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BRI: The Infected Project of the Century

The closely guarded bilateral BRI partnerships are either with autocracies or economically weak and politically fragile nations. Financing is through enticing loans convertible into debt traps. No elements of grant or aid. No free lunches.

LT GEN PR SHANKAR (Retd)

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The BRI envisaged infrastructure and construction projects at a mega scale — Railways, Highways, Ports, Energy Projects, and Industrial Estate Developments across 70 odd countries. The crown jewel being the CPEC. The Chinese ambitions are to displace the US from the top. Engage countries in bilateral economic partnerships. Deploy excess Chinese capital and capacity overseas to boost the economy. Chinese merchandise was to flow in outbound streams. Inbound traffic ensures food, energy, and resource securities for China. BRI consolidates Xi Jinping’s role in perpetuity in creating a Sinocentric world.

The closely guarded bilateral BRI partnerships are either with autocracies or economically weak and politically fragile nations. Financing is through enticing loans convertible into debt traps. No elements of grant or aid. No free lunches. Execution by Chinese contractors. Locals excluded from even trickle-down employment.  All BRI projects are opaque, overpriced and tainted with corruption. That is par for the course and known. 

 The BRI, dubbed as “The Project of the Century”, has been infected by the “Wuhan Virus” and is in standstill mode. It was the main instrument to make China a superpower. In this context it is interesting to see how some similar economic corridors of the past have fared. Each is an interesting story. When seen alongside the BRI they show you the future. 

The Basic Model

Fundamentally, the BRI is a mega copy of the British Empire which was founded on trading posts and colonies. The British mercantile system established it with a strong Navy in the 16th17th centuries. The Empire was built over a century. However Xi Jinping wanted BRI in a hurry. The other superpower model is the US with its global network of military bases, strategic alliances, and reconstruction efforts of the post WW-II era. China lacked the sea power of the British, or the military might of the US. Hence it used cheque book and debt trap diplomacy as hard power currency to establish the BRI. As BRI expanded, its overseas military power could simultaneously grow to eventually consolidate China as the sole superpower.

The Panama Canal

 The Panama Canal (83 km), one of the seven wonders of the modern world, began operations in 1914. It was built by the US to connect its eastern and western coasts and avoid sailing around South America. To build and control the Canal, the US created Panama by carving it out from Colombia in 1903. The US has “as if it were sovereign” rights to the Canal “in perpetuity” though it is being run by Panama today. The traffic has grown from 1,000 ships in 1914 to approximately 14,000 annually. Its annual revenue of $2 billion is the biggest element in Panama’s GDP.

 Despite constantly increasing revenues, Panama went through political and economic turbulence. By 1983 it was in economic ruin under Manuel Noriega’s dictatorship (set up by the US). Noriega ran a parallel economy of drugs, money laundering and human trafficking. He supported guerrilla uprisings in neighbouring countries. Political opponents were assassinated.  Finally, he turned coat in the US too. Retaliatory US sanctions destroyed Panama’s economy. Ultimately the US invaded Panama in 1989 to safeguard its interests. The invasion pushed many people back into poverty. Later, Panama stabilised due to US intervention. In a loose sense, Panama can be termed as an “Independent” state of the US with limited sovereignty. In some sense it is a colony. Despite an economic boom and an upper-middle per capita GDP, more than 25% of Panama’s population live in poverty. Many debt-trapped BRI countries could end up as tomorrow’s Panamas including Pakistan. 

 A century after commencing operations, the Panama Canal has benefitted USA and the rest of the world immensely. Has it benefitted Panama as much? It continues to be a mosquito and insect infested tropical country with bouts of economic ruin, civil strife, and political instability. Its sovereignty is questionable.  Without the US, it might collapse.   

 Berlin-Baghdad Railway

 The 19th century Europe saw great opportunity in the resources of a weakening Ottoman Empire. The Ottoman agricultural system could whet European food requirements. Minerals (Chrome, antimony, lead and zinc mines and some coal) and abundant oil of the Middle East were on offer. Hence a transcontinental rail link through the Ottoman Empire was conceived with Britain, France and Germany competing. Ultimately, the Germans won out. Work began on the Berlin-Baghdad Railway in 1903.

