Is the Belt and Road Initiative a Success or a Failure?

Let’s explore the developments surrounding the Belt and Road Initiative (BRI).

Since its inception in 2013, the BRI has made investments exceeding $1 trillion, leading to the creation of infrastructure projects that connect partner countries to the rest of the world. Most of these projects are located in the Global South, including regions in Asia, Africa, and Latin America. There have also been significant infrastructure developments in Europe, notably in Greece, which has experienced a recovery following a financial crisis over a decade ago.

The BRI was developed by China to facilitate connections between countries worldwide. The initiative focuses on building essential infrastructure that supports economic development and enhances trade for participating nations. Many of these infrastructure projects have been successful, notably redefining the economies of the countries involved, allowing for faster and easier trade.

One notable success is the Jakarta-Bandung High-Speed Rail, which connects Indonesia’s capital, Jakarta, with the city of Bandung. This project has been so effective that Indonesia is considering expanding it throughout the rest of Java. Travel time between Jakarta and Bandung, which used to exceed two hours, has been reduced to just 30 minutes. The high-speed rail is so reliable that some Jakarta residents have chosen to relocate to Bandung for its affordability and convenience. Discussions are currently underway to extend the high-speed rail to the city of Surabaya.

Another successful project is the Addis Ababa-Djibouti Railway, which connects the landlocked country of Ethiopia with the port city of Djibouti. This railway has significantly boosted Ethiopia’s economy by facilitating quicker and easier trade with other countries, while Djibouti has also benefited economically from the partnership.

The Piraeus Port in Greece is another success story, growing into the fourth-largest port in Europe thanks to the BRI, which has strengthened Greece's role as a European shipping hub.

While numerous projects have been successful, some have faced challenges but continue to operate. One example is Sri Lanka’s Hambantota Port. Although the project has been completed, the Sri Lankan government struggled to meet its financial obligations due to unsustainable debt levels, leading to the port being leased to China for 99 years.

The China-Pakistan Economic Corridor (CPEC) presents a mixed bag of accomplishments and challenges. CPEC has successfully facilitated the construction and upgrading of thousands of roads and highways, as well as revamping the Gwadar Port. It has also generated over 13,000 MW of electricity through various means, helping to alleviate Pakistan’s severe power shortages. The connectivity from China’s Xinjiang province to the Arabian Sea via Pakistan has improved. However, CPEC faces significant issues. Pakistan currently has a staggering debt of $60 billion related to the BRI projects. Many railway upgrades, special economic zones, and industrial parks are either delayed or inactive. The second phase of CPEC, which aims to boost manufacturing and job creation, has lagged as well. Critics argue that local populations, particularly in underdeveloped areas like Balochistan, have not reaped many benefits, and protests have erupted in Gwadar over water shortages, land rights, and job availability. Security incidents, including attacks by militants on Chinese workers and infrastructure, have also hindered progress, increasing costs and slowing development. Consequently, while CPEC has had its achievements, it has not yielded the anticipated economic growth for Pakistan, which has seen GDP growth of less than 3%. Given Pakistan's population of 255 million, the economy should ideally be growing by more than 6% due to the BRI, but it is not.

In summary, approximately 60 to 65% of BRI projects are considered successful or on track. About 20 to 25% can be categorized as partial successes or delayed projects, while around 10 to 15% have failed or been canceled.

For more insights into global economics, consider reading my book titled “The Book of One.” For additional information, please visit my website at www.booksofone.com. If you have any questions or suggestions, feel free to comment or email me at carlosrelanojr@booksofone.com.