The Saturation of Multilateralism: A Perspective on the Belt and Road Initiative

In contemporary world politics, the significance of multilateralism has been reduced to merely being a platform for grievance redressal. Despite having a proven track record of effectiveness, multilateral institutions have been overshadowed by the great powers. With increasing Asian dominance, it does not seem that the scenario is likely to change. However, the Asian regional dynamics has certainly redefined the idea of multilateralism with the initiation of the Belt & Road initiative that has given birth to a new kind of regional governance having mutual benefits, unlike conventional neo-liberal structuralism. One needs to understand the difference between multilateral constitutionalism (viz. EU) and multilateral institutionalism. The former is binding, which faces saturation and stagnancy; but the latter is co-operational which continuously provides scope for renewals and reforms. Certain aspects of multilateral institutionalism are discussed in terms of Belt & Road initiative with a focus on the following four points – (a) US-China equation and EU, (b) China’s unbalanced economy, (c) Eurasian expansion and (d) An alternative strategic route for India.

US-China equation and EU.

In the pursuit of developing a larger Eurasian relationship, the focus of the Belt & Road initiative is to link Asia, Africa and Europe where the last one being the ultimate destination since it comprises the largest economy in the world. With regard to the Silk route exclusively, the initiative seeks to connect China, South Asia, West Asia, Central Asia, Russia and Europe, which is expected to be a breakthrough in the history of global transportation systems. 77% of the total population of the world is expected to live in the Asian and African continents by the end of 2030, which raises tremendous potential for trade expansion among the continents with Europe. Moreover, the extensive trade potential calls for state-of-the-art security arrangements that has compelled China, India, Saudi Arabia, Japan and North Korea to spend enormously on military development. In fact, India and Saudi Arabia are jostling to become the biggest arms importers of Asia. In such a scenario, arguably the Belt & Road initiative poses significant challenges to US unilateralism. Amidst the competition between the rising Asian powers, EU’s option could be to align with the Asian partners and promote co-operations for economic and social opportunities. Despite having strong and profound alliances with the West, EU’s transatlantic partnerships seems to have failed with the newly generated populist politics. In fact, the plans for an ambitious European Defense Union project by 2025 looks poised for failure due to lack of consensual unanimity and subordination to NATO. With the West raising the tariff (viz. import duty hike on steel and aluminum) and non-tariff barriers (viz. H1-B visa restrictions), the best chance of EU remains in the involvement with the Belt & Road initiative to forge a comprehensive political and economic relation where China plays a substantial part. It certainly does not advocate the alleged bipolarity between US and China but support the shift of potential control of global governance from the West to Asia where EU markets may serve the best.

China’s unbalanced economy.

Needless to mention that the Belt & Road initiative reflects the Chinese foreign policy to a large extent. However, it is also undeniable that the project, theoretically, extends the possibilities of new investments and trade development with mutuality. The major issue with the Chinese economy is the gap between the domestic consumption levels that are much lower than the investments. Most of the liquidity in the economy is channelized to the state enterprises either in the form of savings of citizens or subsidies, leading to lack of investments in private sectors, negligible employment generation, low income levels. Contrarily, the land-use rights of the state are stringent enough to restrict the labor movement. The non-financial debt rose to 250% in 2016 from 100% of the GDP in 2014-15. However, China has managed to develop CITIC Ltd. and other multilateral funding institutions for the Silk Route project, which conveys its importance in such a peculiarly autocratic free market economy.

Eurasian expansion.

Three out of the six economic corridors are the subject of connectivity between Asia and Europe. They are – (i) China-Mongolia-Russia Economic Corridor, (ii) New Eurasia Land Bridge Economic Corridor and (iii) China-Central Asia-West Asia Economic Corridor. These routes mainly encompass the Eurasian Economic Union (EEU) consisting Russia, Belarus, Kazakhstan, Kyrgyzstan and Armenia to end at different points in Europe. The emphasis is on avoiding the Middle-Eastern turbulence while importing energy resources. Moreover, the corridors will reduce t 50% of the time taken through the ocean routes. The Chongqing-Europe International Express Railway (2011), the Chengdu- Lodz Express Railway and the China-Central Asia Gas pipelines are examples. The projects have been undertaken jointly by the countries in question.

An alternate strategic route for India.

From the Indian perspective, if strategically undertaken, an alternate identical Route and Belt could be developed as a comparative economic and security measure. With the development of Chabahar port, a multilateral approach could be undertaken to construct a land route from Iran to Europe via Turkey, which could connect India’s west coast to Europe. Additionally, the transit route from Iran could be extended to Russia via Turkmenistan, Uzbekistan and Kazakhstan which may be used to bypass Pakistan, Afghanistan and China to import Russian and Central Asian oil and natural gas amidst the political tensions. The suggested India-European corridor could also be utilized for importing oil and natural gas extracted from the Mediterranean (leviathan field). The development of the Kolkata port would be pivotal to develop a sound control over the Indian Ocean region. The important Indian ports such as Mumbai and the Vizag port are directly connected to Kolkata port that is significant for countering the so-called “String of Pearls”. What matters is the development of relations with the ASEAN states and work on the sub-regional institutions already formulated, such as BIMSTEC.

However, it is time to change the perspective from the confines of the fearfully static thought process to a more dynamic one. India is believed to be capable enough to protect its sovereignty and promote its economic aspirations simultaneously. What is needed is zeal and a fearless outlook to counter and devise equally productive alternatives. Multilateralism in this regard may provide endless opportunities for India in the future.

Debasish Das
Adjunct Researcher, AGA
21/4/2018
(The content was articulated in a panel discussion in the Workshop on “Corridors of Engagement” at West Bengal State University, Barasat under the auspices of WBSU and Asia in Global Affairs).