During the past few months, the South Asian region, home to one fourth of the global population and one of the least economically integrated regions in the world, faced several political and economic challenges that may have long-term consequences. One of the important factors in shaping both internal and external politics in the region has probably been the China factor based on its Belt and Road Initiative (BRI). Indeed, China with its investment projects became an essential part of the political and economic life of the region. Particularly, the recent elections in Pakistan, Bhutan and the Maldives showed direct and indirect impact of pro- and anti-Chinese moods in shaping domestic politics of these countries, as well as their foreign-policy orientations. Notably, the top Chinese projects in Asia in terms of value are hosted by Pakistan, Bangladesh and the Maldives [Nation, 2018]. China also maintains multi-dimensional cooperation with other South Asian states, including Afghanistan, Bangladesh, India, Nepal, and Sri Lanka. Beijing’s main interest in the region is to secure trade and energy resources, as well as to maintain stability of the so-called Af-Pak region, the U.S.-invented term to designate Afghanistan and Pakistan, including by countering the extremist groups such as the East Turkestan Islamic Movement. However, there is a concern that China’s proactive policy in South Asia will further exacerbate the geopolitical rivalry in the region.
In order to understand why the Chinese factor has strongly influenced the recent internal political transformations in the South Asian states, it is necessary to assess the ongoing politics in the region and the BRI’s role in it. Pakistan by far is the most peculiar case to look at. With the launch of the China-Pakistan Economic Corridor (CPEC), the flagship project of the BRI, in 2015, Pakistan became the initiative’s largest beneficiary in South Asia. The CPEC is aimed at upgrading Pakistan’s Gwadar Port and creating an extensive network of roads and railways, as well as energy infrastructure, including oil and gas pipelines, which would link China to the Arabian Sea. Since its launch, the CPEC was perceived as an essential element of Pakistan’s national strategy due to China’s $62 billion commitment equal to 20% of Pakistan’s 2017 GDP [The Financial Express, 2018a]. However, at present, according to the IMF report, Pakistan is experiencing a deep economic crisis caused by mismanagement, poor planning and corruption that have led to the accumulation of the $95 billion foreign debt and overall worsening of the country’s economic conditions. These severe economic problems influenced the outcome of the general election held in July 2018, when the victory of Imran Khan of the Pakistan Tehreek-e-Insaf (PTI) party, who was critical of Chinese investments, ended the traditional political dominance of the two parties – the Pakistan Muslim League (Nawaz) and the Pakistan People’s Party. This happened largely due to people’s anger over pervasive corruption and poor governance. In November 2018, as Pakistan’s new prime minister, Imran Khan visited China, in addition to visits to Saudi Arabia, the United Arab Emirates and Malaysia, in order to receive financial assistance that is crucial for Pakistan to avoid a balance of payments crisis caused by the policies of Khan’s predecessor, Nawaz Sharif. Meanwhile, Beijing takes its time in providing financial aid, emphasizing that it does not want Pakistan to be totally dependent on China, since it has already provided $6 billion through the CPEC since last year to support Islamabad’s depleting foreign exchange reserves [South China Morning Post, 2018]. Given this situation, Imran Khan reluctantly seeks to receive a bailout package from the IMF in case if China fails to provide promised financial assistance. At the same time, Khan’s government understands the significance of China-funded projects for Pakistan’s economic development and makes efforts to contain the rise of anti-Chinese sentiment in the country. Thus, despite his emphasis on more transparency around the CPEC, Imran Khan sets continued cooperation with China as his immediate priority.
