SCMAP Perspective is our fortnightly column on PortCalls, tackling the latest developments in the supply chain industry, as well as updates from within SCMAP. On this column, we look at the concerns raised by the Belt and Road Initiative, and particularly the Philippine government embracing the plan head on.
Belt and Road anxieties
On the surface, China’s Belt and Road Initiative is incredibly ambitious: a large infrastructure program cutting across the regional superpower and beyond, fostering trade linkages between it and its neighbors. The initiative’s name echoes the old network of trade routes connecting the East and the West, specifically China, India and Persia with southern and eastern European countries.
Already it has seen major rail and port projects from countries such as Sri Lanka, Pakistan and several African countries, as well as developments in smaller Chinese cities that seek to spur manufacturing growth further. And then there are the flagship infrastructure projects, like the Hong Kong-Macau-Zhuhai Bridge which we’ve discussed in previous columns, which cuts travel between major cities in the Pearl River Delta to just under an hour.
As an immediate neighbor of China, it’s inevitable the Philippines would be in the initiative’s sights. But that’s where politics comes in. There was a wariness about the initiative, particularly as the Aquino administration pursued arbitration regarding the country’s territorial claims over segments of the South China Sea. On the other hand, the Duterte administration embraced closer ties with the country, pushing for bilateral deals on multiple fronts. It makes sense that this government would embrace the Belt and Road Initiative – as seen in Duterte’s personal participation in the recent Belt and Road Forum in Beijing – considering how it ties in nicely with its thrust to boost infrastructure spending.
And yet, thanks to its scale and its lack of clear detail, there has been reason to worry about the Belt and Road Initiative. As the Center for International Relations and Strategic Studies’ Darlene Estrada pointed out last year, the lack of clarity on which countries can take part in the initiative, as well as how projects under its wing will be financed, has led to some negative connotations. There have been some concerns that this is a type of debt-trap diplomacy that ultimately favors Chinese companies over those from the country where the projects are built.
Locally, the specter of China’s incursions into Philippine territory – and Duterte’s seeming willingness to set aside arbitration favoring our claim in exchange for closer ties – continues to hover. Recent reports of business establishments favoring Chinese customers on social media have just aggravated things. (But it must be pointed out that this is hardly the first time we’ve engaged with China to attain common economic goals. We’ve wooed Chinese companies to invest in the country for decades.)
With all that in mind, I’ll have to admit I’m finding it difficult to write about the Belt and Road Initiative. For one, there are so many facets to it, it’s difficult to figure out where to start. And then there are those sensibilities to the local setting. In the short term, how will it affect local workers? In the long term, how will it affect our economy and, perhaps, our sovereignty? Forces are demanding that you take a side and stick by it.
But that’s precisely why we have to watch this initiative with interest. It’s not going to affect us in the future; it’s already affecting us now. Several of the projects proposed under Duterte’s Build Build Build program are set to be funded through Chinese grants, notably the ambitious network of bridges connecting the country’s major islands – although most of these projects are still in the feasibility studies phase. Chinese companies have formed joint ventures with local ones to help construct some of these projects, like the BGC-Ortigas Link Bridge currently underway. Funding for several flood control projects in the capital is coming from the Asian Infrastructure Investment Bank, headquartered in Beijing – although it must be noted that we joined this collective in 2015.
If handled sensibly, the Belt and Road Initiative can help spur our economic development further, helping us catch up with our ASEAN neighbors. But this involves, on our part, vigilance – keeping watch over these projects not for partisan purposes, but to better understand its implications for our long-term growth. We have some tools at our disposal: information on these projects are available on government websites, and there are nascent Freedom of Information policies in place.
On the government’s part, we ask that there be greater transparency when it comes to these projects – not just the ones set to funded by China, but for every project. It’s not enough for our leaders to tell us to just trust them because they said so. It’s up to government to earn the population’s trust with all of these jitters in the frame, not with platitudes designed to score political points, but with hard facts and a firm commitment to the greater good. Is that too much to ask at this point?