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Is BRI Turning China Into ‘Loan Shark’?

Nepal was promised an investment worth $10 billion under the Belt And Road Initiative (BRI) of China. So far, Nepal has not received a single crumb of penny under this project. Even when Nepal receives the promised amount for its infrastructure projects, corruption and China’s expansionist military ambitions may set up hurdles against Nepal’s development dreams.

By Ranjana Thapa Magar, KATHMANDU:- In 2017, Nepal became the first country in South Asia to join China’s global infrastructure project – the Belt And Road Initiative (BRI). Nepal was not alone in signing the Chinese development project, as 60 more countries signed the BRI with China. Launched with big promises, BRI project is now being questioned for the lack of transparency, cumbersome burden of hidden debts and the rise of China as a loan predator.

According to a research from AidData, more than 40 Low And Middle Income Countries (LMIC) have Chinese loans and debts amounting to over 10 percent of their Gross Domestic Product (GDP), each. At least 35 percent of the BRI projects have been hit hard with significantly noticeable problems of corruption, embezzlement, labor exploitation, public protests and environmental degradation.

BRI, with its easy loan parameters and wooing maneuvers, was well received when it was launched. However, those feeble parameters were for luring LMICs to fall into the expansionist trap of China, where hidden debts, coupled with complex terms and conditions, were in waiting. Some recipient countries were even forced to pave way for China’s military ambitions and bases in their sovereign lands.

Nepal was promised an investment worth $10 billion under the BRI. So far, Nepal has not received a single crumb of penny under this project. Even when Nepal receives the promised amount for its infrastructure projects, corruption and China’s expansionist military ambitions may set up hurdles against Nepal’s development dreams.

The research of AidData, which analyzed more than 13,000 Chinese development projects worth over $840 billion and operating in 165 countries, found that China had gifted more than $385 billion in hidden debts for the recipient countries. With high interest rates and multiple binding clauses, those hidden debts would only worsen the recipient country’s situation in terms of indebtedness and dependence.

It is high time for Nepal to be realistic and pragmatic before considering Chinese loans and debts for its infrastructure projects. Chinese loans will definitely come with strings attached. It’s not going to be a Chinese charity event only for Nepal. China will calculate every penny before it diverts its currency yuan into the rivers, roads, hills and plains of Nepal for its development projects.

Nepal and all developing countries have to be cautious and make sure China charges them a very minimal interest rate, or otherwise, they should have the choice – well placed in the Memorandum of Understandings (MoUs) – to convert the loans into development aids. A recipient country of BRI or any other Chinese project must be able to ask China, if there are any hidden clauses of debt, of if China is intentionally keeping loopholes for corruption, or if China is not interested in ensuring rights of the labors involved, or if China can or cannot keep environmental hazards to an unremarkable level.

Above all, BRI and other Chinese projects’ recipient countries must be able to ask China if China is itself turning into a “loan shark” and behaving as a predator for the recipients.

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For Indian tourists travelling by land:- 72 hours (-ve) C-19 report, CCMC form and Antigen Test at entry point

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