India's vigorous development cooperation program is important to its tight and multifaceted connections with many partner nations, particularly those in India’s immediate neighborhood.
• Concessional lines of credit (LOCs) from the Government of India (GoI) are an important component of this development partnership in various socioeconomic development areas such as power, transportation, connectivity, agriculture and irrigation, manufacturing industries, water and sanitation, and healthcare.
• India must accelerate its infrastructure projects and find methods to expand its area of influence. Here are three ways India might respond to China’s OBOR challenge:
  • First, India must improve internal connectivity, integrate the domestic market and link the country’s prosperous east coast to the interior provinces.
  • Second, according to the expert, India must modernize connections with neighboring nations across its land and sea borders.
  • Third, India should collaborate with countries like Japan and international agencies to strengthen regional connectivity in the Indian Subcontinent and beyond.

Study the article on India China Relations here.

Challenges Associated with OBOR in the South Asian Region

Here are the challenges associated with the One Belt One Road (OBOR) initiative, now known as the Belt and Road Initiative (BRI), in the South Asian region:

• Debt Dependency: Many South Asian countries are taking on significant debt to finance BRI projects, leading to concerns about debt sustainability and dependence on Chinese financing.
• Sovereignty Concerns: Large-scale infrastructure projects often entail significant Chinese presence and influence, raising concerns about sovereignty and the potential for political meddling.
• Environmental Impact: Several BRI projects have been criticized for their environmental impact, including deforestation, pollution, and disruption of local ecosystems.
• Labor Issues: There are reports of significant Chinese labor force involvement in BRI projects, which can reduce job opportunities for local populations and lead to labor disputes.
• Transparency and Governance: Lack of transparency in contract negotiations and project implementation raises concerns about corruption and governance, undermining trust in the initiative.
• Political Instability: Political instability in some South Asian countries can pose risks to the success and sustainability of BRI projects, affecting timelines and increasing costs.
• Regional Tensions: The strategic dimension of BRI, particularly in terms of infrastructure like ports and roads, can exacerbate regional tensions, including territorial disputes and rivalries among South Asian nations.
• Competition with Other Initiatives: BRI faces competition from other international infrastructure initiatives (like those led by the US, Japan, and India), which may lead to geopolitical competition and strain bilateral relations.

Study China Pakistan Economic Corridor Here!

Key Takeaways for UPSC Aspirants Scheme Overview: The Belt and Road Initiative (BRI), launched by China in 2013, aims to enhance global trade and stimulate economic growth across Asia and beyond by developing trade routes reminiscent of the ancient Silk Road. Components: BRI encompasses both the Silk Road Economic Belt, which connects China to Europe through Central Asia, and the 21st Century Maritime Silk Road, which links China to Southeast Asia, Africa, and Europe through sea routes. Economic Impact: The initiative aims to enhance economic connectivity and cooperation among participating countries, promoting infrastructure development, reducing trade barriers, and fostering economic integration. Geopolitical Implications: BRI has significant geopolitical ramifications, affecting global power dynamics. It increases China’s influence over participating countries and presents a strategic challenge to Western dominance, particularly in Eurasia. Infrastructure Development: BRI focuses heavily on infrastructure projects, including ports, railways, highways, and energy pipelines, which are intended to improve transportation and trade logistics. Debt Concerns: There are growing concerns about the 'debt trap' diplomacy, with many participating countries potentially accruing unsustainable levels of debt, leading to severe economic and political dependence on China. Strategic and Security Concerns: BRI’s extensive reach raises security concerns, with strategic projects, such as ports and railways, potentially being used for dual civilian and military purposes, thereby impacting regional security dynamics. Environmental and Social Issues: The large-scale infrastructure projects under BRI have faced criticism for environmental degradation, displacement of local communities, and insufficient adherence to social and environmental standards.

Study China’s String of Pearls here.

Testbook is an e-learning platform for preparing for any competitive exam. Aspirants can improve their preparation by participating in live coaching sessions, current affairs sessions, and taking tests available on our Testbook App. Get the Testbook App now!