What is One Belt One Road?
Olivia
June , 2017

A Brief explanation of OBOR

One belt One Road (OBOR) is the combination of the Silk Road Economic Belt and the 21st century Maritime Silk Road also known as the Belt and Road Initative (BRI). The Silk Road Economic Belt is revival of the ancient Silk Road, a network of trade routes which connected the ancient world commercially was established during the Hang Dynasty. It aims to build the road stretching from China to Europe passing through Central Asia, Middle East and Russia including a host of trade and infrastructure projects. The 21st century Maritime Silk Road is intended to reach the Mediterranean by the connection based on bodies of water throughout Asia and Pacific. President Xi Jinping announced the big plan when he visited Kazakhstan and Indonesia in 2013. The objectives for the plan is to create world’s largest platform for all kinds that relate to the economy, policy and social culture.

The Marshall Plan and OBOR

Some international relations academics have been comparing the OBOR with the Marshall Plan. The Marshall Plan, officially known as the European Recovery Programme (ERP), covers the period when the United States injected over $13 billion into the Western European economies to help them rebuild after the Second World War. It is also made to prevent the spread of communism. Scholars from China, however, defend that those plans are not comparable. One of the reasons they compare it to Marshall plan is the international use of the country ‘s currency. China is trying to use their Renminbi (RMB, the official name of their currency) in the cross-border payments.

Countries Involved with OBOR

The programme involves 68 countries with two-thirds of world’s population and one-third of the world’s wealth and up to 40 per cent of global GDP. When President Xi announced the plan, he also stated that around 60 countries along the routes are interested in joining. In the same year, China signed an agreement with the Republic of Djibouti. Dijibouti is a country that is strategically located where the Red sea meets the Gulf of Aden, a crossroad to the Suez Canal, the Persian Gulf, the Indian Ocean and the East African coast. Nepal just signed onto One Belt and One Road making it the latest country to join the effort.

AIIB

China proposed the creation of the Asian Infrastructure Investment Bank (AIIB) in 2013. The bank was founded in 2014. A total of 22 countries signed MOUs to participate and 57 countries have become the founding members of the AIIB. 37 countries are from Asia and Oceania and the rest are from Latin America, Europe and Africa. It is believed that the bank has been launched to rival the western World Bank. President Xi stated that the bank is aimed at investing in projects that are “high-quality, low-cost”. According to The Diplomat, AIIB serve as the financing arm of OBOR.

China is planning to expand billions of dollars for building infrastructure like railways, airports and generating stations. According to Chinese media, the Chinese Government has already invested some $1 trillion into the OBOR project . Xi announced at the summit an additional $124 billion in funding for loans and grants and $8.7 billion in assistance to developing countries. Local companies are also making preparations to welcome investors. Zeng Guang’an, the chairman of construction machinery firm LiuGong told CNBC that Beijing’s plan to invest billions abroad is creating a favourable business environment for Chinese companies expanding internationally.

OBOR and Myanmar

Since political reformation, Myanmar has engaged in active participation with regional organizations such as BIMSTEC, ASEAN, ACMECS and GMS. Myanmar is geostrategically located in the Southeast Asia and South Asia. Myanmar’s objective in joining those organizations is to gain economic benefits from information exchanges, advanced technology, prevention of transnational crime, elimination of drug trafficking and other improvements. The Myanmar-China oil pipeline, one of the OBOR’s ambitions, is being re-visited. The pipeline is linked between Central Asia and Europe. It will carry crude oil from the Middle East and Africa to southwestern China.

Myanmar can take two millions tons of crude oil per year. Suresh Sivanandam, senior research manager for Asia refining at Wood Mackenzie Ltd told Bloomberg that the initial benefits for Myanmar are probably minimal. The country may get a small amount of oil and some revenue from oil storage and pipeline tariff fees, while experience from China in building energy infrastructure will be a boon for the country later. Moreover, state counselor Aung San Suu Kyi visited China to attend the two-day of “Belt and Road Forum for International Cooperation” in Beijing which was held on May 14 and 15.

President Xi made the statement after meeting with Aung San Suu Kyi. He remarked that the two sides could jointly maintain peace and stability on the border. He also noted that they had reached an important consensus on all-round strategic cooperation in the new era when President Htin Kyaw visited China in April. He also added “China and Myanmar share widespread mutual strategic interests”. The State Counselor said “ The Belt and Road Initiative (will bring) peace, reconciliation and prosperity to the region and the world at large and Myanmar is willing to work with China on Peace and Stability.”

OBOR Propaganda Push

It is an undeniable fact that China needs the countries’ approval to implement the plans. Therefore, Chinese boosters flaunt the massive economic promises and the benefits that could be reaped. Considering the plan encompass 4.4 billion people, the project is heavily endowed with big ambitions. The China Xinhua news agency used pop music to influence the international audience. It is composed with fun lyrics and catchy riffs. There is also a couple of videos that show a father telling his daughter about the OBOR plans as bedtime stories. Alexander Gabuev, in his recent article, wrote that the BRI has no stated performance indicators so China has enough room to announce any results of its development as great accomplishments. Opinion of OBOR World leaders from some 30 countries and representatives from more than 130 countries gathered to attend the Summit centered on One Belt One Road but leaders of G7 were absent at there except for Italian Prime Minister Paolo Gentiloni. Russian President Vladimir Putin also attended the summit. Following the results of his two day visit to Beijing, Putin said “It is a sin not to use the opportunities” of Sino-Russian cooperation. As for bilateral relations, Russia can be considered one of the most active partners of OBOR. The reactions to OBOR are mixed. The United States, India and others have concern about the political influence China may garner and worry that, if they agree to build the infrastructure, the consequences may be unexpected, especially in social and environmental terms.

India skipped the OBOR Initiative summit and has decided not to send any representatives to attend because of the “flagship” project issue. China said “The door will always remain open”.

Tianjie He of Oxford Economics told CNN Money that Europe is more accepting than the US but many developed world countries still aren’t comfortable with the rising power of China.

President Xi spoke at the summit emphasizing that criticism of Beijing will dominate the overall project “What we hope to create is a big family of harmonious co-existence”, he said.

Advertisements