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China’s Belt and Road Initiative (BRI) has ambitions to reshape the global economy by connecting more than 60 countries across Asia, Europe and Africa through trade and infrastructure projects. All told, it’s envisioned that nearly two-thirds of the world’s population will in some way be connected through BRI projects in the future. Some economists estimate BRI could increase global trade by 12%.
Despite these benefits, many questions have been raised about China’s motivations for the initiative, and whether Beijing can afford the US$1 trillion it has committed to infrastructure projects and its partners can afford the debt they are taking on. Some fear BRI could be a Trojan horse for global domination through debt traps.
Sri Lanka is often cited as a cautionary tale. Unable to repay the loans on a US$1.5 billion port construction project, the Sri Lankan government agreed to give China a 99-year lease on the port instead. The ports and shipping minister said at the time:
We had to take a decision to get out of this debt trap.
Nepal takes the plungeDespite fears over loans they can’t pay back, many small countries have accepted BRI as an alternative pathway to economic prosperity. Nepal is one of them – it entered into BRI last year with great enthusiasm.
Then in June of this year, Nepali Prime Minister K.P. Sharma Oli travelled to China to sign agreements worth US$2.4 billion on everything from infrastructure and energy projects to post-disaster reconstruction efforts.
This article first appeared on theconversation.com
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