 It was built from 1903 to 1940. It was approx 4900 km long, traversing modern-day Turkey, Syria, and Iraq to Basra, in the Persian Gulf. Germans wanted to counter the British Empire by bypassing the Suez Canal to threaten its dominance in colonial trade. Turkish interest was twofold. Firstly, countering its Russian rivals. Secondly control of Arabian Peninsula and expansion across the Red Sea into Egypt, then under British control. Expansion into Egypt was through an offshoot called the Hejaz railway (Aleppo to Damascus to Medina). The Hejaz Railway was targeted through guerrilla warfare by Lawrence of Arabia. He never let it function fully.

 The Berlin-Baghdad (and ultimately Basra) Railway would enable German goods to reach the warm waters of the Gulf. From there trade could be extended to German colonies farther. The return journey would bring oil. Axiomatically, economic interests would expand political influence. The Railway was to strengthen ties between the Ottoman Empire and Germany to shift the regional balance of power. Similarities to the CPEC are eerie though predated by a century. 

Funding, engineering and construction were mainly German. The Railway became a source of international disputes. It was one of the leading causes of WW-I. When WW-I broke, the Railway was still 960 km short of its objective. By 1915, the Railway was still 480 km short. It had limited utility during WW-I. Baghdad was captured by the British. The Hejaz Railway in the South was sorted out by Lawrence of Arabia.  Construction resumed in the 1930s. The last stretch to Baghdad was built in the late 1930s. The first train from Istanbul to Baghdad departed in 1940.

 Did it serve the purpose for which it was envisaged? Clearly no. By the time the Railway was built, empires and nations ceased to exist the way they were. Colonial contours had changed. Technical difficulties, funding issues, cultural outlooks, geopolitical alignments, and divergent interests stretched construction time to breaking point. The project was so contentious, and ambitious that it was bound to fail on all fronts. It failed — never to meet any one’s aspirations. Fits the infected BRI well? Of course it does.

Suez Canal

 The Suez Canal, constructed between 1859 and 1869, connects the Mediterranean to the Red Sea.  It opened on November 17, 1869. It has been operating for nearly a century and a half. In 2012, 17,225 vessels traversed the Canal. Initially the Canal was British owned. Nasser nationalized it. Suez Canal Authority of Egypt now owns it. Expansion and canal widening commenced in August 2014, to double its capacity from 49 to 97 ships a day. The “New Suez Canal”, was opened on 6 August 2015. In the fiscal year 2014-15, the revenues of the Canal were $5.7 billion.   

A highly profitable Suez Canal should have given stability and progress to Egypt over the past century and a half.  However, the opposite is true. President Nasser ran an inefficient Soviet style centralized economy. The Arab-Israel wars debilitated growth. The 90s saw a series of IMF arrangements once fences with Israel were mended. Egypt received external debt relief due to participation in the Gulf War coalition. Since 2000, structural reforms helped Egypt move towards a market-oriented economy and prompted increased foreign investment. The reforms and policies propelled growth, which averaged 8% annually between 2004 and 2009. However, the trickle-down effect was poor. Wealth distribution was inequitable. Economic conditions worsened. Unemployment burgeoned. After the 2011 revolution, Egypt’s foreign exchange reserves fell from $36 billion in December 2010 to only $16.3 billion in January 2012. Egypt’s long-term credit rating was lowered in 2013.

 Egypt has seen peaceful growth only for about two decades. It has been involved in strife – externally or internally. After the Arab Spring, growth rates have plummeted to 2-3% with double digit inflation. The economy is in poor shape. The stark lesson is that if successful projects did not guarantee growth of nations or people, the largely unsuccessful BRI projects can destroy nations. Have doubts? Examine Hambantota. 

 Analysis

 When seen in the overall context, the BRI has shades of all previous corridors but with its own defining characteristics. Old models had investors and invested nations. In BRI there is one creditor nation and a host of debtor nations. The creditor has been indemnified and guaranteed profits irrespective of the outcome of the projects. The host nations in BRI will end up with non-performing assets and a non-repayable loan with partial loss of sovereignty. The host countries need to see which model they fit in.

Pre pandemic indications itself were clear. All completed BRI projects were economically, politically, and socially unviable. They were being dubbed as “Roads to Nowhere”. Ever since the Wuhan virus has infected the BRI, the projects are firmly on the back-burner. As the virus rages, economies have shrunk. Tax revenues plunged, and expenditure is up. Supply chains from China are disrupted. Migrant Chinese workers have been quarantined, repatriated, or banned. BRI infrastructure lies unfinished. Upstream manufacturing has declined in China. Some projects are into legal problems. This will only magnify.  Many nations are seeking debt write offs/rescheduling. The status of the flagship CPEC is too well known. China is now shifting focus to concentrate on two nonphysical components of BRI namely “Health Silk Road (HSR)” and “Digital Silk Road (DSR)” which are only sops to save its image.

