China’s belt and road: from Malaysia to Philippines, Asean projects face roadblocks

Barrels of ink have been spent on hyping up the belt and road asean, which Beijing launched with great fanfare in 2013. But in the intervening years, the programme has faced a raft of challenges as it sought to move across China’s southern border into Southeast Asia.The RWR Advisory Group in Washington, which monitors belt-and-road projects around the world, estimates that China has started work on or completed projects totalling US$200 billion in Southeast Asia in the five years beginning in 2013. But that number seems inflated to someone who has visited most of the countries in recent years.

China has faced enormous problems getting projects off the ground in the countries that need the investment most. Negotiating the interest rate a country will pay for a loan from a Chinese bank and/or how large a local government or firm will take on is often the subject of years of negotiations. Forced or poorly compensated relocation of farmers to make way for a project has prompted endless protests and complaints and has driven many into poverty.

The lack of concern by Chinese contractors about environmental damage has resulted in governments abandoning some projects. Land acquisition, particularly in more democratic countries, has prompted some farmers to refuse to move. Corruption and hefty kickbacks have dented Beijing’s image and caused delays.

The following is a look at the status of belt-and-road projects across Southeast Asia.

Malaysia: corruption nearly derails rail project

After elections toppled Prime Minister Najib Razak in 2018, his successor Mahathir Mohamad suspended work and mounted investigations into several Chinese projects.The biggest was the almost US$16 billion East Coast Rail Link (ECRL). Mahathir suspected Najib had received inflated loans from a China-owned state bank that were siphoned off to cover the debts of the scandal-plagued state investment fund. Nearly a year later, Mahathir had managed to renegotiate the terms of the ECRL and announced that construction would resume.

Leave a Reply

Your email address will not be published. Required fields are marked *