Sri Lanka’s ongoing political crisis is also centered on questions concerning Chinese initiatives in the country. During former president Mahinda Rajapaksa’s tenure in 2005-2015, Beijing was gradually involved in the Sri Lankan politics, in addition to its large-scale investments, including in the renovation of the Hambantota and Colombo ports and other infrastructure and energy projects. In October 2018, incumbent Sri Lankan President Maithripala Sirisena fired Prime Minister Ranil Wickremesinghe, who was seen as a pro-Indian politician, on charges of corruption and appointed Rajapaksa to replace him, causing a new imbalance in the competition of whether a pro-Chinese or pro-Indian statesperson will be in charge of the government. The appointment was criticized by the opposition, accusing the government in pushing Sri Lanka into an inescapable debt trap set by China over the deal concerning the Hambantota Port [Asia Times, 2018]. Thus, economic dissatisfaction with the Chinese projects underpinned the political conflict in Sri Lanka, and, moreover, the country’s domestic politics was fueled by the geopolitical rivalry between China and India, with both perceiving Sri Lanka as their sphere of influence.
Meanwhile, the September 2018 presidential election in the Maldives also focused on concerns stemming from the Chinese actions in the region. Following the victory of Ibrahim Mohamed Solih, who is considered a pro-Indian politician, the Maldives located strategically in the Indian Ocean gained a close attention due to the ongoing China-India contest for influence in the region. The importance of the election result was seen when Indian Prime Minister Narendra Modi made his first visit to the Maldives to attend Solih’s inauguration ceremony [The Financial Express, 2018b]. For its part, China fears that the incumbent president will revert some decisions favoring Beijing made by previous president Abdulla Yameen, thus threatening the viability of the ongoing Chinese projects. However, the Chinese side have already invested in a number of large-scale projects, including the 2-km long bridge to connect the country’s major airport to the capital city and several other long-term leases, so it might be difficult for the new Maldivian leadership to roll back the Chinese projects.
Interestingly, Bhutan, the only South Asian state that is still to establish diplomatic relations with China, also held the elections to its National Assembly in November 2018, the results of which may have deep implications for the region. Particularly, Bhutan, which is considered India’s satellite state, could potentially diversify its foreign policy and start cooperating with China. Beijing’s possible economic expansion in Bhutan would further enhance the Chinese presence in the region.
As seen from the above analysis, even though China provides loans and financial aid for creating giant networks of physical and communications infrastructure in South Asia, domestic politics and economic conditions in the regional countries exacerbated by other internal factors make the ongoing BRI projects vulnerable. Government changes, financial mismanagement, corruption, as well as the geopolitical competition, are among the major factors that have an impact on China’s position in the South Asian region. Moreover, as the region is strategically important for other key players besides China, such as India and the United States that perceive the region as their traditional sphere of influence, external geopolitical intrigues exert a major influence on internal political developments in the South Asian states. In any case, it should be recognized that China has already made a good progress in establishing itself as a dominant power in South Asia.
References:
Asia Times (2018). Winds of change in South Asian politics. Retrieved from http://www.atimes.com/winds-of-change-in-south-asian-politics/. Accessed on 26.12.2018.
Nation (2018). China’s growing influence in South Asia. Retrieved from https://nation.com.pk/05-Aug-2018/china-s-growing-influence-in-south-asia. Accessed on 26.12.2018.
South China Morning Post (2018). Imran Khan’s China play threatens Middle East headache for Beijing. Retrieved from https://www.scmp.com/week-asia/geopolitics/article/2171254/khans-china-play-threatens-middle-east-headache-beijing. Accessed on 26.12.2018.
The Financial Express (2018a). Bangladesh, Malaysia, Pakistan to gain most from Belt and Road Initiative project. Retrieved from https://thefinancialexpress.com.bd/economy/bangladesh/bangladesh-malaysia-pakistan-to-gain-most-from-belt-and-road-initiative-project-1524116263. Accessed on 10.12.2018.
The Financial Express (2018b). PM Modi to attend swearing-in ceremony of Maldives’ new President Ibrahim Mohamed Solih. Retrieved from
https://www.financialexpress.com/india-news/pm-modi-to-attend-swearing-in-ceremony-of-maldives-new-president-ibrahim-mohamed-solih/1384534/. Accessed on 26.12.2018.
Note: The views expressed in this blog are the author’s own and do not necessarily reflect the Institute’s editorial policy.