  The longer the Virus lasts the greater the effect. Even if a vaccine is found, the poor host nations are not high priority to get them. So BRI projects will languish to deteriorate. Restarting them means refinancing. Poor nations cannot afford it as they recover from the Virus. In case of defaults, China will own an asset which has no value. In the meanwhile Governments can change and politics winds can turn. The unfinished Chinese projects dotting the global landscape will constantly remind people of the Wuhan Virus.

There is a larger issue. Chinese investment in BRI is estimated to be anything between $1.5 Tn and $5.5 Tn. That is between 15- 40% of its GDP and at risk. As per reports $200-520 Billion have already been sunk with no tangible return. See this against the historic backdrop of fate of corridors analyzed above. All one can foresee shuttling in the BRI are bats and pigs carrying viruses up and down. Does the infected BRI seem to be an instrument to propel China to superpower status? In my opinion if the bats do not kill it, the pigs will.

Lt Gen P.R. Shankar was India’s DG Artillery. He is highly decorated and qualified with vast operational experience. He contributed significantly to the modernisation and indigenisation of Artillery. He is now a Professor in the Aerospace Dept of IIT Madras and is involved in applied research for defence technology

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Defence

Major push to Make in India in defence sector

Ajay Jandyal

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To give a major push to Prime Minister Narendra Modi’s Atamanirbhar Bharat mission, the Indian Army has joined hands with various technology firms to cater to the demands of the present security scenario.

The Army says if it has to remain operational all around, it cannot rely on obsolete technology hence latest advancement in the sector have to be adopted.

“The Northern Command is always combat ready in the times to come, the challenges will continue to increase so we have to rely on advance technology and keep on innovating,” Lieutenant General Upendra Dwivedi told The Daily Guardian on the sidelines of the Northern Technology Symposium held in Udhampur on Sunday.

North Tech Symposium was organized under the aegis of HQ Northern Command at Udhampur. Technology symposium, exhibition was organised wherein 162 companies from Indian defence industry including MSMEs, DRDO, DPSU, participated and exhibited their products.

In addition, 42 innovative solutions by Army establishments towards enhancement of combat potential of the Army were also on display. Lt Gen BS Raju, Vice Chief of Army Staff inaugurated the first of its kind technology symposium in Jammu and Kashmir.

Addressing the event, vice-chief of Army staff Lt Gen V S Raju said that he would have appreciated if the investors, capital ventures would have also shown interest in the event to boost the new start-up.

“To cope up with the ever-evolving and ever-changing security scenario, we also need to adopt changes and keep on innovating. I am happy that so many companies have shown interest to showcase their products at the North Tech Symposium. I am hopeful that in near future, many of the products would be put in use by the armed forces,” General Raju said.

In the wake of recent incidence of drone dropping in Jammu and Kashmir and Punjab from across the Indo-Pak border, various companies have displayed their products including anti- drone system, drone jammer which can strengthen the forces and border guarding forces to thwart Pakistan’s plan of disturbing peace.

Other than drone dropping threats, detection of tunnels on Jammu and Kashmir border is also a major threat for the security forces these days as 11 tunnels have been detected on Indian-Pakistan border in the past few years. There was number of companies which showcased their products to detect underground tunnels by using artificial intelligence and special radar.

The symposium saw active participation from of senior officers from different forces including IDS, Army HQ, HQ ARTRAC, other Commands, HQ Northern Command, and its subordinate formations. This interactive platform for knowledge diffusion through Joint Army-Industry participation was an important step in the direction of the government’s initiative of “Make in India”.

On the first day of the seminar, the participants from Army and industry discussed the policy and procedures for expeditious procurement, Raksha Atmanirbharta initiatives by Indian Army, DRDO and Defence Public Sector Undertakings, how can private sector contribute towards surveillance system, weapon sights, drones and counter drone system and miscellaneous technologies like 3D printing.

