Coronavirus and it’s impact on the Belt and Road

The Corona Virus epidemic has shaken the world in numerous ways. The virus which first emerged in the Chinese city of Wuhan (Hubei province)  has led to the loss of over 12000 lives globally – three countries most impacted so far have been Italy, China and Iran., 4,825 lives have been lost in Italy, 3,287 lives have been lost in China, and over 1,500 lives in Iran have been lost as of Saturday, March 21, 2020.

While there are reports, that China is limping back to normalcy, the overall outlook for the country’s economy is grim, to say the least, with some forecasts clearly predicting, that even with aggressive stimulus measures China may not be able to attain 3% growth this year.

The Chinese slow down could have an impact on the country’s ambitious Belt and Road Initiative (BRI). While China has been trying to send out a message, that BRI will not be impacted excessively, the ground realities are likely to be different, owing to a number of factors. 

One of the important, and more controversial components of the BRI has been the 62 Billion USD, China Pakistan Economic Corridor (CPEC) which has often been cited as a clear indicator of ‘Debt Trap Diplomacy’ (this some analysts argue, is China’s way of increasing another country’s dependency on it, by providing loans for  big ticket infrastructural projects, which ultimately lead to a rise in debts).

It is not just the US, and multilateral organizations like the  International Monetary Fund (IMF), but even many in Pakistan, including politicians, have questioned the CPEC project, with regard to it’s transparency and long term economic implications. Yet, the Imran Khan led Pakistan Tehreek-E-Insaaf  (PTI) government, and the previous Pakistan Muslim League (Nawaz)  (PML-N) government have given the project immense importance arguing, that it would be a game changer for the South Asian nation.

On more than one occasion, Beijing has assured Pakistan, that CPEC will go ahead as planned. Chinese Ambassador to Pakistan, Yao Jing, has stated emphatically, that the project will not be hit in spite of the Corona Virus. Senior officials in the Imran Khan government including the Railway Minister, Sheikh Rashid Ahmed and even Foreign Minister, Shah Mehmood Qureshi in an interview to the Global Times stated that while in the short run Corona may have an impact on CPEC, in the long run there would be no significant impact.

Analysts in Pakistan however believe that it is optimistic to argue, that there will be no impact of the Virus on the CPEC project, given the fact that a large number of Chinese workers who had left Pakistan are unlikely to return. Since February 2020, a number of reports have been predicting that the CPEC project is likely to be impacted significantly. Apart from this, Pakistan’s economy is likely to be hit by the virus, the number of cases affected by it is also increasing (as of March 22, 2020 there were over 600 cases and 4 casualties)

Similarly, in the cases of other countries too, there are likely to be significant problems with regard to in China as well as the fact that Chinese workers can not travel . Apart from the fact that Beijing is not likely to send workers for BRI projects, in the  aftermath of the corona virus, countries will themselves not be in a position to focus on BRI related projects at least for sometime. 

 Some projects, which had begun to slow down even before the outbreak spread globally were in Indonesia and Bangladesh. In Indonesia, a high speed rail project connecting Jakarta with Bandung (estimated at 6 Billion USD) has slowed down, since the beginning of the year. Ever since, the onset of the Corona Virus skilled Chinese personnel have been prevented from going back to Indonesia. Bangladesh too has announced delays on the Payra Coal power plant since February 2020. As casualties arising out of the virus increase in Indonesia, and other parts of Asia and Africa, the first priority for countries is to prevent the spread of the virus.

. While it is true, that Beijing would want to send a clear message of keeping its commitments, to match up to its earlier targets is not likely to be an easy task. Even before the outbreak, there were issues due to the terms and conditions of the project, and a number of projects had to be renegotiated due to pressure from local populations.

What China has managed to do successfully, is provide assistance for dealing with COVID 19. In response to a request for assistance from the Italian government, China has sent a group of 300 Doctors, as well as corona virus testing kits and ventilators to Italy. Founder of Ali Baba and one of Asia’s richest men, Jack Ma has also taken the lead in providing assistance to countries in need.  After announcing, that he will 500,000 coronavirus testing kits and 1 million masks to the United States, Ma pledged to donate more than 1 Million kits to Africa, on Monday March 17, 2020 and on March 21,2020 in a tweet the Chinese Billionairre said that he would be donating emergency supplies  to a number of South Asian and South East Asian countries — Afghanistan, Bangladesh, Cambodia, Laos, Maldives, Mongolia, Myanmar, Nepal, Pakistan & Sri Lanka. The emergency supplies include, 1.8 million masks, 210,000 test kits, 36,000 protective suits and ventilators & thermometers.

China is likely to focus on helping signatories of the BRI to send out a positive message, that it is not bothered merely about it’s economic gains but in the long term

The Corona Virus has shaken the whole world, not just China, and the immediate priority of most countries is to control the spread of the pandemic and minimize the number of casualties. Countries dependent upon China, especially those which have jointed the BRI are likely to be impacted. What remains to be seen, is the degree to which BRI is affected, and how developing countries which have put high stakes on BRI related projects respond.

Tridivesh Singh Maini
Tridivesh Singh Maini
Tridivesh Singh Maini is a New Delhi based Policy Analyst associated with The Jindal School of International Affairs, OP Jindal Global University, Sonipat, India