OBOR Initiative

OBOR Initiative

Colombo Port City Project and Chinese involvement

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Not much

Mains level : Chinese encroachment of Lankan Sovereignty

Sri Lanka recently passed the controversial Colombo Port City Economic Commission Bill, which governs the China-backed Colombo Port City project worth $1.4 billion, amid wide opposition to the creation of a “Chinese enclave” in the island nation.

Colombo Port City Project

  • The Colombo Port City has grabbed headlines in Sri Lanka in recent months even as the relentless third wave of the COVID-19 pandemic sweeps through the country.
  • Almost an artificial island, the territory coming up on 2.69 square kilometers of land reclaimed from Colombo’s seafront has stirred controversy since its inception.
  • Those backing it see in that patch of land their dream of an international financial hub — a “Singapore or Dubai” in the Indian Ocean.

When was it launched?

  • The project was launched in September 2014 by Chinese President Xi Jinping during a visit to the island nation under the Mahinda Rajapaksa administration’s second term.
  • After President Mahinda Rajapaksa was ousted in January 2015, the successor “national unity” government of Maithripala Sirisena and Ranil Wickremesinghe went ahead with the project after briefly halting it.
  • On returning to power in November 2019, the Rajapaksas vowed to expedite the project. The Sri Lankan government says the project will bring in around 83,000 jobs and $15 billion initially.

Issues with the project

  • But skeptics claim that it could well become a “Chinese colony”, with the Bill, which is now an Act.
  • The law provides China substantial “immunity” from Sri Lankan laws, besides huge tax exemptions and other incentives for investors.

What is the extent of China’s involvement?

Effectively, China has substantial control over two key infrastructure projects in Sri Lanka for a century.

  • The port city project is financed chiefly through Chinese investment amounting to $1.4 billion.
  • In return, the company will receive 116 hectares (of the total 269 hectares) on a 99-year lease.
  • The city separates from but located adjacent to the Colombo Port, the country’s main harbor — is the third major port-related infrastructure project where China has a significant stake.
  • China Merchants Port Holdings has an 85% stake in the Colombo International Container Terminal under a 35-year ‘Build Operate and Transfer’ agreement with the Sri Lanka Port Authority.
  • In 2017, the Sirisena-Wickremesinghe administration, unable to repay the Chinese loan with which it was saddled by the previous government, handed over the Hambantota Port to China on a 99-year lease.

Concerns from within Sri Lanka

  • Since its launch, the Colombo Port City project has faced opposition from environmentalists and fisherfolk, who feared that the project would affect marine life and livelihoods.
  • However, in the absence of wider political and societal support, their resistance did not dent successive governments’ resolve to pursue the project.
  • The more recent opposition was specific to the Colombo Port City Economic Commission Bill.
  • The resistance came from Opposition parties and civil society groups, including many who do not oppose the project per se, but rather its governance by “an all-powerful commission answerable to no one”.
  • Significantly, a section of Buddhist monks, wielding much influence in Sri Lankan politics and the Sinhala society, also opposed the Bill and said that it eroded Sri Lanka’s sovereignty.

OBOR Initiative

China’s 17+1 Cooperation Forum

Note4Students

From UPSC perspective, the following things are important :

Prelims level : 17+ 1 Forum

Mains level : Not Much

Lithuania has decided to quit China’s 17+1 cooperation forum with central and eastern European states that include other EU members, calling it “divisive”.

About 17+ 1 Forum

  • The forum is an abbreviation for Cooperation between China and Central and Eastern European Countries.
  • It is an initiative by the Chinese Ministry of Foreign Affairs to promote business and investment relations between China and 16 countries of CEE (CEEC).
  • The countries are Albania, Bosnia and Herzegovina, Bulgaria, Croatia, the Czech Republic, Estonia, Greece, Hungary, Latvia, North Macedonia, Montenegro, Poland, Romania, Serbia, Slovakia, and Slovenia.
  • The format was founded in 2012 in Warsaw to push for the cooperation of the “17+1” (the 17 CEE countries and China).
  • Its goals are to promote the Chinese Belt and Road Initiative and enhance cooperation in the fields of infrastructure, transportation, and logistics, trade and investment”.

OBOR Initiative

What is Blue Dot Network?

Note4Students

From UPSC perspective, the following things are important :

Prelims level : Blue Dot Network, BRI

Mains level : Blue Dot Network

A group of US Senators has written to India asking to join the Blue Dot Network.

Try this MCQ:

Q.The Blue Dot Network recently seen in news is a global alliance for:

a) Beaches Certification

b) Infrastructure development

c) 5G connectivity

d) Patents regulation

The Blue Dot Network

  • Blue Dot is a US-led collaboration with Australia and Japan that supports private-sector-led infrastructure financing opportunities in response to China’s Belt and Road Initiative (BRI).
  • It was formally announced on 4 November 2019 at the Indo-Pacific Business Forum in Bangkok, Thailand on the sidelines of the 35th ASEAN Summit.
  • It is led by the U.S. International Development Finance Corporation, Japan Bank for International Cooperation, and Department of Foreign Affairs and Trade of Australia.
  • It is expected to serve as a global evaluation and certification system for roads, ports and bridges with a focus on the Indo-Pacific region.

Fundamental difference between BRI and Blue Dot

  • While the former involves direct financing, giving countries in need immediate short-term relief, the latter is not a direct financing initiative and therefore may not be what some developing countries need.
  • The question is whether Blue Dot offering first-world solutions to third-world countries.
  • Secondly, Blue Dot will require coordination among multiple stakeholders when it comes to grading projects.
  • Given the past experience of Quad, the countries involved in it are still struggling to put a viable bloc. Therefore, it remains to be seen how Blue Dot fares in the long run.

OBOR Initiative

G7 Countries  

Note4students

Mains Paper 2: IR| India and its neighborhood- relations.

From UPSC perspective, the following things are important:

Prelims level: Belt and Road Initiative

Mains level: Concerns raised by Belt and Road Initiative


News

  • Italy set to become first G7 country to join ‘Belt and Road’ initiative.

About G7

  • The G7 or the Group of Seven is a group of the seven most advanced economies as per the International Monetary Fund (IMF).
  • The seven countries are Canada, USA, UK, France, Germany, Japan and Italy. The EU is also represented in the G7.
  • These countries, with the seven largest IMF-described advanced economies in the world represent 58% of the global net wealth ($317 trillion).
  • The G7 countries also represent more than 46% of the global gross domestic product (GDP) based on nominal values, and more than 32% of the global GDP based on purchasing power parity.
  • The requirements to be a member of the G7 are a high net national wealth and a high HDI (Human Development Index).

Eyebrows raised in West

  • Italy’s decision to get closer to Beijing has caused concern amongst its Western allies notably in Washington.
  • The White House National Security Council has earlier urged Rome not to give ”legitimacy to China’s infrastructure vanity project”.
  • Critics of the BRI say it is designed to bolster China’s political and military influence, bringing little reward to other nations, and warn that it could be used to spread technologies capable of spying on Western interests.
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