The symposium served to showcase cutting edge technologies and innovative products providing solutions to some of the complex challenges faced by the security forces in Northern Command and also acted as an ideal platform for mutual exchange of ideas between the domestic defence industry and the Army. The technologies and products on display covered a wide canvas, the prominent ones being surveillance and situational awareness, tactical mobility, firepower, force protection, communications, combat medical facility, robotics and simulators.

The symposium was a huge success and Lt Gen Upendra Dwivedi, AVSM lauded the initiative and innovations of all the vendors. The General Officer expressed his conviction that the plethora of technologies available indigenously can further boost the “Atmanirbhar Bharat” project of the nation. The spirit of Atmanirbharta demands that research and development, the domestic defence industry and Army have work in a synchronized manner to realise the nation’s vision.

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Defence

ARMY MAJOR SUCCUMBS TO INJURIES DURING OPERATION IN KASHMIR

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An Indian Army Major lost his life after slipping into a ravine during a counter-infiltration operation in the Uri sector of Jammu and Kashmir on Thursday.

Major Raghunath Ahlawat.

Late Major Raghunath Ahlawat, 34 was leading his team on a counter-infiltration operation based on reliable intelligence input. “To identify a safe approach for the team he led from the front while carrying out reconnaissance on a route through a steep cliff. “Unfortunately, he slipped due to bad weather and slippery conditions and fell 60 meters into a ravine. Critically injured, he succumbed to his injuries enroute while being evacuated to the nearest Army Hospital,” Indian Army officials said in a statement.

The Army paid tribute to the officer in a ceremony held in the Badami Bagh Cantonment in Srinagar led by Chinar Corps Commander Lieutenant General DP Pandey.

Major Ahlawat was commissioned into the Army in 2012 and hails from Dwarka, New Delhi and is survived by his wife and his parents.

The mortal remains of Late Maj Raghunath Ahlawat were taken for last rites to his native place, where he would be laid to rest with full military honours.

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Defence

FOR 114 FIGHTER JETS, IAF FAVOURS ‘BUY GLOBAL MAKE IN INDIA’ ROUTE

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For over USD 20 billion tender for manufacturing 114 multi-role fighter aircraft (MRFA) the Indian Air Force (IAF) would prefer to take the ‘Buy Global Make in India’ route over the strategic partnership policy model to produce the planes within the country.

‘Buy Global Make in India’ is a category of procurement process provided in the Defence Acquisition Procedure 2020 under Defence Minister Rajnath Singh to smoothen the acquisition of foreign weapon systems and their production within the country under the ‘Make in India’ in the defence programme. Along with the indigenous LCA Tejas and the 5th Generation Advanced Medium Combat Aircraft project, the 114 MRFA project would also be required by the IAF to maintain an edge over both the Northern and Western adversaries. We would prefer to go in for the Buy Global Make in India route which is preferred by the vendors also who are expected to take part in the programme, government sources said. Three American aircraft including the F-18, F-15 and F-21 (modified version of the F-16), Russian Mig-35 and Su-35 along with the French Rafale, Swedish Saab Gripen and the Eurofighter Typhoon aircraft are expected to participate in the programme. The Indian Air Force had also sought the views of these companies on the acquisition procedure that they would like to opt for in the programme and most of them have shown a preference for the Buy Global Make in India route only, they said.

The sources said that the force has also sought directions from the government on the project.

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Defence

INDIA GETS DEFENCE SUPPLIES FROM RUSSIA, BUT PAYMENT MAY BECOME AN ISSUE

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Amid the ongoing war between Russia and Ukraine, defence supplies from Moscow are continuing as the Indian defence forces have received a shipment of overhauled aircraft engines and spares. However, there is concern about whether this would continue in the near future as a solution for making payment to Russia has not yet been found.

“The defence forces have received shipments from the Russians very recently and it is still on. So far, there has not been any glitch in supplies for our forces,” a government source told ANI.

“However, there are concerns on whether these supplies can continue in the same manner as the Indian side cannot make payments to these Russian firms in view of the sanctions related to their banks,” he added.

The sources said the Indian and Russian sides are working to find a way this issue can be overcome and many options are being explored.

The latest supplies from Russia included overhauled fighter aircraft engines and spares for an aircraft fleet and they arrived through the sea route, the sources said.

India also received the final parts of the S-400 Triumf air defence system from Russia whose first squadron is operational with its elements deployed to take care of threats from both Pakistan and China.

India is one of the largest users of Russian weaponry including major platforms like fighter jets, transport aircraft, helicopters, warships, tanks, infantry combat vehicles and submarines.

