The Belt and Road – Part 10: Tall, Powerful and Beautiful Ways to Prosperity

By Prof. Samitha Hettige | Published: 2:00 AM Sep 26 2020
FT The Belt and Road – Part 10: Tall, Powerful and Beautiful Ways to Prosperity

By Prof. Samitha Hettige 

Latin American and the Caribbean nations were not part of the ancient Silk Road. Nearly seven centuries later the Belt and Road initiative (BRI) has expanded towards them creating opportunity to advance cooperation according to many analysts. Advanced maritime transport and air transport has made this connection possible. So far 19 Latin American countries have signed memorandums of understanding (MoUs) with the People’s Republic of China (PRC) to create win-win cooperation boosting global growth. With the post COVID-19 economic growth rate fluctuations analysts believe that being part of the BRI would give opportunity to the region to upgrade health facilities and services to reboot their economies. 

The video conference held in July 2020 among the foreign ministers of the PRC and the BRI partners in the region further highlighted on the post COVID-19 recovery efforts and the possible collaboration and people to people support that would uphold the effort. Before the COVID-19 the PRC send the People’s Liberation Army-Navy (PLAN) Hospital Ship and many medical teams to the region to attend to the health needs of the masses as part of BRI cooperation. The BRI according to many analysts is the most powerful risk mitigation and recovery tool for many COVID-19 affected nations including some developed nations in Europe. 

BRI continue to deepen cooperation in infrastructure, energy and agriculture etc in the region. PRC’s approach to increase trade through the development of the digital economy and raise quality of life through developments in biomedical research with partner countries seems very effective especially in the COVID-19 aftermath. It is well known that Chinese peasants were used as laboratory rats by the Japanese Army special unit to test Biological weapons they were developing to hit at UK, USA, USSR and the allied forces during World War II. Japan was militarily and economically powerful during that period. It is good if those interested can analyse the BRI and do a comparative analysis about nations such as PRC, Japan and Germany on how they behave and behaved when they get economically and militarily powerful and the ideologies that drive those nations. 

Links with Latin America

Mexico, Brazil, Chile, Argentina and Venezuela are some of the key economies in the region. The PRC since 1949 has been working peacefully with all those who recognised the PRC in the region. PRC’s trade with Chile was approx 41 billion USD in 2019. Brazil being PRC’s eight largest trading partner had approx 102 billion USD trade activities in 2018. More than 250 Chinese companies have invested in Brazil showing high growth during the past few years (Ref. Chinese sources). Analysts’ view that Latin America rich in natural resources is an asset to the PRC, which has to supply resources to its growing industrial demand. At the same time, regional partners can use the BRI to improve the efficiency of their logistical operating mechanisms to witness win-win growth and create wealth. Mexico is China’s second-largest trading partner in Latin America and China is Mexico’s second-largest trading partner in the world (Ref Chinese sources). Cooperation between Beijing and Mexico rest largely on infrastructure development projects such as the ‘Tren Maya’ railway project.

Mexico cannot keep the PRC away but due to many geopolitical reasons it seems to be giving in to US lead North American protectionism and taking sides in a trade war in which it should not participate as per many conflict prevention analysts. In the COVID-19 aftermath Mexico is experiencing a socio-economic crisis. As a result in the first two quarters of 2020, Mexican GDP went down to 1.7%. An estimated approx 56% of the national population will be affected according to statistics. To avoid further crisis the state is banking on international cooperation and international agreements are seen as the only way out. Their present policy seems very much pro USA and that has put them in a corner where the USA is practically pushing them to a ‘stay away from enemies of the USA’ position. 

Mexico’s agreements

Of the agreements signed by Mexico to come out of crisis, the most notable agreement is the United States – Mexico – Canada - Agreement (USMCA). While entering to agreements such as USMCA, the USA has stepped back from global trade agreements such as the Trans-Pacific Partnership (Ref WTO). USMCA is a free trade agreement that became effective recently. In the eyes of those who respect the dignity of Mexico, the agreement was an opportunity to patch up the ties with the Trump administration but has put them in more trouble. The USMCA is the successor to NAFTA and some refer to it as the new NAFTA (North American Free Trade Agreement). At one point President Trump threatened to nullify the North American Free Trade Agreement, as well as he saw it was not beneficial to USA. When carefully analysing the agreement, it is evident that benefits for Mexico remain uncertain as it’s more focused on protecting Canadian and American interests in the global trade war as per analysts. 

The agreement says that 75% of the vehicles coming into Mexico should be produced in North American region. Another clause states that if a North American country makes an agreement with a country that does not have free market economic policies USMCA must be reviewed and approved by all members. This is a clear attempt to prevent Mexico working closely with the PRC, which is a country that does not adopt a free market (Ref WTO).

In practical terms it means that any dealings with PRC can be stopped by force or vetoed. The PRC’s stand on free trade agreements has always been to greatly favour trade exchanges between both partners. This approach of the PRC is not new to Sri Lanka for past seven centuries as per historic sources.

The Southern border

After assuming office, President Trump wanted to prevent Mexicans and other refugees entering his country illegally through its Southern border. He was criticised by many in the USA and outside for the wall he proposed along the USA-Mexico border. He even had to declare a state of emergency to get the funds released since the US Congress was blocking the funds and that the southern border was witnessing rapid increase of numbers of immigrants entering the USA (Ref. US sources). Immigrants were crossing over to the USA seeking prosperity. The wall is supposed to stop them coming. 

At present many penetrate the barriers between the two countries seeking prosperity. According to US statistics approx 9 billion USD has been allocated for the wall since 2017. President Trump during his campaign before being elected said that a tall, powerful and a beautiful barrier would be constructed to prevent Mexicans and others entering the USA from the South. The BRI is connecting the world as never before. All nations and populations that partner with BRI are experiencing many win-win situations. Should the Mexicans risk their precious lives and the dignity of their country to penetrate the tall, powerful and the beautiful barrier? or should all those connected to the BRI stand tall and ensure win-win growth to make human lives beautiful? 

The writer is an Academic and a Broadcaster. Views expressed are personal and may not necessarily be the views of his affiliations.

By Prof. Samitha Hettige | Published: 2:00 AM Sep 26 2020

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