Over the last couple of decades, it has broadened its source base by including equipment from countries like the US, France and Israel in a big way but the dependence on Russia still remains very high.

The Air Force is dependent majorly on the Russian supplies as its mainstay Su30 aircraft fleet is Russian along with its Mi-17 helicopter fleet.

The Army is also dependent on the Russian-origin T-90 and T-72 tank fleet for the armoured regiments.

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IAF, ARMY BRASS WILL ASSESS LAC SITUATION

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The top brass of the Indian Army and Air Force would be assessing the preparedness of their forces and infrastructure requirements along the Line of Actual Control (LAC) as the militaries of both India and China continue to remain in a standoff position in eastern Ladakh.

The Indian Air Force brass would be meeting this week from 6 April to discuss the security situation including air operations along the northern borders. The Indian Army commanders led by Army Chief General Manoj Mukund Naravane would be assessing the present deployments along eastern Ladakh and the northeastern sectors from 18 April onwards in the bi-annual commanders’ conference.

The top brass of the Indian Army had jointly discussed the infrastructure requirements and developments required by the Indian side from Ladakh to Arunachal Pradesh during a conference in Lucknow recently.

India has made several changes in its deployments post aggression shown by Chinese troops in April-May 2020.

India and China have been talking to each other at both military and diplomatic levels to address the issues but so far they have not been able to do so mainly because of Chinese reluctance. In recent talks to address the Patrolling Point 15 friction, they proposed a solution that was not acceptable to the Indian side.

Indian security establishment led by National Security Adviser Ajit Doval has been of the view that the issue would be resolved only if the Chinese completely disengaged and went back to pre April 2020 positions.The Indian side has strengthened its deployments manifold all along the LAC. The Indian Air Force has also started building advanced bases in the forward areas including infrastructure to operate fighter jets and attack helicopters from the forward fields such as Nyoma.

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Defence

Sharp fall in infiltration of foreign terrorists, stone pelting: CRPF DG

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There has been a sharp decline in the infiltration of foreign terrorists as well as in stone-pelting incidents in Jammu and Kashmir since the abrogation of Article 370 from the erstwhile state, Director General of Central Reserve Police Force (CRPF) Kuldiep Singh said on Thursday.

However, noting the targeted killings in Jammu and Kashmir, the officer said, “Some time there is a spurt in terrorist incidents” and the recent killing in “periodic series” are among those, and “it occurs”. Replying to queries during a press briefing here at the CRPF Headquarters, Singh said, “CRPF immediately try to control terrorist incidents in Jammu and Kashmir soon after it gets inputs. These incidents are not totally controlled by internal terrorist people who are there. On many occasions, it is controlled by those sitting across the border and it is directed whom to be targeted or not.”

The CRPF DG reiterated that “some directions comes from foreign lands too”, and thus, “terrorist incidents some times increase and sometimes decrease” “It does not mean that things are out of hand…You can see that the incidents of stone-pelting are almost nil. There has been a sharp decline in the number of infiltration of foreign terrorists into Jammu and Kashmir. Sometimes, there is a spurt in terrorist incidents but it happens,” he said.

The officer informed that the CRPF has neutralized 175 terrorists in Jammu and Kashmir and apprehended 183 from March 1, 2021, to March 16, 2022.

Meanwhile, the CRPF has recovered 253 arms from Jammu and Kashmir and seized 7,541 ammunition as well as 96.38 kg explosives, 23 Improvised Explosive Device (IED), 232 grenades, and 36 detonators from the Union Territory, Singh said. Further, he informed that as many as 91 encounters have taken place from March 1, 2021, to March 16 this year. CRPF is the premier Central Armed Police Force (CRPF) entrusted with the responsibility of safeguarding the internal security of the country. It is deployed across the length and breadth of the country, assisting various state police in the discharge of their duties. CRPF is providing security cover to 117 protectees of various categories, he said adding that 32 women personnel have been inducted into the VIP Security Wing.

A total of 41 VIPs were provided security cover by the CRPF during recently concluded Assembly elections in five states, the DG said adding that the security of 27 protectees has been withdrawn post-elections. The CRPF chief also said that under financial assistance from the risk fund, ex-gratia for personnel martyred in action has been increased to Rs 30 lakhs from Rs 20 lakhs, and for all other cases, the ex-gratia has been increased to Rs 20 lakhs from Rs 15 lakhs.

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